Opposition Brief — Wolpoff & Abramson v. Carroll

No. 91-2057

In The

Supreme Court of the United States

October Term, 1992

WOLPOFF & ABRAMSON,

Petitioner.

SUSAN CARROLL,

Respondent

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Fourth Circuit

RESPONDENT'S BRIEF IN OPPOSITION

ANDREA G. GREEN

Counsel of Record

O. RANDOLPH BRAGG

Attorneys for Respondent

UAW Legal Services Plan

200 Continental Drive

Suite 212

Newark, Delaware 19713

(302) 366-0513

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QUESTIONS PRESENTED FOR REVIEW

Whether the Fourth Circuit correctly found that the Fair Debt

Collection Practices Act requires that all communications made

to collect a debt or to obtain information about a consumer, both

initial and subsequent, contain the debt collection warning required

by 15 U.S.C. § 1692e(11) that the debt collector is attempting

to collect a debt and that any information obtained will be used

for that purpose.

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TABLE OF CONTENTS

Questions Presented .... 0... ... 6 eke stews eet eens nn ccna

Tahie of COMSEONE ...cc)ka cw 5405 hod Ra ee eee

Table of Cail. occ cca 0 eee eee eh

Opinions Below . ... 6.0 scec scenes ieee eens nena rs sans

Goacomont of the COS cic sok ccs cet eben beetas taeeee ee)

Summary of Argument ............-2 secs eeec essen :

Reasons for Denying the Writ ...........2eceeeeennnes

|. The Fourth Circuit’s decision does not significantly

impact on the practice of law. .............-.-.

Il. Wolpoff & Abramson’s reliance on the proposed

Commentary is misplaced and misleading. .......

Ill. The doctrine of legislative re-enactment does not

mandate a finding contrary to that of the Fourth

Cistait. cas veh cease eee Proves eer ees

IV. Wolpoff & Abramson incorrectly asserts that the

Fourth Circuit failed to consider the legislative history

of the FOOCPA, 0c cwcu <5 ews Ree eae auc

Come oo io k0d sk cei eG Oe Es

Page

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Contents

Page

TABLE OF CITATIONS

Cases Cited:

Cacace v. Lucas, 775 F. Supp. 502 (D. Conn. 1990)..... 6

Carroll v. Wolpoff & Abramson, 961 F.2d 459 (4th Cir. 1992)

oe ok SG rh ee ee ea 1, 3, 4, 6, 8, 9

(EMS SS eee ee ee 5

Hulshizer v. Global Credit Services, Inc., 728 F.2d 1037 (8th

Cir. 1984) ee aba weene ene ee Oe

Louisville and N.R. Co. v. United States, 282 U.S. 740

EE ade oe 9

Mass. Mutual Life Ins. Co. v. United States, 288 U.S. 269

ES eee i)

Miller v. Payco-General American Credits, 943 F.2d 482 (4th

a A ee ee ee ee 10

Mowbray v. Kozlowski, 914 F.2d 593 (4th Cir. 1990).... 8

Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22 (2d

eS cn SSAA ARAN VA wR S Oe OO 3, 6, 9, 10

Pressley v. Capital Credit and Collection Service, Inc., 760

F.2d 922 (9th Cir. 1985)........-.-+-+-- 5, 4,6, 7.3. ©

Contents

Seabrook v. Onondaga Bureau of Medical Economics, Inc.,

Page

705 EF. See. 31 CNTY. TO os vce ies or ee 6

Scott v. Jones... F.28 A Ce PE ect 8

Staub v. Harris, 626 F.2d 275 (3d Cir. 1980) ........... 8

Wollfolk v. Van Ru Credit Corp., 783 F. Supp. 724 (D. Conn.

Pe a ee ae eee renee Ware eee Rr a a 6

Young v. Credit Bureau of Lockport, Inc., 729 F. Supp. 1421

‘eS i Sek, ree aah is AR ee en 6

Statutes Cited:

Pub. L. No. 99-361 (1986), 100 Stat. 768 .............. 9

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CD We ccc I Nk ten Cesa ne ee eae Mewick cea 2

be AS © akg Sl Renee Pere rarer a nmr ea yee yen Z

PS RA END ce kc uc casa Siew se cvsaereteaaean passim

Rk a gre er eer eres tp me are 8

Ee Secs I ook oxi knetwonsens ines eveeS 7

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Contents

Page

Other Authorities Cited:

S. Rep. No. 382, 95th Cong. ist Sess. 5, 6 (1977)....... 7

51 Fed. Reg. 8019 (March 7, 1986)......----+-+sss005: 4

53 Fed. Reg. 50097-50110 (December [3 See 6 axa eras 7,8

APPENDIX ‘

Appendix A — Letter of June 11, |, MPTP ree eee re ‘la

No. 91-2057

In The

Supreme Court of the United States

October Term, 1992

WOLPOFF & ABRAMSON,

Petitioner,

VS.

| SUSAN CARROLL,

Respondent.

On Petition for a Writ of Certiorari to the United States Court

of Appeals for the Fourth Circuit

RESPONDENT’S BRIEF IN OPPOSITION

OPINIONS BELOW

The opinion of the Fourth Circuit Court of Appeals has now

been reported as Carroll v. Wolpoff & Abramson, 961 F.2d 459

(4th Cir. 1992). A copy of the District Court opinion, which was

not reported, is attached to the Petition for a Writ of Certiorari

at App. B.

th

STATEMENT OF THE CASE

On June 11, 1990 Wolpoff & Abramson, a law firm, sent

4 collection letter to Susan Carroll (App. A, infra, 1a). Susan

Carroll is a ‘‘consumer’’ within the meaning of the definition

contained in the Fair Debt Collection Practices Act (hereinafter

FDCPA or the Act), 15 U.S.C. § 1692a(3), and Wolpoff &

Abramson is a ‘‘debt collector’’ under the terms of 15 U.3.C.

§ 1692a(6). Wolpoff & Abramson maintains that it sent other

correspondence regarding the same account to Susan Carroll prior

to the June 11, 1990 letter. The June 11 letter does not contain

the disclosure required by the FDCPA ai 15 U.S.C. § 1692e(11).

The Act states:

A debt collector may not use any false,

deceptive, or misleading representation or means

in connection with the collection of any debt.

Without limiting the general application of the

foregoing, the following conduct is a violation of

this section: |

(11) Except as otherwise provided for

communications to acquire location

information under section 804, the failure to

disclose clearly in all communications made

to collect a debt or obtain information about

a consumer, that the debt collector is

attempting to collect a debt and that any

information obtained will be used for that

purpose.

15 U.S.C. § 1692e.

Susan Carroll filed her Complaint in the United States District

Court for the District of Maryland on May 10, 1991 alleging

violations of the FDCPA, one of which was violation of 15 U.S.C.

§ 1692e(11).

Cross-motions for summary judgment were filed and on July

30, 1991 the District Court denied plaintiff’s motion, granted

defendant’s motion and issued a Memorandum Opinion, a copy

of which is reprinted as App. B in Wolpoff & Abramson’s Petition

for a Writ of Certiorari. The District Court noted that the Ninth

Circuit in Pressley v. Capital Credit and Collection Service, Inc.,

-760 F.2d 922 (9th Cir. 1985), had ruled that follow-up

communications need not contain the required notice while the

Second Circuit in Pipiles v. Credit Bureau of Lockport, Inc., 886

F.2d 22 (2d Cir. 1989), expressly rejected Pressley and f ound that

all communications must contain this disclosure. The District Court

declined to make a literal application of the statutory langauge

and followed Pressley.

The Fourth Circuit reversed finding the plain language of

the statute ‘‘clear and unambiguous.” Carroll v. Wolpoff &

Abramson, supra at 461.

SUMMARY OF ARGUMENT

The Fourth Circuit correctly found that Wolpoff & Abramson

violated the FDCPA requirement that all communications must

contain the 15 U.S.C. § 1692e(11) debt collection warning. While

this opinion conflicts with the Ninth Circuit’s opinion in Pressley

v. Capital Credit and Collection Services, Inc., 760 F.2d 922 (9th

Cir. 1985), it is entirely consistent with the Second Circuit’s opinion

in Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22 (2d

Cir. 1989) and with every other decision, both reported and

unreported, construing this statutory section.

Wolpoff & Abramson vastly overstates the effect of the

Fourth Circuit’s holding. The statutory provision at issue is easily

satisfied by the inclusion of the phrases in every communication

from a debt collector to an alleged debtor. Despite Wolpoff &

Abramson’s contention to the contrary, there is no ‘‘profound

impact on the practice of law.”’ (Petition for a Writ of Certiorari

at p. 5). .

Wolpoff & Abramson’s reliance on the FTC Proposed

Official Staff Commentary, 51 Fed. Reg. 8019 (March 7, 1986)

is entirely misplaced. The Commentary is non-binding and squarely

conflicts with the statutory language.

Finally, Wolpoff & Abramson incorrectly asserts that the

Fourth Circuit ‘‘completely disregarded two opinions which were

incorporated into the Act through congressional re-enactment of

the statute.’’ (Petition for a Writ of Certiorari at p. 5). In fact,

the Fourth Circuit considered the proposed Staff Commentary

and the Ninth Circuit opinion in Pressley, supra, and, for very

specific reasons, declined to follow them.

REASONS FOR DENYING THE WRIT

The Fourth Circuit’s decision does not significantly impact

on the practice of law.

The Fourth Circuit has held that the FDCPA, pursuant to

15 U.S.C. § 1692e(11), requires that a// communications (emphasis

added) made to collect a debt or obtain information about a

consumer contain the warning that the debt collector is attempting

to collect a debt and that any information obtained will be used

for that purpose. Carroll vy. Wolpoff & Abramson, supra at 461.

In so holding, the court has enforced the exact statutory language.

Wolpoff & Abramson maintains that the Fourth Circuit’s

ruling significantly impacts upon the practice of law. It intimates

that the Fourth Circuit’s opinion may require the Section 1692e(11)

disclosure in legal documents such as complaints, interrogatories,

execution and other pleadings (Petition for a Writ of Certiorari

at p. 9). Such an interpretation goes well beyond the scope of

the Fourth Circuit’s holding. There is no question that the June

11, 1990 letter sent to Susan Carroll by Wolpoff & Abramson,

the only communication at issue in this case, constituted a

‘“communication’”’ under the terms of the FDCPA. 15 U.S.C.

§ 1692a(2). It is also undisputed that the letter failed to contain

the § 1692e(11) debt collection warning. The communication sent

was not a pleading, interrogatory, writ of garnishment, notification

of lien on property, or an appellate brief. Nor was it 2n item

of correspondence required to be sent under any statute prior

to a proceeding executing on a debt. Wolpoff & Abramson

effectively is asking this Court to review the Fourth Circuit’s

opinion due to their fear of an expansion of this opinion in later

litigation. The Fourth Circuit was not called upon to, and did

not, consider the statutory section’s application to pleadings and

other legal documents. As the Fourth Circuit did not reach that

issue, there is no need for this Court to consider it.

Compliance with the statute and with the Fourth Circuit’s

opinion is simple. A collector, whether attorney or non-attorney’,

need only include the § 1692e(11) debt collection warning in all

communications. There is no question that initial communications

with consumer debtors must contain the § 1692e(11) notice.

Emanuel v. American Credit Exchange, 870 F.2d 805 (2d Cir.

1989); Hulshizer v. Global Credit Services, Inc., 728 F.2d 1037

(8th Cir. 1984). Wolpoff & Abramson acknowledges that its two

earlier letters, dated August 9 and November 11, 1989, to Susan

> 1. Wolpoff & Abramson’s assertion that requiring the disclosure in all

communications gives some advantage to non-attorneys (Petition for a Writ

of Certiorari, pp. 9-10) is entirely unsupported.

Miller contained the collection warning required by 15 U.S.C.

§ 1692e(11) (App. D to Petition for a Writ of Certiorari, D-2).

Wolpoff & Abramson and all other collectors, whether

attorney or non-attorney, need only add the debt collection

warning to subsequent communications to comply with 15 U.S.C.

S$ 1692e(11). Including the warning in follow-up communications

would not present a creditor with a problem in the Ninth Circuit.

Compliance with Pipiles and Carroll as to § 1692e(11) would

presumably satisfy all Circuits. The existence of the conflict

therefore presents no real problem for collectors, regardless of

the jurisdictions in which they operate.

Except for the Ninth Circuit in Pressley v. Capital Credit

& Collection Services, Inc., 760 F.2d 922 (9th Cir. 1985), all courts

addressing this issue have required the provision of the debt

collection warning pursuant to 15 U.S.C. § 1692e(11). Carroll

v. Wolpoff & Abramson, supra; Pipiles v. Credit Bureau of

Lockport, Inc., supra; Hulshizer v. Global Credit Services, Inc.,

supra; Wollfolk v. Van Ru Credit Corp., 783 F. Supp. 724 (D.

Conn. 1990); Cacace v. Lucas, 775 F. Supp. 502 (D. Conn. 1990);

Young v. Credit Bureau of Lockport, Inc., 729 F. Supp. 1421

(W.D.N.Y. 1989); and Seabrook v. Onondaga Bureau of Medical

Economics, Inc., 705 F. Supp. 81 (N.D.N.Y. 1989).

The Ninth Circuit in its Press/ey decision held that ‘‘the follow

up notice sent in this case is not a ‘communication’ within which

the disclosure required by 15 U.S.C. § 1692e(11) must be made.’’

Supra at 825. This holding redefines the term ‘*communication”’

and distorts the meaning which is defined in the Fair Debt

Collection Practices Act as “the conveying of information

regarding a debt directly or indirectly to any person through any

medium.” 15 U.S.C. § 1692a(2). The Second Circuit in the Pipiles

decision and the Fourth Circuit in the Carroll decision would not

reach such a result and applied the ‘‘clear and unambiguous”’

language of the statute to require the debt collection warning of

§ 1692e(11) to be disclosed in all communications.

Wolpoff & Abramson’s reliance on the proposed

Commentary is misplaced and misleading.

In addition to relying upon the Ninth Circuit’s opinion in

Pressley v. Capital Credit and Collection Services, Inc., supra,

Wolpoff & Abramson criticize the Fourth Circuit for failing to

follow the Federal Trade Commission’s Proposed Official Staff

Commentary. Wolpoff & Abramson have incorrectly focused upon

the ‘‘proposed’’ FTC Official Staff Commentary on the Fair Debt

Collection Practices Act. The Commentary is no longer

‘‘proposed’’ and is published at 53 Fed. Reg. 50097-50110

(December 13, 1988). Both the Commentary and the Proposed

Commentary as it relates to § 1692e(11) (reprinted at App. E of

the Petition for a Writ of Certiorari) state that the notice is required

only in initial communications. The FDCPA however, explicitly

prohibits the promulgation of trade regulation rules or other

regulations under the Act. 15 U.S.C. § 16921(4). Both the

statutory enactment and the legislative history make it abundantly

clear that the legislation was comprehensive and self-enforcing.

S. Rep. No. 382, 95th Cong. Ist Sess. 5, 6 (1977).

The FTC recognized this limitation and stated in the

introduction to its Official Staff Commentary on the Fair Debt

Collection Practices Act:

This Commentary is the vehicle by which the

staff of the Federal Trade Commission publishes

its interpretations of the Fair Debt Collection

Practices Act (FDCPA). It isa guideline intended

to clarify the staff interpretations to the statute,

but does not have the force or effect of statutory

provisions. It is nota formal trade regulation rule

or advisory opinion of the Commission, and thus

is not binding on the Commission or the public.

53 Fed. Reg. 50097-50110, at $0101 (December 19, 1988).

The proposed Commentary was prepared as a compilation

of and replacement for staff opinion letters previously issued by

the FTC. These letters are not binding on the FTC, let alone the

courts. Scott v. Jones, ___. F.2d ___ (4th Cir. 1992); Staub v.

Harris, 626 F.2d 275 (3d Cir. 1980). The proposed Commentary

therefore should be accorded little weight. In an earlier decision,

similar to the one presented here, the debt collector relied upon

a staff letter from an attorney in the Division of Credit Practices

for the Federal Trade Commission and argued that the violation

of the FDCPA was unintentional. The Eighth Circuit ruled that

the cotlector’s reliance thereon was in conflict with the ‘‘clear

language’”’ of the statute. The ‘‘unambiguous’’ language of 15

U.S.C. § 1692e(11) required the debt collection warning be

provided to the consumer. Hulshizer v. Global Credit Services,

Inc., supra at 1038.

Wolpoff & Abramson misleads the Court by referring to

collector immunity allowed under 15 U.S.C. § 1692k(e) for

reliance on formal FTC advisory opinions (Petition for a Writ

of Certiorari at p. 12). The Commentary is not a formal advisory

opinion and reliance would not provide a ‘‘good faith’’ defense.

In fact, no formal opinions on the FDCPA have issued from the

Federal Trade Commission.

Further, the Fourth Circuit clearly considered the FTC’s

position and rejected it, Carroll v. Wolpoff & Abramson, supra

at 461, n.4, citing Mowbray v. Kozlowski, 914 F.2d 593 (4th Cir.

1990), due to its conflict with the clear and unambiguous statutory

language.

The doctrine of legislative re-enactment does not mandate

a finding contrary to that of the Fourth Circuit.

In 1986 Congress amended the FDCPA by deleting the former

exception of attorneys from the definition of debt collectors. Pub.

L. No. 99-361 (1986), 100 Stat. 768. Wolpoff & Abramson

incorrectly maintains that the existence of the FTC Proposed

Commentary on § 1692e(11) and the Ninth Circuit opinion in

Pressley at the time of the amendment require a finding consistent

with those interpretations. However, when statutory language “‘is

unambiguous and the regulation clearly inconsistent with it,”’

Mass. Mutual Life Ins. Co. v. U.S., 288 U.S. 269, 273 (1933),

the regulatory language will not carry over in a re-enactment.

See also, Louisville and N.R. Co. Vv. United States, 282 U.S. 740,

759 (1931).

The Fourth Circuit considered Wolpoff & Abramson’s

argument of the doctrine of legislative re-enactment but followed

the analysis articulated by the Second Circuit in Pipiles v. Credit

Bureau of Lockport, Inc., supra. Carroll v. Wolpoff & Abramson,

supra at 461. Therein, the Pipiles Court stated:

‘‘The starting point for our interpretation of a

statute is always its language.”’ Mobil Oil Corp.

v. Karbowski, 879 F.2d 1052, 1054 (2d Cir. 1989)

(quoting Community for Creative Non-Violence

v. Reid, ___ U.S. ___, 109 S. Ct. 2166, 2172

(104 L. Ed. 2d 811 (1989)). ‘‘Thus, ‘fa]bsent a

clearly expressed legislative intention - to the

contrary, [the language used] must ordinarily be

regarded as conclusive.’’’ /d. (quoting Consumer

Prod. Safety Comm'n v. GTE Sylvania, Inc., 447

U.S. 102, 108, 100 S. Ct. 2051, 2056, 64 L. Ed.

2d 766 (1980).

10

Pipiles v. Credit Bureau o f Lockport, Inc., supra at 26. The

Second Circuit then rejected the holding of the Pressley Court

and held that the debt collection warning of 15 U.S.C. § 1692e(11)

was required in all communications.

Contrary to Wolpoff & Abramson’s position, the doctrine

of legislative re-enactment is not applicable to this case.

IV.

Wolpoff & Abramson incorrectly asserts that the Fourth

Circuit failed to consider the legislative history of the FDCPA.

Wolpoff & Abramson asserts that the Fourth Circuit failed

to look to legislative intent. The Fourth Circuit’s opinion refers

to its earlier decision in Miller v. Payco-General American Credits,

943 F.2d 482 (4th Cir. 1991), in which legislative intent and history

of the Act are discussed. The Fourth Circuit also considered the

purpose of the debt collection warning in its opinion below. Supra

at 461. It approved the rationale of the Second Circuit in Pipiles

v. Credit Bureau of Lockport, Inc., which stated: ‘Congress [may]

exercise its legislative judgment to adopt a reasonable margin of

safety to insure its remedial goal.’’ Supra at 27. Further, the Fourth

Circuit considered the reasoning of the Ninth Circuit in Pressley

v. Capital Credit and Collection Service, Inc., supra, particularly

its analysis of the legislative history, and rejected it. Again citing

Pipiles, the Fourth Circuit stated that the Pressley analysis ‘*based

in the remarks of one senator was strained’ and effectively would

work a change in the express statutory language. /d. at 461.

_

1]

CONCLUSION

The Petition for a Writ of Certiorari should be denied.

Dated: July 21, 1992

Respectfully submitted,

ANDREA G. GREEN

Counsel of Record

O. RANDOLPH BRAGG

Attorneys for Respondent

UAW Legal Services Plan

200 Continental Drive

Suite 212

Newark, Delaware 19713

(302) 366-0513

la

APPENDIX A — LETTER OF JUNE 11, 1990

LAW OFFICES

WOLPOFF AND ABRAMSON

11140 ROCKVILLE PIKE

ROCKVILLE, MARYLAND 20852-3164

June 11, 1990

12453312 D

SUSAN J. MILLER

206 HOLLINGSWORTH MANOR

ELKTON MD 21921

Re: MACY’S

VS.

SUSAN J. MILLER

Our File No. 12453312 D

Your past due account is in our office for legal action.

It is imperative that you contact us immediately if you wish

to make arrangements to pay this debt prior to additional litigation.

Very truly yours,

WOLPOFF AND ABRAMSON