United States District Court, N.D. Ohio, Eastern Division
MEMORANDUM OPINION AND ORDER
C. NUGENT, JUDGE.
matter is before the Court subsequent to a four-day trial to
the Court, with an advisory jury duly empaneled and sworn
pursuant to Fed. R. Civ. Pro. 39(c)(1). Following trial, the
parties each submitted proposed findings of fact and
conclusions of law. The issues have now been fully presented
and are ready for the Court's consideration.
the Consumer Financial Protection Bureau ("the
Bureau"), filed this action on April 17, 2017, alleging
that Defendant Weltman, Weinberg & Reis Co., L.P.A.
("Weltman") violated Sections 807(3), 807(10 and
814(b)(6) for the Fair Debt Collection Practices Act
("FDCPA"), 15 U.S.C. §§ 1692e(3), (10),
and 16921(b)(6); and, Sections 1031(a), 1036(a)(1), 1054, and
1055 of the Consumer Financial Protection Act of 2010
("CFPA"), 12 U.S.C. §§5531(a),
5536((a)(1), 5564, and 5565, by "misrepresenting the
level of attorney involvement in demand letters and calls to
consumers. (ECF #1, ¶ 1, 2). Following discover}'
both parties moved for summary judgment. (ECF # 44, 45). Both
of these motions were denied. (ECF #61).
of this matter commenced on May 1, 2018, before an advisory
jury, pursuant to Fed. R. Civ. Pro. 39(c)(1). Prior to the
jury's empanelment, the Plaintiff voluntarily dismissed
Counts 4, 5 and 6, with prejudice, and withdrew its request
for disgorgement. (ECF #79). This left Counts One through
Three for trial. Count One alleged that Weltman's demand
letters "misrepresented that the letters were from
attorneys and that attorneys were meaningfully involved, when
in most cases the attorneys were not meaningfully involved in
preparing and sending the letters" in violation of
Sections 807(3) and 807 (1) of the FDCPA, 15 U.S.C. §
1692e(3), (10). Count Two alleged that the same letters
violated Section 1036(a)(1)(A) of the CFPA, 12 U.S.C. §
5536(a)(l)(A), for the same reason. Count Three alleges that
this also constituted deceptive acts and practices in
violation of Sections 1031 (a) and 1036(a)(1)(B) of the CFPA,
12 U.S.C. §§5531(a)(1) and 5536(a)(1)(B).
trial, the Plaintiff called three witnesses: (1) Ms. Eileen
Bitterman; (2) Mr. David Tommer; and, (3) Dr. Ronald
Goodstein, and submitted exhibits. Defendant called two
additional witnesses: (1) Chuck Pona; and, (2) Scott Weltman.
On May 4, 2018, after four days of trial, the jury submitted
their answers to the following interrogatories:
1. Do you find that the Plaintiff proved by a preponderance
of the evidence that the initial demand letter sent by
Weltman contained any false, deceptive, or misleading
representations or means in connection with the collection of
a debt? YES (Enter "yes" or
If your answer to Interrogatory Number 1 is yes, continue to
Interrogatory Number 2. If your answer is no, your
deliberations are finished and you should not answer any
2. Do you find that the Plaintiff proved by a preponderance
of the evidence that Weltman's lawyers were not
meaningfully involved in the debt collection process. NO,
(Enter "yes" or "no").
If your answer to Interrogatory Number 2 is yes, continue to
Interrogatory 3. IF your answer is no, your deliberations are
finished and you should not answer any further questions.
the advisory jury returned these findings, the parties were
given a final opportunity to present their proposed findings
of fact and conclusions of law.
Court is not bound by the advisory jury's determination,
but finds that their answer to Interrogatory Number 2
comports fully with the weight of the evidence presented at
trial. The jury's answer to Interrogatory Number 1,
however, does not correctly reconcile the evidence presented
with the Court's instructions or the standard of proof
required of the Plaintiff in this case. Although there was
some evidence presented in support of the idea that the
letters could be misleading to certain consumers, that
evidence came exclusively from an expert that the Court does
not find credible. Further, the Complaint relies solely on
the assertion that the demand letters were misleading because
they were sent from a law firm, and lawyers were not
meaningfully involved in the debt collection process. The
jury's finding, adopted by this Court, that lawyers were
meaningfully involved disproves the Plaintiffs sole theory of
liability, and precludes recovery under the Complaint.
party disputes that Weltman is a debt collector to whom the
FDCPA and the CFPA apply, or that Weltman's demand
letters were sent in connection with the collection or
attempt to collect debts. The question at issue in this case
is whether Weltman's debt collection demand letters
violated the FDCPA or the CFPA. The FDCPA and the CFPA were
violated if the letters used "any false, deceptive, or
misleading representation or means in connection with the
collection of any debt," or if they falsely represent or
imply that communication is "from an attorney." 15
U.S.C. §1692e and 1692e(3). A demand letter is not false
or misleading for using letterhead that "accurately
describes the relevant legal entities," had an accurate
and truthful signature block, and includes a
"conspicuous notation that the letter is sent by a debt
collector." Sheriff v. Gillie, 136 S.Ct. 1594
letters are alleged to have violated the FDCPA and the CFPA
not because they contain false statements, but because they
allegedly falsely imply that an attorney was meaningfully
involved in the collection of the debts to which the letters
relate. According to case law from various circuits, a demand
letter indicating that it comes "from an attorney"
can be found to be deceptive even if literally true, if the
letter is not the product of an attorney's professional
judgment, or if the attorney was not sufficiently involved in
the collection of the debt or the drafting of the letter.
See, e.g., Nielsen v. Dickerson, 307 F.3d 623
(7th Cir. 2002); Lesher v. Law Offices of
Mitchell N. Kay, P. C., 650 F.3d 993, 1003 (3d Cir.
2011); Greco v. Trauner, Cohen & Thomas, LLP,
412 F.3d 360, 364 (2d Cir. 2005); Consumer Fin. Prot.
Bureau v. Frederick J. Hanna & Assoc, P.C, 114
F.Supp.3d 1342, 1363 '(N.D.Ga. 2015). In order to
establish any of the violations alleged in the Complaint, the
Plaintiff must show, by a preponderance of the evidence,
least sophisticated debtor would believe, based on the
initial demand letter, that Weltman was acting as an attorney
in the debt collection process; and, 2. Weltman's lawyers
were not meaningfully involved in the debt collection
process; and, 3. The representation that Weltman was acting
as an attorney in the debt collection process was material.
least sophisticated debtor is to be considered uninformed,
naive, and trusting, but also possessing reasonable
intelligence, and capable of making basic logical deductions
and inferences. Sanford v. Portfolio Recovery
Assocs., LLC, NO. 12-11526, 2013 WL 3798285, at *12
(E.D. Mich. July 22, 2013)(citations omitted). It is not a
requirement that the Defendant intended to mislead or deceive
a consumer. This standard is "lower than simply
examining whether particular language would deceive or
mislead a reasonable debtor," Smith v. Computer
Credit, Inc., 167 F.3d 1052, 1054 (6th Cir.
1999), but does not give credence to "frivolous
misinterpretations or nonsensical interpretations.. .."
Miller v. Javitch, Block & Rathbone, 561 F.3d
588, 592 (6* Cir. 2009).
is no specific test for what constitutes "meaningfully
involved." Cases have held that an attorney has
sufficient personal involvement in the process if one reviews
the file of the individual consumer to whom the letter was
sent and/or exercises some "professional judgment as to
the delinquency and validity of any individual debt"
before the letter is issued. See, e.g. Consumer Financial
Protection Bureau v. Frederick J. Hanna & Assoc,
P.C., 114 F.Supp.3d 1342, 1363 (N.D.Ga. 2015); Avila v.
Rubin, 84 F.3d 222, 229 (7, h Cir. 1996);
Lesher v. Law Offices of Mitchell N. Kay, P. C., 650
F.3d 993, 999 (3d Cir. 2013). This is not necessarily a set
requirement for meaningful involvement, however, as this is a
question that must be determined based on the individual
facts and totality of the circumstances in each case.
See, Miller v. Wolpoff & Abramson, LLP, 321 F.3d
292, 304 (2d cir. 2003).
order for a representation to be material, it must be likely
to influence the least sophisticated debtor's decision on
whether or not to pay a debt. See, Wallace v. Washington
Mut. Bank, F.A., 683 F.3d 323, 326-27 (6(h
Cir. 2012). Creating a legitimate fear of the actual
consequences of owing a valid debt is not misleading or
deceptive under the act.
parties stipulated to the following facts:
Bureau (Plaintiff) is an independent agency of the United
States that enforces and issues regulations pursuant to
federal consumer financial law, including the Fair Debt
Collection Practices Act and the Consumer Financial
Protection Act of 2010.
Weltman (Defendant) is an Ohio professional corporation
organized under the laws of Ohio that operates as a law firm.
Weltman has maintained a website, www.weltman.com,
from at least July 21s1, 2011, to date.
Weltman is a debt collector under the Fair Debt Collection
Practices Act and a covered person under the Consumer
Financial Protection Act of 2010.
Evidence at Trial
Bitterman, the compliance officer and a shareholder of
Weltman, is a lawyer licensed to practice law in Ohio. She is
responsible for creating policies and overseeing training.
(ECF #75 at 44). She testified as follows.
is owned by shareholders, all of whom are attorneys. (ECF #75
at 130). Weltman is hired by creditors to collect a variety
of types of consumer debt. (ECF #75 at 44-45). During the
relevant time period, Weltman had up to 7, 000 creditor
clients. (ECF #75 at 98). Weltman has a consumer collection
unit that is staffed by non-attorneys but is overseen by an
attorney who is the business unit leader, and collections
support attorneys. (ECF #75 at 48). They are paid on a
contingency fee basis, based on the amount of money they are
able to collect from consumers. (ECF #76 at 94, 107).
attempt to collect on consumer debts, Weltman sends out
letters that are generated from attorney-approved templates.
(ECF #75 at 50-51). One of these templates is an initial
demand letter that includes the name of Weltman, Weinberg
& Reis Co., L.P.A. and the words "Attorneys at
Law," at the top of the letter. (ECF #75 at 57, 86).
These letters are signed by Weltman, and are on Weltman
letterhead. (ECF #75 at 57-58, 80, 86). Ms. Bitterman
testified that 4.2 million demand letters, from these
templates, were sent to consumers between July 21, 2011 and
October 31, 2017. (ECF #75 at 91). She also testified that
some templates for follow-up letters also state that
"this law firm is a debt collector attempting to collect
this debt for our client." or other references
indicating that Weltman is a law firm, which are a truthful
statements. (ECF #75 at 64-66).
does not contend that they are practicing law when they send
demand letters. (ECF #76 at 96). They do not require
an attorney to review every individual consumer account
before a demand letter is sent. (ECF #75 at 98-99). Weltman
attorneys do not form a professional judgment about the
validity of a debt or the appropriateness of sending a demand
letter before the letters are sent. (ECF #75 at 99). Weltman
receives information from creditor clients about consumer
accounts and data is loaded into Weltman's computer
system. (ECF #75 at 73-74). The data is then
"scrubbed." Scrubbing is a process by ...