Court Roundup


Court OKs $311K award aga inst debt collector

BILLINGS, Mont. (AP) -- A North Dakota law firm accused of trying to collect a $3,800 debt after the statute of limitations expired is now the one that owes a lot of money.

An appellate court has upheld a $311,000 jury award to a Montana man who sued the firm in 2007 over a violation of the federal Fair Debt Collection Practices Act.

Johnson, Rodenburg & Lauinger appealed the April 2009 summary judgment and damages awarded to Timothy McCollough of Laurel. The case was heard in July by a special panel of the 9th U.S. Circuit Court of Appeals in Billings, including retired Supreme Court Justice Sandra Day O'Connor.

The panel issued a decision Friday upholding the damages. They include $1,000 statutory maximum for violating the debt collection law, $60,000 in punitive damages and $250,000 for emotional distress.

"I'm just so giddy it's all over. We're finally able to take a deep breath," McCullough told The Billings Gazette on Friday. "We knew we had a good case, but it just went on forever."

McCullough said he hoped the case showed debt collectors that "people are going to know they don't have to take the garbage. They can fight back."

McCullough had old credit card debts from the 1990s and worked with companies to repay what he owed, despite a head injury that left him disabled and on Social Security, which is exempt from collections. In 2000, Chase Manhattan charged off about $3,000 in debt, The Gazette reported.

The credit card debt was sold to CACV of Colorado, which sued McCullough in Yellowstone County for $3,816 in 2005. McCullough, who represented himself, argued that the statute of limitations had expired and that he had no money. The case was dismissed.

In 2006, CACV retained JRL, a law firm that specialized in debt collection, to pursue the collection of outstanding debts it had purchased. Under its contract with CACV, JRL was "responsible to determine (its) legal and ethical ability to collect these accounts."

CACV sent information on McCollough's debt to JRL, whose screening procedures noted the statute of limitations expired Aug. 21, 2005. However, CACV also incorrectly told JRL that McCollough had made a payment in 2004, thus extending the statute of limitations.

Despite the conflicting information, JRL filed a collection complaint against McCollough in April 2007 seeking $3,816 for the debt, interest of $5,537 and $600 for attorney's fees and court costs.

In June 2007, McCollough responded that the statute of limitations had expired and this was the third time he'd been brought to court on the account. The next month, JRL sought further information from CACV and was told they didn't have any more due to the age of the account. In August, CACV told the firm that an earlier notation the statute of limitations had been extended was incorrect.

In December, CACV instructed JRL to dismiss the lawsuit because the statute of limitations had expired. JRL moved to dismiss.

McCollough then sued JRL.

The judge granted partial summary judgment on the Fair Debt Collection Practices Act claims against JRL, in part because JRL sought to have McCollough admit "facts" that were not true -- that he had never disputed the debt, that he made a partial payment in June 2004 and that every statement in the complaint was true.


Lawsuit against county jail to be class action

BOULDER, Colo. (AP) -- A federal judge has given a lawsuit challenging the Boulder County jail's policy on inmates' mail class-action status, meaning it can proceed even if individual inmates are released or transferred.

Judge Wiley Y. Daniel granted class-action status Tuesday to a lawsuit by the Colorado chapter of the American Civil Liberties Union. The ACLU's lawsuit claims the policy of restricting inmates' outgoing mail to postcards is unconstitutional because people are reluctant to freely express themselves and write about personal, sensitive information.

The policy was adopted after two sex offenders sent children letters in envelopes stuffed inside envelopes and addressed to a third party, who forwarded them.

El Paso County dropped a similar practice after the ACLU won a preliminary injunction in its lawsuit against that jail.

New Jersey

Judge tosses suit challenging sports betting ban

TRENTON, N.J. (AP) -- A federal judge has thrown out a lawsuit filed by two Democratic legislators who want to legalize sports betting in New Jersey.

The lawsuit filed last year by state Sens. Raymond Lesniak and Stephen Sweeney challenged the federal law that bans sports betting in all but four states.

U.S. District Judge Garrett Brown issued his 19-page opinion on Monday.

It says the senators had no legal standing to bring the suit, in part because New Jersey voters have not weighed in on the issue.

Lesniak promised to refile the lawsuit in November, if voters approve a ballot question that asks if the state should offer sports betting.

He believes legalized sports betting would help revive the Atlantic City casinos, which have been hurt by competition from casinos in neighboring states.

Published: Thu, Mar 10, 2011