Henson v. Santander Consumer USA Inc.
137 S. Ct. 1718
| SCOTUS | 2017Background
- Petitioners (Henson et al.) alleged Santander purchased defaulted auto loans originally made by CitiFinancial and then engaged in collection practices violating the Fair Debt Collection Practices Act (FDCPA).
- The FDCPA defines a "debt collector" to include those who "regularly collect or attempt to collect . . . debts owed or due . . . another." 15 U.S.C. §1692a(6).
- Lower courts (district court and Fourth Circuit) held Santander was not a "debt collector" under that definition because it was collecting debts it owned after purchase, not collecting debts "owed . . . another."
- Other circuits had reached contrary conclusions on whether debt purchasers who collect for their own account qualify as "debt collectors," creating a circuit split.
- The Supreme Court granted certiorari to resolve the specific question whether purchasers of defaulted debt who collect for their own account fall within the FDCPA definition requiring collection of debts "owed . . . another." The Court did not address alternative theories not raised in the petition.
Issues
| Issue | Plaintiff's Argument (Henson) | Defendant's Argument (Santander) | Held |
|---|---|---|---|
| Whether a purchaser of defaulted debts who collects for its own account is a "debt collector" under §1692a(6) | "Owed" is a past participle: statute covers those who collect debts previously owed to another, so purchasers of defaulted debt fall within the definition | The plain text targets persons who collect debts "owed . . . another" (i.e., for a third party); a purchaser collecting for its own account is not collecting for "another" and thus is not a debt collector | Affirmed: purchasers collecting for their own account do not fall within the "owed . . . another" clause and thus are not necessarily FDCPA "debt collectors" |
| Whether the statutory tense (“owed” v. “owing”) requires reading to include past ownership | Petitioners: past participle "owed" means previously owed to another, so purchasers are covered | Santander: "owed" routinely describes present-state relationships; context shows "owed" means currently owed to someone (present owner), not necessarily previously owed | Court: "owed" can describe present status; context and neighboring provisions use "owed" to mean present relationships, so petitioners’ tense argument fails |
| Whether statutory context/structure implies purchasers of defaulted debt must be covered | Petitioners: exclusions for those who "obtain" debts pre-default imply Congress intended to exclude only pre-default obtentions, so purchasers of defaulted debt are covered | Santander: "obtain" can mean possession without ownership; other definitional cross-references distinguish originators and current owners but the disputed clause focuses on collecting for "another" | Court: textual structure and related definitions do not support petitioners’ inference; the statute separates roles and the clause targets collection for another |
| Whether policy arguments (industry changes) permit judicial expansion of the FDCPA to cover purchasers | Petitioners: modern market for defaulted debt creates similar risks as third-party collectors; Congress would have included purchasers if it foresaw the market | Santander: courts must apply text as written; policy-driven statutory rewrite is for Congress | Court: Policy concerns are insufficient to rewrite clear statutory text; legislative change is for Congress |
Key Cases Cited
- IBP, Inc. v. Alvarez, 546 U.S. 21 (2005) (presumption that identical words in the same statute have the same meaning)
- Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013) (distinguishing ownership from mere possession/obtaining)
- Magwood v. Patterson, 561 U.S. 320 (2010) (court must not replace statutory text with speculation about Congress’ intent)
- Dodd v. United States, 545 U.S. 353 (2005) (presume legislature says what it means and means what it says)
- Rodriguez v. United States, 480 U.S. 522 (1987) (statutory purposes do not justify rewriting text)
- Loughrin v. United States, 573 U.S. 351 (2014) (differences in statutory language typically convey differences in meaning)