Here is my test post.
Arkansas Supreme Court Says Cavalry SPV I, LLC is a Debt Collector, Umm…Duh…
Hey, if the Supreme Court says it, who am I to argue?
Okay, okay, it’s actually only the Arkansas Supreme Court, so that only really counts as binding law if you are in an Arkansas court, but it still matters and I’ll tell you why. First, though, I’ll tell you what the Arkansas case, Simpson v. Cavalry SPV I, LLC was about.
By the way, if you are a California consumer defending against a debt collection case brought by this entity, check out the resource page on how to defend yourself against a debt collection lawsuit brought by Cavalry SPV I, LLC.
Cavalry SPV I, LLC Sued Simpson for An Alleged Debt, and Simpson Sued Cavalry Right Back
There’s nothing unusual about Cavalry SPV I, LLC suing a consumer over an old dubious debt. However, this time, the consumer, Patty Simpson turned around and sued Cavalry right back (go, Patty!).
Specifically, Patty sued Cavalry using the federal Fair Debt Collection Practices Act (FDCPA) by bootstrapping the FDCPA to an Arkansas law which states that the debt collectors can only go about their shady business if they properly register with the state. It turns out that Cavalry had failed to register as a debt collector with Arkansas authorities. Therefore, Patty argued that when Cavalry sued her, it was akin to Cavalry threatening to do something that legally Cavalry was not allowed to do — which is a violation of the FDCPA. Specifically, Cavalry SPV I, LLC, by suing Patty was effectively threatening to use the power of the Arkansas legal system to take money from her; because Cavalry was not registered as a debt collector under Arkansas law this lawsuit constituted a threat to do what it was not permitted to do.
The argument was pretty clever, in my opinion.
Cavalry Took the Question to the Arkansas Supreme Court As to Whether it is Really a Debt Collector
This might sound like the most ridiculous argument ever made, but in fact, debt collectors argue all the time that they are in fact, not debt collectors. And that black is white, and that top is bottom and so forth.
Fortunately, the court in this particular case made a common sense determination based on a straightforward reading of the relevant Arkansas statute that Cavalry SPV I, LLC is in fact a debt collector, at least in Arkansas. And that was good enough to allow Patty Simpson to move forward with her claim against Cavalry.
Here’s Why it Matters Even if You’re Not in Arkansas
No matter what state you are in when you face-off in court against a debt buyer such as Cavalry, your state court system will have access to few, if any authoritative court decisions from the same state. Therefore, courts look to other states, to see how the issue has been handled before. So, if you are in California and no California court has issued a written decision on a topic, the California court might very well end up looking at the decision of an Arkansas court. That’s part of why it matters.
But why does it matter if Cavalry SPV I, LLC is a debt collector, according to the law? That part matters because being a debt collector is part of what makes it subject to the FDCPA, meaning that a consumer can potentially sue Cavalry for violating the laws against unfair debt collection. And that is how consumers can get leverage against giant debt collection companies.
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