A federal judge has dismissed a case arguing a law firm engaged in unfair debt collection practices when allegedly failing to submit filings that would have triggered mandatory settlement conferences for homeowners facing foreclosure. Steven J. Baum P.C. did not violate the Fair Debt Collections Practices Act, Eastern District Judge Sandra Townes (See Profile) ruled, rejecting a putative class action filed by MFY Legal Services, Cole v. Baum, 11-cv-3779, which argued the firm unfairly started foreclosure actions but did not file the requisite attorney affirmation and specialized request for judicial intervention that are needed to begin conferences between borrowers and lenders (NYLJ, Aug. 10, 2011).
In her July 10 ruling, Townes scrutinized CPLR 3408, the state law ordering the conferences. The statute, she wrote, "is not a state analog of the [Fair Debt Collection Practices Act]. That statute does not prohibit unfair, misleading or deceptive collection practices, but merely furthers a state interest in forestalling or preventing foreclosures. Although defendants may be debt collectors, and their alleged violations of Section 202.12-a [mandating submission of a specialized request for judicial intervention] may be characterized as unfair, defendants' violations of this procedural provision neither resulted in, nor contributed to, the sort of unfair debt collection practices prohibited" by the act.
