LVNV Funding Wins New Trial in Appeal of Maryland Debt Collection Case

September 15, 2017

Cleary Gottlieb successfully represented LVNV Funding, Inc. in an appeal before the Court of Special Appeals of Maryland following an adverse $39 million class action jury award in a case tried by other counsel.

The Court of Special Appeals vacated the damages award and ordered a new trial on damages. Cleary took the lead on the post-trial motions and the appeal.

A class action suit was brought against LVNV for violations of Maryland debt collection laws alleging it improperly collected consumer debt without a proper license. Following a trial in which plaintiffs’ counsel argued unjust enrichment and a return of profits, including a profits-on-profits theory of restitution, the jury returned a verdict of $38,630,344.

On appeal, the court accepted Cleary’s arguments that the jury was not properly instructed, including on the method of determining an appropriate monetary award, as well as statute of limitations arguments. The court also held that LVNV should have been permitted to argue that the existence of a valid debt was a defense to the claims. Cleary was successful in obtaining a new trial on damages for LVNV.