970 F.3d 576
5th Cir.2020Background
- Calogero accepted a $33,392.68 Road Home grant from Louisiana after Hurricanes Katrina/Rita and signed a multi-part agreement containing covenants, occupancy and insurance requirements, and a Limited Subrogation/Assignment Agreement assigning certain recoveries to the State and obligating repayment of overpayments.
- More than a decade later, law firm Shows, Cali & Walsh (SCW), identifying itself as a debt collector, sent letters seeking $4,598.89 as repayment of alleged Road Home overpayments; Calogero disputed the debt and SCW provided a breakdown of the amounts claimed.
- Calogero sued SCW under the FDCPA alleging deceptive, false, or unconscionable debt-collection practices in attempting to collect the alleged repayment.
- SCW moved to dismiss under Rule 12(b)(6), arguing the Road Home obligation is disaster relief (not a cognizable "debt" under 15 U.S.C. § 1692a(5)) and thus outside the FDCPA; the district court granted dismissal with prejudice.
- The Fifth Circuit reversed and remanded, holding that Calogero’s repayment obligation arises from a "transaction" under the FDCPA (applying the St. Pierre three‑part framework) and concluding the funds were for personal/household purposes; the court declined to resolve other fact-intensive defenses and violations, remanding them for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Calogero's obligation to repay Road Home funds qualifies as a "debt" under the FDCPA (i.e., "arises out of a transaction"). | Calogero: acceptance of grant in exchange for covenants and subrogation created a consensual transaction, so obligation is a FDCPA "debt." | SCW: Road Home funds were disaster relief/donation, not a consumer transaction; repayment resembles unilateral overpayment recovery and thus is not FDCPA "debt." | The court held the obligation arises from a "transaction" (consensual exchange of grant for covenants/subrogation) and therefore qualifies as a FDCPA "debt." Reversed and remanded. |
| Whether the alleged collection letters violated the FDCPA and alternate defenses (e.g., prescription, federal-agency status). | Calogero: letters were deceptive/violative of FDCPA. | SCW: communications did not violate FDCPA; alternative defenses (statute of limitations/prescription, non-federal status) bar claims. | The court declined to resolve these factual, evidence‑dependent issues on 12(b)(6) and remanded for further factual development and district-court consideration. |
Key Cases Cited
- St. Pierre v. Retrieval-Masters Creditors Bureau, Inc., 898 F.3d 351 (3d Cir. 2018) (articulated three-part test for whether an obligation is a FDCPA "debt").
- Agrelo v. Affinity Mgmt. Servs., LLC, 841 F.3d 944 (11th Cir. 2016) (defining FDCPA "debt" elements: consumer, arising from transaction, personal/family/household purpose).
- Oppenheim v. I.C. Sys., Inc., 627 F.3d 833 (11th Cir. 2010) (analyzing when obligations arise from transactions for FDCPA purposes).
- Hamilton v. United Healthcare of La., Inc., 310 F.3d 385 (5th Cir. 2002) (held insurer’s subrogation-based reimbursement obligation qualified as a FDCPA "debt").
- Turner v. Cook, 362 F.3d 1219 (9th Cir. 2004) (limits FDCPA to obligations arising from consensual consumer transactions).
- Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir. 1997) (characterizing FDCPA coverage as tied to consensual consumer exchanges).
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for plausibility on a motion to dismiss).
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading framework requiring factual plausibility).