*1 articles under channels diplomatic through effected be service require
8 and It channels. government
through official have the drafters unlikely that
is re- service methods these place put govern- participation direct
quiring simultaneously per- officials, while
ment service uncertainties
mitting the
mail. 10(a) does article conclude
We process service effect parties
permit re On by mail. defendants foreign permitted should
mand, Pignone Nuovo proper effect service time reasonable France, Air Enter., v. Fox Jim ly. Dec.1981). Cir. explained, have we reasons
For juris- personal court’s assertion AFFIRMED, and Fagioli is over diction process service determination Hague Con- permissible
ismail is This matter REVERSED. is
vention proceedings. further
REMANDED Plaintiff, HAMILTON,
Kyle M.
v. OF HEALTHCARE
UNITED INC.,
LOUISIANA,
Defendant. Plaintiff-Appellant, Hamilton,
Kyle M. Inc., Recoveries,
Healthcare
Defendant-Appellee. 01-31179.
No. Appeals, Court States Circuit.
Fifth 1, 2002.
Nov. *2 Louisiana, Healthcare health group in force a
(“United”), had father’s through offered plan, to which employer, *3 that to Pursuant dependent. as a insured certain paid coverage, United necessitated services and other medical totaling in excess accident, allegedly Leake (argued), Fagan Davidson George accident, the time $100,000. At LA, Plain- Orleans, Andersson, New & unin- in effect had also father Hamilton’s tiff-Appellant. motorist underinsured sured and/or M. Juston (argued), King, Jr. John Errol polices two to pursuant (“UM”) coverage McGlinchey Staf- Grey, O’Brien, B. Emily Company Insurance Farm State with LA, Defendants Rouge, ford, Baton nearly Farm”). paid Farm (“State State Appellee. $5,000 in and in UM benefits $250,000 to pursuant Hamilton to MedPay benefits HRI, thereafter, Shortly policies. those Unit- with contract to its acting pursuant to Hamilton’s notices sending ed,1 began attempt to Farm and State M. GARZA father DAVIS, EMILIO Before United rights subrogation enforce Judges. STEWART, Circuit and pro- any of the against have to claimed Judge: STEWART, Circuit E. CARL from might receive that Hamilton ceeds insurer own including his the dis- parties, from third appeals M. Hamilton Kyle Farm, Hamil- through Prac- Farm. State Debt State Fair Collection of his missal $57,757.06 1692, paid counsel, subsequently et (“FDCPA”), 15 U.S.C. ton’s Act tices to proceeds, policy $250,000 Re- UM Healthcare out of (1997), against seq. otherwise have (“HRI”), as from would as well Hamilton coveries, which United. behalf entitled, lacked HRI on that it been determination court’s district who counsel appeals new also retained He then jurisdiction. Hamilton diversity Unit- to allow the monies refusal to recover attempted court’s from On Farm. the fol- For State complaint. obtained amend ed had him part, sent United counsel reasons, REVERSE February we lowing fur- Louisiana why REMAND in detail outlining and part, letter AFFIRM 22:2006(7) and Sections Statutes proceedings. Revised ther subrogation type precluded 22:663 PROCEDURAL AND FACTUAL against had made that United claims BACKGROUND Attached proceeds. Farm State petition. a state copy was a letter seri- Hamilton October In recover sought to lawsuit state Hamilton’s automobile single-vehicle in a injured ously HRI through to United paid the funds As passenger. was a he which accident at- any further enjoin the Court asked required accident, Hamilton of the a result ben- coordinate either Defendant, tempts United treatment. other medical separate business wholly and United HRI ser- enforcement provides HRI 1. ownership. no common entities as United such for insurers vices insurer. with the agreement contractual any claims to subrogate efits or future controversy defect. The district court de- policies. under the State Farm proceeds so, nied In doing these motions. it con- removed case to federal United proposed cluded that the amendments completely ERISA alleging preempt- complaint cure the Hamilton’s state law ed claims. After controversy amount in Judgment defect. removed, putative Hamilton filed was entered and Hamilton appealed. action, naming class HRI as defendant. suit, that HRI’s STANDARD OF REVIEW during recovery acts of funds from FDCPA, himself and others violates the 12(b)(6) We review a Rule dis *4 well as the Louisiana Unfair Trade Prac- novo, missal de all accepting well-plead Act, 51:1401, § tices La.Rev.Stat. Ann. et facts as true. Hughes, Abrams v. Baker (West (“LUTPA”). 1987) seq. The two Inc., 424, (5th Cir.2002). 292 F.3d subsequently cases were consolidated and Questions of fact light are viewed in the filed, the defendants in both cases motions plaintiffs, most ques favorable to the and Thereafter, to dismiss. the district court tions of law are reviewed de novo. Mow remanded United suit to state court. Tex., bray v. County, Cameron 274 F.3d La., Hamilton v. United Health Care of (5th Cir.2001). 269, 12(b)(6) “Rule 01-650, Nos. A. Civ. 01-585 & 2001 WL motions granted should not be unless it * (E.D.La. 17, 2001). 536300, May at appears beyond a doubt plaintiff that the The district court then considered HRI’s prove can set no of facts in support of his Motion Judgment Pleadings for on the and claim which would entitle him to relief.” Summary Alternative Motion for Judg- Becken, Castro 349, Romero v. 256 F.3d ment, which the court treated aas motion (5th Cir.2001) (internal quotations and pursuant to dismiss to Federal Rule of omitted). citations 12(b)(6). By Civil Procedure an order en- July tered on the motion was
granted
part,
and the court dismissed
DISCUSSION
Hamilton’s FDCPA claim with prejudice,
The
part
FDCPA was enacted in
finding that Hamilton failed to state a
“to eliminate
prac
abusive debt collection
claim
not collecting
because HRI was
1692(e)
§
tices
collectors.” 15 U.S.C.
“debt” under the FDCPA.
(1997).
such,
“As
the FDCPA enumerates
21, 2001,
On August
the district court
practices
several
contrary
considered
that
independent
concluded
no
basis for
goal,
that
and forbids debt
collectors
subject
jurisdiction
federal
matter
existed
taking such action.” Poirier v. Aleo Col
over
remaining
law
state
claims be-
lections, Inc.,
cause Hamilton failed to establish that the
1997). For the
apply,
FDCPA to
obli
$75,000
amount in controversy exceeded
gation at issue
qualify
“debt,”
must
as a
purposes
for
diversity jurisdiction.
The
“any
defined
or
obli
court
supplemental jur-
refused
exercise
gation of a
to pay money
consumer
arising
isdiction over the state law claims. As
out of a
such,
the money,
which
the state law claims were dismissed
property, insurance, or
without
services
prejudice.
which are
Hamilton then filed a
subject
Motion
for
of the
primarily
Reconsideration and
transaction are
Motion for
Leave
Supplemental
personal,
to File a
for
family,
pur
and
or
Amend-
household
Complaint
ed
seeking
poses,
to add new
whether or
theories
not such
has
recovery
order to cure the
1692a(5).
amount-in-
been reduced to judgment.” §
un-
partners,
Care,
one
its
and
Health
Hamilton’s
dismissed
court
The
dis-
law. The
state
12(b)(6)
and
FDCPA
der the
Rule
claim
FDCPA
reim-
Care’s
Health
that
court held
claim trict
concluding that
after
was
insured
its
against
claim
behalf
bursement
enforce
sought to
HRI
that
FDCPA.
mean
for
“debt”
within
not a
a “debt”
was
that
reasoned
began its
The court
*2-3.
court
The
FDCPA.
ing of
to insurance
key
relating
ele
“debts”
several
inclusion
noting
analysis
aat
“obviously aimed
1692a(5)
to be
appear
was
term
of the
ments
cov-
insurance
court concluded
contracts
who
case.
consumer
in this
present
premi-
consensual
not pay
into
then does
entered
erage
Hamilton
pur
con-
further
“insurance”
*2. The
Id. at
um.”
“transaction”
or
“personal
“not intended
was
chased
cluded
was “obli
em-
here,
an
where
which
the situation
use”
family
to cover
if
subro-
beneficiary
money” to United
or her
gated
ployee
found
bene-
received
valid.
has
plan
benefit
gation
employee
whether
a reimbursement
give rise
question
may
fits that
*5
trans
his
out of’
fails to
“arises
then
plan,
that
obligation
under
problematic.
more
inquiries
to be
fide
bona
plan’s
with
action
the
respond
Hamil
for”
“but
that
recognized
existence
on the
court
that bear
facts
to the
Unit
with
contract
insurance
or benefi-
employees’
health
the
ton’s
of
nonexistence
proceeds
the UM
recovery
reimbursement,
on
the
ed,
so that
his
duty of
ciary’s
However, in
obligation.
no
hold
To
create
Id.
sue.”
is forced
insurer
the
that
argument
concluded,
un-
“would
rejecting
otherwise,
court
the
Unit
contract
out of
of
meaning
arose
“debt”
the normal
duly strain
Augustine,
Garner
on
ed,
relied
Congress”
court
by
used
has been
that
language
Ltd.,
93 C
Levens,
No.
rn &
Id.
FDCPA.
Ke
in the
1994).
Feb.16,
(N.D.Ill.
1994 WL
con-
Gamer,
the district
Based
Corporation
Services
Gamer,
Care
Health
subrogation
a contractual
that
cluded
health
Care”)
group
administered
(“Health
out of’
“arising
in fact
claim, while
of
a number
for
plans
benefit
welfare
kind of
insurance, is not
of
contract
employer.
including Garner’s
employers,
Congress intended
that
payment
was a
Garner
48589, at *1.
1994 WL
pro-
for the
it created
when
daughter
Garner’s
plan.
that
member
consumers.
tection
medical
paid
Care
and Health
injured
was
claims
HRI’s
that
contends
Hamilton
Health
care.
her medical
to cover
benefits
aof
transac
“arise[ ]
Hamilton
against
reimbursement
filed suit
Care
is]
[that
...
in which
tion
to re
refused
after Garner
paid
benefits
primarily
[is]
the transaction
subject of
infor
requests
Care’s
to Health
spond
pur
household
family, or
personal,
assess
it to
allow
mation, which would
1692a(5).
that
He asserts
§
poses.”
rights
any reimbursement
it had
whether
to find
failing
erred
a
recovery from
of Garner’s
by reason
contract-
of United’s
enforcement
HRI’s
letters
subsequent
toor
party,
third
reimburse
rights
based
Health
When
counsel.
Care’s
Health
Hamil
by United
paid
benefits
ment
was no
there
learned
counsel
Care’s
a
constitutes
insurer
health
group
ton’s
was vol
reimbursement,
suit
right
this
1692a(5).
support
To
filed
then
Garner
untarily dismissed.
v. Nat'l
cites Pollice
Hamilton
position,
representing
firm
the law
against
L.P.,
Funding,
Tax
(3d
deductible or loss of use fees because he
Cir.2000) (“[T]he plain meaning of section believed they were encompassed by the
1692a(5) indicates that a ‘debt’ is created LDW. Budget contended that LDW cov-
whenever
consumer is obligated to pay
erage did not apply and that Brown violat-
money
aas
result
aof
transaction whose
ed the restrictions clause in the rental
subject is primarily for personal, family or
agreement, and retained collection agents
household purposes.”). Further, he ar-
to initiate
collection activities against
gues that the district court’s determination Brown. Brown filed suit against the col-
that the contractual subrogation claim was
lection agents under the state law and the
too attenuated from the original purchase
FDCPA, and the district court dismissed
of insurance to be a “debt” under the
the complaint pursuant
12(b)(6).
to Rule
FDCPA is contrary to protec-
broad
The court found that because the alleged
tions afforded by the FDCPA.
obligations did not arise from an “exten-
sion or offer
credit,”
there
claims
no
Gamer is distin-
“debt” as
guishable
defined
the FDCPA.
because it
involved self-funded
924. On appeal, the
plan, whereas
Eleventh Circuit held
Hamilton’s health plan
anis
that as long as the
insured plan,
consumer
here,
Louisiana Revised
creates an obligation to pay,
Statute
Section
“debt” is
22:663 prohibits United
created, and that the
from seeking
extension
credit is
reimbursement. He argues
not a prerequisite to
existence of
Gamer’s limitation
a “debt”
on the scope of
under the FDCPA.
i.e.,
Id. The
court con-
conclusion that
“debts” —
cluded that
“Budget’s
FDCPA’s
assertion
inclusion of
insurance was meant
*6
Brown is obligated
to
as a result of
only
address
a
non-payment
consum-
of premiums
er transaction
suffices
an
to bring the
insured —was based
obli-
upon the erro-
gation” within the term
neous assumption
“debt.” Id.
there must be an
extension of credit to the consumer.
HRI counters that
there is no “debt”
Additionally, Hamilton claims that his within the definition of the FDCPA be
purchase of the United insurance policy is
cause the “subject of the transaction”
the consumer transaction
gave
to
rise
from which the obligation
pay
arose is
United’s obligations to pay medical bene-
not “primarily for personal,
family or
fits and its alleged right
to seek reim-
household purposes.”
1692a(5).
Con
bursement out of
proceeds
of his re-
trary to Hamilton’s assertion that the con
coveries against third parties.
In support
sumer “transaction”
purchase
was the
of his claim that the reimbursement
insurance,
obli-
HRI claims that Hamilton’s re
gation arose
purchase
from the
of insur-
imbursement obligation arose out of the
ance, Hamilton relies on Brown v. Budget
automobile accident and his subsequent
Sys., Inc.,
Rent-A-Car
(11th
Id. Because no such to, from,’ short, ‘incident ‘flowing or .or ” contract, business, arrange- or consensual Red Ball Mo having connection with.’ Hawthorn, ment—occurred Mut. Liab. Freight, Employers tor v. require that Brown did not the court held (5th 374, of Wi, Ins. 189 F.2d 378 Co. at issue obligation to that the tort conclude DictioNary 1951); see also Blaok’s Law the FDCPA. was covered ed.1999) orig (defining “arise” as 102 from). Moreover, stemming in or statutory inating of with all issues
As
meaning
the term “trans
ordinary
be
of
place to
appropriate
terpretation,
many
to
dif
action” is a broad reference
analysis is
text
itself.
gin our
with the
States,
dealings between
411,
types of business
ferent
Hughey v. United
495 U.S.
any
1979,
specific
not connote
parties,
and does
L.Ed.2d 408
S.Ct.
Bass,
(1990).
The district court and Gamer’s
interpretation
the definition of
is
HRI next
argument
offers an alternative
Supreme
too narrow. As the
Court stated
in support of the district court’s Rule
States,
pro
Hubbard v. United
we are
12(b)(6)
complaint.
dismissal Hamilton’s
into
reading
statutory
hibited
clear
HRI contends that it is not a “debt collec-
language
Congress
restriction
itself
meaning
tor” within the
of the statute.
did,
695, 703,
not include. 514 U.S.
115 Instead,
it maintains that
it is excluded
(1995) (“[Aft-
S.Ct.
nize clearly is case in this issue collector” “debt reasons, RE- we foregoing For circum- determination to a tied determination court’s the district VERSE inception surrounding the stances do not case in this at issue funds that we REMAND Accordingly, debt. and under the a “debt” qualify consideration further court district in- proceedings further REMAND issue. this AF- alsoWe opinion. with this consistent the court that urges Finally, Hamilton that decision court’s the district FIRM claims remaining dismissing its erred in this exist did not jurisdiction diversity existed. jurisdiction diversity because case. the parties that dispute does not HRI AFFIRMED part, REVERSED Hamil- that instead, maintains diverse; it REMANDED. part, amount-in-con- to meet has failed ton of Hamil- The crux requirement. troversy Judge, GARZA, Circuit M. EMILIO will fees attorneys’ is argument ton’s dissenting part: concurring in part amount-in-controversy well above raise $75,000. conclusion majority’s agree I correctly dismissed noted that The district lack claims remaining a class imputed may be attorneys’ fees addition, I jurisdiction. matter subject however, observed it also representative; for us inappropriate would be it agree fees to imputing held we have Healthcare whether the issue rule on permitted only is representative class (“HRI”) constitutes Recoveries, at provides explicitly a statute when Col- Debt the Fair collector” “debt Henegar, Graham torneys’ fees. (“FDCPA”). I can- Act *9 Practices Further, Cir.1981). lection 732, 736 majority’s with the however, not, agree to attorneys’ fees awards a statute when to that leave (explaining (1962) 222 L.Ed.2d dis- in the nothing erroneous find also 2. We amendment given when not re- need amend deny Hamilton's decision court's trict futile). v. complaint. Foman would be to amend quest 227, 182, 178, 83 S.Ct. Davis, U.S. that an conclusion obligation to pay doubt, an I however, that the matter is so insurance subrogation claim constitutes a simple. The word “debt” as defined “debt” under the FDCPA. FDCPA does not have the expansive scope that the majority’s analysis suggests. The
The FDCPA defines a “debt” as follows:
(whose
Seventh Circuit
decisions are relied
[A]ny obligation
or
obligation of on extensively by the majority opinion) has
a consumer to pay money arising out of
reasoned that “not all obligations
a transaction in which
money,
prop-
are
considered
‘debts’
erty, insurance, or services which are
[FDCPA].” Bass
Stolper,
Koritzinsky,
the subject of the transaction
pri-
Neider, S.C.,
Brewster &
111 F.3d
marily
personal,
family, or household
(7th Cir.1997).
On the contrary, “the
purposes, whether or not such obligation definition of ‘debt’ ... serves to limit the
has been
judgment.
reduced to
scope of
Id.;
the [Act].”
see also Haw
1692a(5)(2000).
15 U.S.C.
thorne v.
Adjustment, Inc.,
Mac
(11th Cir.1998) (“[W]e
do
The
majority opinion
focuses
hold that every consensual or
“any
words
business
obligation” and “arising out
dealing constitutes a
of,”
‘transaction’ trigger
and concludes that the FDCPA applies
ing application
(such
of the FDCPA
to an
a hold
insurance subrogation claim. The
ing would be contrary to
plain
lan
reasoning
the majority opinion appears
guage
the statute limiting
applicability
be as follows: United Health Care of
to specified
I.”).1
transactions ...
Louisiana,
(“United”)
agreed
pro-
(via
vide insurance for Hamilton
an agree-
addition,
only an extremely broad
ment with his father’s employer). That
interpretation of “arising
of’
could lead
agreement
is a “transaction”
majority
conclude that United’s sub-
that is “primarily
personal,
family,
rogation
“aris[es]
of’
single
purposes”
household
provides
because it
transaction between United and Hamilton.
health care insurance for employees and The subrogation claim
asserted
their families.
agreement
is a “but
arose out of a string of
First,
events.
for” cause of United’s subrogation claim,
there was the insurance contract between
for,
agreement,
without the
United would United and
Second,
Hamilton.
there was
have no claim for reimbursement. There-
the contract for uninsured
underin-
and/or
fore, the
concludes,
majority
the subroga-
sured
(“UM
motorist coverage
policy”) be-
tion claim “arises out of’ a consumer
tween Hamilton and State
Third,
Farm.
insurance,
and constitutes a
there was the accident that injured Hamil-
of the FDCPA.
Fourth,
ton.
there was United’s payment
1.
majority
opinion refers to language
Circuit,
The Seventh
discussing
the "abso-
suggesting
Bass
that the FDCPA should be
lute
FDCPA,
language” of the
was determin-
given a
interpretation.
broad
important
It is
ing only that
the Zimmerman court was
keep
in mind the context of the Bass
wrong to limit the
obligations
Act to
involving
court’s statements. The Seventh Circuit was
Bass,
extension of credit.
111 F.3d at
determining whether it should follow dicta
1325. As
language quoted
in this dissent
from the Third Circuit’s decision in Zimmer
clear,
makes
the Bass court did not mean that
man v. HBO
Group,
395 Cir.1999) in a case (noting, (5th Fifth, 942-44 there bills. medical of Hamilton’s statute, the different federal involving a to Hamil- Farm by State payment the was terms to So, courts given al- interpretations policy. UM to the ton “arising out and “arising from” subrogation such say that this might one though of Therefore, interpretation of’). insur- broad underlying of the out arose claim appropriate Ham- be may not and of’ “arising out between agreement ance claim the say that this ilton, also context. could one events. other these of any one of out
arose
pro
area
in this
Indeed,
law
case
the
the
say that
to
most accurate
It would
opinion’s
majority
the
support
no
vides
combi-
of
out
arose
“arising out
interpretation
expansive
single
of a
events,
not
and
out
nation
appellate
other
in which
Each case
of.”
transaction.2
under the
to exist
a “debt”
found
courts
con
opinion
majority
Nevertheless,
arose
obligation that
an
FDCPA involved
question
nois
“[t]here
cludes
Thus, courts
transaction.
single
out of
arose
pay
to
obligation
pay
obligation
an
have determined
insurance.”
purchasing
transaction of
dues,
v.
Ladick
association
owner’s
home
by assert
conclusion
this
supports
opinion
(10th
1205, 1207
Gemert,
F.3d
146
Van
phrase
given
has
Court
this
ing that
Boehm, Pearlstein
Cir.1998);
v.
Newman
interpreta
expansive
an
out of’
“arising
(7th
477,
Ltd.,
482
F.3d
119
Bright,
&
construed
have
that we
It is true
tion.
for water
pay
Cir.1997),
obligation
an
insur
interpreting
broadly when
phrase
Tax
service,
v. Nat’l
Pollice
sewer
and
v.Co.
Ins.
Am. States
See
policies.
ance
(3d
379,
401
L.P.,
F.3d
225
Funding,
Cir.1998)
(5th
363, 370
F.3d
133
Bailey,
good on a
to make
2000),
obligation
an
‘aris
words
that the
(“This
has held
Riddle,
L.
check,
v. Jesse
Snow
dishonored
of,’
within
used
when
ing out
Cir.1998);
(10th
1350, 1353
P.C.,
F.3d
143
compre
‘broad,
general,
are
policy,
Lund
1124;
v.
Charles
at
133
Duffy,
F.3d
coverage.’
effecting broad
terms
hensive
(9th
739, 742
P.C.,
F.3d
Assoc.,
gren &
mean
‘understood
words
... The
1330, and an
Bass,
at
F.3d
Cir.1997);
in,”
origin
from,”
“having
“originating
rent,
v.
Romea
back
pay
obligation
from.”’”)
“flowing
of,” or
“growing
(2d
111, 119
Assoc.,
F.3d
Heiberger &
Inc. v.
Freight,
Motor
Ball
Red
(quoting
“debts”
Cir.1998),
constitute
all
of Wis.,
Ins. Co.
Liab.
Mut.
Employers
was
case,
obligation
each
In
FDCPA.
Cir.1951))
(5th
(emphasis
374, 378
F.2d
good
particular
pay
promise
Nat’l
v.
Coll.
added);
Christian
Jarvis
at
case,
In each
service.
Pa., 197
Pittsburgh,
Co.
Fire Ins.
Union
transaction.
single
aon
depended
issue
(same).
Cir.1999)
742,
n. 5
no
have found
courts
where
cases
consistently used
however,
not,
have
We
the obli-
relationship between
“debt,” the
“arising
interpretation
expansive
this
transaction
consumer
gation
interpreting
context
in the
out of’
feder
courts
example,
For
attenuated.
more
Various
Humphries
See
al statutes.
prop-
held that
have
Employees,
Fed. USINS
wholly
engaged in another
degree to
wisely
noted
2. The
i.e.,
United,
contract
his
attenuat-
unrelated
is
subrogation claim
United's
which
through another
policy
obtaining
own
Hamil-
UM
See
underlying contract.
ed from
exist.”)
Inc.,
(empha-
La.,
insurer,
Nos.
obligation would
no
Healthcare
v. United
ton
01-650,
01-585,
added).
WL
sis
Civ.A.
2001) (''[H]ad
Plaintiff
(E.D.La. July
*3
*11
erty taxes does not constitute a debt for
The
problem
central
with the majority’s
purposes of applying
Pollice,
the FDCPA.
analysis is that it oversimplifies the issue
401-02;
225 F.3d at
Rossi,
Beggs v.
145 in this case. The majority lumps the sub-
(2d
Cir.1998).
512-13
The obli
rogation provision with the rest of the
to,
gation
pay property
does,
taxes
in a
agreement,
insurance
without recognizing
sense, “arise out of’ the purchase of a
that not all obligations under the agree-
Indeed,
home.
under the majority’s ex ment are identical for purposes of the
pansive interpretation of “arising
of,”
out
it FDCPA.
It
beyond
seems-
dispute that a
would be nearly impossible to' conclude
obligation
consumer’s
to pay
premiums
all,
otherwise. After
purchase
of a on an-insurance policy “arises out of’ the
home is a “but for”
cause
the obligation insurance agreement, and thus constitutes
pay
property
Pollice,
taxes.
howev
a “debt” under the FDCPA. The obli-
er, the Third Circuit found that the obli
gation
pay
premiums fits in perfectly
gation
pay
property taxes did not arise with, the line of cases cited above. The
from
purchase
of property, but rather
obligation clearly arises out of a single
from the
ownership.” 225 F.3d at
“fact of
(the
insurance agreement) and
402 (emphasis in original). The Third Cir
pays for a particular
(health
service
insur-
cuit declined to adopt an interpretation of
ance).
“arising
of’
expansive
as that of the
majority in this casé.
Indeed, no
Subrogation
case
by
very nature, however,
appears
support
the majority opinion’s cannot fit into this neat paradigm. Subro-
broad reading of “arising out of.”3
gation never arises out of a single transae
3. Hamilton relies on
Budget
Brown v.
Therefore,
Rent-A-
Brown provides no support
Inc.,
Systems,
Car
397 Thus, claim subrogation a party. the third substitution “[t]he is Subrogation tion. single transaction aof cannot arise of another place the person one parties.4 two elaim[.]” lawful between Black’s to a reference ed.1990). In (6th 1427 DICTIONARY Law consumer, a sub- by paying a Nor does assignment. an is essence, subrogation or good claim, particular a receive rogation City Capital v. Rohner, Gehrig & Co. See valid, subrogation United’s If service. 1981) 579 Bank, neither purposes, two serve would claim many that, the law (observing First, Hamilton. directly benefits which equiva is agreement states, subrogation “a would reimburse claim subrogation the (the person One assignment”). to an lent bills. Hamilton’s medical paying United (the person another assigns subrogor) Hamilton, prevent Second, would the has subrogor the a claim subrogee) money victim, receiving from insured the insur the health In party. third against and Farm and State United both from as concept plays context, this ance his in- overcompensated thereby being promises company an insurance follows: Greenblatt, 1340-41 supra, at juries. See accident, it that, of an in case the insured to reim- serves subrogation (noting that no insured The bills. his medical pay will prevent and company insurance burse from recovering worry about has longer en- “unjustly being from insured because source any other or a tortfeasor dis- riched”).5 Thus, the “debts” unlike to cover agreed has company the insurance pay obligations above—the cussed (the party insured The costs. his medical dues, and water association homeowners’ the insur assigns to therefore subrogor) bills, rent —Hamilton’s sewer (the right subrogee) company ance particular not does source. or other a tortfeasor from recover Indeed, does Hamilton or service. good arise not claim does subrogation But that paying benefit any direct receive accident, not actually in an is insured until contrary, Unit- On the claim.6 subrogation from money receive right to has and their costs to reduce may able be panies Indeed, insured relationship between 4. might pass these They subrogation. through company is and an insurance individual the form along their customers savings rela- a debtor-creditor described typically Greenblatt, supra, at (the See Instead, premiums. acci- party lower the insured tionship. compa- insurance (suggesting that and victim) "the creditor” 1354-55 considered is dent account subrogation into (or that owes take party can nies other the tortfeasor rates, rates for Jeffrey and set lower See setting debtor.” their money) is "the insured Subrogation: subrogation); Steven Greenblatt, agree to and Insurance customers A. Hanson, Nonpecuniary Eats Enough, Who Big Croley Jon D. Isn’t & the Pie P. When (1997). Pain-and-Suffering Dam- L.Rev. 64 U. Accidents: Last? Costs of Chi. company Law, are insurance ages insured and Tort L.Rev. Harv. "subrogee,” that insur- "subrogor” (1995) (similarly opining and known n. if ex ante might rates lower respectively. companies ance through their costs likely recover they from company collects an insurance 5. When claims). paying subrogation successful accident, subro- caused the tortfeasor however, claim, party an insured subrogation places “it purpose: a third gation serves is not an accident injured in has been who tortfeasor on the compensation burden particular benefit. this paying for Greenblatt, injurious behavior.” deters thus accident, party the insured Prior attempting to HRI Because is supra, at 1341. accident other when might have benefitted Farm, this by State made payments recover would That subrogation claims. paid victims case. instant in the not at issue third factor is passed company the case if resulting (the in costs savings reduction off benefit do individuals insured may be that 6. It in the consumers onto its subrogation) from com- subrogation. Insurance indirectly from claim, valid, ed’s if pre-
vent from Albenjamin receiving BLANKS, a “windfall” Plaintiff- collecting both State Appellant, Farm.7
This last point helps why underscore it SOUTHWESTERN BELL COMMUNI would be inappropriate to apply the CATIONS, INC., individually and do FDCPA in this case. Hamilton’s obli- ing business as Bell, Southwestern do gation does not fit our traditional concep- ing business Operations, as Inc., SBC tion “debt.” United is not demanding doing as business Southwestern Bell money from a poor consumer who has Telephone Company; Southwestern recently been down luck. Telephone Bell Company, individually already has paid Hamilton’s medical bills. doing business as Southwestern Now State Farm has given Hamilton mon- Telephone Bell Company Texas, do ey to pay for essentially the same ex- ing business Southwestern Bell penses. subrogation claim, United’s if val- Services, doing business Southwest id, simply prevent Hamilton from ern Telephone Bell Company, doing being paid twice. The FDCPA was not business as Bell, Southwestern Defen designed to cover this case. The Act was dant-Appellee. drafted to protect consumers who were No. 02-10089 having difficulty paying their debts. It Summary Calendar. was not intended to protect an accident victim, attempts who get a “windfall” United States Court of by Appeals, receiving money from multiple sources. Fifth Circuit.
There support is no Nov. in either text 2002. precedent for the majority’s conclusion
that an obligation an insurance
subrogation claim constitutes a “debt” for
purposes of applying I, the FDCPA.
therefore, respectfully dissent. premiums. form of accident, lower After the problem duce the of "moral hazard" —the however, the accident victim himself does not possibility that party an insured might delib- any receive direct benefit paying the subro- erately put himself at risk in order to obtain a gation claim. Sykes, "windfall.” Alan O. Subrogation and Insolvency, Legal (2001) I. 7. Scholars have noted Stud serves (observing “public policy against important function: preventing an in- such ‘windfalls' party sured is an oft-stated being overcompensated rationale for subrogation”). injuries accident, suffered in an helps it re-