954 F.3d 965
7th Cir.2020Background
- Richards financed a Chevrolet Tahoe; the loan granted Huntington National Bank a security interest and allowed repossession on default.
- After Richards defaulted, Huntington contracted PAR, Inc., which subcontracted Lawrence Towing to repossess the Tahoe.
- Lawrence Towing employees arrived at Richards’s Indianapolis home; she objected, ordered them off her property, and they called police; an officer handcuffed Richards briefly and the Tahoe was towed.
- Richards sued under the FDCPA, alleging violation of 15 U.S.C. § 1692f(6)(A): nonjudicial repossession when there is no "present right to possession." She argued Indiana law conditions nonjudicial repossession on proceeding "without breach of the peace."
- The district court granted summary judgment to defendants, treating the FDCPA claim as an improper attempt to enforce state law; state-law claims were dismissed without prejudice.
- The Seventh Circuit reversed and remanded, holding that whether a repossessor had a "present right to possession" under § 1692f(6)(A) is determined by state law and that a reasonable jury could find a breach of the peace, so Richards’s FDCPA claim could proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1692f(6)(A) requires inquiry into state law to determine a "present right to possession" | Richards: "Present right" depends on state law; Indiana bars nonjudicial repossession after a breach of the peace, so defendants lacked present right | Defendants: "Present right" means only an enforceable security interest; statute requires no separate state-law inquiry | Court: "Present right to possession" is governed by state property/contract law; state-law inquiry required |
| Whether Richards’s claim improperly repackages state-law violations as FDCPA claims (citing Beler/Bentrud) | Richards: § 1692f(6)(A) is a specific FDCPA provision that reaches nonjudicial repossessions lacking a present right to possess | Defendants: Allowing the claim would turn § 1692f into an enforcement mechanism for state law | Court: Distinguished Beler and Bentrud (which involved § 1692f’s general clause); § 1692f(6)(A) specifically imports a state-law inquiry and therefore the FDCPA claim is permissible |
Key Cases Cited
- Pantoja v. Portfolio Recovery Assocs., LLC, 852 F.3d 679 (7th Cir. 2017) (standard of review for summary judgment)
- Beler v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 480 F.3d 470 (7th Cir. 2007) (§ 1692f’s general "unfair or unconscionable" clause is not a vehicle to enforce unrelated state or federal laws)
- Bentrud v. Bowman, Heintz, Boscia & Vician, P.C., 794 F.3d 871 (7th Cir. 2015) (reaffirming limits on using § 1692f’s general clause to police state-law contract disputes)
- Seeger v. AFNI, Inc., 548 F.3d 1107 (7th Cir. 2008) (interpreting § 1692f(1) required consulting state law to decide whether collection methods were permitted)
- Suesz v. Med-1 Sols., Inc., 757 F.3d 636 (7th Cir. 2014) (en banc) (use of state law to define statutory venue-related terms under the FDCPA)
- Lockhart v. United States, 136 S. Ct. 958 (2016) (last-antecedent canon of statutory interpretation)
- Allen v. First Nat’l Bank of Monterey, 845 N.E.2d 1082 (Ind. Ct. App. 2006) (under Indiana law a repossessor must desist and seek judicial remedy if a breach of the peace occurs)