A federal court in Nebraska threw out a putative class action suit brought under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., and the Nebraska Consumer Protection Act, Neb. Rev. Stat. § 59-1601 et seq., holding that collection agencies could recover attorneys’ fees when using in-house counsel to file suits.

Plaintiff Trisha Robinson incurred medical debts of $3,692.85 to Thayer County Health Services, who then assigned the debt to Accelerated Receivables Solutions, Inc. (“ARS”). On September 20, 2016, ARS filed a complaint in state court to recover the principal, interest in the amount of $257.39, costs, and reasonable attorneys’ fees. On February 23, 2017, Robinson filed an action against ARS on behalf of herself and a class, alleging violations of the FDCPA for seeking to recover amounts not permitted by law in violation of §1692f.

The crux of Robinson’s FDCPA claim was that Nebraska’s collection laws did not allow ARS to recover attorneys’ fees for services performed by in-house counsel. ARS had used in-house counsel in filing the state court action and in its attempts to collect the debt. The Court rejected this argument and found that ARS was entitled to recover attorneys’ fees for the services performed by its in-house counsel. Robinson attempted to invoke the rule that pro se litigants generally cannot recover attorneys’ fees by characterizing ARS as a “pro se law firm.”

Fortunately, the court recognized the absurdity of this argument. The court relied on Nebraska precedent allowing for the recovery of fees by in-house counsel in rejecting this theory of liability. Additionally, Robinson’s argument that ARS should be treated as a pro se litigant ran “counter to the long-standing axiom that corporations cannot appear pro se.”

The court’s reasoning is important for its rejection of a baseless theory of liability under the FDCPA. Had the court allowed the case to continue, plaintiffs’ counsel would be emboldened in advancing similar class actions against collection agencies utilizing in-house counsel. The case is Robinson v. Accelerated Receivables Solutions, Inc., et al., No. 8:17-cv-00056 (D. Neb. Apr. 19, 2018). A copy of the opinion can be found here.