Illinois State Court Rejects Hunstein Class Action Claims

Actuate Law Teams Up with Barron and Newburger to secure an ARM industry victory. 

March 15, 2023 / Chicago, Illinois: In a March 15, 2023 Order, the Honorable Judge Eve M. Reilly of the Cook County Circuit Court wholly rejected a consumer’s putative class action claims under the Fair Debt Collection Practices Act (“FDCPA”), dismissing all claims with prejudice. The plaintiff, a defaulted debtor, filed the lawsuit against a debt collection agency and the owner of the debt in June 2021 based on the so-called “Hunstein” theory that a debt collector violates the FDCPA’s prohibition of third-party disclosure by communicating private debt information using a third-party letter vendor to print and mail letters. The Eleventh Circuit Court of Appeals seemingly blessed this theory of liability in April 2021 in an opinion that, while since vacated, triggered a wave of copycat lawsuits across the country.

Actuate Law, representing the owner of the debt, teamed up with Barron & Newburger, counsel for the collection agency, to argue against the validity of the claims. The court agreed that, while Section 1692c prevents communications with most third parties in connection with the collection of any debt, the type of communication at issue is not covered by the FDCPA. The transmission of information to a letter vendor, as “a matter of course,” was intended only to allow the vendor to populate a letter to the debtor; the “purpose and context of [the] communication was not intended to induce payment.” In other words, the “communication to the letter vendor was not made in connection with the collection of a debt.” The Court further agreed that “these types of communications do not fall within the purpose or legislative history of the FDCPA.”

It has taken a few years to reverse the Hunstein mania that started in 2021, but this latest victory is yet another weapon to add to the defense arsenal. This win was a true collaborative team effort between Actuate and B&N.