Legal Case Summary

. But you're saying there should be a cause of action to sue someone for noticing a rule 2004 proceeding that they're really entitled to. No, no, no, your Honour, only if you do so in a way that's improper. Only if, only if such notice violates the FTCPA, in many jurisdictions, your Honour, a 2004 exam requires an application to the court. In the district of New Jersey under our local rules, no application is required. Therefore, a debt collector can notice even improperly such a deposition and in this case required in another state. And none of that would, none of that is governed by the bankruptcy code or rule. But it would be prohibited by your Honour, only if it violates the F, only if it otherwise violates the FTCPA, the way that this one does. And does it here? Yes, Your Honour, this one, this one definitely does. Why? In many different, there are a few different ways. First, it contained a subpoena that was invalid in multiple different respects. Required the debtor to attend a deposition that was out of state. Is that a violation of the FTCPA? Your Honour, it would be a threat to take an action that cannot legally be taken. It is also a false representation or implication that documents are legal process when they are not. If there was no, and that's because it violated rule 45. Yes, Your Honour. If there's no issue on rule 45. If the subpoena had been compliant, there were other issues with the business. Is this a subpoena? The document appeared to be a subpoena. Did it say it was a subpoena? I do not recall off the top of my head with it, specifically it was a subpoena. It appears to be a subpoena

. That is the way that attendance is compelled at a 2004 examination under our local rules in New Jersey. It is to send a subpoena. The FTCPA standard is the least sophisticated debtor. Notice of examination in accordance with FRBP2004 and local rule2004-1. Yes, Your Honour. Signed by a lawyer, it's not a court issued at all. Yes, Your Honour. It's not court issued. Is that a subpoena? It looks like a subpoena, yes. It's a quack like a subpoena. The point is that the least sophisticated debtor might not realize that he or she is not required to comply with the subpoena. Because it was faulty and effective as the bankruptcy court. Is this permissible under the bankruptcy code? Not as it is formulated, Your Honour. It would have a lawful subpoena would have been permitted under our local rules and also under rule2004. This is permissible under the bankruptcy code. You're saying it can still be a basis for a cause of action under the Fair Debt Collection Practices Act? Yes, Your Honour. In addition, there were other aspects about this. That is exactly the era-consailable conflict that you were talking about. There were other issues with respect to this communication. Notably, it did not contain the disclaimer in 15 USC, 1692, E

.M. There are two many maranhas in the morning, Your Honour. One is in G and one is in E. It contained the many maranhas in G about the debt validation. It did not contain the many maranhas that the debt collectors attempted to collect a debt. And that any information may have used for that purpose. The FTCPA is a strict liability statute that applies only to debt collectors and specifically regulates their communication. It doesn't apply to debt collectors so that people are not harassed and therefore have to file bankruptcy. Why does the spirit of the FTCPA on the policy behind it? How is that really animated in a bankruptcy proceeding? Typically, Your Honour, in a bankruptcy proceeding, it is not. It is only under certain circumstances such as this one. There are many different reasons for the FTCPA and the findings within this statute about abuse of debt collection practices. In this case, we are talking about a couple who, when reviewing the documents, would have believed that they had to take a day off from work and travel to New York and produce a whole bunch of documents. They didn't get the documents. They never. Your Honour, yes, they did. The lawyer did. Your Honour, that is the same under the third circuit of the Ellen versus LaCelle. There is no distinction there. And frankly, I didn't realize until looking at it later that they didn't get it. That it was not the first that they did not get it

. That it did not comply with the FTCPA or with the subpoena with the rule 45. But then you're back to the rule 45 argument. Yes, Your Honour. You have to look pretty closely to realize all of the different ways in which the subpoena was defective. Let me ask you a question. Are you saying that because these two statutory schemes do not conflict at all, and we therefore never really look at what happened to see if it's in conflict, but you take the language in Randolph that there is no stated legislative preemption in either of the laws. So therefore they necessarily both apply at all times. Your Honour, there are instances in which the FTCPA and the bankruptcy code do overlap. Do overlap. Do overlap. Do run into each other so that they don't both so that the FTCPA doesn't apply. I would give it just as an example of the discharge injunction that that that is discharged is potentially actionable under the, when it when it when it's credit or attempts to collect a debt that has been discharged as potentially actionable under 524 of the bankruptcy code, it's also potentially actionable under under the FTCPA. And that's the context in which all of these cases that with which I disagree arise where you get to discharge. You should be able to be to sue under the FTCPA. Your Honour, yes, you should be able to sue either under the FTCPA for a debt collector or a where it's a creditor you should be able to pursue. You have two remedies to add to each other. They're they don't conflict with each other. They don't conflict each other well. How about the proof of claim situation? Proof of claims, obviously a proof of claim that bankruptcy court has the ability to deal with a proof of claim. It can strike the proof of claim through the adjabment process of the court could deal with these

. You're on the issue. Your honor not the most of the bankruptcy court could do here was to what the bankruptcy court did, which was quasheless and subpoena. The bankruptcy court cannot provide any redress for the debtor. In fact, the debt collector here had not even submitted to the. How about thank you for having attorney's fees? Your honor, if you're looking under 9,011, none of these documents were ever submitted to the bankruptcy court. Well, but they could have been that is that they there would have been a sanctioning authority. I think a bankruptcy does might be startle to know that he or she was without the ability to deal with a violation of a rule or procedure governing a 2004 notice or subpoena if one occurred. In a situation where an application has been made to a bankruptcy court and the court could review the documents to see whether they were appropriate. That is a different context from what we have here where none of the documents were required to be submitted to the bankruptcy court before being sent to the consumers. Can I ask a follow up one your question about the potential conflict? Is there any way in which the failure to include the mini marandal language about maybe use for debt collection purposes? Which you say is required by the FD CPA and actionable if it's not included. Is there any way in which including it would expose the creditor to a violation or liability under the FD CPA? No, under the bankruptcy court. Whether that might violate the automatic state by saying, well, by the same token that this notice indicated that it was not an attempt to collect a debt. It also could provide that this indicated that it was not an attempt to collect a debt for the purposes of the automatic state. There's nothing that says you couldn't put in this notice that they're not attempting to collect a debt. Which in fact they weren't. But that could have been phrased in a way to indicate that the automatic state that they're attempting to negotiate a resolution rather than trying to directly collect the debt. But the FD CPA language as I understand it would require them to say this is an attempt to collect that. I think the point of that is not so much to say that the debt collector is attempting to collect a debt but that any information will be used for that purpose. And I think that there is a distinction between acknowledging that the debt collector in this case is in the process of something that's in connection with the collection of any debt, which is what the standard is. And the actual attempt to collect money or get money from the consumer

. I guess I'm worried about your distinction because there's case law that says that attempts to negotiate or resolve or settle are attempts to collect a debt. So how can the creditors say this despite all appearances to the contrary and despite the fact that at the end of the day I want your money. This is not an attempt to collect a debt. And one way to get the money is to challenge this chargeability. You're on I think that the cases with respect to the automatic state tend to be very specific whether they're clearly trying to and threatening some sort of action or trying to collect the a not so much trying to try to this one might argue this is a way around the automatic state. You're trying to coerce a debt or into paying by threatening to trade and do another state for a deposition. However, when looking at the automatic state, I do not think any of the automatic state cases would specifically apply to this action. I have two more questions. One of which I'm surprised at your answer on the proof of claim because when proof of claim and your concession there that the FTCPA doesn't apply because the proof of claim will be allowed or disallowed by the court. You're on I didn't mean to concede that the that the FTCPA does not not necessarily the cases are. I asked you if they're totally you know or totally separate and they both can and exist and you said in that situation the court can resolve proof of claim. So therefore absolutely that could be resolved under either under either three thousand seven of the rules of bankruptcy procedure or potentially if the proof of claim some in some way is false deceptive or or is leading might fall under the. It can be this will be a cause of action for it that would be only on the FTCPA so I'm surprised. Yes, I agree with that. So is I get back to my question. Is there any instance in which you would say that there would be a conflict between the two. I think there are instances in which there might be a conflict. I think that in the instances in which those arise that could be addressed. This doesn't happen to be one of them. The bankruptcy not the bankruptcy rules are applied to apply this

. The second question is once and I did bankruptcy law. It's a long time ago so I'm dangerous but once you know when someone a lawyer gets the debtors lawyer gets this notice has to do with a discharged ability proceedings is going to be filed. Decision of what to do with respect to that whether to settle this or whatever that comes before the court that if the if the debtor were to then say oh yes and write a check. That that's not going to happen because if this debt is non-dischargeable the other debtor the other creditors are better off. Because it's going to pass through the proceeding you're not going to have to pay any money on account of it. So this is the kind of thing that the court is going to have to approve. So it's not the kind of harass for us for money to be paid over that happens outside the bankruptcy. Doesn't the context of the bankruptcy really matter here? It does you're on it though I would say that the approval of the payment of the money only occurs if there's either a reaffirmation agreement or a settlement with respect to the end of the which record is not what's happened. If in the context if if well if something is going to be paid to this creditor outside of a plan or outside of a distribution under you know chapter seven the court somebody's going to have to okay that this is not something where they're just going to write a check because they don't want to receive phone calls. You're on your own in theory you're correct in practice I wouldn't necessarily say so and I think particularly in the context this these that has happened not to be prosay but if you were looking at a pro say better they very much they very likely might write a check or call the creditor rather than submit to the possibility of an on discharge ability proceeding. Wow. I wouldn't want to go for the bankruptcy judge and say that I did that but know what I know what I'm going to. Okay we'll hear from you on the bottle. May it please the court my name is Susan Johnston I remember of the firm Weinstein and Riley representing the appellees in this case if I a card services in a and the law firm Weinstein and Riley and just to pick up on the last comment your honor neither would I know circumstances would what my firm on behalf of any of our clients. So we represent across the country engage in the settlement with a pro say better that we did not bring to the court for approval that would never happen well by the same token if you believe there's a basis for discharge non-dusturge ability why don't you just file the non-dusturge ability complaint rather than sending a letter that says you know we can settle this and you know you can pay now and avoid all this aggravation which is you know could be subject to the FTCP. Well I have a couple of different answers to that your honor one is that we have found it useful in many courts many bankruptcy courts have found it useful to engage in prefiling discussions with the opposing counsel to determine whether there is in fact the ability to prove intent which is always the problem in these cases we know what the charges are in a non-dusturge ability context what we don't know is the we don't always have all of the objective factors. So I think that the judges that the courts have permitted us to rely upon to prove the subjective intent factor so that these prefiling conversations are often useful in identifying either cases where we cannot prove intent because they give us facts that we need to know and that would refute our ability to bring up on a fish case. But then why do you include in there you know pay now x dollars pay overtime x dollars I mean it's really to try to to figure it out and notice the proceeding why not just send the notice that we don't know so we're going to have a we're going to have a certainly one way to do it one of the things that we're hoping to accomplish however is is to get the runner well you're on earth now that's a very that's a very important point that you just make because there is a very important distinction between the the prefiling communications about non-dusturge ability complaint. And that collection this is not a demand there's nothing in this letter that says this is a demand for payment the reason why we did not make the the many many many Miranda is because we are not acting is it that collector wouldn't the least sophisticated that are read it that way I don't think so your honor because I think that the language of the letter that we sent makes it very clear that it is not a demand there's nothing in there about a demand it doesn't say that it says that we believe that we have a complaint we believe you all and here's this count it's a now it doesn't actually say that your honor I don't think it actually says that it actually look at the language of the letter with the two numbers I mean before you occur the cost of our plan is willing to provide this guy settling the account yes that's right it does it does say that but it's not a demand for the begins by saying that we believe that we have a complaint for non-dusturge ability now isn't there case law that says that that kind of settlement over sure is a part of a deck collection your honor there is case law that says that I'm not aware that it says that in the context of a 523 complaint within the bankruptcy case in other words if you write a letter before anybody's fall for bankruptcy and you say those things then yes I think I would have to agree with your honor that there is case law that says that that is that that is an aspect with that collection I do not agree I have not seen and I have not seen cases in the 523 context that say that it is a violation of the FDCPA for a creditor's lawyer to write a letter to the debtors lawyer saying we believe that we may have a 523 a complaint we'd like to talk to you about it we may take discovery but in the meantime if you want to resolve it we're happy to resolve it so it's a it's a conversation that is often productive in resolving these things some of the time we don't sue people because of hardship some of the time we don't sue people because we receive information from the debtors lawyer in this context you're drawing a distinction between a letter that you would send to a lawyer on the one hand a letter that you would send merely to a debtor I'm not necessarily drawing that distinction but I do think it's important that in this case the letter went to the lawyer because there is authority for the proposition that you don't violate the FDCPA by sending a letter to a lawyer that's important I think we're pretty tough on that in our circuit there is a case in the in the search circuit that suggests that it is a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that doesn'taris the lague in the operation process So, you know, some money comes into the estate. There may be an automatic stay against actions against the debtor, but there's nothing as they debtor should waive or forego assets, which would be a cause of action here

. And there's nothing in the Fair Declire to practice that says, oh, by the way, you know, if you're in bankruptcy, you know, it's different. You might make it- Is money coming to the estate? Well, this money would not in a chapter seven, it would not come to the estate. In a chapter 13 it might. Well, because it may as the date of violate the- Right. In a seven, it would not come to the estate in a 13. It's not going to benefit anybody else, but the- But the debtor and the lawyer, because the lawyer always asks for attorney's fees and that's the same. I can't be able to pay costs. Now, man, make an- In answer to the panel asked questions about the availability, about whether there was a conflict between the FTCPA and the Bank of St. Asgim and which- And precisely the question, if you- I could interrupt- Yes. Yes, is whether if you did put the language in that plaintiff's counsel says was required under the FTCPA that the information gathered could be used as part of a debt collection effort or would that expose you to a violation of the automatic state? You know, I think it certainly exposes to a lawsuit, not unlike this lawsuit. I also think it would not be true in a letter like this in a 523-A context, because we're not seeking the information to collect the debt. We're seeking the information to determine whether or not the debt is just chargeable. And it's different information. The- The category of information that we need to extract in order to prove fraud and non-distartibility is different from the category of information that may be some overlap. But generally speaking what you're looking for is pattern and practice of charges employed in employment, income, anticipation, that sort of thing. And- And so, in answer to your question, it- I don't know that it would expose us to liability because- But I think it might expose us to criminal lawsuits for sure. And it might expose us to liability if the court thought that what we were actually trying to do is collect a debt instead of trying to determine non-distartibility. So I think that risk is there. If I understood the argument that Opposition Council made, it was that in order to avoid this kind of damned if you do damned if you don't situation, you should have put language in your notice of the 2004 examination and invitation to talk, something to the effect that this is not information, an effort to obtain information that will be used in connection with that collection efforts. Well, you're under- You're under- Does that give you concern? How do you respond to that? If- If the court ruled that- If the court were inclined to formulate a safe harbor along the lines of the seven circuit safe harbor, Judge Posner has written several decisions saying, I can't make you do it, but I can tell you if you do it this way, you won't be liable in my court for an FDCPA violation

. If the court were inclined to say something along the lines of, if you're going to write a letter to a debtor and or his council in a bankruptcy context in which you're seeking- In which your ultimate goal is to obtain a verdict that the judgment that is not undisturbed, if you include this language along the lines that you're under just indicated, then you would not be liable. You know, I can't quarrel with that because what I want to do is achieve clear standards that we can comply with so that we're not subject to lawsuit. Is it true? Is it true that if- Is it true that if language that the information is not going to be sought as part of a debt collection effort? I think it's true, you're under- Because I think there's an important distinction to be made between suit on a debt, suit on a contract that you bring in state court on the one hand and an action to determine the non-distribbility of the debt and bankruptcy court on the other hand. I think that's really important and I think it's really important to separate those concepts in a- in a- I don't know how to characterize it. In a sense, it's not true because of course at the end of the day what we want is a determination that the debt is not dischargeable so that we can collect it. So in that sense, it's not true but it's a real difficult land wall. Isn't it just an opportunity for you on behalf of your client to try to sidestep getting in line with everyone else? No, we're already in line with everybody else in the sense that we have a- in the debt or schedule, is it scheduled our claim? No, no, no, no, I'm sorry. I'm sorry. I'm sorry, I'm sorry. I'm sorry, I'm sorry. Isn't your letter an attempt to sidestep getting in line? I mean, your- you- you send the letter, your hope is that the language induces action and the action that you seek to induce is payment now. No. Sorry, go ahead. I'm sorry. Well, it's not payment now. I mean, if in response to this letter, the lawyer says, hey, we should pay this now, maybe maybe that's not good. Bankruptcy Council, advice, but he says, hey, whatever the numbers are, instead of, you know, you owe 11,000 plus, you'll owe 9,000 plus, maybe I can get them now to 8,000, let's pay. I mean, that's what you're really seeking. So I don't really understand this notion that we're seeking a statement of non- just dischargeability. I mean, you're seeking to go out the debt

. But, Your Honor, the bankruptcy code gives me a remedy. It gives all creditors' remedies to examine the circumstances surrounding the incurrence of the debt. And if the creditor believes that the debt was incurred in violation of Section 523A of the bankruptcy code, we have a remedy, which is that we can sue for non- just chargeability. And then the debt are coming out of the proceedings. It's going to have to pay that. He's going to have to pay that debt. Now, we have the right to do that. We have an absolute right under the bankruptcy code to bring that lawsuit if we can, if we can allege a prime- if it's your case. Now, the benefit is just like any other time you're going to bring suit, you don't just file suit, you send a letter saying, you know, this is going to happen. This is going to happen. So if you want to avoid it, you can avoid it. Your Honor, this is a, this is also a very important point as far from my perspective. And one possible rid of this is the court will rule that we can have no pre filing communications with the debtor. That would put a burden on creditors like my clients that I'm not aware shared by any other credit or in any other context. In my experience, I spent most of my bankruptcy career practicing big firms representing large companies in chapter 11 cases. You would normally not, you know, surprise somebody with the lawsuit. Normally you might draft it and send it to your opposing counsel. You might say, we think you might call them up and say, I think you screwed up. I have a claim against you. Well, I said this thing from here. We'd be requiring you to pick up the phone instead of sending a letter. What I don't, and we do that sometimes to your Honor. I mean, the point is, the point, the point that's really important about this is I don't, I should step back for just a minute and say that I am not defending the rule 2004 notice. I don't disagree that there were some problems with it. And obviously the court quashed it. But I would say that a rule 2004 subpoena is a remedy that's available to me in the bankruptcy code. And that if you, and that there are therefore remedies for improper 2004 subpoenas in the bankruptcy court that they achieved, they got that, they got it quashed. Also agree with your Honor that if we did something really wrong, the court could do something about it. And why should we not have let the debtor have a cause of action that's provided under the FDCPA for something that's wrong? Because there will be no cause of action in the bankruptcy court. They'll be just slap on the wrist or whatever. Oh. No, no affirmative remedy. Not necessarily. I mean, I don't think you can assume that the bankruptcy court would view the kind of deliberate pattern in practice that is alleged in this complaint as something that should be resolved with a slap on the wrist. I really, I don't think they would do that. I just want to follow up with two other points. Do you agree that this is in effect a subpoena? It's a, no. It can be enforced, pursuant to rule 45, if need be. But I don't agree that this document itself on its face is a subpoena. It's a notice of 2004 exam

. We'd be requiring you to pick up the phone instead of sending a letter. What I don't, and we do that sometimes to your Honor. I mean, the point is, the point, the point that's really important about this is I don't, I should step back for just a minute and say that I am not defending the rule 2004 notice. I don't disagree that there were some problems with it. And obviously the court quashed it. But I would say that a rule 2004 subpoena is a remedy that's available to me in the bankruptcy code. And that if you, and that there are therefore remedies for improper 2004 subpoenas in the bankruptcy court that they achieved, they got that, they got it quashed. Also agree with your Honor that if we did something really wrong, the court could do something about it. And why should we not have let the debtor have a cause of action that's provided under the FDCPA for something that's wrong? Because there will be no cause of action in the bankruptcy court. They'll be just slap on the wrist or whatever. Oh. No, no affirmative remedy. Not necessarily. I mean, I don't think you can assume that the bankruptcy court would view the kind of deliberate pattern in practice that is alleged in this complaint as something that should be resolved with a slap on the wrist. I really, I don't think they would do that. I just want to follow up with two other points. Do you agree that this is in effect a subpoena? It's a, no. It can be enforced, pursuant to rule 45, if need be. But I don't agree that this document itself on its face is a subpoena. It's a notice of 2004 exam. I mean, the pattern in practice, the practice in bankruptcy court when you want to obtain discovery under rule 2004 is to serve a notice of examination under rule 2004. If you have to enforce it against the third party, you have to get a subpoena. Or you have to get a bankruptcy court order authorizing you to do it. So if there was a failure to comply with rule 45's requirements, what you're saying is that it doesn't, that there's no exposure under the FDCPA because of those deficiencies, because this was not technically a subpoena. I'm not really arguing that you're on, or I think my argument on the subpoena part of it is that it's, first of all, it was never served on the debtors. It only went to the debtors council. And I do believe, I mean, in the fact that it only went to debtors council means that it was in effect the notice as opposed to a subpoena. We certainly didn't attempt to enforce it as a subpoena. We didn't serve it on them as a subpoena. We didn't attempt to enforce it as a subpoena. I'm not trying to dance around this. I'm really not. I really think that the real issue here is not so much that there were mistakes in the subpoena, but that this, or in the notice, sorry. My point is not so much that there were not mistakes in it because I, you know, frankly, you're under as Mr. Winchell, if he was the one who signed it. I mean, obviously, I'm not the attorney who signed it, but I wouldn't have, I wouldn't have written it that way just so you know, I want to do it better than that. But, but my point is that because we're entitled under the bankruptcy code and the bankruptcy rules to send, to engage in prefiling 2004 examinations, my point is that the remedy, the remedy is under that, is under the bankruptcy code rules and that you don't need this, you know, a year later, when they've already gotten the motion plot, they've already gotten the subpoena plot, if you're later, they sue us saying that there are all kinds of things wrong with it. I mean, it's over. We never even, we never filed a lawsuit against them. Let me ask you a question

. I mean, the pattern in practice, the practice in bankruptcy court when you want to obtain discovery under rule 2004 is to serve a notice of examination under rule 2004. If you have to enforce it against the third party, you have to get a subpoena. Or you have to get a bankruptcy court order authorizing you to do it. So if there was a failure to comply with rule 45's requirements, what you're saying is that it doesn't, that there's no exposure under the FDCPA because of those deficiencies, because this was not technically a subpoena. I'm not really arguing that you're on, or I think my argument on the subpoena part of it is that it's, first of all, it was never served on the debtors. It only went to the debtors council. And I do believe, I mean, in the fact that it only went to debtors council means that it was in effect the notice as opposed to a subpoena. We certainly didn't attempt to enforce it as a subpoena. We didn't serve it on them as a subpoena. We didn't attempt to enforce it as a subpoena. I'm not trying to dance around this. I'm really not. I really think that the real issue here is not so much that there were mistakes in the subpoena, but that this, or in the notice, sorry. My point is not so much that there were not mistakes in it because I, you know, frankly, you're under as Mr. Winchell, if he was the one who signed it. I mean, obviously, I'm not the attorney who signed it, but I wouldn't have, I wouldn't have written it that way just so you know, I want to do it better than that. But, but my point is that because we're entitled under the bankruptcy code and the bankruptcy rules to send, to engage in prefiling 2004 examinations, my point is that the remedy, the remedy is under that, is under the bankruptcy code rules and that you don't need this, you know, a year later, when they've already gotten the motion plot, they've already gotten the subpoena plot, if you're later, they sue us saying that there are all kinds of things wrong with it. I mean, it's over. We never even, we never filed a lawsuit against them. Let me ask you a question. The under 2000s for the notice actually should be served on the debtor. Should it not? Under 2000s. Yes, if you want, if you want to get it enforced. See, that's my point, Your Honor. I wasn't there at the time this was done. I didn't write it. I didn't sign it. If I, and the record doesn't show what was intended by the lawyer, I mean, this was a motion to dismiss. So the record is relatively undeveloped. But my belief, I mean, if I had to guess, my belief is that what he was trying to do was demonstrate to the opposing counsel two things. One is the kinds of facts that he might want in order to resolve this, either formally or amicably. And two, I know what a rule of 2004 is, you know, I can, but he didn't attempt to enforce it. So there was absolutely no prejudice or damage suffered by the debtors in this case. I mean, I assume they saw it because the lawyer gave it to him. One more question, if I'm right. You're argument that this was simply a discussion that you were trying to initiate and that there was no need to put in language, the FDCPA required language that the information could be used for the purpose of debt collection because you weren't going to use it for that purpose. That's correct. But if you had put in the language that plaintiff's counsel urges, something to the effect that this information will not be used for debt collection purposes, would you, in order to avoid a conflict with the automatic stay? Would you be precluded from ever using any of the information you gathered if settlement failed in pursuing discharge ability? Well, you might be your honor. You might be and you certainly would face that challenge from them. Is it technical matter under rule 2004, that the information that you get may or may not be admissible in the underlying lawsuit? So it might be a roadmap for further discovery, but I think you've faced that challenge, absolutely

. The under 2000s for the notice actually should be served on the debtor. Should it not? Under 2000s. Yes, if you want, if you want to get it enforced. See, that's my point, Your Honor. I wasn't there at the time this was done. I didn't write it. I didn't sign it. If I, and the record doesn't show what was intended by the lawyer, I mean, this was a motion to dismiss. So the record is relatively undeveloped. But my belief, I mean, if I had to guess, my belief is that what he was trying to do was demonstrate to the opposing counsel two things. One is the kinds of facts that he might want in order to resolve this, either formally or amicably. And two, I know what a rule of 2004 is, you know, I can, but he didn't attempt to enforce it. So there was absolutely no prejudice or damage suffered by the debtors in this case. I mean, I assume they saw it because the lawyer gave it to him. One more question, if I'm right. You're argument that this was simply a discussion that you were trying to initiate and that there was no need to put in language, the FDCPA required language that the information could be used for the purpose of debt collection because you weren't going to use it for that purpose. That's correct. But if you had put in the language that plaintiff's counsel urges, something to the effect that this information will not be used for debt collection purposes, would you, in order to avoid a conflict with the automatic stay? Would you be precluded from ever using any of the information you gathered if settlement failed in pursuing discharge ability? Well, you might be your honor. You might be and you certainly would face that challenge from them. Is it technical matter under rule 2004, that the information that you get may or may not be admissible in the underlying lawsuit? So it might be a roadmap for further discovery, but I think you've faced that challenge, absolutely. So what do you do with it? Forget it? And that's, how does that continue? How does that continue? I don't consider it practice. I don't think that we should have to put that disclaimer in these letters because I don't think that we are trying to collect debts in these letters. I think if we did put it in the letter, it would expose us to hazards down the road in the ultimate lawsuit. And if you don't put it in the letter, you're obviously subject to suit under the FD CPA because here you are. Unless and less, unless, you know, we get a rule from this court that is consistent with the decisions in these three other cases that I'm aware of that say that under in this context, this is not covered by the FD CPA. I mean, I think just one, one, I have one last question. Would you advocate that analysis along the lines of Randolph, but finding that indeed the conflict exists? You know, I think you're under that that would be the conservative approach. I think that as I read these cases, there is, there does seem to me to be an evolving trend. The lower courts, some of the lower courts are saying that when the claim would require specific discussion, determination, analysis of bankruptcy code and rules, you should not import FD CPA remedies. That is kind of a broad rule that seems to be kind of derived from the increasing variety of cases in which this kind of ruling has been held. I don't think the court needs to go there to resolve this. And I'm not sure that the case law has developed enough for the court to be comfortable with that. I mean, we have sporadic incidents, you know, examples here and there. You know, the discharging junction through the claim context, maybe 363, you know, maybe in my case, 523, we have a number of different areas spots on the map where courts have said FD CPA remedies should not be imported. But I'm not sure that I'm not sure the court would be comfortable going there at this point given the relatively undeveloped nature of the jurisdiction. There's a middle ground in here at least. It looks like there is at least an argue basis for non-disgirability given the dates and the drawdown of monies might even draw a distinction that, you know, it has to, you know, it's a duck or a crack. It looks like a valid. At least it's at least adjusted as further inquiry, which is what the goal was. The one last point that I was making

. So what do you do with it? Forget it? And that's, how does that continue? How does that continue? I don't consider it practice. I don't think that we should have to put that disclaimer in these letters because I don't think that we are trying to collect debts in these letters. I think if we did put it in the letter, it would expose us to hazards down the road in the ultimate lawsuit. And if you don't put it in the letter, you're obviously subject to suit under the FD CPA because here you are. Unless and less, unless, you know, we get a rule from this court that is consistent with the decisions in these three other cases that I'm aware of that say that under in this context, this is not covered by the FD CPA. I mean, I think just one, one, I have one last question. Would you advocate that analysis along the lines of Randolph, but finding that indeed the conflict exists? You know, I think you're under that that would be the conservative approach. I think that as I read these cases, there is, there does seem to me to be an evolving trend. The lower courts, some of the lower courts are saying that when the claim would require specific discussion, determination, analysis of bankruptcy code and rules, you should not import FD CPA remedies. That is kind of a broad rule that seems to be kind of derived from the increasing variety of cases in which this kind of ruling has been held. I don't think the court needs to go there to resolve this. And I'm not sure that the case law has developed enough for the court to be comfortable with that. I mean, we have sporadic incidents, you know, examples here and there. You know, the discharging junction through the claim context, maybe 363, you know, maybe in my case, 523, we have a number of different areas spots on the map where courts have said FD CPA remedies should not be imported. But I'm not sure that I'm not sure the court would be comfortable going there at this point given the relatively undeveloped nature of the jurisdiction. There's a middle ground in here at least. It looks like there is at least an argue basis for non-disgirability given the dates and the drawdown of monies might even draw a distinction that, you know, it has to, you know, it's a duck or a crack. It looks like a valid. At least it's at least adjusted as further inquiry, which is what the goal was. The one last point that I was making. I'm sorry. I mean, I interrupted you. I'm not supposed to do that. The one last point that I would make is that, and I think the court can reach this is that FIA card services in is not a debt collector. And therefore not subject to the FD CPA in the attorney's. The attorney was. But if you're acting for, but if you're acting, well, then maybe, maybe reliable and they're not. My point is, my client, if FIA card services is not a debt collector, it's either the successor interest to the original holder in the NA bank or which makes it a creditor, which makes it a creditor and it's not illegal for a creditor. So, but the lawyer. The lawyer is a debt collector under our. I'm not, I'm not arguing about that, Your Honor, but, but, but, but I think the, the allegations in the complaint, there is an allegation in the complaint that FIA card services is a debt collector, but it's a bare bones conclusion. Reallocation. The court can take judicial notice of Bank of America's 10Q, which says that FIA card services is the bank. I mean, and there's a case. Okay. So, so at the very least, at the very least, FIA card services should, under no circumstances, have any liability here. I would also obviously submit for all the above reasons that neither should not law firm because the letter was sent to a lawyer, which we thought was justified. The letter was sent in the context of F23A, etc. Thank you. Thank you

. I'm sorry. I mean, I interrupted you. I'm not supposed to do that. The one last point that I would make is that, and I think the court can reach this is that FIA card services in is not a debt collector. And therefore not subject to the FD CPA in the attorney's. The attorney was. But if you're acting for, but if you're acting, well, then maybe, maybe reliable and they're not. My point is, my client, if FIA card services is not a debt collector, it's either the successor interest to the original holder in the NA bank or which makes it a creditor, which makes it a creditor and it's not illegal for a creditor. So, but the lawyer. The lawyer is a debt collector under our. I'm not, I'm not arguing about that, Your Honor, but, but, but, but I think the, the allegations in the complaint, there is an allegation in the complaint that FIA card services is a debt collector, but it's a bare bones conclusion. Reallocation. The court can take judicial notice of Bank of America's 10Q, which says that FIA card services is the bank. I mean, and there's a case. Okay. So, so at the very least, at the very least, FIA card services should, under no circumstances, have any liability here. I would also obviously submit for all the above reasons that neither should not law firm because the letter was sent to a lawyer, which we thought was justified. The letter was sent in the context of F23A, etc. Thank you. Thank you. Thank you. You know, I have a few points I'll try to hit them briefly. One thing these to be clear is that the standard is in connection with the collection of any debt. It is not that you're specifically trying to collect it. The standard is more broader than please pay now, even though that's what the letter essentially is encouraging doing. Assume we write the opinion your way. How would it read? What would we say? That the FDC PIA continues to apply during a bankruptcy case. No matter what. Well, to the extent that there is a conflict between the FDC and the FDC PIA and the bankruptcy code, that can be addressed in a case where there is a conflict. Well, how could we tell the lawyer for Winston Riley what to put in the notice that would not violate his decision? A simple letter to contact. Please contact it. Why is it in Riley? We have a question about your client. The differences are all the phone versus something in writing. I get these calls on a regular basis from creditors. In fact, I do do the one right now where they have not brought it. They have not served it in 2004. They simply contact. I would not just say that's an odd application of the FDC PIA. Well, depends on what the contact, depends on what the correspondent says. What do we tell them to say in a way that would keep them from violating the FDC PIA? While they are availing themselves of their 2004 examination rights? The sending a proper subpoena, proper lawful 2004 examination demand with a subpoena, something that would be

. Thank you. You know, I have a few points I'll try to hit them briefly. One thing these to be clear is that the standard is in connection with the collection of any debt. It is not that you're specifically trying to collect it. The standard is more broader than please pay now, even though that's what the letter essentially is encouraging doing. Assume we write the opinion your way. How would it read? What would we say? That the FDC PIA continues to apply during a bankruptcy case. No matter what. Well, to the extent that there is a conflict between the FDC and the FDC PIA and the bankruptcy code, that can be addressed in a case where there is a conflict. Well, how could we tell the lawyer for Winston Riley what to put in the notice that would not violate his decision? A simple letter to contact. Please contact it. Why is it in Riley? We have a question about your client. The differences are all the phone versus something in writing. I get these calls on a regular basis from creditors. In fact, I do do the one right now where they have not brought it. They have not served it in 2004. They simply contact. I would not just say that's an odd application of the FDC PIA. Well, depends on what the contact, depends on what the correspondent says. What do we tell them to say in a way that would keep them from violating the FDC PIA? While they are availing themselves of their 2004 examination rights? The sending a proper subpoena, proper lawful 2004 examination demand with a subpoena, something that would be. Who determines proper? Well, you're under the. If it's under rule 2004, the bankruptcy code. The bankruptcy code would determine whether it's lawful. I said in New Jersey, they don't go to the bankruptcy code first. It has to be in the appropriate form. But if the proper subpoena, as you describe it, had to include language that says information obtained, maybe used for the purpose of debt collection, would that violate the automatic state? You're under that would not necessarily violate the automatic state. Is card services at debt collection? I understand. The FIA card services is a debt collector. The way that the FDC PIA is written with respect to creditors is somewhat ambiguous. It is not the same term as we use it in the bankruptcy code. It's not clear whether with a FIA card services, we don't have the facts yet to know whether they actually own the account or whether they were collecting a front collected for MBNA. But presuming that the success or an interest in the own it, they're not a debt collector, are they? They're creditors. I think there's more involved as to whether they're a debt collector. Did they file a proof of claim? You're under the Chapter 7 No Asset Case, so no. So, let me ask a different question. Would you concede that they're not a debt collector? I would concede this under certain circumstances. They might not be a debt collector. We wouldn't know until we did discover just to whether they were offering a debt collector here. So you're saying that this paragraph in the event, it's covered by the FDC PIA, they should say. And in the event, we're attempting collected debt, but we're not attempting collected debt

. Who determines proper? Well, you're under the. If it's under rule 2004, the bankruptcy code. The bankruptcy code would determine whether it's lawful. I said in New Jersey, they don't go to the bankruptcy code first. It has to be in the appropriate form. But if the proper subpoena, as you describe it, had to include language that says information obtained, maybe used for the purpose of debt collection, would that violate the automatic state? You're under that would not necessarily violate the automatic state. Is card services at debt collection? I understand. The FIA card services is a debt collector. The way that the FDC PIA is written with respect to creditors is somewhat ambiguous. It is not the same term as we use it in the bankruptcy code. It's not clear whether with a FIA card services, we don't have the facts yet to know whether they actually own the account or whether they were collecting a front collected for MBNA. But presuming that the success or an interest in the own it, they're not a debt collector, are they? They're creditors. I think there's more involved as to whether they're a debt collector. Did they file a proof of claim? You're under the Chapter 7 No Asset Case, so no. So, let me ask a different question. Would you concede that they're not a debt collector? I would concede this under certain circumstances. They might not be a debt collector. We wouldn't know until we did discover just to whether they were offering a debt collector here. So you're saying that this paragraph in the event, it's covered by the FDC PIA, they should say. And in the event, we're attempting collected debt, but we're not attempting collected debt. And you're on it. You should be used. We should clarify one point. We should clarify one point again. That the E11 provision only applies to the initial communication with the consumer. It does not apply to all subsequent communications. I'll say in a lot of these phone calls, someone will simply repeat that to me. And I don't consider that a state violation to give the mini Miranda to disclaimer within the FDC PIA. I much prefer to hear it than to think that they might be calling my client and not giving that mini Miranda. I want to point out something about F5203, which is the non-destarchable information. If they had brought the case and it had turned out to be inappropriate, they would be potentially liable for cost and attorney fees under 523D. I think that's one of the reasons that they don't bring the cases initially, is that particularly in this case, they really didn't have a basis for it. There was no basis at all for it. Well, but they don't know. I mean, if the timing and the withdrawal of the money fits, you don't know. And rather than just bringing the case, they could notice a lawful 2004 examination. That's the point. The communication says if there's going to be communications either with the debtor or the debtor, that's capital, they must be truthful. They must be lawful. They must be accurate

. And you're on it. You should be used. We should clarify one point. We should clarify one point again. That the E11 provision only applies to the initial communication with the consumer. It does not apply to all subsequent communications. I'll say in a lot of these phone calls, someone will simply repeat that to me. And I don't consider that a state violation to give the mini Miranda to disclaimer within the FDC PIA. I much prefer to hear it than to think that they might be calling my client and not giving that mini Miranda. I want to point out something about F5203, which is the non-destarchable information. If they had brought the case and it had turned out to be inappropriate, they would be potentially liable for cost and attorney fees under 523D. I think that's one of the reasons that they don't bring the cases initially, is that particularly in this case, they really didn't have a basis for it. There was no basis at all for it. Well, but they don't know. I mean, if the timing and the withdrawal of the money fits, you don't know. And rather than just bringing the case, they could notice a lawful 2004 examination. That's the point. The communication says if there's going to be communications either with the debtor or the debtor, that's capital, they must be truthful. They must be lawful. They must be accurate. They can't do things like tell the lawyer we sent you this document to your client falsely when they didn't send it to the client. They shouldn't include a subpoena that indicates a scope that is inclined for something broader than whether they could establish fraud. If you look at this, this is more than necessary. It establishes the possibility that the charges might have been fraudulent and non-destarchable. It's just very, say one last thing to be clear, this occurred at the very beginning of a case, which happened in the seven cases, it could have been converted to a chapter 13 case, had it been converted. In fact, this case would have stayed in the bankruptcy court because it would have flowed to the benefit of the estate. It was just that the discharge was entered before we were able to resolve this case, and therefore we did not get a verdict. Okay. Great. Thank you very much. We'll argue and take it under advisement.

Case, Robert Maxwell, Simon Stacey, Elaine Simon, versus FIA Court Services. May it please the Court, Your Honours. I'd like to reserve three minutes for a bottle. Thank you. Name's Andy Winchell, the law offices of Andy Winchell. I'm representing the plaintiffs and appellants for Robert and Stacey Simon. You're on this case is about whether the Fair Debt Collection Practices Act ceases to be applied after the commencement of a bankruptcy case. My clients were sent notices, communications that violated the Fair Debt Collection Practices Act, and broad inaction, the importance of penance within the notices in the bankruptcy court, broad inaction within the bankruptcy court, which was dismissed for lack of subject matter jurisdiction. Are you a council who sent them? Who sent them? You were, I'm sorry, I'm on the wrong side of the question. I am the council who received them. Yeah, yes, you're right. Do you, there's a case law on lots of it all around the place, including in our circuit, all over the place. What line of reasoning do you advocate and why? Your Honour, I would direct Your Honours to the decision in Randolph and the seven circuit. Judge Easterbrook laid out the issues about as well as any decision in the field, talked about that there is no, although the two statutory schemes overlap somewhat, generally speaking, they deal with entirely different matters. The FDCPA deals with debtors and debt collectors. It does not apply to creditors at all. Now, do we, if we would apply his logic, do we then look at the, at what happened at the specific communication and compare it, what, in other words, the letter relating to a discharge proceeding that could be brought and attached notice under the code? Do we, do we look at that and then match that up with the bankruptcy code and see whether there's a conflict or what can we do? Your Honour, the bankruptcy code does not govern this type of notice at all. There is nothing in the bankruptcy code or the rules that speaks to the content of this type of notice. Oh, yes, the 2004 notice. Your Honour, 2004 provides for the ability to have an examination. It does not specifically govern what is in the, the transmittal letter or even what is in the, what is in the deposition notice or the, the document request. But you're saying there should be a cause of action to sue someone for noticing a rule 2004 proceeding that they're really entitled to. No, no, no, your Honour, only if you do so in a way that's improper. Only if, only if such notice violates the FTCPA, in many jurisdictions, your Honour, a 2004 exam requires an application to the court. In the district of New Jersey under our local rules, no application is required. Therefore, a debt collector can notice even improperly such a deposition and in this case required in another state. And none of that would, none of that is governed by the bankruptcy code or rule. But it would be prohibited by your Honour, only if it violates the F, only if it otherwise violates the FTCPA, the way that this one does. And does it here? Yes, Your Honour, this one, this one definitely does. Why? In many different, there are a few different ways. First, it contained a subpoena that was invalid in multiple different respects. Required the debtor to attend a deposition that was out of state. Is that a violation of the FTCPA? Your Honour, it would be a threat to take an action that cannot legally be taken. It is also a false representation or implication that documents are legal process when they are not. If there was no, and that's because it violated rule 45. Yes, Your Honour. If there's no issue on rule 45. If the subpoena had been compliant, there were other issues with the business. Is this a subpoena? The document appeared to be a subpoena. Did it say it was a subpoena? I do not recall off the top of my head with it, specifically it was a subpoena. It appears to be a subpoena. That is the way that attendance is compelled at a 2004 examination under our local rules in New Jersey. It is to send a subpoena. The FTCPA standard is the least sophisticated debtor. Notice of examination in accordance with FRBP2004 and local rule2004-1. Yes, Your Honour. Signed by a lawyer, it's not a court issued at all. Yes, Your Honour. It's not court issued. Is that a subpoena? It looks like a subpoena, yes. It's a quack like a subpoena. The point is that the least sophisticated debtor might not realize that he or she is not required to comply with the subpoena. Because it was faulty and effective as the bankruptcy court. Is this permissible under the bankruptcy code? Not as it is formulated, Your Honour. It would have a lawful subpoena would have been permitted under our local rules and also under rule2004. This is permissible under the bankruptcy code. You're saying it can still be a basis for a cause of action under the Fair Debt Collection Practices Act? Yes, Your Honour. In addition, there were other aspects about this. That is exactly the era-consailable conflict that you were talking about. There were other issues with respect to this communication. Notably, it did not contain the disclaimer in 15 USC, 1692, E.M. There are two many maranhas in the morning, Your Honour. One is in G and one is in E. It contained the many maranhas in G about the debt validation. It did not contain the many maranhas that the debt collectors attempted to collect a debt. And that any information may have used for that purpose. The FTCPA is a strict liability statute that applies only to debt collectors and specifically regulates their communication. It doesn't apply to debt collectors so that people are not harassed and therefore have to file bankruptcy. Why does the spirit of the FTCPA on the policy behind it? How is that really animated in a bankruptcy proceeding? Typically, Your Honour, in a bankruptcy proceeding, it is not. It is only under certain circumstances such as this one. There are many different reasons for the FTCPA and the findings within this statute about abuse of debt collection practices. In this case, we are talking about a couple who, when reviewing the documents, would have believed that they had to take a day off from work and travel to New York and produce a whole bunch of documents. They didn't get the documents. They never. Your Honour, yes, they did. The lawyer did. Your Honour, that is the same under the third circuit of the Ellen versus LaCelle. There is no distinction there. And frankly, I didn't realize until looking at it later that they didn't get it. That it was not the first that they did not get it. That it did not comply with the FTCPA or with the subpoena with the rule 45. But then you're back to the rule 45 argument. Yes, Your Honour. You have to look pretty closely to realize all of the different ways in which the subpoena was defective. Let me ask you a question. Are you saying that because these two statutory schemes do not conflict at all, and we therefore never really look at what happened to see if it's in conflict, but you take the language in Randolph that there is no stated legislative preemption in either of the laws. So therefore they necessarily both apply at all times. Your Honour, there are instances in which the FTCPA and the bankruptcy code do overlap. Do overlap. Do overlap. Do run into each other so that they don't both so that the FTCPA doesn't apply. I would give it just as an example of the discharge injunction that that that is discharged is potentially actionable under the, when it when it when it's credit or attempts to collect a debt that has been discharged as potentially actionable under 524 of the bankruptcy code, it's also potentially actionable under under the FTCPA. And that's the context in which all of these cases that with which I disagree arise where you get to discharge. You should be able to be to sue under the FTCPA. Your Honour, yes, you should be able to sue either under the FTCPA for a debt collector or a where it's a creditor you should be able to pursue. You have two remedies to add to each other. They're they don't conflict with each other. They don't conflict each other well. How about the proof of claim situation? Proof of claims, obviously a proof of claim that bankruptcy court has the ability to deal with a proof of claim. It can strike the proof of claim through the adjabment process of the court could deal with these. You're on the issue. Your honor not the most of the bankruptcy court could do here was to what the bankruptcy court did, which was quasheless and subpoena. The bankruptcy court cannot provide any redress for the debtor. In fact, the debt collector here had not even submitted to the. How about thank you for having attorney's fees? Your honor, if you're looking under 9,011, none of these documents were ever submitted to the bankruptcy court. Well, but they could have been that is that they there would have been a sanctioning authority. I think a bankruptcy does might be startle to know that he or she was without the ability to deal with a violation of a rule or procedure governing a 2004 notice or subpoena if one occurred. In a situation where an application has been made to a bankruptcy court and the court could review the documents to see whether they were appropriate. That is a different context from what we have here where none of the documents were required to be submitted to the bankruptcy court before being sent to the consumers. Can I ask a follow up one your question about the potential conflict? Is there any way in which the failure to include the mini marandal language about maybe use for debt collection purposes? Which you say is required by the FD CPA and actionable if it's not included. Is there any way in which including it would expose the creditor to a violation or liability under the FD CPA? No, under the bankruptcy court. Whether that might violate the automatic state by saying, well, by the same token that this notice indicated that it was not an attempt to collect a debt. It also could provide that this indicated that it was not an attempt to collect a debt for the purposes of the automatic state. There's nothing that says you couldn't put in this notice that they're not attempting to collect a debt. Which in fact they weren't. But that could have been phrased in a way to indicate that the automatic state that they're attempting to negotiate a resolution rather than trying to directly collect the debt. But the FD CPA language as I understand it would require them to say this is an attempt to collect that. I think the point of that is not so much to say that the debt collector is attempting to collect a debt but that any information will be used for that purpose. And I think that there is a distinction between acknowledging that the debt collector in this case is in the process of something that's in connection with the collection of any debt, which is what the standard is. And the actual attempt to collect money or get money from the consumer. I guess I'm worried about your distinction because there's case law that says that attempts to negotiate or resolve or settle are attempts to collect a debt. So how can the creditors say this despite all appearances to the contrary and despite the fact that at the end of the day I want your money. This is not an attempt to collect a debt. And one way to get the money is to challenge this chargeability. You're on I think that the cases with respect to the automatic state tend to be very specific whether they're clearly trying to and threatening some sort of action or trying to collect the a not so much trying to try to this one might argue this is a way around the automatic state. You're trying to coerce a debt or into paying by threatening to trade and do another state for a deposition. However, when looking at the automatic state, I do not think any of the automatic state cases would specifically apply to this action. I have two more questions. One of which I'm surprised at your answer on the proof of claim because when proof of claim and your concession there that the FTCPA doesn't apply because the proof of claim will be allowed or disallowed by the court. You're on I didn't mean to concede that the that the FTCPA does not not necessarily the cases are. I asked you if they're totally you know or totally separate and they both can and exist and you said in that situation the court can resolve proof of claim. So therefore absolutely that could be resolved under either under either three thousand seven of the rules of bankruptcy procedure or potentially if the proof of claim some in some way is false deceptive or or is leading might fall under the. It can be this will be a cause of action for it that would be only on the FTCPA so I'm surprised. Yes, I agree with that. So is I get back to my question. Is there any instance in which you would say that there would be a conflict between the two. I think there are instances in which there might be a conflict. I think that in the instances in which those arise that could be addressed. This doesn't happen to be one of them. The bankruptcy not the bankruptcy rules are applied to apply this. The second question is once and I did bankruptcy law. It's a long time ago so I'm dangerous but once you know when someone a lawyer gets the debtors lawyer gets this notice has to do with a discharged ability proceedings is going to be filed. Decision of what to do with respect to that whether to settle this or whatever that comes before the court that if the if the debtor were to then say oh yes and write a check. That that's not going to happen because if this debt is non-dischargeable the other debtor the other creditors are better off. Because it's going to pass through the proceeding you're not going to have to pay any money on account of it. So this is the kind of thing that the court is going to have to approve. So it's not the kind of harass for us for money to be paid over that happens outside the bankruptcy. Doesn't the context of the bankruptcy really matter here? It does you're on it though I would say that the approval of the payment of the money only occurs if there's either a reaffirmation agreement or a settlement with respect to the end of the which record is not what's happened. If in the context if if well if something is going to be paid to this creditor outside of a plan or outside of a distribution under you know chapter seven the court somebody's going to have to okay that this is not something where they're just going to write a check because they don't want to receive phone calls. You're on your own in theory you're correct in practice I wouldn't necessarily say so and I think particularly in the context this these that has happened not to be prosay but if you were looking at a pro say better they very much they very likely might write a check or call the creditor rather than submit to the possibility of an on discharge ability proceeding. Wow. I wouldn't want to go for the bankruptcy judge and say that I did that but know what I know what I'm going to. Okay we'll hear from you on the bottle. May it please the court my name is Susan Johnston I remember of the firm Weinstein and Riley representing the appellees in this case if I a card services in a and the law firm Weinstein and Riley and just to pick up on the last comment your honor neither would I know circumstances would what my firm on behalf of any of our clients. So we represent across the country engage in the settlement with a pro say better that we did not bring to the court for approval that would never happen well by the same token if you believe there's a basis for discharge non-dusturge ability why don't you just file the non-dusturge ability complaint rather than sending a letter that says you know we can settle this and you know you can pay now and avoid all this aggravation which is you know could be subject to the FTCP. Well I have a couple of different answers to that your honor one is that we have found it useful in many courts many bankruptcy courts have found it useful to engage in prefiling discussions with the opposing counsel to determine whether there is in fact the ability to prove intent which is always the problem in these cases we know what the charges are in a non-dusturge ability context what we don't know is the we don't always have all of the objective factors. So I think that the judges that the courts have permitted us to rely upon to prove the subjective intent factor so that these prefiling conversations are often useful in identifying either cases where we cannot prove intent because they give us facts that we need to know and that would refute our ability to bring up on a fish case. But then why do you include in there you know pay now x dollars pay overtime x dollars I mean it's really to try to to figure it out and notice the proceeding why not just send the notice that we don't know so we're going to have a we're going to have a certainly one way to do it one of the things that we're hoping to accomplish however is is to get the runner well you're on earth now that's a very that's a very important point that you just make because there is a very important distinction between the the prefiling communications about non-dusturge ability complaint. And that collection this is not a demand there's nothing in this letter that says this is a demand for payment the reason why we did not make the the many many many Miranda is because we are not acting is it that collector wouldn't the least sophisticated that are read it that way I don't think so your honor because I think that the language of the letter that we sent makes it very clear that it is not a demand there's nothing in there about a demand it doesn't say that it says that we believe that we have a complaint we believe you all and here's this count it's a now it doesn't actually say that your honor I don't think it actually says that it actually look at the language of the letter with the two numbers I mean before you occur the cost of our plan is willing to provide this guy settling the account yes that's right it does it does say that but it's not a demand for the begins by saying that we believe that we have a complaint for non-dusturge ability now isn't there case law that says that that kind of settlement over sure is a part of a deck collection your honor there is case law that says that I'm not aware that it says that in the context of a 523 complaint within the bankruptcy case in other words if you write a letter before anybody's fall for bankruptcy and you say those things then yes I think I would have to agree with your honor that there is case law that says that that is that that is an aspect with that collection I do not agree I have not seen and I have not seen cases in the 523 context that say that it is a violation of the FDCPA for a creditor's lawyer to write a letter to the debtors lawyer saying we believe that we may have a 523 a complaint we'd like to talk to you about it we may take discovery but in the meantime if you want to resolve it we're happy to resolve it so it's a it's a conversation that is often productive in resolving these things some of the time we don't sue people because of hardship some of the time we don't sue people because we receive information from the debtors lawyer in this context you're drawing a distinction between a letter that you would send to a lawyer on the one hand a letter that you would send merely to a debtor I'm not necessarily drawing that distinction but I do think it's important that in this case the letter went to the lawyer because there is authority for the proposition that you don't violate the FDCPA by sending a letter to a lawyer that's important I think we're pretty tough on that in our circuit there is a case in the in the search circuit that suggests that it is a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that is not necessarily a case that doesn'taris the lague in the operation process So, you know, some money comes into the estate. There may be an automatic stay against actions against the debtor, but there's nothing as they debtor should waive or forego assets, which would be a cause of action here. And there's nothing in the Fair Declire to practice that says, oh, by the way, you know, if you're in bankruptcy, you know, it's different. You might make it- Is money coming to the estate? Well, this money would not in a chapter seven, it would not come to the estate. In a chapter 13 it might. Well, because it may as the date of violate the- Right. In a seven, it would not come to the estate in a 13. It's not going to benefit anybody else, but the- But the debtor and the lawyer, because the lawyer always asks for attorney's fees and that's the same. I can't be able to pay costs. Now, man, make an- In answer to the panel asked questions about the availability, about whether there was a conflict between the FTCPA and the Bank of St. Asgim and which- And precisely the question, if you- I could interrupt- Yes. Yes, is whether if you did put the language in that plaintiff's counsel says was required under the FTCPA that the information gathered could be used as part of a debt collection effort or would that expose you to a violation of the automatic state? You know, I think it certainly exposes to a lawsuit, not unlike this lawsuit. I also think it would not be true in a letter like this in a 523-A context, because we're not seeking the information to collect the debt. We're seeking the information to determine whether or not the debt is just chargeable. And it's different information. The- The category of information that we need to extract in order to prove fraud and non-distartibility is different from the category of information that may be some overlap. But generally speaking what you're looking for is pattern and practice of charges employed in employment, income, anticipation, that sort of thing. And- And so, in answer to your question, it- I don't know that it would expose us to liability because- But I think it might expose us to criminal lawsuits for sure. And it might expose us to liability if the court thought that what we were actually trying to do is collect a debt instead of trying to determine non-distartibility. So I think that risk is there. If I understood the argument that Opposition Council made, it was that in order to avoid this kind of damned if you do damned if you don't situation, you should have put language in your notice of the 2004 examination and invitation to talk, something to the effect that this is not information, an effort to obtain information that will be used in connection with that collection efforts. Well, you're under- You're under- Does that give you concern? How do you respond to that? If- If the court ruled that- If the court were inclined to formulate a safe harbor along the lines of the seven circuit safe harbor, Judge Posner has written several decisions saying, I can't make you do it, but I can tell you if you do it this way, you won't be liable in my court for an FDCPA violation. If the court were inclined to say something along the lines of, if you're going to write a letter to a debtor and or his council in a bankruptcy context in which you're seeking- In which your ultimate goal is to obtain a verdict that the judgment that is not undisturbed, if you include this language along the lines that you're under just indicated, then you would not be liable. You know, I can't quarrel with that because what I want to do is achieve clear standards that we can comply with so that we're not subject to lawsuit. Is it true? Is it true that if- Is it true that if language that the information is not going to be sought as part of a debt collection effort? I think it's true, you're under- Because I think there's an important distinction to be made between suit on a debt, suit on a contract that you bring in state court on the one hand and an action to determine the non-distribbility of the debt and bankruptcy court on the other hand. I think that's really important and I think it's really important to separate those concepts in a- in a- I don't know how to characterize it. In a sense, it's not true because of course at the end of the day what we want is a determination that the debt is not dischargeable so that we can collect it. So in that sense, it's not true but it's a real difficult land wall. Isn't it just an opportunity for you on behalf of your client to try to sidestep getting in line with everyone else? No, we're already in line with everybody else in the sense that we have a- in the debt or schedule, is it scheduled our claim? No, no, no, no, I'm sorry. I'm sorry. I'm sorry, I'm sorry. I'm sorry, I'm sorry. Isn't your letter an attempt to sidestep getting in line? I mean, your- you- you send the letter, your hope is that the language induces action and the action that you seek to induce is payment now. No. Sorry, go ahead. I'm sorry. Well, it's not payment now. I mean, if in response to this letter, the lawyer says, hey, we should pay this now, maybe maybe that's not good. Bankruptcy Council, advice, but he says, hey, whatever the numbers are, instead of, you know, you owe 11,000 plus, you'll owe 9,000 plus, maybe I can get them now to 8,000, let's pay. I mean, that's what you're really seeking. So I don't really understand this notion that we're seeking a statement of non- just dischargeability. I mean, you're seeking to go out the debt. But, Your Honor, the bankruptcy code gives me a remedy. It gives all creditors' remedies to examine the circumstances surrounding the incurrence of the debt. And if the creditor believes that the debt was incurred in violation of Section 523A of the bankruptcy code, we have a remedy, which is that we can sue for non- just chargeability. And then the debt are coming out of the proceedings. It's going to have to pay that. He's going to have to pay that debt. Now, we have the right to do that. We have an absolute right under the bankruptcy code to bring that lawsuit if we can, if we can allege a prime- if it's your case. Now, the benefit is just like any other time you're going to bring suit, you don't just file suit, you send a letter saying, you know, this is going to happen. This is going to happen. So if you want to avoid it, you can avoid it. Your Honor, this is a, this is also a very important point as far from my perspective. And one possible rid of this is the court will rule that we can have no pre filing communications with the debtor. That would put a burden on creditors like my clients that I'm not aware shared by any other credit or in any other context. In my experience, I spent most of my bankruptcy career practicing big firms representing large companies in chapter 11 cases. You would normally not, you know, surprise somebody with the lawsuit. Normally you might draft it and send it to your opposing counsel. You might say, we think you might call them up and say, I think you screwed up. I have a claim against you. Well, I said this thing from here. We'd be requiring you to pick up the phone instead of sending a letter. What I don't, and we do that sometimes to your Honor. I mean, the point is, the point, the point that's really important about this is I don't, I should step back for just a minute and say that I am not defending the rule 2004 notice. I don't disagree that there were some problems with it. And obviously the court quashed it. But I would say that a rule 2004 subpoena is a remedy that's available to me in the bankruptcy code. And that if you, and that there are therefore remedies for improper 2004 subpoenas in the bankruptcy court that they achieved, they got that, they got it quashed. Also agree with your Honor that if we did something really wrong, the court could do something about it. And why should we not have let the debtor have a cause of action that's provided under the FDCPA for something that's wrong? Because there will be no cause of action in the bankruptcy court. They'll be just slap on the wrist or whatever. Oh. No, no affirmative remedy. Not necessarily. I mean, I don't think you can assume that the bankruptcy court would view the kind of deliberate pattern in practice that is alleged in this complaint as something that should be resolved with a slap on the wrist. I really, I don't think they would do that. I just want to follow up with two other points. Do you agree that this is in effect a subpoena? It's a, no. It can be enforced, pursuant to rule 45, if need be. But I don't agree that this document itself on its face is a subpoena. It's a notice of 2004 exam. I mean, the pattern in practice, the practice in bankruptcy court when you want to obtain discovery under rule 2004 is to serve a notice of examination under rule 2004. If you have to enforce it against the third party, you have to get a subpoena. Or you have to get a bankruptcy court order authorizing you to do it. So if there was a failure to comply with rule 45's requirements, what you're saying is that it doesn't, that there's no exposure under the FDCPA because of those deficiencies, because this was not technically a subpoena. I'm not really arguing that you're on, or I think my argument on the subpoena part of it is that it's, first of all, it was never served on the debtors. It only went to the debtors council. And I do believe, I mean, in the fact that it only went to debtors council means that it was in effect the notice as opposed to a subpoena. We certainly didn't attempt to enforce it as a subpoena. We didn't serve it on them as a subpoena. We didn't attempt to enforce it as a subpoena. I'm not trying to dance around this. I'm really not. I really think that the real issue here is not so much that there were mistakes in the subpoena, but that this, or in the notice, sorry. My point is not so much that there were not mistakes in it because I, you know, frankly, you're under as Mr. Winchell, if he was the one who signed it. I mean, obviously, I'm not the attorney who signed it, but I wouldn't have, I wouldn't have written it that way just so you know, I want to do it better than that. But, but my point is that because we're entitled under the bankruptcy code and the bankruptcy rules to send, to engage in prefiling 2004 examinations, my point is that the remedy, the remedy is under that, is under the bankruptcy code rules and that you don't need this, you know, a year later, when they've already gotten the motion plot, they've already gotten the subpoena plot, if you're later, they sue us saying that there are all kinds of things wrong with it. I mean, it's over. We never even, we never filed a lawsuit against them. Let me ask you a question. The under 2000s for the notice actually should be served on the debtor. Should it not? Under 2000s. Yes, if you want, if you want to get it enforced. See, that's my point, Your Honor. I wasn't there at the time this was done. I didn't write it. I didn't sign it. If I, and the record doesn't show what was intended by the lawyer, I mean, this was a motion to dismiss. So the record is relatively undeveloped. But my belief, I mean, if I had to guess, my belief is that what he was trying to do was demonstrate to the opposing counsel two things. One is the kinds of facts that he might want in order to resolve this, either formally or amicably. And two, I know what a rule of 2004 is, you know, I can, but he didn't attempt to enforce it. So there was absolutely no prejudice or damage suffered by the debtors in this case. I mean, I assume they saw it because the lawyer gave it to him. One more question, if I'm right. You're argument that this was simply a discussion that you were trying to initiate and that there was no need to put in language, the FDCPA required language that the information could be used for the purpose of debt collection because you weren't going to use it for that purpose. That's correct. But if you had put in the language that plaintiff's counsel urges, something to the effect that this information will not be used for debt collection purposes, would you, in order to avoid a conflict with the automatic stay? Would you be precluded from ever using any of the information you gathered if settlement failed in pursuing discharge ability? Well, you might be your honor. You might be and you certainly would face that challenge from them. Is it technical matter under rule 2004, that the information that you get may or may not be admissible in the underlying lawsuit? So it might be a roadmap for further discovery, but I think you've faced that challenge, absolutely. So what do you do with it? Forget it? And that's, how does that continue? How does that continue? I don't consider it practice. I don't think that we should have to put that disclaimer in these letters because I don't think that we are trying to collect debts in these letters. I think if we did put it in the letter, it would expose us to hazards down the road in the ultimate lawsuit. And if you don't put it in the letter, you're obviously subject to suit under the FD CPA because here you are. Unless and less, unless, you know, we get a rule from this court that is consistent with the decisions in these three other cases that I'm aware of that say that under in this context, this is not covered by the FD CPA. I mean, I think just one, one, I have one last question. Would you advocate that analysis along the lines of Randolph, but finding that indeed the conflict exists? You know, I think you're under that that would be the conservative approach. I think that as I read these cases, there is, there does seem to me to be an evolving trend. The lower courts, some of the lower courts are saying that when the claim would require specific discussion, determination, analysis of bankruptcy code and rules, you should not import FD CPA remedies. That is kind of a broad rule that seems to be kind of derived from the increasing variety of cases in which this kind of ruling has been held. I don't think the court needs to go there to resolve this. And I'm not sure that the case law has developed enough for the court to be comfortable with that. I mean, we have sporadic incidents, you know, examples here and there. You know, the discharging junction through the claim context, maybe 363, you know, maybe in my case, 523, we have a number of different areas spots on the map where courts have said FD CPA remedies should not be imported. But I'm not sure that I'm not sure the court would be comfortable going there at this point given the relatively undeveloped nature of the jurisdiction. There's a middle ground in here at least. It looks like there is at least an argue basis for non-disgirability given the dates and the drawdown of monies might even draw a distinction that, you know, it has to, you know, it's a duck or a crack. It looks like a valid. At least it's at least adjusted as further inquiry, which is what the goal was. The one last point that I was making. I'm sorry. I mean, I interrupted you. I'm not supposed to do that. The one last point that I would make is that, and I think the court can reach this is that FIA card services in is not a debt collector. And therefore not subject to the FD CPA in the attorney's. The attorney was. But if you're acting for, but if you're acting, well, then maybe, maybe reliable and they're not. My point is, my client, if FIA card services is not a debt collector, it's either the successor interest to the original holder in the NA bank or which makes it a creditor, which makes it a creditor and it's not illegal for a creditor. So, but the lawyer. The lawyer is a debt collector under our. I'm not, I'm not arguing about that, Your Honor, but, but, but, but I think the, the allegations in the complaint, there is an allegation in the complaint that FIA card services is a debt collector, but it's a bare bones conclusion. Reallocation. The court can take judicial notice of Bank of America's 10Q, which says that FIA card services is the bank. I mean, and there's a case. Okay. So, so at the very least, at the very least, FIA card services should, under no circumstances, have any liability here. I would also obviously submit for all the above reasons that neither should not law firm because the letter was sent to a lawyer, which we thought was justified. The letter was sent in the context of F23A, etc. Thank you. Thank you. Thank you. You know, I have a few points I'll try to hit them briefly. One thing these to be clear is that the standard is in connection with the collection of any debt. It is not that you're specifically trying to collect it. The standard is more broader than please pay now, even though that's what the letter essentially is encouraging doing. Assume we write the opinion your way. How would it read? What would we say? That the FDC PIA continues to apply during a bankruptcy case. No matter what. Well, to the extent that there is a conflict between the FDC and the FDC PIA and the bankruptcy code, that can be addressed in a case where there is a conflict. Well, how could we tell the lawyer for Winston Riley what to put in the notice that would not violate his decision? A simple letter to contact. Please contact it. Why is it in Riley? We have a question about your client. The differences are all the phone versus something in writing. I get these calls on a regular basis from creditors. In fact, I do do the one right now where they have not brought it. They have not served it in 2004. They simply contact. I would not just say that's an odd application of the FDC PIA. Well, depends on what the contact, depends on what the correspondent says. What do we tell them to say in a way that would keep them from violating the FDC PIA? While they are availing themselves of their 2004 examination rights? The sending a proper subpoena, proper lawful 2004 examination demand with a subpoena, something that would be. Who determines proper? Well, you're under the. If it's under rule 2004, the bankruptcy code. The bankruptcy code would determine whether it's lawful. I said in New Jersey, they don't go to the bankruptcy code first. It has to be in the appropriate form. But if the proper subpoena, as you describe it, had to include language that says information obtained, maybe used for the purpose of debt collection, would that violate the automatic state? You're under that would not necessarily violate the automatic state. Is card services at debt collection? I understand. The FIA card services is a debt collector. The way that the FDC PIA is written with respect to creditors is somewhat ambiguous. It is not the same term as we use it in the bankruptcy code. It's not clear whether with a FIA card services, we don't have the facts yet to know whether they actually own the account or whether they were collecting a front collected for MBNA. But presuming that the success or an interest in the own it, they're not a debt collector, are they? They're creditors. I think there's more involved as to whether they're a debt collector. Did they file a proof of claim? You're under the Chapter 7 No Asset Case, so no. So, let me ask a different question. Would you concede that they're not a debt collector? I would concede this under certain circumstances. They might not be a debt collector. We wouldn't know until we did discover just to whether they were offering a debt collector here. So you're saying that this paragraph in the event, it's covered by the FDC PIA, they should say. And in the event, we're attempting collected debt, but we're not attempting collected debt. And you're on it. You should be used. We should clarify one point. We should clarify one point again. That the E11 provision only applies to the initial communication with the consumer. It does not apply to all subsequent communications. I'll say in a lot of these phone calls, someone will simply repeat that to me. And I don't consider that a state violation to give the mini Miranda to disclaimer within the FDC PIA. I much prefer to hear it than to think that they might be calling my client and not giving that mini Miranda. I want to point out something about F5203, which is the non-destarchable information. If they had brought the case and it had turned out to be inappropriate, they would be potentially liable for cost and attorney fees under 523D. I think that's one of the reasons that they don't bring the cases initially, is that particularly in this case, they really didn't have a basis for it. There was no basis at all for it. Well, but they don't know. I mean, if the timing and the withdrawal of the money fits, you don't know. And rather than just bringing the case, they could notice a lawful 2004 examination. That's the point. The communication says if there's going to be communications either with the debtor or the debtor, that's capital, they must be truthful. They must be lawful. They must be accurate. They can't do things like tell the lawyer we sent you this document to your client falsely when they didn't send it to the client. They shouldn't include a subpoena that indicates a scope that is inclined for something broader than whether they could establish fraud. If you look at this, this is more than necessary. It establishes the possibility that the charges might have been fraudulent and non-destarchable. It's just very, say one last thing to be clear, this occurred at the very beginning of a case, which happened in the seven cases, it could have been converted to a chapter 13 case, had it been converted. In fact, this case would have stayed in the bankruptcy court because it would have flowed to the benefit of the estate. It was just that the discharge was entered before we were able to resolve this case, and therefore we did not get a verdict. Okay. Great. Thank you very much. We'll argue and take it under advisement