Dawson Wise v. Zwicker & Associates PC
780 F.3d 710
6th Cir.2015Background
- Wise, an Ohio resident, accepted an American Express credit‑card Agreement that contained a Utah choice‑of‑law clause and a fee‑shifting term requiring the cardholder to pay reasonable attorneys’ fees on default.
- Wise defaulted; American Express retained Zwicker & Associates attorneys who demanded fees pre‑suit and pleaded for attorneys’ fees in an Ohio statecourt complaint.
- Wise filed a putative class action in federal court claiming the attorneys’ demands violated the FDCPA (15 U.S.C. § 1692) and Ohio’s OCSPA, arguing Ohio law bars enforcement of fee‑shifting in consumer debt contracts.
- The district court compelled that Utah law governed the Agreement, held the fee provision enforceable, dismissed the FDCPA claim on the pleadings, and dismissed the OCSPA claim.
- The Sixth Circuit reversed as to the FDCPA claim, holding the pleadings lack sufficient facts to resolve the choice‑of‑law dispute under Restatement § 187/§ 188 and remanded for further fact development; it affirmed dismissal of the OCSPA claim because transactions with a financial institution are excluded from the statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ohio or Utah law governs enforceability of the fee‑shifting clause | Wise: Ohio law governs (fee clauses in consumer debt unenforceable), so demands for fees were false/misleading under the FDCPA | Defendants: Utah choice‑of‑law clause controls and Utah enforces fee‑shifting in consumer credit agreements | Reversed dismissal of FDCPA claim — choice‑of‑law cannot be resolved on pleadings; remand for factual development |
| Whether inclusion/demand of attorneys’ fees in complaint and pre‑suit demands violated FDCPA (§§1692e, 1692f) | Wise: Demands were false/misleading or unfair because Ohio law bars fee recovery for consumer debts | Defendants: Fee demands were lawful under Utah law and protected litigation activity | Remanded for adjudication after choice‑of‑law resolved; not decided on merits due to unresolved choice‑of‑law facts |
| Whether Noerr‑Pennington shields defendants for seeking fees in litigation | Defendants: Petition‑clause immunity protects litigation conduct | Wise: Noerr does not protect sham or false petitions; FDCPA includes lawyers and litigation | Court: Noerr‑Pennington inapplicable; FDCPA covers lawyer collection activity and sham/false pleadings are unprotected |
| Whether OCSPA applies to debt collection here | Wise: OCSPA prohibits unfair/deceptive acts in consumer transactions; defendants are suppliers | Defendants: OCSPA excludes transactions with financial institutions; American Express is a financial institution | Affirmed dismissal of OCSPA claim — credit card transaction with a financial institution falls outside OCSPA scope |
Key Cases Cited
- Frey v. Gangwish, 970 F.2d 1516 (6th Cir. 1992) (FDCPA enacted to eliminate abusive debt collection practices)
- Stratton v. Portfolio Recovery Assocs., LLC, 770 F.3d 443 (6th Cir. 2014) (debt collector liable under FDCPA without plaintiff proving actual damages or collector’s intent)
- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, L.P.A., 559 U.S. 573 (2010) (bona fide error defense unavailable for mistakes of federal law under FDCPA)
- Barany‑Snyder v. Weiner, 539 F.3d 327 (6th Cir. 2008) (Ohio generally refuses to enforce attorney‑fee provisions in consumer debt contracts)
- Wilborn v. Bank One Corp., 906 N.E.2d 396 (Ohio 2009) (Ohio follows the American rule; attorney fees recoverable only by statute, contract, or bad faith)
- DaimlerChrysler Corp. Healthcare Benefits Plan v. Durden, 448 F.3d 918 (6th Cir. 2006) (applying Restatement choice‑of‑law factors in federal common‑law context)
- Int’l Ins. Co. v. Stonewall Ins. Co., 86 F.3d 601 (6th Cir. 1996) (choice‑of‑law requires balancing Restatement §6 factors)
- Med. Mut. of Ohio v. deSoto, 245 F.3d 561 (6th Cir. 2001) (federal courts look to Ohio’s Restatement adoption in contract choice‑of‑law matters)
- Hartman v. Great Seneca Fin. Corp., 569 F.3d 606 (6th Cir. 2009) (Noerr‑Pennington does not protect sham petitions or pleadings containing intentional falsehoods)
- Homa v. American Express Co., 558 F.3d 225 (3d Cir. 2009) (location of payment mailing address may control performance contacts for credit‑card contracts)