An appellate court on Friday affirmed a $311,000 federal jury award to a Laurel man who sued a North Dakota law firm over its debt collection practices.
The case of Timothy McCollough v. Johnson, Rodenburg & Lauinger was argued in Billings in July before a special panel of the 9th U.S. Circuit Court of Appeals. Retired Supreme Court Justice Sandra Day O'Connor along with Judges Sidney R. Thomas of Billings and William A. Fletcher of San Francisco heard the case.
Thomas issued the 30-page opinion, in which the court upheld all of the rulings made by the presiding judge, U.S. Magistrate Judge Carolyn Ostby, and the jury's verdict.
In April 2009, a jury awarded McCollough $311,000 in damages, finding that JRL had violated the Montana Unfair Trade Practices Act and that its prosecution of McCollough was malicious and an abuse of process. The damages included $250,000 for emotional distress, a statutory maximum of $1,000 for violating the law, and $60,000 in punitive damages, which was the maximum under Montana law.
"It was a complete victory for Tim. I'm just absolutely tickled," said McCollough's attorney, John Heenan of Billings. Heenan noted that the appellate court rejected every argument JRL made on appeal. "I'm very proud of Tim for hanging in there for as long as he has," he said.
"I'm just so giddy it's all over. We're finally able to take a deep breath," McCollough said Friday afternoon. "We knew we had a good case. But it just went on forever."
McCollough said he hoped the case showed debt collectors that "people are going to know they don't have to take the garbage. They can fight back."
McCollough didn't have immediate plans for the settlement. "I've got to let it sink in," he said.
McCollough had sued the firm in 2007, alleging that it violated the federal Fair Debt Collection Practices Act and related state law by engaging in abusive and unlawful debt collection litigation. McCollough had old credit card debts from the 1990s and worked with companies to pay the debts, despite a head injury that left him disabled and on Social Security, which is exempt from collections.
One of the old debts was sold to a collection company, CACV of Colorado, which sued him in Yellowstone County in 2005. Representing himself in the state case, McCollough said the statue of limitations had expired, he had no money and he had been harassed by the credit card company. The case was dismissed.
Two years later, JRL, which has offices in Fargo and Bismarck, sued McCollough for $9,800, which included $6,000 in attorney fees and interest. McCollough fought back a second time, got the case dismissed and then sued JRL for violating debt collection laws.
Before the case went to trial, Ostby ruled that JRL had violated federal law by demanding attorney fees not allowed by Montana law; by filing and continuing a lawsuit barred by the statute of limitations in Montana; and by serving on McCollough requests for information she called "an abusive, unfair and unconscionable means to attempt to collect a time-barred debt."
JRL maintained it had done nothing wrong, although a partner in the firm testified at trial that the McCollough case had prompted the company to change its procedures.