Jury Makes Findings in CFPB v. WWR

Jury Makes Findings in CFPB v. WWR
by Jessica Lamoreux

The case brought against Weltman, Weinberg, & Reis (“WWR”) by the Consumer Federal Protection Bureau (“CFPB”) moved one step closer to resolution, if not clarity, this month. Senior U.S. District Judge Donald Nugent will issue a verdict after considering the jury’s conclusions of fact, which were returned on two questions:

  • Did WWR’s initial demand letters contain “false, deceptive, or misleading representations or means”? The jury concluded that they did.
  • Did the CFPB prove that WWR’s attorneys were not meaningfully involved in the debt collection process? The jury concluded that it did not.

The meaningful involvement issue is not new to debt collection firms. The CFPB contends, in the WWR case and elsewhere, that an initial demand letter sent on a law firm’s letterhead contains an implicit representation that an attorney has reviewed the file and determined that the claim is valid. The CFPB has repeatedly taken action against debt collection firms based on its theory that an initial demand letter from an attorney is deceptive or misleading if no attorney has been meaningfully involved in the case prior to sending the letter. To date, meaningful involvement claims brought by the CFPB have been resolved through consent entries ordering fines and penalties against the law firm involved; WWR is unique in having declined to enter into a consent entry with the CFPB thus far.

Looking at the CFPB’s theory of meaningful involvement, however, the jury’s conclusions in the WWR case do not clearly point to a verdict. The jury’s conclusions do not support the CFPB’s allegations in that the jury found that the CFPB failed to prove that WWR’s attorneys were not meaningfully involved in their cases. The jury did not unambiguously let WWR off the hook either though, because it also concluded that the letters contained “false, deceptive, or misleading representations or means.” It is certainly not clear, therefore, that the jury agrees with the CFPB’s meaningful involvement theory or, if they do, that they believe the meaningful involvement claim against WWR was proven at trial. The jury’s conclusions leave open the question: if WWR attorneys were meaningfully involved in their cases, what about their demand letters was false, deceptive, or misleading?

In June, both parties will have the opportunity to argue why the jury’s conclusions support a ruling in their favor, after which the Court will issue a final verdict in this case. Because other cases the CFPB has brought were resolved by consent entry rather than the judgment of a court, there is not much case law available to guide firms in their compliance efforts. When finally decided by the Court, this case is likely to provide much-needed guidance regarding the meaningful attorney involvement standard.

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