Arizona Federal Court Holds FDCPA’s $1,000 Statutory Damages Provision Applies Separately to Each Defendant

In Casillas v. Thunderbird Collections Specialists Incorporated, et al., the plaintiff sustained a work-related injury requiring medical treatment for which a worker’s compensation claim was filed. Under state law, an injured worker who receives a workers’ compensation award is not legally responsible for medical bills covered by the award. Unaware of this law, a collection agency began efforts to recover the plaintiff’s unpaid medical bills, including engaging a law firm to file a collection suit.

After the collection suit was dismissed for lack of service, the plaintiff filed an action in Arizona federal court against the collection agency and its law firm for violations of the Fair Debt Collection Practices Act, 15 § USC 1692 et seq. (FDCPA), alleging that the defendants’ representations that the plaintiff was responsible for his medical bills, including the filing of the lawsuit, were false, deceptive, and misleading.

The collection agency made an offer of judgment, which the plaintiff accepted. The law firm then moved for summary judgment, but rather than disputing the violation, argued, in part, that the plaintiff was precluded from recovering against the law firm because the case arose out of a single FDCPA violation, for which the plaintiff had already received the $1,000 maximum statutory damages available from the collection agency.

The court disagreed, noting that while the defendants’ actions related to the same debt, the collection agency’s liability went beyond violations of the FDCPA and therefore its conduct was distinct from that of the law firm. Surveying decisions by other district courts on the issue, the court further concluded that, even assuming that the defendants’ actions were not independent of each other, § 1692k(a) “provides for statutory damages in the amount of $1,000 per defendant-debt collector.”