A consumer who carefully chooses to sue a debt collector in a friendlier local court should be able to prevent the removal of the lawsuit to a foreign federal court.
A consumer sued the debt collector NCO Financial Systems, Inc. (“NCO”) and a cable company in a local Delaware County court in Pennsylvania. The court was a small claims court with relaxed rules and tolerant of unrepresented persons. The consumer alleged that the cable company turned him over to NCO for collections after he had already resolved a billing dispute with it. Despite resolution of the disputed debt prior to NCO’s involvement, NCO began collections. While NCO attempted collections, the consumer alleged that it negatively placed the debt in the consumer’s credit report.
Although the consumer could have chosen to sue under certain federal laws, say, the Fair Debt Collection Practices Act and/or the Fair Credit Reporting Act, the consumer alleged violations of only state law. However, NCO caused the local state-court lawsuit to be thrown into a far more formal and inhospitable federal court for unrepresented consumers.
The consumer challenged NCO’s moving his lawsuit out of the court he picked claiming that the allegation of state-law violations should be heard in a state court, not a federal court.
The federal court agreed with the consumer and relied upon a federal law that prevents improper removal of state-court lawsuits into federal court. In sending the consumer’s lawsuit back to the court of his choice, the federal judge said, “[the consumer] has clearly decided to base his claims on state law, and in state court.”
Ferkler v. RCN Corporation, et al., 2:11-cv-02686 (E.D. Pa. April 21, 2011).