New Jersey Supreme Court Issues Important FDCPA Decision

    By Brian Wolfman

    In Hodges v. Feinstein, Raiss, Kelin & Booker LLC, No. A-113 (1/31/07), the New Jersey Supreme Court held, by a vote of 4 to 2, that lawyers who regularly file summary dispossess (eviction) proceedings are “debt collectors” subject to the Fair Debt Collection Practices Act.  The majority opinion is worth reading for a number of reasons.  The key holding rejected the defendant law firm’s argument that the firm was not an FDCPA “debt collector” because “the sole remedy available in a summary dispossess proceeding is possession, not money damages.”  The court agreed that possession was the sole statutory remedy, but responded by relying, of all things, on reality: “We do not question the legislative intent to provide landlords a remedy of expedited possession. However, in practice, the summary dispossess action is also a powerful debt collection mechanism.”  Two justices dissented, agreeing with the law firm that because the only remedy sought was possession, the firm was not a “debt collector” under the FDCPA.

   

The tenants’ claim that the law firm had violated the FDCPA was based on notices that allegedly misrepresented the character and amount of money that the tenants had to pay to avoid eviction.  To me, the most important aspect of the decision is the genuine concern expressed by both the majority and the dissent for the impoverished tenants, all of whom were recipients of HUD Section 8 assistance.  The majority directed a civil rules committee to devise rules to harmonize the state’s summary dispossess proceedings and the FDCPA, with the aim of ensuring that tenants are told exactly what they owe and what they may do to avoid eviction.  And, on an interim basis, the court directed that summary dispossess complaints contain important basic information.  On this score, the dissent emphatically agreed:

[The new procedures] will curb overreaching by landlords and lawyers who take advantage of uninformed tenants facing ejectment by alleging in the summary dispossess complaint an amount due that is in excess of what is allowed by law to be charged as “rent” and, therefore, is more than must be paid by the tenant to avoid eviction. I, however, would impose that improvement to our summary dispossess process pursuant to this Court’s general supervisory interest and constitutional responsibility for fairness in the practice and procedure in our courts, see N.J. Const. art. VI, § 2, ¶ 3, rather than basing it on some perceived impetus from the FDCPA.

Comments

[Bob]

I would agree that a tenant has a right to know all information. It is not "fair practice" to take advantage of a tenant who does not know all options.