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What is the standard of care imposed by the Model Form JOA on the well operator?
Background
Under a Model Form JOA, BPX as operator and Crimson and other non-operators drilled the McCarn A1H well. After a problem that prevented further drilling the parties agreed to plug and abandon the well.
BPX billed Crimson for its proportionate share of drilling expenses; Crimson refused to pay. In BPX’s suit to recover Crimson’s share of costs, Crimson asserted the affirmative defense of prior material breach by BPX’s failure to act as a prudent operator in drilling the well. Crimson argued the standard of care was a “reasonably prudent operator” while BPX relied on the exculpatory clause in Art. V.A of the JOA that excused liability unless BPX acted with gross negligence or willful misconduct.
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While it remains to be seen what, if any, changes a change in leadership in the CFPB will bring to the Debt Collection Rule, for now collection agencies should begin readying themselves for a November 30
th effective date. Now that the Rule has been fully published, this article will explore the Rule’s center piece, Section 1006.34 (Debt Validation Notices), and five traps for the unwary.
Trap Number 1:
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For purposes of debt validation, the Rule makes clear that if the debt collector knows or should know that the consumer is deceased, and if the debt collector has not previously provided the validation notice to the deceased consumer, the debt collector must provide the debt validation notice to a person authorized to act on behalf of the deceased consumer’s estate. Under the CFPB’s interpretation this would include executors, administrators and personal representatives. Debt collectors therefore should be e
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On Dec. 18, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) completed its seven-year rulemaking process for debt collection. In 2013, the CFPB embarked on an ambitious journey to write regulations to interpret the 40-year-old Fair Debt Collections Practices Act (“FDCPA”). Until the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was passed, no federal regulator had the authority to interpret the FDCPA through rule writing. The Dodd-Frank Act expressly paved the way for a federal regulator, the CFPB, to take a look at what it regarded as evidence of “abusive, deceptive, and unfair debt collection practices” and to interpret appropriate features of the FDCPA through rule writing.
meaningful attorney involvement and debt sale restrictions. Parts I and II were both adopted pursuant to the Bureau’s authority under the Fair Debt Collection Practices Act and not its UDAAP authority under the Dodd-Frank Act, and are effective November 30, 2021.
Part II of the final rule has three primary components, dealing with (1) the collection of time-barred debt, (2) passive debt collection, and (3) validation notices.
Time-Barred Debt
Part II includes prohibitions against taking or threatening legal action on time-barred debt, as was the case with the proposed rule.
See §1006.26(b). Proposed §1006.26(b) prohibited a debt collector from bringing or threatening to bring a legal action against a consumer to collect a debt that the debt collector knows or should know is a time-barred debt. However, the Bureau finalized §1006.26(b) with two principal changes.