44 F. Supp. 3d 1230
N.D. Ga.2014Background
- FDCPA case against Capital One Bank regarding debt collection of HSBC-originated accounts.
- Plaintiff Davidson alleges Capital One is a “debt collector” under FDCPA §1692a(6) by acquiring defaulted debts and collecting them.
- Capital One argues it is not a debt collector because it collects debts it owns, not debts owed to another.
- Magistrate Judge Scofield recommended denying the motion to dismiss and allowing class certification renewal after 20 days.
- The district court adopted the R&R to conclude Capital One is not a debt collector under the second prong of §1692a(6); grant of Capital One’s Motion to Dismiss followed.
- Plaintiff’s class-certification motion was denied as moot and related motions were resolved in favor of Capital One.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Capital One is a “debt collector” under FDCPA §1692a(6). | Davidson contends Capital One regularly collects debts owed to another. | Capital One asserts it collects its own debts, not those owed to others. | No; Capital One not a debt collector under §1692a(6). |
| Whether the §1692a(6)(F) exception applies to Capital One. | Relying on the exception, plaintiff argues debt acquired in default can still be collected as a debt collector. | The court should apply the explicit text; the exception excludes debts not in default when acquired. | Unavailing; court held the exception does not apply because the debt was not in the class defined as owed to another. |
| Whether plaintiff plausibly alleged Capital One as a debt collector at the pleading stage. | Amended complaint shows acquisition of defaulted debt and collection activity. | Allegations do not show collection for another’s debt; Capital One seeks to collect its own debt. | Plaintiff failed to plausibly allege debt-collector status; motion to dismiss granted. |
Key Cases Cited
- Schlosser v. Fairbanks Capital Corp., 323 F.3d 534 (7th Cir. 2003) (debt collectors vs creditors; acquiring defaulted debt context)
- FTC v. Check Investors, Inc., 502 F.3d 159 (3d Cir. 2007) (duel roles of creditor and debt collector; limitations on loopholes)
- Schlegel v. Wells Fargo Bank, N.A., 720 F.3d 1204 (9th Cir. 2013) (acquired debt in default; debt collector status under second prong scrutinized)
- Hixson v. Bank of Am., N.A., 517 F. App’x 767 (11th Cir. 2013) (FDCPA applicability where debtor seeks to collect its own debt; statutory language focused)
- Hasbun v. Recontrust Co., N.A., 508 Fed.Appx. 941 (11th Cir. 2013) (FDCPA coverage of debt collectors; creditor vs. debt collector distinctions)