No En Banc Rehearing in Crawford

The Eleventh Circuit declined to revisit its decision in Crawford v. LVNV Funding, No. 13-12389 (11th Cir. July 10, 2014), where it found that a proof of claim to collect a stale debt in chapter 13 bankruptcy violates the Fair Debt Collection Practices Act. See NCBRC Blog here. On September 18th, the court denied LVNV Funding and Resurgent Capital Services’s petition for rehearing en banc.

Some commentators predicted that the court might take on the rehearing because the decision upset a body of law prohibiting such FDCPA claims. See, e.g., Inside ARM blog here, and Bankruptcy Law Blog here. Specifically, the Crawford decision conflicts with Walls v. Wells Fargo Bank, N.A., 276 F. 3d 502 (9th Cir. 2002), where the court found that the Bankruptcy Code preempts the FDCPA and that, therefore, the debtor’s remedy for violation of the discharge injunction was limited to contempt under section 105 of the Bankruptcy Code.

In Crawford, the court side-stepped the question of preemption stating: “Some circuits hold that the Bankruptcy Code displaces the FDCPA in the bankruptcy context. See Simmons v. Roundup Funding, LLC, 622 F.3d 93, 96 (2d Cir. 2010); Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 510 (9th Cir. 2002). Other circuits hold the opposite. See Simon v. FIA Card Ser., N.A., 732 F.3d 259, 271−74 (3d Cir. 2013); Randolph v. IMBS, Inc., 368 F.3d 726, 730−33 (7th Cir. 2004). In any event, we need not address this issue because LVNV argues only that its conduct does not fall under the FDCPA or, alternatively, did not offend the FDCPA’s prohibitions. LVNV does not contend that the Bankruptcy Code displaces or “preempts” §§ 1692e and 1692f of the FDCPA.”