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Adam Leitman Bailey, P.C. Gets Landlord Dismissed from Federal Fair Debt Collection Practices Act Suit

Under the Fair Debt Collection Practices Act (FDCPA) when landlords (or other creditors) make errors in computing the amount owed to them, the affected tenant can sue the landlord’s “debt collectors.” This includes the landlord’s lawyers, claiming that they were misleading or deceptive about the amount due.  These suits can be very difficult and expensive to defend. Although a landlord, as a direct creditor and not a debt collector, is not subject to the FDCPA, many of these suits try to include landlords by adding additional claims against them.

Adam Leitman Bailey, P.C. was retained by a landlord whose eviction proceeding, brought by other lawyers, had been dismissed based on a significantly erroneous rent demand.  The tenant brought an FDCPA claim in Brooklyn federal court against the other lawyers and added a New York deceptive business practices (General Business Law § 349) claim against the landlord.  The tenant was represented by very aggressive lawyers who sought to litigate virtually every issue in the expectation that their legal fees would be reimbursed if they won their claim under the FDCPA. To limit the fees they might be charged, and because of the difficulty of defeating an FDCPA claim on the merits, the lawyers who had been sued conceded liability on the FDCPA claim, and the Court ruled that as a result, the FDCPA claim – and the discovery in the case – would be limited to the amount of emotional distress damages the plaintiff suffered.

When Adam Leitman Bailey, P.C. analyzed the case, it recognized that though the claim had been brought in federal court because of the federal FDCPA claim, the only claims against the landlord were based on state law under the federal court’s “supplemental jurisdiction.” After the plaintiff’s lawyer argued that it needed more discovery under the state deceptive practices claim, Adam Leitman Bailey, P.C. pounced, moving to dismiss because allowing federal courts to decline supplemental jurisdiction where supplemental state claims would “substantially predominate” over the federal claims.

Judge Margo K. Brodie accepted these arguments in full, holding that because the deceptive practices claim is “much broader in scope” than the remaining issue of FDCPA damages, it would unduly complicate the federal case, and the landlord should be dismissed from the case. Judge Brodie also found declining supplemental jurisdiction was proper because the question of whether a deceptive business practices claim could be brought for a landlord-tenant dispute was an unresolved issue of state law. In addition to dismissing the deceptive practices claim against the landlord, Judge Brodie, on her own initiative, dismissed the claim against the lawyers that had brought the eviction.

Vladimir Mironenko of Adam Leitman Bailey, P.C.’s litigation department represented the landlord in this total victory.

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