393 P.3d 1122
Or.2017Background
- Plaintiffs are a lawyer (Daniel N. Gordon) and his law firm that represent creditors and debt buyers in high-volume consumer debt collection and litigation (thousands of accounts, many default judgments).
- Oregon DOJ investigated after consumer complaints and alleged patterns of questionable practices (claims for attorneys’ fees/interest without contract attachments, ignoring choice-of-law and statutes of limitations, reliance on default judgments).
- DOJ served a proposed Assurance of Voluntary Compliance (AVC) imposing procedural and substantive restrictions on the firm’s collection and litigation practices; plaintiffs refused and sued for declaratory/injunctive relief.
- The trial court held UTPA provisions did not apply to plaintiffs’ collection activities and enjoined enforcement; Court of Appeals reversed as to two UTPA provisions (ORS 646.607(1) and ORS 646.608(1)(b)) but affirmed dismissal as to the UDCPA; plaintiffs sought review.
- Supreme Court affirmed Court of Appeals: UTPA applies to plaintiffs’ debt-collection conduct under both ORS 646.607(1) ("unconscionable tactics") and ORS 646.608(1)(b) (causing likely confusion about loans/credit).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ORS 646.607(1) (prohibiting "any unconscionable tactic" in connection with collecting or enforcing an obligation) covers plaintiffs' debt-collection activities | "Unconscionable tactics" requires a customer relationship between actor and harmed person; plaintiffs are not the debt owners and debtors were not their customers, so statute doesn't apply | The phrase is broad; examples are nonexclusive and "in connection with" collecting obligations covers actors who act on behalf of obligees (debt owners) | Held: ORS 646.607(1) applies; "unconscionable tactic" is informed by common-law unconscionability and need not be limited to a direct customer relationship; plaintiffs’ activities are "in connection with" collecting obligations and "in the course of" business |
| Whether ORS 646.608(1)(b) (causing likelihood of confusion as to source/sponsorship/approval of real estate, goods, or services, including loans) applies to plaintiffs' representations in debt collection | Statute is limited to misrepresentations about a person's own goods/services to consumers; does not cover statements about third-party creditors or debt owners | Statute prohibits causing confusion about loans/extensions of credit generally; requires causation and that conduct arise in the course of the actor’s business (including indirect connection) | Held: ORS 646.608(1)(b) applies; the text requires only that the actor causes likelihood of confusion about loans and that the conduct occur in the course of the actor’s business (an indirect connection suffices) |
Key Cases Cited
- State v. Kurtz, 350 Or 65 (interpretive principle: "including but not limited to" signals nonexclusive examples)
- Wolverton v. Stanwood, 278 Or 341 (statute applies when conduct is at least indirectly connected with the actor’s business)
- Bagley v. Mt. Bachelor, Inc., 356 Or 543 (discussion of unconscionability in contract law)
- Kamin v. Kuhnau, 232 Or 139 (equitable relief where one party takes unconscionable advantage)
- Marston v. Myers, 217 Or 498 (constructive trust justified by unconscionable conduct)