FAIR DEBT COLLECTION PRACTICES ACT-PENNSYLVANIA USURY LAWS

September 26th, 2022 by Rieders Travis in Miscellaneous

Lutz v. Portfolio Recovery Assocs., LLC, 2022 U.S. App. LEXIS 26061 (3rd Cir. September 19, 2022) (Phipps, C.J.)  In this case, a consumer, who seeks to represent a putative class, sues a debt collection firm for attempting to collect an outstanding credit-card debt, which had accrued interest at an annual rate of 22.90%. After the consumer had not paid the balance for several months, the bank canceled the card, ceased charging interest, closed the account, and sold it to the debt-collection firm. The firm did not charge interest on the account balance after purchasing it, but the firm did attempt to collect the outstanding balance inclusive of the previously accrued interest.  In his amended complaint, the consumer claimed that the debt collection firm violated the Fair Debt Collection Practices Act by making false statements about the amount of the debt, see 15 U.S.C. § 1692e, and by collecting a debt not permitted by law, see id. § 1692f. Both of those claims rest on the premise that a Pennsylvania statute prohibits the debt collection firm from collecting the interest that had previously accrued at an annual rate greater than 6%. See 7 P.S. § 6203.A; see also 41 P.S. § 201(a).  The debt collection firm moved to dismiss those claims and the others brought by the consumer, all for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). The District Court granted that motion and did not afford the consumer another opportunity to amend the complaint.  Through a timely appeal, the consumer argues that the District Court erred in dismissing the FDCPA claims and that the District Court should have permitted him an opportunity to amend his complaint again. But the consumer does not plausibly allege that Pennsylvania law prohibited the debt collection firm from collecting interest that had previously accrued at greater than 6% annually. Thus, as elaborated below, on de novo review of the motion to dismiss and abuse-of-discretion review of the denial of the motion to amend the pleadings, we will affirm the judgment of the District Court.

Attorney Cliff Rieders

Attorney Cliff RiedersCliff Rieders is a Nationally Board Certified Trial Lawyer practicing personal injury law. A large part of his practice involves multi-district litigation, including cases related to pharmaceuticals, vitamin supplements and medical devices. He is admitted in several state and federal courts, as well as the Supreme Court of the United States. Rieders is the past regional president of the Federal Bar Association and is a life member of the distinguished American Law Institute, which promulgates proposed rules adopted by many state courts. He is a past president of the Pennsylvania Association for Justice, formerly Pennsylvania Trial Lawyers Association. As a founder of the Pennsylvania Patient Safety Authority, he served on the Board for 15 years.

Not only has Rieders held many highly esteemed, leadership positions, he authored legislation related to the Patient Safety Authority and the Mcare Act, which governs medical and hospital liability actions in Pennsylvania. He authored texts upon which both practitioners and judges rely, including Pennsylvania Malpractice Laws and Forms, and Financial Responsibility Law Issues in Pennsylvania, the latter governing auto and truck collisions in Pennsylvania. In addition, he wrote several books on the practice of law in Pennsylvania regarding wrongful death and survivor actions, insurance bad faith, legal malpractice claims and worker rights, among others. Rieders also serves as a resource to practitioners as a regular speaker for Celesq, an arm of the world’s largest legal publisher, Thomson Reuters West Publishing.

As recognition of his wide range of contribution to his profession and of his dedication to protecting the rights of his clients, he received numerous awards, among them the George F. Douglas Amicus Curiae Award, the Milton D. Rosenberg Award, the B’nai B’rith Justice Award, and awards of recognition from the Pennsylvania Trial Lawyers. [ Attorney Bio ]

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