Heintz v. Jenkins
131 L. Ed. 2d 395, 514 US 291, 1995 U.S. LEXIS 2840 (1995)
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Rule of Law:
The Fair Debt Collection Practices Act (FDCPA) applies to attorneys who regularly engage in consumer debt-collection activities, including litigation. The repeal of the statute's original attorney exemption indicates a clear congressional intent to regulate lawyers as debt collectors if their activities meet the general statutory definition.
Facts:
- Darlene Jenkins borrowed money from Gainer Bank to purchase a car and was required by the loan agreement to maintain insurance on the vehicle.
- The agreement permitted the bank to purchase insurance to protect the car if Jenkins failed to do so.
- Jenkins defaulted on her loan and allowed her insurance to lapse.
- Gainer Bank hired the law firm of attorney George Heintz to collect the debt.
- As part of an effort to settle a collection lawsuit, Heintz sent a letter to Jenkins' lawyer demanding payment.
- The amount demanded in the letter included $4,173 for an insurance policy the bank had purchased.
- Jenkins alleged this policy was not for 'loss or damage' as specified in the loan agreement, but also insured the bank against her failure to repay the loan, making the demanded amount improper.
Procedural Posture:
- Gainer Bank's law firm sued Darlene Jenkins in state court to recover the outstanding balance on her car loan.
- Jenkins then filed a separate lawsuit against attorney George Heintz and his firm in federal District Court, alleging violations of the FDCPA.
- The District Court granted Heintz's motion to dismiss for failure to state a claim, holding that the FDCPA does not apply to lawyers engaged in litigation.
- Jenkins, as appellant, appealed to the U.S. Court of Appeals for the Seventh Circuit.
- The Seventh Circuit, siding with Jenkins, reversed the District Court's decision, holding that the FDCPA does apply to litigating attorneys.
- Heintz, as petitioner, was granted a writ of certiorari by the U.S. Supreme Court to resolve a conflict with the Sixth Circuit's contrary holding.
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Issue:
Does the term 'debt collector' under the Fair Debt Collection Practices Act apply to a lawyer who regularly attempts to collect consumer debts through litigation?
Opinions:
Majority - Justice Breyer
Yes. The Fair Debt Collection Practices Act applies to lawyers who regularly engage in consumer debt collection, even when that activity consists of litigation. First, the plain language of the Act defines a 'debt collector' as anyone who 'regularly collects or attempts to collect' debts owed to another. In ordinary English, a lawyer who tries to obtain payment through legal proceedings is attempting to collect a debt. Second, the original 1977 version of the Act contained an explicit exemption for attorneys, which Congress repealed in its entirety in 1986. This repeal strongly indicates a legislative intent to subject lawyers to the Act when they meet the general definition of a debt collector. The Court rejected arguments that applying the Act's provisions to litigation would create anomalous results, finding that the statute's bona fide error defense and plausible interpretations of its specific provisions resolve any potential conflicts.
Analysis:
This decision significantly broadened the scope of the FDCPA by eliminating any implied immunity for attorneys engaged in debt collection. It clarified that law firms that regularly pursue consumer debt claims are subject to the same consumer protection rules as traditional collection agencies. The ruling forces these law firms to scrutinize their litigation practices, from initial complaints to settlement letters, to ensure compliance with the FDCPA's strictures against false representations and unfair practices. The Court's reasoning emphasizes a textualist approach, relying on the plain meaning of the statute and the clear legislative signal sent by the repeal of the attorney exemption.
