Simmons v. Roundup Funding, LLC

Summarized by David Banker , Womble Bond Dickinson (US) LLP
15 years 5 months ago

Citation:

(2nd Circuit, Dec 31,1969)

Tag(s):

2nd Circuit

Ruling:

A proof of claim filed in bankruptcy court cannot form the basis for a claim under the Fair Debt Collection Practices Act ("FDCPA"). 15 U.S.C. § 1692 et seq. Federal courts have consistently ruled that filing a proof of claim in bankruptcy court (even one that is somehow invalid) cannot constitute the sort of abusive debt collection practice proscribed by the FDCPA, and that such a filing therefore cannot serve as the basis for an FDCPA action. See, e.g., B-Real, LLC v. Rogers, 405 B.R. 428, 431-32 (M.D. La. 2009); Middlebrooks v. Interstate Credit Control, Inc., 391 B.R. 434, 437 (D. Minn. 2008). There is no need to protect debtors who are already under the protection of the bankruptcy court, and there is no need to supplement the remedies afforded by bankruptcy itself.

Procedural context:

Appeal to the United States Court of Appeals for the Second Circuit (Jacobs, C.J., Winter, J. and McLaughlin, J.) from a judgment of the United States District Court for the Southern District of New York (Sweet, J.), dismissing on the pleadings a FDCPA claim.

Facts:

Roundup Funding, LLC ("Roundup"), filed a proof of claim in the Simmons' ("Debtors") bankruptcy case for a debt in the claimed amount of $2,039.21. The Debtors filed an objection, and Roundup's counsel, Malen & Associates ("Malen"), filed a response (which, the Debtors alleged, included no relevant information). At a hearing, the bankruptcy court reduced Roundup's claim to $1,100, the amount the Debtors conceded they owed. The Debtors brought a putative class action against Roundup and Malen, alleging that they had violated the FDCPA by misrepresenting and inflating the amount of the Debtors' debt.

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