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A Win for Debt Collectors: Massachusetts District Court Strikes Down COVID-19 Debt Collection Ban

May 27, 2020Article

On March 27, 2020, Massachusetts Attorney General Maura Healey issued an emergency regulation with the stated intent of protecting consumers from unfair debt collection practices during the COVID-19 crisis.[1]  The regulation provided, among other things, that it would be considered unfair or deceptive for any creditor or debt collector to (1) initiate, file or threaten to file any new collection lawsuit; (2) initiate, threaten to initiate, or act upon any garnishment, seizure, attachment, or withholding of wages, earnings, property, or funds for the payment of a debt to a creditor; (3) initiate, threaten to initiate, or act upon any repossession of any vehicle; (4) apply for, threaten to apply for, cause to be served or enforce any capias warrant; (5) visit or threaten to visit the household of a debtor at any time; (6) visit or threaten to visit the place of employment of a debtor at any time; and (7) confront or communicate in person with a debtor regarding the collection of a debt  in any public place at any time.[2]  The regulation also prohibited debt collectors from initiating communications with any debtor via telephone (unless that communication was requested by the customer).[3]  Both of these provisions were to apply for 90 days following the effective date of the regulation (until June 25, 2020) or until the State of Emergency Period expired, whichever came first.[4]

On April 20, 2020, the Association of Credit and Collection Professionals, ACA International, Inc. (“ACA”), filed a complaint in the United States District Court for the District of Massachusetts, specifically challenging the constitutionality of the regulation under the First and Fourteenth Amendments of the United States Constitution and Articles 10 and 30 of the Massachusetts Constitution, primarily on free speech grounds.[5] 

On May 6, 2020, United States District Judge Richard G. Stearns granted ACA’s request for a temporary restraining order, ruling that Attorney General Healey already had robust debt collection safeguards at her disposal, meaning that the only thing the emergency regulation actually accomplished was to single out certain types of debt collectors and violate commercial free speech.  Judge Stearns observed that "[t]he best that can be said for the Regulation is that it decreases incrementally the number of times that a phone might ring in a debtor's home with a wanted or unwanted call from one species of debt collector."[6]  Judge Stearns further noted that the previous Massachusetts regulation already limited the number of debt collection calls to two per week, and that the challenged regulation did not in any way curtail debt collection communications by mortgagors, landlords, nonprofit entities, or the federal government.  As such, the speech restriction—which only "incrementally" advanced the state interest presented by the Attorney General—failed to withstand even the intermediate scrutiny standard of review required by the First Amendment.[7]

"While I laud the Attorney General's desire to protect citizens of Massachusetts during a time of financial and emotional stress created by the Covid-19 pandemic,” Judge Stearns wrote, “I do not believe that the Regulation adds anything to their protections that the existing comprehensive scheme of law and regulation already affords to debtors other than an unconstitutional ban on one form of communication."[8]  In addition, Judge Stearns opined that, “[g]iven the plethora of protection provided to debtors by the laws and regulations the court has previously cited, the interest a debtor may have in the regulation may not weigh as heavily as the threat of extinction faced by smaller collection agencies who have been effectively put out of business.”[9]  Judge Stearns concluded his 29-page opinion with the final statement that "a capitalist society has a vested interest in the efficient functioning of the credit market which depends in no small degree on the ability to collect debts."[10]

This ruling is a substantial win for debt collectors and could ultimately have effects that reach states beyond Massachusetts by persuading other courts considering challenges to similar regulations to strike them down as unconstitutional.


Author: Jenny DeFrancisco (Associate, New York) Editor: S. Christopher Collier (Senior Partner, Atlanta)

Hawkins Parnell & Young's national litigation team is helping businesses across the United States navigate unprecedented legal challenges arising from the COVID-19 pandemic. Visit our COVID-19 Resource Center for the latest insights and guidance.


[1] Addendum to Massachusetts Secretary of State Regulation Filing Form, 940 CMR 35:00, Unfair and Deceptive Debt Collection Practices During the State of Emergency Caused by COVID-19, https://www.mass.gov/doc/ma-reg/download

[2] Id.

[3] Id.

[4] Id.

[5] ACA Int’l v. Maura Healey, Civil Action No. 1:20-cv-10767-RGS (D. Mass.) (Apr. 20, 2020 Complaint).

[6] Id. (May 6, 2020 Order, p. 17).

[7] Id.

[8] Id. at p. 22.

[9] Id. at p. 28.

[10] Id.