Henson v. Santander Consumer USA Inc.
582 US ___ (2017)

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Justia Opinion Summary

The Fair Debt Collection Practices Act authorizes private lawsuits and fines against “debt collector[s],” defined as anyone who “regularly collects or attempts to collect . . . debts owed or due . . . another,” 15 U.S.C. 1692a(6). CitiFinancial loaned money to petitioners, who defaulted. Santander purchased the defaulted loans from CitiFinancial and sought to collect in ways petitioners believe violated the Act. The district court and Fourth Circuit held that Santander was not a debt collector because it did not regularly seek to collect debts “owed . . . another” but sought instead only to collect debts that it purchased and owned. A unanimous Supreme Court affirmed. A company may collect debts that it purchased for its own account, without triggering the statutory definition. The statute’s plain language focuses on third party collection agents regularly collecting for a debt owner—not on a debt owner seeking to collect debts for itself. The Court rejected an argument that the word “owed” is the past participle of the verb “to owe,” and indicates that the debt collector definition must exclude loan originators but embrace debt purchasers. The Court stated that it would not “rewrite a constitutionally valid 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.”

  • Syllabus  | 
  • Opinion (Neil M. Gorsuch)

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

Syllabus

HENSON et al. v. SANTANDER CONSUMER USA INC.

certiorari to the united states court of appeals for the fourth circuit

No. 16–349. Argued April 18, 2017—Decided June 12, 2017

The Fair Debt Collection Practices Act authorizes private lawsuits and weighty fines designed to deter the wayward practices of “debt collector[s],” a term embracing anyone who “regularly collects or attempts to collect . . . debts owed or due . . . another.” 15 U. S. C. §1692a(6). The complaint filed in this case alleges that CitiFinancial Auto loaned money to petitioners seeking to buy cars; that petitioners defaulted on those loans; and that respondent Santander then purchased the defaulted loans from CitiFinancial and sought to collect in ways petitioners believe violated the Act. The district court and Fourth Circuit held that Santander didn’t qualify as a debt collector because it did not regularly seek to collect debts “owed . . . another” but sought instead only to collect debts that it purchased and owned.

Held: A company may collect debts that it purchased for its own account, like Santander did here, without triggering the statutory definition in dispute. By defining debt collectors to include those who regularly seek to collect debts “owed . . . another,” the statute’s plain language seems to focus on third party collection agents regularly collecting for a debt owner—not on a debt owner seeking to collect debts for itself.

Petitioners’ arguments to the contrary do not dislodge the statute’s plain meaning. Petitioners point out that the word “owed” is the past participle of the verb “to owe,” and so suggest that the debt collector definition must exclude loan originators (who never seek to collect debts previously owed someone else) but embrace debt purchasers like Santander (who necessarily do). But past participles like “owed” are routinely used as adjectives to describe the present state of a thing. Congress also used the word “owed” to refer to present debt relationships in neighboring provisions of the Act, and petitioners have not rebutted the presumption that identical words in the same statute carry the same meaning. Neither would reading the word “owed” to refer to present debt relationships render any of the Act’s provisions surplusage, contrary to what petitioners suggest.

Petitioners also contend that their interpretation best furthers the Act’s perceived purposes because, they primarily argue, if Congress had been aware of defaulted debt purchasers like Santander it would have treated them like traditional debt collectors because they pose similar risks of abusive collection practices. But it is not this Court’s job to rewrite a constitutionally valid 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. And neither are petitioners’ policy arguments unassailable, as reasonable legislators might contend both ways on the question of how defaulted debt purchasers should be treated. This fact suggests for certain but one thing: that these are matters for Congress, not this Court, to resolve. Pp. 3–11.

817 F. 3d 131, affirmed.

Gorsuch, J., delivered the opinion for a unanimous Court.

Primary Holding

A company is not considered a debt collector under the Fair Debt Collection Practices Act if it is collecting debts that it purchased for its own account.

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