A debt collector did not violate the Fair Debt Collection Practices Act (FDCPA) when it filed a summary judgment motion in a collection action after the debtor had sought enforcement of a credit card agreement’s arbitration provision, a federal appellate court recently held. In reaching this conclusion, the court emphasized that the “FDCPA is not an enforcement mechanism for matters governed elsewhere by state and federal law.”

In Bentrud v. Bowman, Heintz, Boscia & Vician, P.C., an Indiana law firm specializing in debt collection brought suit on behalf of its credit card issuer client against a debtor in state court. After the debt collector filed a motion for summary judgment, the debtor responded by invoking an arbitration provision contained in his credit card agreement. Granting the debtor’s election of arbitration, the state court denied summary judgment. This ruling stayed the case, but provided that the stay would “automatically” dissolve if the debtor failed to initiate arbitration within 30 days.

In an unusual turn of events, no one agreed to conduct the arbitration before the court-imposed 30-day deadline had passed. The debt collector then filed a second motion for summary judgment.

Responding to this filing, the debtor brought an action against the debt collector in the U.S. District Court for the Southern District of Indiana, arguing that the law firm’s second motion for summary judgment in state court—filed after the debtor had elected arbitration—constituted a violation of the FDCPA’s prohibition on unfair or unconscionable means of attempting to collect a debt. The district court granted the debt collector’s motion for summary judgment, and the debtor appealed to the Seventh Circuit.

The U.S. Court of Appeals for the Seventh Circuit affirmed the district court’s ruling. It noted that the FDCPA provides a list of eight illustrative violations, one of which is taking or threatening to take any “nonjudicial action” against the debtor. The Court reasoned that, in light of this illustration, “state judicial proceedings are outside the scope” of the Act. It concluded that when the debtor filed its second summary judgment motion, “it acted consistently with the state court order setting a time limit to initiate arbitration,” and thus the motion was not “an unfair or unconscionable means of attempting to collect a debt” under the FDCPA. The Seventh Circuit declined to permit the debtor to use the FDCPA as a means of enforcing the arbitration provision in his credit card agreement, emphasizing that “his remedy sounds in breach of contract, not the FDCPA.”