Halberstam v. Global Credit & Collection Corp.
MEMORANDUM DECISION AND ORDER granting defendant's 25 Motion to take appeal of this Court's January 11, 2016 Order pursuant to 28:1292(b) is GRANTED. ( Ordered by Judge Brian M. Cogan on 5/5/2016 ) (Guzzi, Roseann)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------HERSCHEL HALBERSTAM, on behalf of
himself and all other similarly situated
GLOBAL CREDIT AND COLLECTION
- against -
DECISION AND ORDER
COGAN, District Judge.
Defendant has requested certification, pursuant to 28 U.S.C. § 1292(b), of this Court’s
Memorandum Decision and Order, dated January 11, 2016, for immediate appeal. The motion is
granted. This Court’s Order is hereby amended to include the required certification for appeal.
The facts of this case are simple and not in dispute. On October 7, 2014, a representative
of defendant called plaintiff in an attempt to collect a debt. Plaintiff did not answer the phone;
instead, a third party did. The third party asked if he could take a message for plaintiff. The
collection agent left a message with his name, phone number, and said it was “regarding a
personal business matter.” I had no doubt, and I remain of the view, that the purpose of leaving
such a message was to induce plaintiff to return the collection agent’s call without knowing that
he was calling a collection agent. Describing the purpose of the call to a third party as a
“personal business matter” was at least as suggestive, and probably more, of a business
opportunity for plaintiff to make money as it was of its true purpose, which was to cause plaintiff
to pay money.
I granted summary judgment for plaintiff because I found that by leaving a message for
plaintiff with a third party that was calculated to induce a return call without the debtor knowing
that he would be calling a collection company, defendant violated section 1692c(b) of the Fair
Debt Collection Practices Act (“FDCPA”). With narrow exceptions not applicable here, that
statute flatly prohibits debt collectors from communicating with third parties in an attempt to
collect a debt. Defendant had argued that since the statute also prohibits it from identifying itself
as a debt collector to the third party, the only other option it had was to be rude and hang up the
phone. I rejected this argument, pointing out that all that the collection agent had to do when
asked if he wanted to leave a message was say, “no, thank you, I’ll call back later.”
I can certify an order for interlocutory review under 28 U.S.C. § 1292(b) when the order
“involves a controlling question of law as to which there is substantial ground or difference of
opinion and that an immediate appeal from the order may materially advance the ultimate
termination of the litigation.” The proponent of certification must show that: (1) the order
concerns a controlling question of law; (2) there is a substantial ground for difference of opinion;
and (3) an immediate appeal may materially advance the ultimate termination of the litigation.
See Casey v. Long Island R. Co., 406 F.3d 142, 146 (2d Cir. 2005).
The Second Circuit has “repeatedly cautioned [that] use of this certification procedure
should be strictly limited.” In re Flor, 79 F.3d 281, 284 (2d Cir. 1996). “[O]nly exceptional
circumstances [will] justify a departure from the basic policy of postponing appellate review
until after the entry of a final judgment.” Klinghoffer v. S.N.C. Achille Lauro Ed Altri–Gestione
Motonave Achille Lauro in Amministrazione Straordinaria, 921 F.2d 21, 25 (2d Cir. 1990)
(internal citations omitted).
“[A] question of law is ‘controlling’ if reversal of the district court's order would
terminate the action.” In re Air Crash at Georgetown, Guyana, 33 F. Supp. 3d 139, 155
(E.D.N.Y. 2014) (citing Klinghoffer, 921 F.2d at 24). Additionally, in determining whether a
controlling question of law exists, a court may also consider whether the certified issue has
precedential value for a large number of cases. See Primavera Famileinstifung v. Askin, 139 F.
Supp. 2d 567, 570 (S.D.N.Y. 2001).
The second prong can be satisfied where “the issues are difficult and of first impression.”
Klinghoffer, 921 F.2d at 24. However, the Second Circuit has cautioned that “the mere presence
of a disputed issue that is a question of first impression, standing alone, is insufficient to
demonstrate a substantial ground for difference of opinion.” In re Flor, 79 F.3d at 284.
Certification for interlocutory appeal “is not intended as a vehicle to provide early review of
difficult rulings in hard cases.” German by German v. Fed. Home Loan Mortg. Corp., 896 F.
Supp. 1385, 1398 (S.D.N.Y. 1995). Rather, the district judge must “analyze the strength of the
arguments in opposition to the challenged ruling” to determine “whether the issue for appeal is
truly one on which there is a substantial ground for dispute.” In re Flor, 79 F.3d at 284.
The third prong, whether an immediate appeal may materially advance the termination of
the litigation, is closely tied to the first prong. See Primavera, 139 F. Supp. 2d at 570 (citing The
Duplan Corp. v. Slaner, 591 F.2d 139, 148 n.11 (2d Cir. 1978)).
I am convinced that this case has the exceptional circumstances necessary to justify
certifying the case for interlocutory review. First, this case presents a controlling question of
law. If the Second Circuit were to reverse my grant of summary judgment on plaintiff’s behalf,
the case would be over. Further, the issue of whether leaving a message with a third party
violates the FDCPA has the potential to impact a large number of other cases, as well as debt
collection practices more generally.
Defendant has made a strong showing that not only its current practices, but those of the
entire industry, would be significantly impacted by the Court’s ruling in this case. Defendant
submitted an affidavit from an Executive Vice President, who has twenty years of experience in
the industry, explaining that defendant’s policy of leaving a message like the one at issue is
common in the industry. Additionally, defendant’s counsel has submitted an affidavit that cites
to discussions he has had with the Association of Credit and Collection Professionals, which
disclosed that it is the standard pattern and practice of many collection agencies to leave nonspecific call-back messages with third parties.
Second, this is both an issue of first impression and one where there are substantial
grounds for dispute. The existing FDCPA case law does not address whether this type of
message left with a third party is a prohibited communication. 1 Moreover, while the Court
adheres to its view that the practice at issue here violates the literal language of the statute, the
technical violation at issue will likely have a far greater benefit to the plaintiffs’ FDCPA bar than
it will have in protecting debtors from abusive collection practices. I think that rather than have
a single district court decision cause uncertainty as to the continuation of a common practice in
an entire industry, immediate appellate guidance on the issue would be preferable.
There are a number of district court cases addressing the practice of leaving call-back messages on the debtor’s
answering machine, which message then happens to be overheard by a third party (e.g., a family member) that has
access to the machine. See e.g. Foti v. NCO Financial Systems, Inc., 424 F. Supp. 2d 643 (S.D.N.Y. 2006). In my
view, those cases are inapposite to the question presented here, where the debt collector makes a conscious decision
to give information to a third party for the purpose of getting the debtor to call back without knowing that he is
calling a collection agent.
Finally, an immediate appeal will advance the termination of the litigation. If the Court’s
decision was incorrect the parties will be spared the expense of a class certification motion as
well as further proceedings to determine damages.
Defendant’s motion  to take appeal of this Court’s January 11, 2016 Order pursuant
to 28 U.S.C. § 1292(b) is GRANTED.
Digitally signed by
Brian M. Cogan
Dated: Brooklyn, New York
May 5, 2016
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