BUSINESS LAW
Supreme Court of Alaska (2025)
Alison Tobin
In Portfolio Recovery Associates, LLC v. Duvall, 568 P.3d 1224 (Alaska 2025), the Supreme Court of Alaska held that debt purchasers seeking to collect debt not expressly authorized by the agreement that created the debt or permitted by law, and that filing suit without adequate proof of debt ownership and amounts are violations Alaska’s Unfair Trade Practices and Consumer Protection Act (UTPA) and that consumers who prevail on these claims may be awarded statutory damages and attorneys’ fees. (Id. at 1242, 1249, 1252–53, 1255–56). The court consolidated three appeals from the superior court, all of which challenged debt purchaser Portfolio Recovery Associates, LLC’s debt-collection practices. (Id. at 1230). In all three cases, Portfolio Recovery Associates, LLC filed suit against credit card holders for past-due debt. (Id.). In response, the credit card holders filed counterclaims alleging violations of the UTPA and filed for summary judgment. (Id.). The lower court found that in each of the three cases, Portfolio failed to present adequate evidence that they were the rightful owners of the debt, or evidence of the actual amount owed by each card holder. (Id.). Thus, the lower court granted the card holder’s motions for summary judgment and some of their UTPA counterclaims, awarding attorneys’ fees accordingly. (Id.). Reasoning that debt-collection claims are governed by contract law in Alaska, the Court affirmed the superior court’s finding that debt requires specific proof of assignment to be collected and the only debt that may be collected is debt authorized by the agreement or otherwise permitted under law. (Id. at 1242, 1249). Further finding that the card holder’s counterclaims met the evidentiary standards required by summary judgement, the Court found that the superior court did not err in granting the cardholder’s UTPA counterclaims or in granting statutory damage awards. (Id. at 1254, 1256, 1258). However, the Court remanded to the lower courts for reconsideration of attorneys’ fees in two of the cases. (Id. at 1260). Affirming on the merits, the Supreme Court held that filing suit to collect debt without permissible proof of the ownership and amount debt, as well as filing to collect interest, late fees, or other incidental charges violates the Alaska UTPA and consumers who prevail on UTPA claims are entitled to statutory damages and attorneys’ fees. (Id. at 1242, 1249, 1252–53, 1255–56).
