A split appellate panel on Wednesday reversed a Sacramento federal judge's rulings that favored a debt collector and his practice of sending collection letters "in care of" a person's place of employment.

The panel sent the matter back to Sacramento for further proceedings that comply with the appellate opinion, but took the case away from U.S. District Judge John A. Mendez because of his dismissive attitude toward it and disparaging remarks he made about it and the attorney who filed it.

The panel ordered the Sacramento court to assign the case to another judge. The panel acknowledged this is an extraordinary action but explained that it is warranted because of Mendez's strong personal feelings.

The panel also reversed Mendez's refusal to certify the suit as a class action on behalf of debtors targeted in the same way by the same collector. That issue was also sent back to Sacramento for further review.

Mendez ruled in July 2010 that a Southern California lawyer's custom of sending collection letters "in care of" employers without first obtaining permission from the debtor did not violate the federal Fair Debt Collection Practices Act.

But a majority of the three-judge panel of the 9th U.S. Circuit Court of Appeals said in a 40-page order that the practice carries an unacceptably high risk of unnecessarily stressing and embarrassing debtors, which is "precisely what the act is designed to prevent."

The lawsuit was initiated by Catherine Evon against debt collector and lawyer Sidney Mickell of Montclair in San Bernardino County. He sent a collection letter addressed to Evon "in care of" her North Highlands place of employment. The letter was opened and read by various individuals, including people in the legal department, before it found its way to Evon.

The letter stated that she owed a debt and that failure to pay could result in legal action.

Wednesday's opinion notes that Congress enacted the debt collection law in 1968 in response to "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors, (which) contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy." One of the practices Congress intended to eliminate is embarrassing communications, the opinion states.

The opinion was authored by Circuit Judge Betty B. Fletcher, who was joined by Circuit Judge Richard A. Paez. Circuit Judge John T. Noonan dissented.

"The majority supposes that a debt collection letter addressed to a debtor at (her) place of employment is a communication made to an indefinite number of persons in the employer's business," Noonan wrote. "Is there a general rule that letters to a person in care of the person's employer will be opened? Nothing in my experience suggests that such is the rule or common practice in the United States. The majority invents a custom to confirm its conclusion."

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