A Legal Department Without Lawyers

Richard Rosenau received a debt collection letter from Unifund Corp saying it was from the Unifund Legal Department.  Rosenau learned the Legal Department consisted of six employees, four of whom are Legal Liasons who handle various daily clerical duties, one is a Project Coordinator and one is an Administrative Assistant.  The Legal Department is supervised by a Vice President of Legal Operations.  No one in the Legal Department is a lawyer.

Rosenau felt deceived and filed a lawsuit under Fair Debt Collection Practices Act (FDCPA) 15 U.S.C. 1692e(10) alleging Unifund used a false representation or deceptive means to collect a debt.  While he was at it, he included a request to act as a class action representative on behalf of similarly situated persons who received letters from the same Legal Department.  Unifund defended on the basis that the letter is not from a law firm and is not signed by an attorney.  Two courts agree.

The District Court in Eastern Pennsylvania believed the letter was not deceptive and concluded it would be bizarre or idiosyncratic to infer that it came from an attorney.  On appeal to the 3rd Circuit, that Court agreed and said “using the term Legal Department is not equivalent to using the letterhead or signature of an attorney.”  The Appellate Court took a subjective look at the facts and said “different legal departments have different functions.”  After reviewing the evidence, the Court concluded that Unifund had a Legal Department, therefore the broad allegation of deception under 1692e(10) was meritless.

Note:  As I discuss in Debt Collection Letter May Not Falsely Imply it is from Lawyer, this Court remanded the case to the District Court for further action on Rosenau’s 1692e(3) allegation that the letter falsely implied it was sent by a lawyer.