Kay: Collection Lawyers Beware

Gon­za­les v. Kay and Kay Law Firm, No. 0–20544 (5th Cir. August 3, 2009) (Jolly, Prado, and Southwick)

Jose Gon­za­lez failed to pay his Sprint PCS Wire­less cell­phone bill and he received a col­lec­tion let­ter from the Kay Law Firm. The let­ter was printed on the firm’s let­ter­head, but was not signed. It con­tained all the reg­u­lar Fair Debt Col­lec­tion Act (“FDCA”) lan­guage on the front, but had this dis­claimer on the back:

At this point in time, no attor­ney with this firm has per­son­ally reviewed the par­tic­u­lar cir­cum­stances of your account.

Gon­za­les filed suit, essen­tially argu­ing that the Kay Law Firm wasn’t actu­ally a law firm at all, but instead a debt col­lec­tion agency that used the impri­matur of a law firm to inti­mate debtors into pay­ing. Kay filed a Rule 12b(6) motion and the dis­trict court granted it on the basis of the dis­claimer on the back of the col­lec­tion letter.

The Fifth Cir­cuit reversed. The court observed that the Sec­ond Cir­cuit had upheld a dis­missal of a FDCA claim with sim­i­lar facts, but dis­tin­guished the case on the fact that the attor­ney dis­claimer was on the front of the col­lec­tion let­ter and not the back. The court sur­mised that the back­handed way the dis­claimer was pre­sented to Gon­zles could ren­der the let­ter decep­tive. The court remanded the case to the dis­trict court and gave col­lec­tion lawyers the fol­low­ing admonishment:

We cau­tion lawyers who send debt col­lec­tion let­ters to state clearly, promi­nently, and con­spic­u­ously that although the let­ter is from a lawyer, the lawyer is act­ing solely as a debt col­lec­tor and not in any legal capac­ity when send­ing the let­ter. The dis­claimer must explain to even the least sophis­ti­cated con­sumer that lawyers may also be debt col­lec­tors and that the lawyer is oper­at­ing only as a debt col­lec­tor at that time.

A copy of the Gon­za­les opin­ion can be had here: Gon­za­les.

Tagged as: Attorney disclaimers, FDCA