Though it eventually reached the Eleventh Circuit, the Court’s decision in Miljkovic v. Shafritz & Dinkin, P.A., — F. 3d. –, No. 14-13715, 2015 WL 3956570 (11th Cir. June 30, 2015), had its origins in Florida state court, where Publix Federal Credit Union obtained a judgment and continuing writ of garnishment against Nedzad Miljkovic after he had failed to repay his automobile loan. Miljkovic filed a claim of exemption from the garnishment, and Publix responded by filing a sworn opposition, serving discovery requests, and offering to settle the debt for less than the judgment amount. Miljkovic refused the settlement offer and responded to the discovery requests, but the garnishment was dissolved on Publix’s motion shortly thereafter.
Miljkovic sued Shafritz & Dinkin, P.A., and Mitchell A. Dinkin, attorneys for Publix, alleging that they had violated several provisions of the FDCPA, because they had “no factual basis” for opposing his claim of exemption and their sworn reply was a calculated effort to coerce a settlement. The district court granted the defendants’ motion to dismiss, concluding that Miljkovic failed to state a claim under the FDCPA because the defendants’ sworn opposition to his exemption claim was a mere procedural filing required by state law, and because it was directed to the state court and to his attorney, rather than to Miljkovic himself. Alternatively, the district court also found that even if the FDCPA did apply, he still had failed to state a claim under the FDCPA.
Miljkovic’s appeal from the district court’s dismissal presented the Eleventh Circuit with an issue of first impression: whether representations made in court filings by attorneys during the course of debt-collection litigation are actionable under the Fair Debt Collection Practices Act. Based on the plain language of the statute, the Court concluded that the FDCPA applies equally to conduct directed at a consumer’s attorney (or any other non-consumer), declining to follow cases from the Second, Third, Eighth, and Ninth Circuits.
As the Court explained, according to its plain language (and the Supreme Court’s decision in Heintz v. Jenkins, 514 U.S. 291 (1995)), the FDCPA applies to lawyers and law firms who regularly engage in debt-collection activity, and categorically prohibits abusive conduct in the course of collecting a debt, even when that activity involves litigation, and even when that conduct is directed at someone other than the debtor. Thus, “in the absence of statutory language to the contrary,” the Court declined to recognize an exemption from the FDCPA for conduct that otherwise would be actionable simply because it is directed at someone other than the consumer and reversed the district court’s holding that the FDCPA did not apply to the defendants’ conduct in opposing Miljkovic’s exemption claim.
On the other hand, the Court affirmed the district court’s alternative holding, agreeing that Miljkovic had failed to allege facts sufficient to state a claim under the FDCPA. First, the Court rejected Miljkovic’s claim under § 1692d, which prohibits conduct with the natural consequence of “harassing, abusing, or oppressing” the least sophisticated consumer. Though § 1692d proscribes such conduct generally, the statute also contains examples of prohibited conduct such as the “use of violence,” the “use of obscene or profane language,” and repeated phone calls intended to annoy or harass “any person at the called number.” In the context of litigation, the Eleventh Circuit previously had held that, absent conduct exhibiting a “tone of intimidation,” the mere filing of a collection lawsuit against a consumer does not fall within the ambit of § 1692d. Reasoning that the same was true of the defendants’ opposition to Miljkovic’s exemption, the Court held that he likewise failed to state a claim under § 1692d.
Miljkovic also claimed that the defendants had violated § 1692e(10), alleging that their opposition to his exemption claim constituted a “false representation or deceptive means” of collecting a debt because it lacked any “factual basis.” The Eleventh Circuit affirmed the district court’s dismissal, however, because the defendants’ oppositional statement was “not misleading or deceptive in the traditional sense,” in that it did not “misrepresent the nature or effect of the writ of garnishment,” “erroneously state the amount of the debt owed,” “incorrectly identify the holder of the alleged debt,” or “contain ‘false or deliberately ambiguous threats’ of future litigation.” Thus, the Court concluded that Miljkovic failed to allege that the defendants’ communication was deceptive or misleading to the least sophisticated consumer.
In doing so, the panel dodged the issue of whether the Eleventh Circuit should adopt the “competent lawyer” standard applied by the Seventh and Eighth Circuits for adjudging the deceptive capacity of communications with consumers’ attorneys. Because he had failed as a matter of law to show that the defendants’ conduct would be deceptive or misleading even to the least sophisticated consumer, Miljkovic was “necessarily unable to demonstrate that individuals held to a higher standard of competence, be it an attorney or a state court judge, could be misled or deceived by the sworn reply.” Accordingly, the Court declined to “adopt or reject” the “competent lawyer” standard, though it did acknowledge that the defendants had “reasonably” suggested that “the ‘least sophisticated consumer’ standard is inappropriate for evaluating the tendency of conduct or language to deceive or mislead a consumer’s attorney.”
Lastly, the Eleventh Circuit also affirmed the district court’s conclusion that Miljkovic failed to state a claim under § 1692f, which prohibits the use of “unfair or unconscionable means to collect or attempt to collect any debt.” Though Miljkovic had alleged that the defendants’ opposition was a bad faith attempt to coerce a settlement, the Court determined that his assertion was merely a legal conclusion that it was not required to accept as true. And “by failing to identify how the defendants’ conduct “was either unfair or unconscionable in addition to being abusive, deceptive, or misleading,” Miljkovic “fail[ed] to allege any conduct beyond that which he assert[ed] violates the other provisions of the FDCPA.” Thus, the Court held that he could not state a claim under § 1692f, often referred to as the FDCPA’s “catch-all” provision, because “a catch-all is not a free-for-all.”
The Eleventh Circuit’s decision in Miljkovic will no doubt be most remembered for its notable holding on an issue of first impression: that the FDCPA applies categorically to conduct falling within the plain language of the statute, even in the context of litigation, and even when the conduct in question is directed at someone other than the consumer. But it will likely be cited for much more. For example, though many district courts had reached the same conclusion, and while it did not expressly acknowledge it as another issue of first impression, the Eleventh Circuit had never before declared that, in order to state a claim for violation of § 1692f, a plaintiff must either allege improper acts specifically enumerated in that section or allege misconduct beyond that which allegedly violates some other provision of the FDCPA. Thus, even though the Court saved for another day whether the “competent lawyer” standard should apply to debt collectors’ communications with consumers’ attorneys, the Eleventh Circuit’s opinion in Miljkovic is still likely to prove instructive on the sufficiency of allegations necessary to sustain a claim under the FDCPA, not just in the course of litigation, but in other contexts, as well.