Background - Arias had a Bank of America checking account into which he deposited Social Security retirement income (SSRI); Bank of America identified some SSRI deposits and indicated a portion might be protected. - Judgment creditor 1700 Inc., through its counsel GMBS, served a restraining notice on Arias’s bank to garnish funds to satisfy a default judgment on a lease claim. - Arias submitted an exemption claim form and bank statements showing only SSRI deposits and repeatedly told GMBS all funds were exempt; GMBS refused to release funds unless Arias paid or litigated. - GMBS filed an objection in New York State court asserting Arias failed to provide bank records ‘‘starting from a zero balance’’ and had not disproved commingling; at the hearing GMBS reviewed the same statements Arias provided and withdrew its objection, agreeing to release the funds. - Arias sued GMBS in federal court under the FDCPA and related New York law; the district court granted judgment on the pleadings for GMBS on the FDCPA claim and declined supplemental jurisdiction over state claims. - The Second Circuit vacated and remanded, holding Arias plausibly alleged FDCPA violations under sections 1692e and 1692f based on GMBS’s allegedly false statements and bad-faith litigation conduct. ### Issues | Issue | Plaintiff's Argument | Defendant's Argument | Held | |---|---:|---|---| | Whether GMBS made actionable false or misleading representations in violation of 15 U.S.C. § 1692e | Arias: GMBS falsely claimed he failed to provide required documents (zero-balance records) and failed to disprove commingling, which would discourage asserting exemptions | GMBS: statements were legal advocacy in litigation, not misleading; Arias wasn’t actually misled and knew he hadn’t commingled funds | Court: Statements were inaccurate as a matter of EIPA law and could mislead the least sophisticated consumer; §1692e claim plausibly pleaded | | Whether GMBS’s conduct violated 15 U.S.C. § 1692f by using unfair or unconscionable means | Arias: GMBS filed a baseless objection despite documentary proof of SSRI, forcing an unnecessary hearing to harass or extract payment | GMBS: it complied with EIPA procedures and had a good-faith basis (bank’s ambiguous note; uncertified statements) to object; FDCPA is strict liability so motive irrelevant | Court: Allegations support that GMBS knowingly prolonged litigation and imposed unnecessary hearing costs—sufficient to state a §1692f claim; bad faith is relevant to unfairness | | Whether sections 1692e and 1692f can be alleged together for the same conduct | Arias: overlapping protection; misrepresentations and unfair litigation conduct can both violate FDCPA | GMBS: the provisions are mutually exclusive | Court: Not mutually exclusive; same conduct can violate both depending on theory and effects | | Whether state-law remedies under EIPA preclude federal FDCPA relief | Arias: FDCPA supplements state law; both remedies can coexist | GMBS: EIPA provides its own sanctions, so FDCPA relief is limited | Court: FDCPA’s purpose includes supplementing inadequate state protections; FDCPA claims are not displaced by EIPA remedies | ### Key Cases Cited Cruz v. TD Bank, N.A., 711 F.3d 261 (2d. Cir. 2013) (describing purpose of New York’s EIPA to protect exempt funds) Easterling v. Collecto, Inc., 692 F.3d 229 (2d. Cir. 2012) (least sophisticated consumer standard for §1692e analysis) Sykes v. Mel S. Harris & Assocs. LLC, 780 F.3d 70 (2d. Cir. 2015) (sections 1692e and 1692f can overlap) Eades v. Kennedy, PC Law Offices, 799 F.3d 161 (2d. Cir. 2015) (FDCPA applies to certain litigating activities by debt-collection counsel) Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (FDCPA applies to lawyers collecting debts) Currier v. First Resolution Inv. Corp., 762 F.3d 529 (6th Cir. 2014) (examples of unfair or unconscionable collection practices)