514 U.S. 291 (1995), 94-367, Heintz v. Jenkins

Docket Nº:No. 94-367
Citation:514 U.S. 291, 115 S.Ct. 1489, 131 L.Ed.2d 395, 63 U.S.L.W. 4266
Party Name:HEINTZ et al. v. JENKINS
Case Date:April 18, 1995
Court:United States Supreme Court

Page 291

514 U.S. 291 (1995)

115 S.Ct. 1489, 131 L.Ed.2d 395, 63 U.S.L.W. 4266

HEINTZ et al.



No. 94-367

United States Supreme Court

April 18, 1995

Argued February 21, 1995



Petitioner Heintz is a lawyer representing a bank that sued respondent Jenkins to recover the balance due on her defaulted car loan. After a letter from Heintz listed the amount Jenkins owed as including the cost of insurance bought by the bank when she reneged on her promise to insure the car, Jenkins brought this suit against Heintz and his law firm under the Fair Debt Collection Practices Act, which forbids "debt collector[s]" to make false or misleading representations and to engage in various abusive and unfair practices. The District Court dismissed the suit, holding that the Act does not apply to lawyers engaging in litigation. The Court of Appeals disagreed and reversed.


The Act must be read to apply to lawyers engaged in consumer debt-collection litigation for two rather strong reasons. First, a lawyer who regularly tries to obtain payment of consumer debts through legal proceedings meets the Act's definition of "debt collector": one who "regularly collects or attempts to collect, directly or indirectly, [consumer] debts owed . . . another," 15 U.S.C. § 1692a(6). Second, although an earlier version of that definition expressly excluded "any attorney-at-law collecting a debt as an attorney on behalf of and in the name of a client," Congress repealed this exemption in 1986 without creating a narrower, litigation-related, exemption to fill the void. Heintz's arguments for nonetheless inferring the latter type of exemption—(1) that many of the Act's requirements, if applied directly to litigation activities, will create harmfully anomalous results that Congress could not have intended; (2) that a postenactment statement by one of the 1986 repeal's sponsors demonstrates that, despite the removal of the earlier blanket exemption, the Act still does not apply to lawyers' litigating activities; and (3) that a nonbinding "Commentary" by the Federal Trade Commission's staff establishes that attorneys engaged in sending dunning letters and other traditional debt-collection activities are covered by the Act, while those whose practice is limited to legal activities are not— are unconvincing. Pp. 294-299.

25 F.3d 536, affirmed.

Page 292

George W. Spellmire argued the cause for petitioners. With him on the briefs were D. Kendall Griffith, Bruce L. Carmen, and David M. Schultz.

Daniel A. Edelman argued the cause for respondent. With him on the brief were Joanne S. Faulkner and Richard J. Rubin.[*]

Justice Breyer delivered the opinion of the Court.

The issue before us is whether the term "debt collector" in the Fair Debt Collection Practices Act, 91 Stat. 874, 15 U.S.C. §§ 1692-1692o (1988 ed. and Supp. V), applies to a lawyer who "regularly," through litigation, tries to collect consumer debts. The Court of Appeals for the Seventh Circuit held that it does. We agree with the Seventh Circuit and we affirm its judgment.

The Fair Debt Collection Practices Act prohibits "debt collector[s]" from making false or misleading representations and from engaging in various abusive and unfair practices. The Act says, for example, that a "debt collector" may not use violence, obscenity, or repeated annoying phone calls, 15 U.S.C. § 1692d; may not falsely represent "the character, amount, or legal status of any debt," § 1692e(2)(A); and may not use various "unfair or unconscionable means to collect or attempt to collect" a consumer debt, § 1692f. Among other things, the Act sets out rules that a debt collector must follow for "acquiring location information" about the debtor, § 1692b; communicating about the debtor (and the

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debt) with third parties, § 1692c(b); and bringing "[l]egal actions," § 1692i. The Act imposes upon "debt collector[s]" who violate its provisions (specifically described) "[c]ivil liability" to those whom they, e.g. , harass, mislead, or treat unfairly. § 1692k. The Act also authorizes the Federal Trade Commission (FTC) to enforce its provisions. § 1692l (a). The Act's definition of the term "debt collector" includes a person "who regularly collects or attempts to collect, directly or indirectly, debts owed [to] . . . another." § 1692a(6). And, it limits "debt" to consumer debt, i.e. , debts "arising out of . . . transaction[s]" that "are primarily for personal, family, or household purposes." § 1692a(5).

The plaintiff in this case, Darlene Jenkins, borrowed money from the Gainer Bank in order to buy a car. She defaulted on her loan. The bank's law firm then sued Jenkins in state court to recover the balance due. As part of an effort to settle the suit, a lawyer with that law firm, George Heintz, wrote to Jenkins' lawyer. His letter, in listing the amount she owed under the loan agreement, included $4,173 owed for insurance, bought by the bank because she had not kept the car insured as she had promised to do.

Jenkins then brought this Fair Debt Collection Practices Act suit against Heintz and his firm. She claimed that Heintz's letter violated the Act's prohibitions against trying to collect an amount not "authorized by the agreement creating the debt," § 1692f(1), and against making a "false representation of . . . the . . . amount . . . of any debt," § 1692e(2)(A). The loan agreement, she conceded, required her to keep the car insured " 'against loss or damage' " and permitted the bank to buy such insurance to protect the car should she fail to do so. App. to Pet. for Cert. 17. But, she said, the $4,173 substitute policy was not the kind of policy the loan agreement had in mind, for it insured the bank not only against "loss or damage" but also against her failure to repay the bank's car loan. Hence, Heintz's "representation"

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about the "amount" of her "debt" was "false"; amounted to an effort to collect an "amount" not "authorized" by the loan agreement; and thus violated the Act.

Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the District Court dismissed Jenkins' Fair Debt Collection lawsuit for failure to state a claim. The court held that the Act does not apply to lawyers engaging in litigation. However, the Court of Appeals for the Seventh Circuit reversed the District Court's judgment, interpreting the Act to apply to litigating lawyers. 25 F.3d 536 (1994). The Seventh Circuit's view in this respect conflicts with that of the Sixth Circuit. See Green v. Hocking, 9 F.3d 18 (1993) (per curiam). We granted certiorari to resolve this...

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