Multiple Parties File Lawsuit to Stop Nevada Medical Collections Law From Going Into Effect

Earlier this month, the State of Nevada passed a law to regulate medical debt collection (SB 248).  The hastily passed new law, which goes into effect July 1, 2021, is, as we say in the south, clear as mud. Of course, some might say using the word “clear” in the same sentence as SB 248 is too generous, and they wouldn’t be wrong.

On June 25, 2021, due to the lack of clarity in SB 248, a group comprised of collection agencies, law firms, and industry associations (plaintiffs) filed a lawsuit against Sandy O’Laughlin in her capacity as Nevada State Commissioner. The lawsuit asks the District Court of Nevada to declare SB 248 is unenforceable and grant preliminary and permanent injunctive relief to stop the enforcement of SB 248 because (a) it violates the U.S. Constitution, and (b) its provisions are preempted by federal law.  More specifically, in addition to several constitutional arguments, the plaintiffs allege that SB 248 is (a) impermissible and unconstitutionally vague; (b) preempted by the Fair Debt Collection Practices Act (FDCPA); (c) preempted by the Fair Credit Reporting Act (FCRA). 

To illustrate that the law is impermissibly vague, the plaintiffs allege that SB 248:

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