In June 2021, Nevada enacted a law that requires debt collectors to provide written notification to debtors 60 days before taking any action to collect a medical debt. Debt collectors sought a preliminary injunction against the law, claiming it violated the First Amendment, was unconstitutionally vague, and was preempted by the FCRA and the FDCPA. The district court denied the request for a preliminary injunction, and in a 2-1 decision issued today, the Ninth Circuit affirmed.
As to the First Amendment arguments, the court rejected the (wild) argument that debt-collection communications are not commercial speech, and thus the law was subject to strict scrutiny. Applying Central Hudson’s intermediate scrutiny standard instead, the court found the fit between Nevada’s goal and the means to accomplish that goal reasonable and proportionate. As to preemption, the court rejected both express and implied preemption arguments.
Dissenting, Judge Van Dyke would have granted the preliminary injunction based on his assessment that the Nevada law prohibits debt collectors from complying with the FDCPA and undermines a central purpose of the FCRA.
