Opinion analysis: Gorsuch’s first opinion confirms exemption of debt buyers from Fair Debt Collection Practices Act

This morning brought the first opinion from Justice Neil Gorsuch, explaining the decision of a unanimous court in Henson v. Santander Consumer USA that the Fair Debt Collection Practices Act does not apply to debt buyers – entities that buy and collect defaulted consumer debt. Perhaps this was not Gorsuch’s favorite case of the April argument calendar; it was the first argument in which he did not ask a question. But it does present the customary criteria for a first opinion: a unanimous decision in a case lacking great controversy. What makes the opinion more important than the decision it reflects is its first glimpse of Gorsuch’s style: Does it tell us anything useful about the approach he will take to drafting his opinions? Obviously one unanimous majority opinion in a straightforward statutory case is a small and unrepresentative sample, but at the risk of over-reading today’s offering, I would suggest that the two most salient features of this particular opinion are an effort to craft memorable prose – some may regard it as purple – and a commitment to taking seriously all of the arguments of the losing party.

As suggested above, the case presents a basic question under the Fair Debt Collection Practices Act: whether the statute applies to the recently emerging industry of “debt buyers,” large entities that purchase the debts they collect instead of limiting themselves to providing collection services to the lenders that originated the defaulted obligations. The dispute turns on the oddity that the statute regulates debt collection, but only by debt collectors, not the originators of the debt. Sensibly or not, Congress decided that federal supervision was appropriate not for original lenders, but only for third-party collectors arguably less likely to have an ongoing relationship with the debtor. This case involves neither of those groups, but rather an entity that (at least for the customers involved here) buys debts previously originated by others and then collects them on its own behalf.

We are alerted to our author’s self-conscious styling by the opinion’s alliterative opening reference to the “[d]isruptive dinnertime calls [and] downright deceit [that] drew Congress’s eye to the debt collection industry,” resulting in a statute that authorizes “weighty fines … to deter wayward collection practices.” Literary devices aside, the opinion’s treatment of the statutory question is direct and comprehensive. Noting that the statute limits its coverage to those that collect debts “owed … another,” the opinion all but resolves the controversy in a single paragraph, explaining that

by its plain terms this language seems to focus our attention on third party collection agents working for a debt owner—not on a debt owner seeking to collect debts for itself. Neither does this language appear to suggest that we should care how a debt owner came to be a debt owner — whether the owner originated the debt or came by it only through a later purchase.

Having offered an affirmative reading of the statute, the opinion turns to the core textual argument of the borrowers, who “observe that the word ‘owed’ is the past participle of the verb ‘to owe.’ And this, they suggest, means the statute’s definition of debt collector captures anyone who regularly seeks to collect debts previously ‘owed … another.’” As the opinion explains, the central submission of the borrowers is that Congress “would have used the present participle ‘owing’” if Congress had intended that “you must collect debts currently ‘owing … another’ before implicating the Act.” Having generously offered nearly half a page of text setting out the borrower’s argument, Gorsuch proceeds to dismiss it out of hand as inconsistent with the “ordinary meaning” of our common speech. As he sees it, “[p]ast participles like ‘owed’ are routinely used as adjectives to describe the present state of a thing—so, for example, burnt toast is inedible, a fallen branch blocks the path, and (equally) a debt owed to a current owner may be collected by him or her.” Perhaps offering a lifeline to readers who might find the discussion of “tenses” and “participles” a bit elevated, he underscores the point with a folksy (though perhaps not precisely on-point) example: “Just imagine if you told a friend that you were trying to ‘collect a debt owed to Steve.’ Doesn’t it seem likely our friend would understand you as speaking about a debt currently owed to Steve, not a debt Steve used to own and that’s now actually yours.” Although the tone makes the anecdote disarming, it might match the interpretive question more closely if the author had you ask how surprised your friend would be to learn that you had chosen those words (“owed to Steve”) to describe a debt previously but no longer owned by Steve.

At that point, many (if not most) of the present justices might feel that enough had been said to justify the court’s understanding of the statutory language. Gorsuch’s opinion, though, continues for an additional four pages addressing with care several additional minor points adduced by the borrowers to support their position. Because it would surprise no reader of the opinion (or of this entry) to learn that none of those points undermined the author’s confidence in the first-stated understanding of the statute, I think I can safely spare the reader any further discussion of them.

After disposing of the statutory points, the opinion turns pointedly to what it treats as completely separate questions of “policy,” noting that “from the beginning that is the field on which th[e borrowers] seem most eager to pitch battle.” As the opinion explains, the borrowers argue that Congress in the original statute

excluded loan originators from the Act’s demands because it thought they already face sufficient economic and legal incentives to good behavior. But … Congress never had the chance to consider what should be done about those in the business of purchasing defaulted debt. … Had Congress known this new industry would blossom, th[e borrowers] say, it surely would have judged defaulted debt purchasers more like … independent debt collectors.

Just as it does in its treatment of the borrowers’ statutory contention, the opinion follows the lengthy summary of the borrowers’ argument with an abrupt rejection. The opinion explains that “[a]ll of this seems to us quite a lot of speculation. And while it is of course our job to apply faithfully the law Congress has written, it is never our job to rewrite a constitutionally valid statutory text under the banner of speculation about what Congress might have done had it faced a question that, on everyone’s account, it never faced.” Working its way up to a charged conclusion, the opinion acknowledges that “reasonable people can disagree with how Congress balanced the various social costs and benefits in this area,” and also admits the possibility of “reasonable disagreements on whether Congress should reenter the field and alter the judgments it made in the past,” given the frequency with which “new business models … emerge in response to regulation,” and with which “regulation in turn … address[es] new business models.” With that backdrop set, the opinion closes with what surely is intended to be a memorable rhetorical flourish: “Constant competition between constable and quarry, regulator and regulated, can come as no surprise in our changing world. But neither should the proper role of the judiciary in that process—to apply, not amend, the work of the People’s representatives.”

[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, was among the counsel to the petitioner in this case. The author of this post, however, is not affiliated with the firm.]

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