Frederick J. Hanna & Associates filed a motion Friday to dismiss the Consumer Financial Protection Bureau's lawsuit charging the firm and its three principal partners with operating a collection lawsuit mill.
The CFPB alleged in its lawsuit, filed in July in federal district court in Georgia, that between 2009 and 2013 the Hanna law firm filed more than 350,000 collection lawsuits in Georgia alone and collected millions of dollars each year, often from consumers who may not actually have owed the debts. The CFPB wants compensation for victims, a civil fine and an injunction against the law firm and its partners.
The law firm's motion to dismiss, filed in U.S. District Court for the Northern District of Georgia, states that the CFPB's claims under the Dodd-Frank Act are barred because the Act prohibits the CFPB from bringing any claim against a lawyer for conduct that constitutes the practice of law.
Hanna & Associates focuses exclusively on collection litigation. The firm performs collections and typically files lawsuits if the efforts do not lead to collections. Its three principal partners, Frederick J. Hanna, Joseph Cooling and Robert Winter, play active roles in the companys business strategies.
The CFPB's claims, according to the law firm, revolve solely around the practice of law - specifically filing lawsuits in court and supporting those lawsuits with affidavits.
The motion to dismiss specifically argues that the CFPB has failed to state a claim under the Fair Debt Collection Practices Act (FDCPA) or Dodd-Frank, because there is no standard under federal law requiring "meaningful attorney involvement" in filing a lawsuit in court. That standard arose in connection with debt collection letters and has no application to lawsuits filed in court.
Further, the motion states that the CFPB has failed to identify any example of the Hanna firm ever filing an affidavit from a client that "lacked personal knowledge," or any facts where it could be inferred that the firm was aware of any such affidavits.
Finally, the motion argues that the CFPB's attempt to bring claims going back to 2009 is barred by the one-year statute of limitations in the FDCPA and the non-retroactivity of Dodd-Frank, which became effective in 2011.
Hanna & Associates has denied the CFPB's claims including "the overall mischaracterization of our law firm as a mill or factory." The firm said it has fully cooperated with the CFPB in the year leading up to the CFPB's lawsuit, including logging thousands of man hours helping the CFPB review the law firm's practice.
"Our law firm takes great pride in its commitment to compliance with all consumer protection laws and takes great pains to ensure compliance with state civil procedure and evidentiary laws, step by step," officials with the law firm stated. "At all times, our firm has faithfully followed the long established legal rules and guidelines set forth under the Georgia Civil Practice Act and the long line of established federal judicial precedent with regard to the Fair Debt Collection Practices Act. We believe the law and evidence will show that; and we look forward to presenting our side of the case to the court at the appropriate time."