Settlement Offer Does Not Moot FDCPA Claims

Plaintiffs alleged claims under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.S. § 1692 et seq.  In each case, defendant/debt collectors sent emails offering to settle the case for $1,001 – an amount exceeding by $1.00 the maximum that each plaintiff could recover, plus legal fees and costs.  The offers were not accepted. The  District Court granted the defendants’ motions to dismiss, holding the offers left the consumers with "no remaining stake" in the litigation and that the cases were moot.

The Eleventh Circuit reversed the trial courts holding that the defendants s did not offer judgment as part of the settlement, an important distinction in the mootness analysis. It was error to have found the settlement offers rendered the FDCPA claims moot because the offers did not offer to have judgment entered against them.  The Court went on to state that because the settlement offers were not for the full relief requested, a live controversy remained over the issue of a judgment, and the cases were not moot.  Furthermore, the Court stated, a judgment was important to the consumers because the district court could enforce it. Instead, with no offer of judgment accompanying the settlement offers, the consumers were left with a mere promise to pay.  If payment was not made, the consumers faced the prospect of filing a breach of contract suit in state court with its attendant filing fees — resulting in two lawsuits instead of just one.

Zinni v. ER Solutions, Inc., 2012 U.S. App. LEXIS 18163 (11th Cir. Fla. Aug. 27, 2012)

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

• Stop Collection Harassment;
or
• Consumer Rights Orlando