December 4, 2020

Volume X, Number 339

Advertisement

December 03, 2020

Subscribe to Latest Legal News and Analysis

December 02, 2020

Subscribe to Latest Legal News and Analysis

December 01, 2020

Subscribe to Latest Legal News and Analysis

TCPA Quick Hitter: Court Holds Counterclaim Seeking to Recover Debt in TCPA Suit May Proceed

Among the seemingly hundreds of controversies brewing in TCPAWorld is whether a consumer can face a counterclaim for collection of a debt in a TCPA suit brought against a loan servicer or collector for purportedly illegal calls.

While the issue seems straightforward—the debtor owes the money and the defendant should be able to collect (or at least offset) the amount owed on the contract in the TCPA suit—many courts have refused to permit such counterclaims fearing that offensive action by a TCPA defendant might somehow “chill” consumer protection lawsuits.

Weird.

Well in a recent case, the Northern District of California applied the “majority rule” and common sense (IMO) by allowing a counterclaim to proceed. In  Nalan v. Access Fin., Case No. 5:20-cv-02785-EJD, 2020 U.S. Dist. LEXIS 198836 (N.D. Cal.  October 23, 2020) the Plaintiff (allegedly) stopped paying for his car and received collection calls as a result. The Plaintiff sued the collector, who responded with a counterclaim for the $1,778.00 bucks it was (allegedly) owed.

The Plaintiff responded by moving to dismiss the counterclaim asserting a lack of jurisdiction. The Court was unpersuaded and found that the debt and the phone calls arose out of the same nexus of operative facts:  “Here, both Plaintiff’s and Access’ claims are related to the underlying automobile loan debt owed by Plaintiff to Access. These claims may be fairly classified as part of the same “case or controversy” and therefore, the Court may exercise supplemental jurisdiction over Access’ counterclaim pursuant to 28 U.S.C. § 1367(a)”

This is a great case to keep handy as Defendants often disdain the prospect of facing a lawsuit from a consumer that has failed to pay their obligations and is yet looking for a windfall under the TCPA. Pursuing a counterclaim at least allows the parties to equalize their position between one another and reduce all burdens and obligations to a single judgment. Plus this tactic can be a great class action killer. Feel free to reach out to learn more.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 302
Advertisement

TRENDING LEGAL ANALYSIS

Advertisement
Advertisement

About this Author

Eric Troutman Class Action Attorney
Of Counsel

Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems.

Eric has built a national litigation practice based upon deep experience, rigorous...

213-689-6510
Advertisement
Advertisement