In December 2017, New Economy Project and co-counsel filed a state class action lawsuit against the debt collection law firm Houslanger & Associates and its debt buyer clients Virgo Capital and Aquarius Capital, as well as debt buyers Gotham Collection Services and HK Recovery Group, on behalf of Gladys Bostic, Cimeron DuBose, Gerald Dycha, and Heyward Collins, all low-income New Yorkers. The lawsuit alleges that the defendants violated federal debt collection and state consumer protection laws by collecting on judgments they knew were obtained through fraud.
A previous class action lawsuit New Economy Project brought with co-counsel, Sykes v. Mel S. Harris and Associates, LLC, alleged that the Mel Harris law firm and its debt buyer clients had, for years, systematically obtained court judgments through fraud. Sykes ended in a groundbreaking settlement where, for a vast majority of class members, the Sykes defendants stopped collecting on their judgments and a New York state court later vacated the judgments. About 25,000 Sykes class members did not get this relief, however, because the Sykes defendants had sold their judgments to third-party debt buyers – including Virgo Capital and Aquarius Capital – before the settlement in Sykes. Ms. Bostic, Ms. DuBose, Mr. Dycha, and Mr. Collins are seeking monetary and injunctive relief on behalf of themselves and these 25,000 class members.
The state lawsuit, which New Economy Project filed with co-counsel, Emery Celli Brinckerhoff & Abady LLP, Mobilization for Justice, and National Center for Law and Economic Justice, is proceeding in the Supreme Court of the State of New York, County of New York.
The lawsuit is a companion to a federal lawsuit that New Economy Project filed with co-counsel in the U.S. District Court for the Southern District of New York in November 2017.