Fifth Circuit Finds Law Firm was not Regularly Engaged in Consumer Debt Collection

In Reyes v. Steeg Law, LLC, 2019 WL 258068, (5th Cir. Jan. 17, 2019), the Fifth Circuit considered whether a law firm was a debt collector under the FDCPA. Under the FDCPA, attorneys qualify as debt collectors when they regularly engage in consumer debt collection, including but not limited to litigation on behalf of a creditor client. The Fifth Circuit affirmed the District Court’s holding that Steeg Law, which specialized in real estate and condominium law, was not regularly engaged in consumer debt collection because the firm had sent only 36 letters (related to 34 liens) in the year before plaintiff filed suit and because the work for those letters (i.e., negotiations, research, and draft work) was not a large part of the firm’s overall practice. The Fifth Circuit distinguished its prior precedent Garrett v. Derbes, 110 F.3d 317, 318 (5th Cir. 1997) where it held that an attorney regularly engaged in consumer debt collection because, during a single nine-month…

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