CALOGERO, ET. AL. v. SHOWS, CALI & WALSH, LLP

In the aftermath of hurricanes Katrina and Rita in 2005, Congress provided billions of dollars through the “Road Home” program for repair, rebuilding and other services to homeowners whose residences were destroyed or severely damaged.

In 2007, Iris Calogero and Margie Nell Randolph, both elderly widows, each received grants to restore homes devastated by the storms. A decade later, they received letters from the defendant, a law firm hired by the state of Louisiana. The letters alleged they owed thousands of dollars because they did not follow certain rules under the program, administered by the state. The letters threatened them with litigation.

After Calogero disputed the debt, the defendant changed the basis of the alleged debt and added a new penalty. Meanwhile, the state was suing thousands of other homeowners under similar claims.

On behalf of the plaintiffs and others in their situation, the Southern Poverty Law Center and co-counsels Margaret Woodward, Jenny Deasy and Keren Gesund filed a federal class action lawsuit claiming the debt collector violated the federal Fair Debt Collection Practices Act (FDCPA) by using false, deceptive or misleading representations to collect the alleged debt. The lawsuit was filed in the U.S. District Court for the Eastern District of Louisiana.

A federal judge dismissed the complaint, but it was reinstated by the U.S. Court of Appeals for the 5th Circuit. Following that decision, the lower court judge granted a summary judgment in favor of the law firm. Calogero and Randolph appealed that decision.

In February 2023, the U.S. Department of Housing and Urban Development (HUD) announced that it was ending efforts to reclaim funds from homeowners who received money through the Road Home program. Randolph received partial relief that she sought in the lawsuit when HUD forgave the outstanding balance on the debt she allegedly owed.

On March 15, 2024, the appeals court ruled in favor of the homeowners again, sending the case back to the district court for more proceedings consistent with its opinion stating that the debt collector had violated the FDCPA in multiple ways. On remand, the district court certified the case as a class action. The parties subsequently reached a settlement that will provide monetary compensation to Randolph, Calogero and class members.

Class members can choose to opt out of or object to the settlement on or before March 3, 2025.