Federal Court Upholds Consumer’s Right to Pick His Court of Choice

by Joseph Mullaney on November 25, 2011 · 7 comments

 

The Takeaway:

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.

The Facts:

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 Ruling:

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.”

The Cite:

Ferkler v. RCN Corporation, et al., 2:11-cv-02686 (E.D. Pa. April 21, 2011).

Tagged as: nco

  • Anonymous

    It’s smart that the consumer knew to bring the lawsuit back to a smaller court. The consumer was suing NCO for breaking State Laws not federal laws. I wonder how the consumer made out in the State court?

  • sellmore

    It’s only right that if the violations were of both federal and state law, that the plaintiff have the right to choose whether to pursue the case in federal or state court.  I believe federal courts are often harder on bad debt practices so you would think the collector would be grateful in this case.

  • Mimsey

    It’s comforting to know that if a consumer doesn’t trust that his case is going to a fair and unbiased court, there’s a chance that the courts will allow him to select a court that is more trustworthy.

  • Sean

    Well unbiased would be great but then again that would be in the perfect world too and this world is far from perfect. I think while we want the courts to work at the best they can, we still see things slipping through the cracks (like this) and people who abuse the limits they are given like we sometimes see come up in the news.

  • Jamie

    This is a common practice because they want to make it difficult for the consumer to be in court.  The debt collectors know that if you aren’t there, they will win a judgment by default and then you’re tough out of luck.

  • MaybeNot

    Relaxing the rules
    for people without the benefit of legal counsel when it comes to collection of
    debts makes sense to me. Debt collection agencies are notorious for pushing the
    limits of the law so that consumers often don’t have a chance of winning their
    case.

  • CreatureComfort

    All of our courts should be fair and unbiased. There should be no way for either a defendant or plaintiff to stack the deck in either direction. At least in this case, the consumer has a chance of getting a fair shake in being allowed to pick his court. Still, it shouldn’t matter.

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