On March 16, 2021, Gordon Rees Scully Mansukhani Philadelphia partner, Lawrence Bartel, with assistance from Philadelphia partner Andrew Schwartz, secured a precedential decision in favor of the firm's client, Celentano, Stadtmauer & Walentowicz (“CSW”) in the Third Circuit Court of Appeals.
CSW sought, on behalf of its medical provider client, to recover a medical debt against the non-signatory spouse of a deceased patient. The plaintiff argued that the CSW violated the Fair Debt Collection Practices Act ("FDCPA") when attempting to collect the outstanding medical debt from the non-signatory spouse. The plaintiff contended that the Equal Credit Opportunity Act (“ECOA”) 15 U.S.C. § 1691 et seq., preempts New Jersey’s common-law doctrine of necessaries (where a spouse is jointly liable for necessary expenses incurred by the other spouse) and CSW failed to adhere to the procedural requirements of the doctrine.
Judges Thomas L. Ambro, David J. Porter and Jane Richards Roth affirmed the District Court’s decision, dismissing the plaintiff’s FDCPA claim, holding that (1) the ECOA does not preempt the doctrine of necessaries because the medical debt was “incidental credit,” and was not subject to the “signature rule” and exempt from the ECOA’s prohibition; (2) that CSW followed appropriate procedures to take advantage of the doctrine of necessaries; and (3) that the plaintiff was properly denied leave to amend her complaint because such an amendment was futile.