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Sixth Circuit: A Corporation May Be a Protected “Person” Under the FDCPA

Posted By USFN, Tuesday, September 1, 2015
Updated: Saturday, September 26, 2015

September 1, 2015


by Graham H. Kidner
Hutchens Law Firm – USFN Member (North Carolina, South Carolina)

The Sixth Circuit Court of Appeals, in a case from Tennessee, held that the definition of a protected “person” under FDCPA’s enforcement provision, 15 U.S.C. § 1692k, includes a corporation. [Anarion Investments LLC v. Carrington Mortgage Services, LLC, 2015 Westlaw 4503588 (6th Cir. July 23, 2015)].

Some background: The underlying lawsuit alleged the misrepresentation in foreclosure proceedings that the foreclosure trustee was properly appointed “by an instrument duly recorded,” which “instrument” Anarion claimed did not exist. The District Court had dismissed the action brought by a corporation, on the ground that only an individual person had standing to bring such an action. Relying on the definition of “person” in the Dictionary Act, the Sixth Circuit reversed — observing that some sections of the FDCPA are expressly applicable only to individual persons, while other sections do not contain such limitation.

The Sixth Circuit majority opinion states:

“FDCPA’s enforcement provision, 15 U.S.C. § 1692k, states that ‘any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person[.]’ 15 U.S.C. § 1692k (a) (emphasis added). The sole issue before us is whether Anarion is a ‘person’ under this provision and the Act generally. [¶] 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[.]’ 1 U.S.C. § 1. Here there is plenty of relevant context, since ‘person’ appears 24 times in the FDCPA. In some places, the term refers exclusively to artificial entities.” Anarion Investments LLC v. Carrington Mortgage Services, LLC, id.

The dissenting opinion strongly argued that “the context [of the FDCPA clearly and repeatedly] indicated otherwise.” The FDCPA contains several references to Congress’s intent to protect individuals from harassment and unfair collection practices, and that consumer (not business) debt, is the sole focus of the statute. The dissent warns of the precedential effect of the ruling, opening up litigation in favor of corporate plaintiffs.

The precedential effect may be somewhat limited because of the rather unusual facts: specifically, the plaintiff was the assignee of the lessee of the secured property, whose attorney was the original lessee and owner of the corporate plaintiff. The court has, nevertheless, opened the door to a new category of plaintiff that is arguably not contemplated by the purpose of the statute.

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