On March 18, the U.S. District Court for the Eastern District of Michigan granted in part and denied in part motions to dismiss a pro se consumer’s complaint alleging that a credit union and a law firm violated federal debt collection and consumer reporting laws when they attempted to collect on a default judgment. The court dismissed all claims against the credit union with prejudice and dismissed all but one claim against the law firm, allowing only the FDCPA debt verification claim under 15 U.S.C. § 1692g(b) to proceed.

The case arose after a credit union obtained a default judgment of $4,624.74 against the consumer in Michigan state court in October 2023 for an unpaid debt. The consumer alleged she did not learn of the judgment until March 2025 and unsuccessfully moved in state court to set it aside and to object to garnishment efforts. She then filed a federal lawsuit asserting claims under the FDCPA, the FCRA, TILA, and the UCC, alleging the defendants improperly continued garnishment, collection, and negative credit reporting without validating the debt.

The court adopted the magistrate judge’s recommendation that the Rooker-Feldman doctrine, which prohibits federal courts from conducting appellate review of final state court judgments, barred the consumer’s claims to the extent she sought vacatur of the state court default judgment. The court also agreed that the consumer’s FDCPA misrepresentation claims were too conclusory to survive. However, the court disagreed with the magistrate judge on the § 1692g(b) debt verification claim, finding the consumer had adequately alleged that the law firm continued collection efforts after she disputed the debt without first verifying it. The court also dismissed the FCRA claims as conclusory and denied leave to amend.