SCOTUS Provides Analysis on Nonjudicial Foreclosure Proceedings and FDCPA Case Arguments

Obduskey v. McCarthy Holthus LLP focuses on debate about definitions of debt collector in the federal law.

1/15/2019 11:30 AM

SCOTUS Provides Analysis on Nonjudicial Foreclosure Proceedings and FDCPA Case Arguments

Arguments in Obduskey v. McCarthy & Holthus LLP held Jan. 7 show the complexity of the Fair Debt Collection Practices Act when it comes to nonjudicial foreclosures and debt collectors, according to an analysis by Danielle D’Onfro, a lecturer on law at Washington University in St. Louis, on the U.S. Supreme Court’s blog.

In June 2018, the Supreme Court granted certiorari in the case, Obduskey v. McCarthy & Holthus LLP, to determine whether nonjudicial foreclosure proceedings and those who are involved in them are subject to the FDCPA, ACA International previously reported. (Members may read more background on this case on the Industry Advancement Program website.)

In November 2018, the Consumer Financial Protection Bureau filed an amicus brief with the U.S. Supreme Court supporting that a law firm hired by a mortgage company after a consumer defaulted on a loan is not defined as a debt collector as outlined in the FDCPA, ACA International previously reported.

“This case turns on whether the FDCPA covers parties that handle nonjudicial foreclosures,” D’Onfro writes.

During the Jan. 7 arguments, Justices Samuel Alito, Neil Gorsuch and Brett Kavanaugh had several questions for Daniel Geyser, Obduskey’s attorney, about the definition of debt collectors.

“The only consensus to emerge by the end of the argument was that there were many “unnatural” ways to read the statute. Several justices seem sympathetic to Obduskey’s policy argument, but more seem skeptical of his statutory argument. Beyond that, it is hard to make any confident prediction about the result, particularly because Justice Ruth Bader Ginsburg intends to participate in the case although she did not attend the argument. Because the justices appear reluctant to do anything that would require significant changes to state foreclosure laws, a narrow opinion seems most likely,” D’Onfro concludes.

Related Content from ACA International:

BCFP Files Amicus Brief with U.S. Supreme Court Supporting Law Firm in FDCPA Case

Supreme Court to Decide Whether the FDCPA Applies to Non-Judicial Foreclosure Proceedings (Available to ACA International members only.)

Seventh Circuit Emailed Validation Notice Case Forces Tip-Off between ACA International and the BCFP

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