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April 2022

Multi-state Team Kills Class Claims Brought Against National Debt Buyer Client

In a vigorously contested battle, after robust motion practice and argument, Judge Pedro Colon of the Milwaukee County, Wisconsin District Court granted the firm client’s motion to compel arbitration, effectively eviscerating the plaintiff’s class claims. Chicago Partner Avanti Bakane, Seattle Senior Counsel Melissa Manning, and Chicago Of Counsel Jamie Wiesenfeld secured the win.

The plaintiff pursued a strained theory that defendant debt buyer offered her the option of seeking hardship such that she would not have to pay off her delinquent account not to provide reprieve but instead as a scheme to obtain financial information from her such that it could evaluate whether to seek legal remedies against her.

Before getting into discovery to shut down this opportunistic claim, defendant moved to compel arbitration. Seeking to keep her class claims alive, the plaintiff vigorously opposed, going to lengths to argue ambiguity of straightforward purchase documents.

Much like her thin theory of the case, the plaintiff’s position lacked merit, and the court granted defendant’s motion, compelling arbitration of claims. In doing so, Judge Pedro Colon of the Milwaukee County, Wisconsin State Court adopted defendant debt buyer’s position that the purchase agreement at issue was unambiguous in its sale of everything pertaining to the accounts - including the account agreements.

After finding the discussion of cases distinguishing the receivables from accounts irrelevant to this case - which only dealt with accounts – the court found that defendant indeed stepped into the original creditor’s shoes as assignee of an enforceable right to compel arbitration.

The ruling comes as a welcome victory for Gordon & Rees and the industry as plaintiffs slide into state court in avoidance of Article III standing requirements, particularly in class action cases with potentially high exposure.  

Cyneisha Hankins v. Portfolio Recovery Assocs., et al. (Milwaukee County, Wis. 2021-CV-5172, April 2, 2022).

Avanti D. Bakane
Jaime L. Wiesenfeld