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Obduskey v. McCarthy & Holthus LLP

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Supreme Court of the United States
Obduskey v. McCarthy & Holthus LLP
Term: 2018
Important Dates
Argument: January 7, 2019
Decided: March 20, 2019
Outcome
Affirmed
Vote
9-0
Majority
Chief Justice John G. Roberts • Clarence Thomas • Ruth Bader Ginsburg • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh

Merck Sharp & Dohme Corp. v. Albrecht is a case that was argued before the Supreme Court of the United States on January 7, 2019, during the court's 2018-2019 term. The Court affirmed the ruling of the United States Court of Appeals for the 10th Circuit, holding that a business that only engages in nonjudicial foreclosure proceedings "is not a 'debt collector' under the Fair Debt Collection Practices Act, except for the limited purpose of enforcing security interests under 15 U. S. C. §1692f(6)."[1] The case comes on a writ of certiorari to the 10th Circuit.[2]

HIGHLIGHTS
  • The case: Dennis Obduskey obtained a loan for a home in 2007, which was serviced by Wells Fargo. He defaulted on the loan in 2009. Foreclosure proceedings were initiated several times over the next six years but were never completed. Wells Fargo hired McCarthy and Holthus, LLP in 2014 to carry out a non-judicial foreclosure on the home. Obduskey filed suit, claiming a violation of the Fair Debt Collection Practices Act (FDCPA). A district court granted Wells Fargo and McCarthy's petition to dismiss the case, and the circuit court affirmed.
  • The issue: Whether the Fair Debt Collection Practices Act applies to non-judicial foreclosure proceedings.[3]
  • The outcome: The Court affirmed the ruling of the United States Court of Appeals for the 10th Circuit, holding that a business that only engages in nonjudicial foreclosure proceedings "is not a 'debt collector' under the Fair Debt Collection Practices Act, except for the limited purpose of enforcing security interests under 15 U. S. C. §1692f(6)."[1]


    • You can review the lower court's opinion here.[4]

    Timeline

    The following timeline details key events in this case:

    • March 20, 2019: The U.S. Supreme Court affirmed the 10th Circuit Court's ruling
    • January 7, 2019: Oral argument
    • June 28, 2018: U.S. Supreme Court agreed to hear case
    • March 13, 2018: Petition filed with U.S. Supreme Court
    • January 19, 2018: The Tenth Circuit Court affirmed the lower court's decision to dismiss the case

    Background

    Dennis Obduskey obtained a loan for a home in 2007, which was serviced by Wells Fargo. He defaulted on the loan in 2009. Foreclosure proceedings were initiated several times over the next six years but were never completed. Wells Fargo hired McCarthy and Holthus, LLP in 2014 to carry out a non-judicial foreclosure on the home. Obduskey filed suit against, claiming a violation of the Fair Debt Collection Practices Act (FDCPA).[4]

    A district court granted Wells Fargo and McCarthy's petition to dismiss the case, ruling that the FDCPA was not applicable because foreclosures are not considered a collection of debt and therefore McCarthy was not a debt collector. The court noted, however, that courts have not agreed on whether foreclosures are collections of debt.

    On appeal, the Tenth Circuit Court affirmed the district court's ruling. The following is an exceprt from the Tenth Circuit's ruling:

    “ McCarthy did not demand payment nor use foreclosure as a threat to elicit payment. It sent only one letter notifying Mr. Obduskey that it was hired to commence foreclosure proceedings. Mr. Obduskey is, of course, free to contest this

    foreclosure in a Rule 120 proceeding, see C.R.C.P. 120(d); however, we hold that McCarthy’s mere act of enforcing a security interest through a non-judicial foreclosure proceeding does not fall under the FDCPA.[5]

    		”
    —The U.S. Court of Appeals for the Tenth Circuit[4]

    Questions presented

    The petitioner presented the following questions to the court:[3]

    Questions presented:
    • Whether the Fair Debt Collection Practices Act applies to non-judicial foreclosure proceedings.

    Audio

    • Audio of oral argument:[6]

    Transcript

    • Read the oral argument transcript here.

    Outcome

    Justice Stephen Breyer delivered the opinion for a unanimous Court. The Court affirmed the ruling of the 10th Circuit, holding that a business that only engages in nonjudicial foreclosure proceedings "is not a 'debt collector' under the Fair Debt Collection Practices Act, except for the limited purpose of enforcing security interests under 15 U. S. C. §1692f(6)."[1]

    Opinion

    In the opinion, Justice Breyer wrote, referring to the FDCPA,

    “ We believe that the statute exempts entities engaged in no more than the 'enforcement of security interests' from the lion’s share of its prohibitions. And we must enforce the statute that Congress enacted.[5] ”

    Text of the opinion

    • Read the full opinion here.

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 SCOTUSblog, "Obduskey v. McCarthy & Holthus LLP," accessed March 20, 2019
    2. ↑ Supreme Court of the United States, "17-1307 Obduskey v. McCarthy & Holthus LLP," accessed November 30, 2018
    3. ↑ 3.0 3.1 Supreme Court of the United States, "QPReport 17-1307 Obduskey v. McCarthy & Holthus LLP," accessed November 30, 2018
    4. ↑ 4.0 4.1 4.2 SCOTUSblog, "Obduskey v. McCarthy & Holthus LLP," accessed November 30, 2018
    5. ↑ 5.0 5.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    6. ↑ Supreme Court of the United States, Obduskey v. McCarthy & Holthus LLP, argued January 7, 2019
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