A lawyer filed a claim under the Fair Debt Collection Practices Act, 15 U.S.C. Section 1692 (FDCPA) alleging that a debt collection letter from a law firm was misleading. The problem with this allegation is that the law firm defendant faithfully used the “safe harbor” language approved by the Second Circuit. The Defendant moved for judgment on the pleadings and the court granted the motion. The court declined to sanction the plaintiff. However, the court awarded Rule 11 sanctions, on its own motion, against the plaintiff’s attorney.
The court reasoned that any competent lawyer practicing in the area of debt collection would know that the case, Avila v.Riexinger & Associates, LLC, 817 F.3d 72 (2d Cir. 2016), provided a safe harbor for the debt collector. If the debt collector followed the language of Avila, he or she could not be held to have violated the FDCPA, at least in the Second Circuit. The court concluded that the lawyer for the plaintiff, Igor Litvak, should not have brought the claim or should have dropped it once he became aware of the safe harbor. The court explained:
Here, Timoshenko’s claim is patently frivolous in light of the Avila safe harbor, for all of the reasons discussed above. Moreover, the evidence suggests that Litvak, her attorney, knew this to be the case. As described in Defendant’s brief (and undisputed by Litvak), Defendant’s counsel spoke with Litvak on August 9, 2017 and advised him that the Collection Letter did not violate the FDCPA because the language at issue conforms to the safe-harbor language endorsed by the Second Circuit in Avila. See ECF No. 8-1 at 12. Any competent attorney would know Avilaforecloses Timoshenko’s claim, and once made aware of that case (assuming, generously, that he did not already know about it), Litvak should have advised his client to voluntarily dismiss this action. Instead, he responded with the same frivolous argument that the Court dispensed with above, pointing to Carlin and Balke and vowing to press on. But the patina of legality afforded by reference to plainly inapposite case law does little to cloak what looks to the Court suspiciously like a shakedown. Defendant likely could have settled this case for significantly less than the legal expenses it has incurred in filing its answer and motion, and no doubt Litvak knew as much when he decided to defend an indefensible position.
In view of the above, the Court will issue an order requiring Litvak to show cause why he should not be sanctioned for violating Rule 11(b)(2). Litvak is advised that the Court will also be considering whether to order him to pay Defendant’s attorneys’ fees and costs pursuant to 28 U.S.C. § 1927. Defendant is welcome (though not required) to weigh in on the § 1927 issue, but no legal expenses incurred in briefing the issue will be included in any eventual award.