Desmond Conboy v. SBA, 992 F.3d 153

Conboy and Gilsenan obtained an SBA‑backed commercial loan (Ceoltas Irish Pub) with unconditional guarantees; they defaulted and sold the property but remained liable under the guarantees.
SBA assigned the deficiency to CBE Group for collection; plaintiffs sued SBA, CBE, Seda Cog, and others in state court; SBA removed to federal court.
After discovery, defendants moved for summary judgment; plaintiffs filed an untimely, noncompliant opposition (no Local Rule 56.1 counter‑statement), which the District Court treated as conceding many facts.
The District Court granted summary judgment: FDCPA and UTPCPL inapplicable to commercial debt; plaintiffs produced no record evidence for FCRA, unjust enrichment, contract with CBE, or claims against Seda Cog; guarantees precluded state‑law defenses against SBA; sovereign immunity barred certain claims against SBA.
On appeal, plaintiffs’ counsel largely copied the district‑court brief into the appellate brief and repeated prior opposition on sanctions; the Third Circuit affirmed summary judgment and awarded Rule 38 damages against appellants’ counsel for filing a frivolous, copy‑and‑paste appeal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Applicability of FDCPA/UTPCPL to the debt	Debt collection laws apply because defendants acted as collectors	Debt is commercial, not consumer; statutes apply only to consumer debts	Statutes inapplicable: FDCPA and UTPCPL govern consumer (not commercial) debts
FCRA claim against SBA (credit reporting)	SBA’s reporting harmed credit; SBA’s actions permit FCRA suit	Sovereign immunity and lack of evidence defeat FCRA claim	No record evidence created material dispute; FCRA claim failed against SBA
Contract/defense preemption by guarantees	Plaintiffs challenge enforcement and collection actions	Unconditional federal loan guarantees require federal law and bar invoking state law to avoid obligation	Guarantees foreclose state‑law contract defense; contract claim against SBA fails
Claims vs. CBE and Seda Cog (contract/unjust enrichment/debt collector status)	CBE/Seda remained involved; were debt collectors; modification/communications toll limitations	Plaintiffs produced no evidence of contract with CBE or facts supporting unjust enrichment or Seda Cog liability	Plaintiffs failed to identify material facts; summary judgment for CBE and Seda Cog affirmed
Appellate sanctions under Rule 38	Counsel argues motions for sanctions were improper	CBE sought Rule 38 damages for frivolous appeal and waste of appellate resources	Appeal was frivolous (copy‑paste, no appellate argument); Rule 38 damages awarded against counsel

Beam v. Bauer, 383 F.3d 106 (3d Cir. 2004) (attorney responsibility; frivolous appeals warrant sanctions)
Kerchner v. Obama, 612 F.3d 204 (3d Cir. 2010) (purpose of Rule 38 damages to deter frivolous appeals)
Hilmon Co. (V.I.) v. Hyatt Int'l, 899 F.2d 250 (3d Cir. 1990) (counsel obligation to research merit; frivolousness standard)
Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718 (2017) (FDCPA definition of "debt collector" focuses on collecting for another)
In re Smith, 866 F.2d 576 (3d Cir. 1989) (UTPCPL private‑action provision limited to consumer purchasers)
Staub v. Harris, 626 F.2d 275 (3d Cir. 1980) (FDCPA intended for consumer debts)
Brumfield v. Sanders, 232 F.3d 376 (3d Cir. 2000) (defamation suits against the United States barred)
Kabakjian v. United States, 267 F.3d 208 (3d Cir. 2001) (affirming that judgments may be sustained on any record‑apparent ground)