Infante v. Portfolio Recovery Associates, LLC
1:15-cv-10596
N.D. Ill.Jun 6, 2017Background
- Plaintiff Victoria Infante alleged Portfolio Recovery Associates (PRA) violated the FDCPA by failing to report her dispute to Experian in July 2015, relying chiefly on an Experian report dated July 14, 2015 that did not show the debt as disputed.
- PRA produced internal records and a declaration showing it reported the dispute to all three credit bureaus on July 8, 2015, and Plaintiff produced a TransUnion report (July 16, 2015) indicating the debt was disputed.
- PRA filed a Rule 11/28 U.S.C. § 1927 sanctions motion after Plaintiff voluntarily dismissed her FDCPA claim following summary judgment briefing; the motion was referred to a magistrate judge.
- Magistrate Judge Weisman recommended denial of sanctions, reasoning conflicting evidence (the Experian report versus PRA’s records) made counsel’s pursuit reasonable and justified discovery.
- Judge John Z. Lee conducted de novo review, adopted the magistrate judge’s recommendation, overruled PRA’s objections, and denied the sanctions motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 11 sanctions are warranted for pursuing the FDCPA claim | Infante/counsel had a reasonable factual basis (the July 14 Experian report) and could investigate through discovery | PRA: evidence (internal records, declaration, TransUnion report) showed the claim lacked factual support and counsel should have withdrawn | Denied — conflicting evidence made counsel’s investigation and pursuit reasonable; no Rule 11 violation |
| Whether § 1927 sanctions are warranted for multiplying proceedings | Counsel did not act unreasonably or in bad faith; discovery was appropriate to resolve the factual dispute | PRA: counsel continued despite repeated, contradicting defendant evidence, so conduct was objectively unreasonable | Denied — conduct did not rise to the high bar for § 1927; claims were colorable and discovery-appropriate |
| Whether plaintiff conceded facts that refute her claim | Plaintiff’s filings did not concede PRA’s version; she defended investigation and reliance on Experian report | PRA claims plaintiff effectively admitted facts that refute her theory | Denied — court found no such concession and treated evidence as genuinely disputed |
| Whether counsel had duty to check later credit reports before suing | Plaintiff relied on the July 14 Experian report that formed the basis of the claim; later reports would not defeat the July 14 theory | PRA argues counsel should have obtained subsequent reports showing dispute status before filing | Denied — counsel was not required to seek unrelated later reports; the July 14 report provided a sufficient starting factual basis |
Key Cases Cited
- Mendez v. Republic Bank, 725 F.3d 651 (7th Cir. 2013) (de novo review standard for magistrate recommendations)
- Cuna Mut. Ins. Soc. v. Office & Prof'l Emps. Int'l Union, Local 39, 443 F.3d 556 (7th Cir. 2006) (Rule 11 objective inquiry standard)
- Beverly Gravel, Inc. v. DiDomenico, 908 F.2d 223 (7th Cir. 1990) (factors for reasonableness of pre‑filing investigation)
- Kizer v. Children's Learning Ctr., 962 F.2d 608 (7th Cir. 1992) (bringing suit despite questionable facts can still be reasonable)
- Jolly Grp., Ltd. v. Medline Indus., Inc., 435 F.3d 717 (7th Cir. 2006) (§1927 duty to dismiss claims that are no longer viable)
- Walter v. Fiorenzo, 840 F.2d 427 (7th Cir. 1988) (§1927 sanctions require serious, studied disregard for judicial process)