OCTOBER TERM, 1994
Syllabus
HEINTZ ET AL.
v. JENKINS
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH
CIRCUIT
No. 94-367. Argued February 21, 1995-Decided April 18, 1995
Petitioner Heintz is a lawyer representing a bank that sued
respondent Jenkins to recover the balance due on her defaulted car
loan. After a letter from Heintz listed the amount Jenkins owed as
including the cost of insurance bought by the bank when she reneged
on her promise to insure the car, Jenkins brought this suit against
Heintz and his law firm under the Fair Debt Collection Practices
Act, which forbids "debt collector[s]" to make false or misleading
representations and to engage in various abusive and unfair
practices. The District Court dismissed the suit, holding that the
Act does not apply to lawyers engaging in litigation. The Court of
Appeals disagreed and reversed.
Held: The Act must be read to apply to lawyers engaged in
consumer debt-collection litigation for two rather strong reasons.
First, a lawyer who regularly tries to obtain payment of consumer
debts through legal proceedings meets the Act's definition of "debt
collector"; one who "regularly collects or attempts to collect,
directly or indirectly, [consumer] debts owed ... another," 15 U.
S. C. § 1692a(6). Second, although an earlier version of that
definition expressly excluded "any attorney-atlaw collecting a debt
as an attorney on behalf of and in the name of a client," Congress
repealed this exemption in 1986 without creating a narrower,
litigation-related, exemption to fill the void. Heintz's arguments
for nonetheless inferring the latter type of exemption-(l) that
many of the Act's requirements, if applied directly to litigation
activities, will create harmfully anomalous results that Congress
could not have intended; (2) that a postenactment statement by one
of the 1986 repeal's sponsors demonstrates that, despite the
removal of the earlier blanket exemption, the Act still does not
apply to lawyers' litigating activities; and (3) that a nonbinding
"Commentary" by the Federal Trade Commission's staff establishes
that attorneys engaged in sending dunning letters and other
traditional debt-collection activities are covered by the Act,
while those whose practice is limited to legal activities are
notare unconvincing. Pp.294-299.
25 F.3d
536, affirmed.
BREYER, J., delivered the opinion for a unanimous Court.
292
George W Spellmire argued the cause for petitioners.
With him on the briefs were D. Kendall Griffith, Bruce L.
Carmen, and David M. Schultz.
Daniel A. Edelman argued the cause for respondent.
With him on the brief were Joanne S. Faulkner and Richard
J. Rubin.
*
JUSTICE BREYER delivered the opinion of the Court.
The issue before us is whether the term "debt collector" in the
Fair Debt Collection Practices Act, 91 Stat. 874, 15 U. S. C. §§
1692-16920 (1988 ed. and Supp. V), applies to a lawyer who
"regularly,"
through litigation, tries to collect consumer
debts. The Court of Appeals for the Seventh Circuit held that it
does. We agree with the Seventh Circuit and we affirm its
judgment.
The Fair Debt Collection Practices Act prohibits "debt
collector[sJ" from making false or misleading representations and
from engaging in various abusive and unfair practices. The Act
says, for example, that a "debt collector" may not use violence,
obscenity, or repeated annoying phone calls, 15 U. S. C. § 1692d;
may not falsely represent "the character, amount, or legal status
of any debt," § 1692e(2)(A); and may not use various "unfair or
unconscionable means to collect or attempt to collect" a consumer
debt, § 1692f. Among other things, the Act sets out rules that a
debt collector must follow for "acquiring location information"
about the debtor, § 1692b; communicating about the debtor (and
the
*Briefs of
amici curiae urging reversal were filed for
the American Bar Association by
George E. Bushnell; for the
Commercial Law League of America by
Manuel H. Newburger and
Barbara M. Barron; and for the National Association of
Retail Collection Attorneys by
Ronald S.
Canter and
Rosalie B. Levinson.
Robert J. Hobbs, Joan S.
Wise, Deborah
M. Zuckerman, and
Alan Alop filed a brief for the
National Consumer Law Center, Inc., et al. as
amici curiae
urging affirmance.
Andrew Rosen filed a brief for Sherry Ann Edwards as
amicus curiae.
293
debt) with third parties, § 1692c(b); and bringing "[l]egal
actions," § 1692i. The Act imposes upon "debt collector[s]" who
violate its provisions (specifically described) "[c]ivilliability"
to those whom they,
e. g., harass, mislead, or treat
unfairly. § 1692k. The Act also authorizes the Federal Trade
Commission (FTC) to enforce its provisions. §
1692l(a). The
Act's definition of the term "debt collector" includes a person
"who regularly collects or attempts to collect, directly or
indirectly, debts owed [to] ... another." § 1692a(6). And, it
limits "debt" to consumer debt, i.
e., debts "arising out of
... transaction[s]" that "are primarily for personal, family, or
household purposes." § 1692a(5).
The plaintiff in this case, Darlene Jenkins, borrowed money from
the Gainer Bank in order to buy a car. She defaulted on her loan.
The bank's law firm then sued Jenkins in state court to recover the
balance due. As part of an effort to settle the suit, a lawyer with
that law firm, George Heintz, wrote to Jenkins' lawyer. His letter,
in listing the amount she owed under the loan agreement, included
$4,173 owed for insurance, bought by the bank because she had not
kept the car insured as she had promised to do.
Jenkins then brought this Fair Debt Collection Practices Act
suit against Heintz and his firm. She claimed that Heintz's letter
violated the Act's prohibitions against trying to collect an amount
not "authorized by the agreement creating the debt," § 1692f(1),
and against making a "false representation of ... the ... amount
... of any debt," § 1692e(2)(A). The loan agreement, she conceded,
required her to keep the car insured "'against loss or damage'" and
permitted the bank to buy such insurance to protect the car should
she fail to do so. App. to Pet. for Cert. 17. But, she said, the
$4,173 substitute policy was not the kind of policy the loan
agreement had in mind, for it insured the bank not only against
"loss or damage" but also against her failure to repay the bank's
car loan. Hence, Heintz's "representation"
294
about the "amount" of her "debt" was "false"; amounted to an
effort to collect an "amount" not "authorized" by the loan
agreement; and thus violated the Act.
Pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure, the District Court dismissed Jenkins' Fair Debt
Collection lawsuit for failure to state a claim. The court held
that the Act does not apply to lawyers engaging in litigation.
However, the Court of Appeals for the Seventh Circuit reversed the
District Court's judgment, interpreting the Act to apply to
litigating lawyers.
25 F.3d
536 (1994). The Seventh Circuit's view in this respect
conflicts with that of the Sixth Circuit. See
Green v.
Hocking, 9 F.3d
18 (1993)
(per curiam). We granted certiorari to resolve
this conflict. 513 U. S. 959 (1994). And, as we have said, we
conclude that the Seventh Circuit is correct. The Act does apply to
lawyers engaged in litigation.
There are two rather strong reasons for believing that the Act
applies to the litigating activities of lawyers.
First, the
Act defines the "debt collector[s]" to whom it applies as including
those who "regularly collec[t] or attemp[t] to collect, directly or
indirectly, [consumer] debts owed or due or asserted to be owed or
due another." § 1692a(6). In ordinary English, a lawyer who
regularly tries to obtain payment of consumer debts through legal
proceedings is a lawyer who regularly "attempts" to "collect" those
consumer debts. See,
e. g., Black's Law Dictionary
263 (6th ed. 1990) ("To collect a debt or claim is to obtain
payment or liquidation of it, either by personal solicitation or
legal proceedings").
Second, in 1977, Congress enacted an earlier version of
this statute, which contained an express exemption for lawyers.
That exemption said that the term "debt collector" did not include
"any attorney-at-law collecting a debt as an attorney on behalf of
and in the name of a client." Pub. L. 95-109, §803(6)(F), 91 Stat.
874, 875. In 1986, however, Congress repealed this exemption in its
entirety, Pub. L. 99361, 100 Stat. 768, without creating a
narrower, litigation-
295
related, exemption to fill the void. Without more, then, one
would think that Congress intended that lawyers be subject to the
Act whenever they meet the general "debt collector" definition.
Heintz argues that we should nonetheless read the statute as
containing an implied exemption for those debt-collecting
activities of lawyers that consist of litigating (including, he
assumes, settlement efforts). He relies primarily on three
arguments.
First, Heintz argues that many of the Act's requirements,
if applied directly to litigating activities, will create harmfully
anomalous results that Congress simply could not have intended. We
address this argument in light of the fact that, when Congress
first wrote the Act's substantive provisions, it had for the most
part exempted litigating attorneys from the Act's coverage; that,
when Congress later repealed the attorney exemption, it did not
revisit the wording of these substantive provisions; and that, for
these reasons, some awkwardness is understandable. Particularly
when read in this light, we find Heintz's argument
unconvincing.
Many of Heintz's "anomalies" are not particularly anomalous. For
example, the Sixth Circuit pointed to § 1692e(5), which forbids a
"debt collector" to make any "threat to take action that cannot
legally be taken." The court reasoned that, were the Act to apply
to litigating activities, this provision automatically would make
liable any litigating lawyer who brought, and then lost, a claim
against a debtor.
Green, supra, at 21. But, the Act says
explicitly that a "debt collector" may not be held liable if he
"shows by a preponderance of evidence that the violation was not
intentional and resulted from a bona fide error notwithstanding the
maintenance of procedures reasonably adapted to avoid any such
error." § 1692k(c). Thus, even if we were to assume that the
suggested reading of § 1692e(5) is correct, we would not find the
result so absurd as to warrant implying an exemption for litigating
lawyers. In any event, the assumption
296
would seem unnecessary, for we do not see how the fact that a
lawsuit turns out ultimately to be unsuccessful could, by itself,
make the bringing of it an "action that cannot legally be
taken."
The remaining significant "anomalies" similarly depend for their
persuasive force upon readings that courts seem unlikely to
endorse. For example, Heintz's strongest "anomaly" argument focuses
upon the Act's provisions governing "[c]ommunication in connection
with debt collection." § 1692c. One of those provisions requires a
"debt collector" not to "communicate further" with a consumer who
"notifies" the "debt collector" that he or she "refuses to pay" or
wishes the debt collector to "cease further communication." §
1692c(c). In light of this provision, asks Heintz, how can an
attorney file a lawsuit against (and thereby communicate with) a
nonconsenting consumer or file a motion for summary judgment
against that consumer?
We agree with Heintz that it would be odd if the Act empowered a
debt-owing consumer to stop the "communications" inherent in an
ordinary lawsuit and thereby cause an ordinary debt-collecting
lawsuit to grind to a halt. But, it is not necessary to read §
1692c(c) in that way-if only because that provision has exceptions
that permit communications "to notify the consumer that the debt
collector or creditor may invoke" or "intends to invoke" a
"specified remedy" (of a kind "ordinarily invoked by [the] debt
collector or creditor"). §§ 1692c(c)(2), (3). Courts can read these
exceptions, plausibly, to imply that they authorize the actual
invocation of the remedy that the collector "intends to invoke."
The language permits such a reading, for an ordinary court-related
document does, in fact, "notify" its recipient that the creditor
may "invoke" a judicial remedy. Moreover, the interpretation is
consistent with the statute's apparent objective of preserving
creditors' judicial remedies. We need not authoritatively interpret
the Act's conductregulating provisions now, however. Rather, we
rest our
297
conclusions upon the fact that it is easier to read § 1692c(c)
as containing some such additional, implicit, exception than to
believe that Congress intended, silently and implicitly, to create
a far broader exception, for all litigating attorneys, from the Act
itself.
Second, Heintz points to a statement of Congressman Frank
Annunzio, one of the sponsors of the 1986 amendment that removed
from the Act the language creating a blanket exemption for lawyers.
Representative Annunzio stated that, despite the exemption's
removal, the Act still would not apply to lawyers' litigating
activities. Representative Annunzio said that the Act
"regulates debt collection, not the practice of law. Congress
repealed the attorney exemption to the act, not because of
attorney[s'J conduct in the courtroom, but because of their conduct
in the backroom. Only collection activities, not legal activities,
are covered by the act .... The act applies to attorneys when they
are collecting debts, not when they are performing tasks of a legal
nature .... The act only regulates the conduct of debt collectors,
it does not prevent creditors, through their attorneys, from
pursuing any legal remedies available to them." 132 Congo Rec.
30842 (1986).
This statement, however, does not persuade us.
For one thing, the plain language of the Act itself says nothing
about retaining the exemption in respect to litigation. The line
the statement seeks to draw between "legal" activities and "debt
collection" activities was not necessarily apparent to those who
debated the legislation, for litigating, at first blush, seems
simply one way of collecting a debt. For another thing, when
Congress considered the Act, other Congressmen expressed fear that
repeal would limit lawyers' "ability to contact third parties in
order to facilitate settlements" and "could very easily interfere
with a client's right to pursue judicial remedies." H. R. Rep. No.
99-405, p. 11
298
(1985) (dissenting views of Rep. Hiler). They proposed
alternative language designed to keep litigation activities outside
the Act's scope, but that language was not enacted.
Ibid.
Further, Congressman Annunzio made his statement not during the
legislative process, but
after the statute became law. It
therefore is not a statement upon which other legislators might
have relied in voting for or against the Act, but it simply
represents the views of one informed person on an issue about which
others may (or may not) have thought differently.
Finally, Heintz points to a "Commentary" on the Act
by
the FTC's staff. It says:
"Attorneys or law firms that engage in traditional debt
collection activities (sending dunning letters, making collection
calls to consumers) are covered by the [Act], but those whose
practice is limited to legal activities are not covered."
Federal Trade Commission-Statements of General Policy or
Interpretation Staff Commentary on the Fair Debt Collection
Practices Act, 53 Fed. Reg. 50097, 50100 (1988) (emphasis added;
footnote omitted).
We cannot give conclusive weight to this statement. The
Commentary of which this statement is a part says that it "is not
binding on the Commission or the public."
Id., at 50101.
More importantly, we find nothing either in the Act or elsewhere
indicating that Congress intended to authorize the FTC to create
this exception from the Act's coveragean exception that, for the
reasons we have set forth above, falls outside the range of
reasonable interpretations of the Act's express language. See,
e. g., Brown v.
Gardner, 513 U. S. 115, 120-122
(1994); see also
Fox v.
Citicorp Credit Servs., Inc.,
15 F.3d
1507, 1513 (CA9 1994) (FTC staff's statement conflicts with
Act's plain language and is therefore not entitled to deference);
Scott v.
Jones, 964 F.2d
314, 317 (CA4 1992) (same).
299
For these reasons, we agree with the Seventh Circuit that the
Act applies to attorneys who "regularly" engage in
consumer-debt-collection activity, even when that activity consists
of litigation. Its judgment is therefore
Affirmed.
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