ANARION INVESTMENTS LLC, Plaintiff-Appellant, v. CARRINGTON MORTGAGE SERVICES, LLC; BROCK & SCOTT, PLLC; CHRISTIANA TRUST, Defendants-Appellees.
Nos. 14-5781/5993
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
July 23, 2015
15a0159p.06
RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b). Appeal from the United States District Court for the Middle District of Tennessee at Nashville. No. 3:14-cv-00012—Aleta Arthur Trauger, District Judge. Argued: March 11, 2015. Before: KETHLEDGE and DONALD, Circuit Judges; McCALLA, District Judge.
COUNSEL
ARGUED: Scott D. Johannessen, LAW OFFICES OF SCOTT D. JOHANNESSEN, Nashville, Tennessee, for Appellant. Nicholas H. Adler, BROCK & SCOTT, PLLC, Franklin, Tennessee, for Appellees. ON BRIEF: Scott D. Johannessen, LAW OFFICES OF SCOTT D. JOHANNESSEN, Nashville, Tennessee, for Appellant. Nicholas H. Adler, BROCK & SCOTT, PLLC, Franklin, Tennessee, for Appellees.
KETHLEDGE, J., delivered the opinion of the court in which McCALLA, D.J., joined. DONALD, J. (pp. 5–10), delivered a separate dissenting opinion.
OPINION
KETHLEDGE, Circuit Judge. This appeal concerns the meaning of the word “person” as used in the Fair Debt Collection Practices Act (FDCPA or Act),
We take the facts alleged in Anarion‘s complaint as true. See Glazer v. Chase Home Finance LLC, 704 F.3d 453, 457 (6th Cir. 2013). In 2008, Bank of America loaned Kirk Leipzig $960,000, secured by a deed of trust on the residence (located in Brentwood, Tennessee) that he bought with the money. Leipzig then assigned his rights in the residence to the Leipzig Living Trust, which in turn leased it to Johannessen in 2010. The lease has a five-year term and includes an option to buy. Johannessen exercised that option in 2011, but otherwise did not act to obtain title to the property then. Around that time, Leipzig stopped making payments on the bank loan. In January 2013, Johannessen assigned his lease and option rights to Anarion. By then the residence was in foreclosure.
In a handful of foreclosure notices in a local newspaper, Carrington stated that Brock & Scott was a “substitute trustee” for purposes of the bank loan “by an instrument duly recorded.” Anarion alleges there was no such “instrument.” That putative “misrepresentation” then gave rise to this suit, which the district court dismissed under
The FDCPA‘s enforcement provision,
The presumptive answer to that question is yes. The federal Dictionary Act provides that, “[i]n determining the meaning of any Act of Congress,” the word “person” includes artificial entities—like Anarion—unless “the context indicates otherwise[.]”
The defendants respond that in some places the term “person” refers unambiguously to natural persons. For example, § 1692d(1) bars debt collectors from harassing “any person” by means of, among other things, “[t]he use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.” (Emphasis added.) Similarly, § 1692e(4) bars debt collectors from representing or implying that “nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful[.]” (Emphasis added.) Corporations have no physical person to harm, and cannot be arrested or imprisoned, so those references themselves apply only to natural persons. But corporations do have “reputation[s]” and “property,” which means that “any person” as used in these provisions includes artificial
entities. Neither of these provisions, therefore, provides support for the assertion that “any person” as used in the Act means only natural persons.
Instead the contrary is implied by one of the Act‘s core provisions, § 1692a(3), which defines “consumer” to mean “any natural person obligated or allegedly obligated to pay any debt.” That formulation strongly suggests that, when Congress meant to refer only to natural persons, it did so expressly. Moreover, if the term “any person” is already limited to natural persons, then the word “natural” as used in § 1692a would be meaningless. We strive not to read statutes that way. See Ford Motor Co. v. United States, 768 F.3d 580, 587 (6th Cir. 2014). In summary, the usual rule from the Dictionary Act applies here: the term “person” as used in the FDCPA includes both artificial entities and natural persons alike.
The defendants’ remaining argument is that extending the FDCPA‘s protections to entities like Anarion—an investment company, of all things—would outpace the statute‘s purpose. Even taking that argument on its own terms, however, two aspects of the FDCPA alleviate that concern. First, the definition of debt in § 1692a prevents any person—natural or artificial—from filing a lawsuit over an attempt to collect a debt owed by a business.
The district court‘s judgment is reversed, and the case remanded for proceedings consistent with this opinion. Anarion‘s separate appeal in No. 14-5781 is dismissed as moot.
ANARION INVESTMENTS LLC, Plaintiff-Appellant, v. CARRINGTON MORTGAGE SERVICES, LLC; BROCK & SCOTT, PLLC; CHRISTIANA TRUST, Defendants-Appellees.
Nos. 14-5781/5993
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
July 23, 2015
DISSENT
BERNICE BOUIE DONALD, Circuit Judge, dissenting.
It is true that the Dictionary Act establishes a presumption that, unless Congress indicates otherwise, the word “person” refers to individuals and legal entities alike when used in legislative text. Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2768 (2014);
However, several factors suggest that Congress did “indicate otherwise,” i.e., that the word “person” is best thought of as a natural person when referring to plaintiffs under the FDCPA. First, the Supreme Court has made clear that congressional history properly guides our application of the Dictionary Act to interpret a term otherwise undefined in a statutory text. Rowland v. Cal. Men‘s Colony, Unit II Men‘s Advisory Counsel, 506 U.S. 194, 198-201 (1993) (observing relevant congressional history lacked any indication Congress contemplated the term “person” to include legal entities with regards to
When Congress passed the FDCPA in 1977, it did so out of concern that existing laws did not adequately protect consumers from aggressive third-party debt collectors.
The language of the Act reflects this congressional purpose, particularly in light of the three main actors involved in a consumer debt collection scenario: a creditor, a debt collector employed by that creditor, and a debtor. The majority compares uses of the word “person” across these categories as an indication Congress intended to include legal entities in all three postures. However, the Act is most consistent when one considers debtors to be natural persons facing creditors and debt collectors of all stripes—from individuals to banks and other companies. This reading is reflected throughout the statutory text, including those sections cited by Anarion and the majority.
The enforcement provision of the FDCPA makes liable “any debt collector who fails to comply with any provision of [the statute] with respect to any person[.]”
In Rowland, an association of prison inmates sought to proceed in forma pauperis under
Nor did the Rowland Court require a broad interpretation of the term “person”
In this context, Congress began by clearly identifying the group it intends to benefit from the FDCPA. Several of the FDCPA‘s provisions indicate it is designed to protect against harm to natural persons, whether that harm is caused by natural persons or legal entities. With that in mind, we must look beyond the default definition of “person” to the broader aim of the statute. Indeed, even in an instance where the default definition prevailed, we held application of the Dictionary Act was appropriate not merely because it “comport[ed] with our common understanding,” but because it also “le[d] to a result that [wa]s consistent with the purpose of the FDCPA.” Gillie v. Law Office of Eric A. Jones, LLC, 785 F.3d 1091, 1098 (6th Cir. 2015) (emphasis added).
There are several instances within the FDCPA in which interpreting “person” to include legal entities “seems not to fit.” Rowland, 506 U.S. at 200. Beginning with the specific provision in question, § 1692k, we find that its four uses of the word “person” universally refer to a debtor entitled to protection under the FDCPA. See
The majority acknowledges that these provisions contain “references [that] apply only to natural persons,” but then goes on to insist we must include legal entities as plaintiffs because, for example, “corporations do have ‘reputation[s]’ and ‘property[.]‘” Maj. Op. at 3 (second alteration in original). From this, the majority concludes that “[n]either of these provisions . . . provides support for the assertion that ‘any person’ as used in the Act means only natural persons.”
natural persons and legal entities is not, under Rowland, a reason to contradict the law‘s overall aim. See Rowland, 506 U.S. at 208 (“Thus, recognizing the possibility of an organizational in forma pauperis status even in the supposedly ‘extreme’ case of the [association] would force us to delve into the difficult issues of policy and administration without any guidance from § 1915.“). The majority‘s analysis might apply as regards the provisions it highlights, but its analysis also supports a more context-appropriate interpretation: that the FDCPA aims to protect natural
The existing jurisprudence surrounding the FDCPA echoes this more nuanced interpretation. Despite the thousands of claims that have been brought in federal court since the passage of the FDCPA in 1977, neither the majority nor the parties cite a single instance in which a legal entity has sued as a “person” entitled to relief under the Act. Anarion attempts to combat this stark reality by citing our opinions in Wright v. Financial Service of Norwalk, Inc., 22 F.3d 647, 649 (6th Cir. 1994) (en banc), and Montgomery v. Huntington Bank, 346 F.3d 693, 697 (6th Cir. 2003), for the proposition that reference to “any person” in the FDCPA is “couched in the broadest possible language.” Wright, 22 F.3d at 649 (quoting Riviera v. MAB Collections, Inc., 682 F. Supp. 174, 175 (W.D.N.Y. 1988)) (internal quotation marks omitted). However, those cases both addressed a question of which natural persons—direct consumers and/or parties related to them—had standing to sue under the FDCPA, not whether non-natural persons had the same rights.
The majority, for its part, dispatches the issue by explaining that “[n]othing in our decision today means that Anarion can bring suit under the FDCPA,” because several other requirements must be met to state a claim under the Act. Maj. Op. at 4. However, this seems a cavalier response to a very real concern. That Anarion may not have stated a claim does not mean that another legal entity will not follow with a more viable claim—now enabled by an unprecedented holding that legal entities are “persons” deserving of protection under a statute designed to protect individuals from harassing phone calls or threats of violence. This holding potentially opens the door to a new class of plaintiffs under the FDCPA and effectively provides a new cause of action in foreclosure appeals. Were that my sole ground for concern, I might
decide differently. As written, however, the majority‘s holding runs counter to the FDCPA‘s purpose, language, and history. Accordingly, I respectfully dissent.