ACA Int'l v. Healey

Decision Date06 May 2020
Docket NumberCIVIL ACTION NO. 20-10767-RGS
Citation457 F.Supp.3d 17
Parties ACA INTERNATIONAL v. Maura HEALEY, in her official capacity as Massachusetts Attorney General
CourtU.S. District Court — District of Massachusetts

Robert J. Carty, Jr., Pro Hac Vice, Seyfarth Shaw LLP, Houston, TX, David M. Bizar, Seyfarth Shaw, Boston, MA, for ACA International.

Eric A. Haskell, Jennifer E. Greaney, Attorney General's Office, Boston, MA, for Maura Healey.



Plaintiff ACA International (ACA) seeks a temporary restraining order and preliminary injunction enjoining Maura Healey, the Attorney General of Massachusetts (Attorney General) from enforcing 940 CMR 35.00, "Unfair and Deceptive Debt Collection Practices During the State of Emergency Caused by COVID-19" (the Regulation), issued in her official capacity on March 26, 2020, and made effective the same day. See Pl.'s Ex. 2 (Dkt #2-2) at 1. ACA asserts a likelihood of success on the merits of its claims, arguing that the Regulation "violates the constitutional and state-law rights of ACA members." Pl.'s Mem. (Dkt #7) at 2. ACA contends that some of its Massachusetts members will be irreparably harmed by the Regulation as it effectively prohibits them from conducting their businesses in the Commonwealth with the likely result of bankruptcy.


ACA is a registered Minnesota non-profit trade association with more than 2,300 members who work in the credit-and-collection industry (some within and others outside of Massachusetts), including in their ranks first-party creditors, debt buyers, and collections agencies.1 ACA provides its members products, services, and publications, including educational and compliance-related information. That ACA has standing to litigate this case is not a matter in dispute. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc. , 528 U.S. 167, 181, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000).

The Attorney General issued the Regulation pursuant to Mass. Gen. Laws ch. 93A, § 2 (Chapter 93A), which prohibits unfair or deceptive acts in trade or commerce.2 Id. § 2(a). The Regulation states that "[t]he purpose of 940 CMR 35.00 is to provide emergency regulations3 to protect consumers from unfair and deceptive debt collection practices during the State of Emergency declared by the Governor of Massachusetts on March 10, 2020 pursuant to Executive Order No. 591: Declaration of State of Emergency to Respond to COVID-19." The Regulation prohibits debt collectors from initiating telephone calls to debtors and from initiating a lawsuit to collect a debt.

Section 35.03 of the Regulation, entitled "Prohibitions on Debt Collection Activity with Regard to All Creditors, Including Debt Collectors," provides that:

[f]or the ninety (90) days following the effective date of this regulation or until the State of Emergency Period expires, whichever occurs first, it is an unfair or deceptive act or practice for any creditor, including a debt collector, to: (a) initiate, file, or threaten to file any new collection lawsuit; (b) initiate, threaten to initiate, or act upon any legal or equitable remedy for the garnishment, seizure, attachment, or withholding of wages, earnings, property or funds for the payment of a debt to a creditor; (c) initiate, threaten to initiate, or act upon any legal or equitable remedy for the repossession of any vehicle; (d) apply for, cause to be served, enforce, or threaten to apply for, cause to be served or enforce any capias warrant; (e) visit or threaten to visit the household of a debtor at any time; (f) visit or threaten to visit the place of employment of a debtor at any time; and (g) confront or communicate in person with a debtor regarding the collection of a debt in any public place at any time.

Section 35.04 of the Regulation, entitled "Prohibition on Debt Collection Telephone Calls with Regard to Debt Collectors Only," provides that:

[f]or the ninety (90) days following the effective date of this regulation or until the State of Emergency Period expires, whichever occurs first, it shall be an unfair or deceptive act or practice for any debt collector to initiate a communication with any debtor via telephone , either in person or by recorded audio message to the debtor's residence, cellular telephone, or other telephone number provided by the debtor as his or her personal telephone number, provided that a debt collector shall not be deemed to have initiated a communication with a debtor if the communication by the debt collector is in response to a request made by the debtor for said communication.
(Emphasis added).

The term "debt collector" is defined in § 35.02 to mean:

any person or business whose principal purpose is the collection of a debt, or who regularly collects or attempts to collect, directly or indirectly, a debt owed or due or asserted to be owed or due another. The term debt collector shall also include any person who buys or acquires debt that is in default at the time of purchase or acquisition and who seeks to collect such debt. The term debt collector shall include a creditor who, in the process of collecting his own debt, uses any name other than his own which would indicate that a third person is collecting or attempting to collect the debt. The term debt collector shall also include a person in a business the principal purpose of which is the enforcement of security interests.

While the Regulation bars debt collectors from initiating telephone calls to consumers and creditors or seeking legal recourse on any matter involving a debt, 940 CMR 35.03, 35.04, there are exceptions. Persons seeking to collect mortgage debts, tenant debts, or debts for telephone, gas, or electric utility companies may file lawsuits and resort to their existing remedies. See 940 CMR 35.03(2)-(3). Debt collectors may initiate telephone conversations if the sole purpose of the call is to discuss rescheduling court appearances, or to collect a mortgage or tenant debt. See 940 CMR 35.04(2)-(3). The Regulation also exempts six classes of collectors from its prohibitions by excluding them from its definition of "Debt Collector." These include certain nonprofit entities, federal employees, persons collecting fiduciary- or escrow-related debts, and anyone serving legal process to judicially enforce a debt. See 940 CMR 35.02.

ACA members complain that their only alternative to telephone calls for the foreseeable future is letters, which "rarely yield collection results for a large proportion of the accounts in inventory and are largely used to convey the consumers' rights under federal and state law." Compl. ¶ 44. Also, ACAI represents that in the case of its medical provider clients, it provides information over the telephone about charity care and other health care programs for which distressed consumers may be eligible, some of which are time sensitive.

ACA's Complaint asserts the following claims against the Regulation - Count I and II - violations of the First Amendment; Count III - violation of the Massachusetts Anti-Slapp statute; Count IV - infringement of the Massachusetts common-law litigation privilege; Count V - violation of the Due Process Clause of the Fourteenth Amendment; Count VI - denial of Equal Protection; Count VII - violation of the separation of powers under the federal and state constitutions; and Count VIII - unlawful expansion of the Attorney General's regulatory authority under Chapter 93A. ACA filed for an emergency temporary restraining order on April 20, 2020, followed by a motion for an expedited hearing on April 24, 2020. The court allowed the motion for an expedited hearing and held a video conference on May 1, 2020.


The standard for issuing a temporary restraining order is "the same as for a preliminary injunction." Bourgoin v. Sebelius , 928 F. Supp. 2d 258, 267 (D. Me. 2013). In order for a court to grant this species of relief, a plaintiff "must establish that [it] is likely to succeed on the merits, that [it] is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in [its] favor, and that an injunction is in the public interest." Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc. , 645 F.3d 26, 32 (1st Cir. 2011), quoting Winter v. Natural Res. Def. Council, Inc. , 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008).4 In the conventional case, "[t]he party seeking the preliminary injunction bears the burden of establishing that these four factors weigh in its favor." Esso Standard Oil Co. v. Monroig-Zayas , 445 F.3d 13, 18 (1st Cir. 2006). However, "[i]n the First Amendment context, the likelihood of success on the merits is the linchpin of the preliminary injunction analysis.... [I]rreparable injury is presumed upon a determination that the movants are likely to prevail on their First Amendment claim." Sindicato Puertorriqueño de Trabajadores v. Fortuño , 699 F.3d 1, 10-11 (1st Cir. 2012).


Before turning to the ACA's likelihood of success on the merits, let me note that much of plaintiff's briefing is addressed to issues of state law. Among these are whether the Attorney General in issuing the Regulation exceeded the authority granted her by the Legislature under the Massachusetts Consumer Protection Statute, Chapter 93A, § 2 ; whether her actions violated Mass. Gen. Laws, ch. 231, § 59H, the anti-SLAPP statute; whether in decreeing that any violation of 940 CMR 35.00 would be deemed a strict liability offense, she usurped the exclusive right of the Legislature to enact laws in violation of art. 30 of the Massachusetts Declaration of Rights;5 and whether in singling out a discrete subclass of debt collectors for sanction, she violated the equal protection guarantees of art. 10.

These are matters of genuine importance, but I agree with the Attorney General that it is not for a federal court to police the...

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1 books & journal articles
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    • Albany Law Review Vol. 84 No. 4, December 2021
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