Summary
holding that § 1692a(C) applies “only to individuals, not to a governmental subdivision or agency”
Summary of this case from Narayan v. Cnty. of SacramentoOpinion
CASE NO. 2:03-CV-81.
October 24, 2007
OPINION AND ORDER
Plaintiff, Tracy Passa ("plaintiff"), acting on behalf of herself and a putative class of plaintiffs, alleges that defendants violated the Fair Debt Collection Practices Act ("FDCPA" or "the Act"), 15 U.S.C. § 1692 et seq., the Ohio Consumer Sales Practices Act ("OCSPA"), Ohio Revised Code ("O.R.C.") § 1345.01 et seq., 42 U.S.C. § 1983 ("Section 1983"), and engaged in fraudulent misrepresentation under Ohio law based on their participation in the City of Columbus' ("City") Check Resolution Program. On June 3, 2005, plaintiff filed the Amended Complaint, Doc. No. 33, naming as defendants the City, Buckeye Check-Cashing, Inc. and BCCI Management Co. dba Check$mart ("Check$mart"), Quick Cash Advance, Inc. dba Quick Cash USA ("Quick Cash") and Cash Till Payday, Ltd. dba Always Payday ("Always Payday"). Amended Complaint ¶¶ 84-118.
With the consent of the parties, 28 U.S.C. § 636(c), this matter is before the Court on Defendant City of Columbus' Second Motion for Summary Judgment, Doc. No. 122 ( "Motion for Summary Judgment"). For the reasons that follow, the Motion for Summary Judgment motion is DENIED.
I. FACTS AND PROCEDURAL BACKGROUND
Plaintiff, a resident of Noble County, Ohio, obtained several "pay day" loans from Check$mart, a business located in Zanesville, Ohio, and licensed to make such loans pursuant to O.R.C. § 1315.35 et seq. Amended Complaint ¶¶ 18-22, 57. Plaintiff issued post-dated checks to serve as collateral for these loans. Id. ¶ 23, 59. One of the loans became due on May 8, 2002. Id. ¶¶ 26, 63. Plaintiff informed Check$mart that she could not repay that loan and that the postdated check she had given them as collateral would be dishonored if negotiated. Id. ¶ 65. After plaintiff failed to repay the May 8, 2002, loan, Check$mart attempted to negotiate the post-dated check. Id. ¶¶ 29, 65. Plaintiff's checking account contained insufficient funds to cover the check. Id. ¶¶ 65, 66.
The City maintained at the time a Check Resolution Program, through the Dispute Resolution Unit of the City Attorney's Office. Id. ¶ 26. Merchants who are eligible to participate in the Check Resolution Program file a certified case submission application with the prosecutor's office in Columbus, Ohio. Id. ¶¶ 27-32. The case submission is automatically accepted and a hearing date is docketed. Id. ¶ 36. Notices are then mailed from the prosecutor's office to the alleged delinquent customers requesting that they appear at the Franklin County Municipal Court to resolve a complaint made against them. Id.
On July 11, 2002, the City sent plaintiff a letter indicating that Check$mart had scheduled a mediation through the Check Resolution Program, to be held on July 31, 2002, at 4:30 p.m., in an attempt to resolve the dispute related to the May 8, 2002, payday loan. Id. ¶¶ 76-78 and Exhibit 9 at 1 attached thereto. Plaintiff did not attend this mediation. Id. ¶ 80. On August 6, 2002, the City sent a second notice to plaintiff, indicating that another mediation would be held on August 14, 2002. Id. and Exhibit 9 at 3 attached thereto. Plaintiff alleges that, by sending these notices, the City violated the FDCPA, the OCSPA, Section 1983 and the common law of Ohio. Id. ¶¶ 84-118. Plaintiff alleges that the City illegally "lent Check$mart its official status and authority to assist Check$mart in collecting this consumer payday loan. . . ." Id. ¶ 76. Also, plaintiff alleges that Quick Cash and Always Payday engaged in similar misconduct with their customers. Id. ¶¶ 7, 8, 84-118. Plaintiff contends that the City made at least one communication to approximately 20,000 persons at the requests of Check$mart, Quick Cash and Always Payday. Id. ¶ 7.
On March 6, 2007, this Court denied the City's first motion for summary judgment, concluding that there exist genuine issues of material fact regarding the City's status as a debt collector under the FDCPA and the OCSPA:
Although the City characterizes the [Check Resolution Program] as a mediation program, in which the city merely provides a forum and procedure whereby disputants may attempt to resolve their dispute, the Court simply cannot ignore the City's own description of its program as one that "assists in the collection of money unpaid to merchants."Opinion and Order, Doc. No. 118, at 8. However, the Court also raised the possibility that the City may qualify for the exclusion to the definition of "debt collector" established by 15 U.S.C. § 1692a(6)(C). Id. at 8 fn.4.
The City has now moved for summary judgment on the basis that it falls within the government actor exclusion under 15 U.S.C. § 1692a(b)(C). Motion for Summary Judgment. Plaintiff filed a memorandum in opposition on May 10, 2007. Plaintiff Tracy Passa's Memorandum Opposing the City's Second Motion for Summary Judgment, Doc. No. 123 ( "Memo. in Opp.."). On May 14, 2007, the City filed its reply in support of its Motion for Summary Judgment. Reply of Defendant City of Columbus to Plaintiff Tracy Passa's Memorandum Opposing the City's Second Motion for Summary Judgment, Doc. No. 124 ("Reply").
II. STANDARD
The standard for summary judgment is well established. This standard is found in Rule 56 of the Federal Rules of Civil Procedure, which provides in pertinent part:
The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). Pursuant to Rule 56(c), summary judgment is appropriate if "there is no genuine issue as to any material fact. . . ." Id. In making this determination, the evidence "must be viewed in the light most favorable" to the non-moving party. Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970). Summary judgment will not lie if the dispute about a material fact is genuine, "that is, if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, summary judgment is appropriate if the opposing party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The "mere existence of a scintilla of evidence in support of the [opposing party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [opposing party]." Anderson, 477 U.S. at 252.
The "party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions" of the record which demonstrate "the absence of a genuine issue of material fact." Celotex Corp., 477 U.S. at 323. The burden then shifts to the nonmoving party who "must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 250 (quoting Fed.R.Civ.P. 56(e)). "Once the moving party has proved that no material facts exist, the non-moving party must do more than raise a metaphysical or conjectural doubt about issues requiring resolution at trial." Agristor Fin. Corp. v. Van Sickle, 967 F.2d 233, 236 (6th Cir. 1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)).
III. ANALYSIS
A. Fair Debt Collection Practices Act
The FDCPA was designed to "eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). The FDCPA therefore applies only if a defendant qualifies as a debt collector. Under the FDCPA, a "debt collector" is defined as:
Any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly, or indirectly, debts owed or due or asserted to be owed or due another.15 U.S.C. § 1692a(6).
However, the FDCPA also makes clear that the term "debt collector" does not include the following:
(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;
(B) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;
(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;
(D) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;
(E) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and
(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (I) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.15 U.S.C. § 1692a(6). The City now argues that it may invoke the exclusion from the definition of "debt collector" established by § 1692a(6)(C).
Plaintiff raises four arguments in opposing the City's contention that it falls within the government actor exclusion of § 1692a(6)(C). Memo. in Opp., at 3-23. First, plaintiff contends that the City cannot claim the protection of § 1692a(6)(C) because the City has previously waived this defense. Id. at 3-4. Second, plaintiff argues that the City's failure to assert this affirmative defense in its answer to the Amended Complaint operates as a bar to relying on the defense at this stage of the litigation. Id. at 4-6. Third, plaintiff contends that the City does not fall within the plain language of § 1692a(6)(C). Id. at 6-16. Finally, in an equitable argument, plaintiff contends that withholding the protection of § 1692a(6)(C) from the City is not unfair. Id. at 16-23. The Court will address each of plaintiff's arguments in turn.
1. Plaintiff's argument that a "judicial admission" bars the City's defense
Plaintiff contends that the City previously conceded in writing and during oral argument that it was not exempt from liability under § 1692a(6)(C). Memo. in Opp., at 3-4. Plaintiff argues that the City's "concession therefore constituted a binding judicial admission" which prohibits the City from raising this legal defense. Id. at 4 (citing Martinez v. Bally's Louisiana, Inc., 24 F.3d 474 (5th Cir. 2001) (a judicial admission "has the effect of withdrawing a fact from contention")). In response, the City argues that there has been no such admission. Reply, at 1.
Judicial admissions "go to matters of fact," thereby "dispensing with proof of formal matters and of facts about which there is no real dispute." New Amsterdam v. Casualty Co., 323 F.2d 20, 24 (6th Cir. 1963) (emphasis added).
The doctrine of judicial admissions has never been applied to counsel's statement of his conception of the legal theory of the case. When counsel speaks of legal principles, as he conceives them and which he thinks applicable, he makes no judicial admission and sets up no estoppel which would prevent the court from applying to the facts disclosed by the proof, the proper legal principles as the Court understands them. . . . Under this liberalized practice, a party's misconception of the legal theory of his case does not work a forfeiture of his legal rights.Id. at 24-25. See also MacDonald v. Gen'l Motors Corp., 110 F.3d 337, 341 (6th Cir. 1997) (the Sixth Circuit is reluctant to treat opinions and legal conclusions as binding judicial admissions). Accordingly, a party's construction of a statute is a legal conclusion, not a factual matter that constitutes a judicial admission. See, e.g., Roger Miller Music, Inc. v. Sony/AATV Publishing, LLC, 477 F.3d 383, 394-95 (6th Cir. 2007) (reversing holding that defendant's statements are binding judicial admissions where the defendant's interpretation of 17 U.S.C. § 304 dealt with legal conclusions, not matters of fact). To hold to the contrary would be to turn "a valuable time-saving device, the voluntary use of which should be encouraged, into a trap for the unwary." MacDonald, 110 F.3d at 341.
Turning to the instant case, plaintiff's argument that the City's prior construction of § 1692a(6)(C) constitutes a binding judicial admission is not well-taken.
2. Plaintiff's argument that the City waived affirmative defense
Plaintiff asserts that "the City's answer [to the first amended complaint] did not plead entitlement to the statutory exception from FDCPA coverage that 15 U.S.C. [§] 1692a(6)(C) affords to an officer or employee of the United States or any State collecting debts as part of or within the scope of his or her official duties." Memo. in Opp., at 5. Plaintiff expressly argues that the City therefore waived this defense. Id. at 5-6. In reply, the City contends that it specifically pled this defense in its answer to the first amended complaint. Reply, at 1-2 (citing second defense). The City's argument is well-taken.
The FDCPA is a remedial statute. See, e.g., Kelly v. Great Seneca Fin. Corp., 443 F. Supp.2d 954, 959 (S.D. Ohio 2005). Exemptions to such statutes must be specifically pled as an affirmative defense or will be deemed waived. See, e.g., Fed.R.Civ.P. 8(c); Old Line Life Ins. Co. of Am. v. Garcia, 418 F.3d 546, 550 (6th Cir. 2005) (a failure to plead an affirmative defense generally results in waiver); Schmidtke v. Conesa, 141 F.2d 634, 635 (1st Cir. 1944) (the defense of exemption must be expressly alleged under Rule 8(c)); Schwind v. EW Assoc., Inc., 357 F. Supp.2d 691, 697 (S.D. N.Y. 2005) (the defense of exemption under a remedial statute must be specifically pled or will be waived). However, failure to plead an affirmative defense will not always result in waiver, particularly where the responding party has an opportunity to respond to the affirmative defense and no prejudice results. See, e.g., Garcia, 418 F.3d at 550 ("However, failure to plead an affirmative defense does not always result in waiver."); Stupak-Thrall v. Glickman, 346 F.3d 579, 585 (6th Cir. 2003) ("Because the plaintiffs had a fair opportunity to respond to the government's statute of limitations argument, we find that the plaintiffs suffered no prejudice and, therefore, the government did not waive their defense.") (citing Smith v. Sushka, 117 F.3d 965, 969 (6th Cir. 1997)); Schwind, 357 F. Supp.2d at 699 (considering exemption defense where plaintiff was not surprised by defense and no prejudice would result). "The purpose of Rule 8(c) is to give the opposing party notice of the defense and a chance to argue, if he or she can, why the defense lacks merit." Mickowski v. Visi-Trak Worldwide, LLC, 415 F.3d 501, 506 (6th Cir. 2005).
Here, the City raised the following defense:
26. At all times referred to in Plaintiff's First Amended Complaint, the City' [sic] did not qualify as a debt collector under the statutory definition contained within the Fair Debt Collection Practices Act.Answer to Amended Complaint, Doc. No. 51, ¶ 26. This Court concludes that the City's answer fairly raised the defense of exclusion from the definition of "debt collector" under § 1692a(6)(C).
Plaintiff argues, however, that the City "has an affirmative burden to raise and prove that the exception permits it to avoid the general law otherwise applicable." Memo. in Opp., at 5 (emphasis added). However, as set forth above, Rule 8(c) requires only that a defendant raise the affirmative defense in its responsive pleading; a defendant bears the ultimate burden of proof and persuasion later in the litigation, at the dispositive motion stage and at trial. See, e.g., Fed.R.Civ.P. 8(c); Garcia, 418 F.3d at 550; Rushing v. Kansas City Southern Ry., 185 F.3d 496, 505 (5th Cir. 1999) (because the defendant "bears the ultimate burden of persuasion on its affirmative defenses, it must adduce evidence to support each element of its defenses and demonstrate the lack of any genuine issue of material fact with regard thereto" at summary judgment); Schmidtke, 141 F.2d at 635; Schwind, 357 F. Supp.2d at 697; Wohl v. Cleveland Bd. of Educ., 741 F. Supp. 688, 690 (N.D. Ohio 1990) (the defendant bears the ultimate burden of proof at trial). Plaintiff's cited cases in support are therefore inapposite to her waiver argument against the City in this case. Memo. in Opp., at 5 n. 10 (citing Schaffer ex rel. Schaffer v. Weast, 546 U.S. 49, 57-58 (2005) (the burden of persuasion as to affirmative defenses shifts to defendants)); Jackson v. Seaboard Coast Line R. Co., 678 F.2d 992, 1013 (5th Cir. 1982) (the defendant waived affirmative defense when it waited until after judgment to raise exemption as an affirmative defense); Rachbach v. Cogswell, 547 F.2d 502, 505 (10th Cir. 1976) (defendant could not rely on exemption defense when it raised it for the first time on appeal); United States v. Ohio Edison Co., 276 F. Supp.2d 829, 856 (S.D. Ohio 2003) (at trial, the "the party claiming the benefit of an exemption to compliance with a statute bears the burden of proof as to the exemption")). Accordingly, plaintiff's waiver argument must fail.
3. Statutory interpretation of FDCPA
The parties in this case disagree on whether or not the phrase "officer or employee" utilized in § 1692a(6)(C) includes a governmental subdivision, such as the City, thereby excluding the City from liability as a debt collector under the Act. See 15 U.S.C. § 1692a(6)(C)). The City contends that the government actor exclusion applies to governmental subdivisions like it because the City can act only through its employees, who are expressly protected by this subsection. Motion for Summary Judgment, at 3-6.
In response, plaintiff contends that the plain language § 1692a(6)(C) "precludes its application to any agency, corporation, LPA, or other type of legal entity other than natural persons who can hold the status or characteristic of being an 'officer' or an 'employee.'" Memo. in Opp., at 11. Plaintiff argues that the actual words utilized by Congress, i.e., words "officer" and "employee," reflect a Congressional intent that the exclusion apply only to individuals. Id. Plaintiff criticizes contrary authority as ignoring the plain statutory language and instead erroneously looking to (and then misapplying) legislative history. Id. at 12-16. Plaintiff further argues that, because the City had fair notice of the FDCPA and could have avoided liability under the statute, there is no unfairness in applying the FDCPA to the City. Id. at 16-23.
In reply, the City claims for itself the exclusion from liability created by § 1692a(6)(C) because "if the employees of the City are not considered to be performing debt collection then there is no way that the City can perform such an activity since the City can act only when its employees act." Reply, at 2. For the following reasons, the Court concludes that the exclusion from liability created by § 1692a(6)(C) cannot properly be interpreted to apply to the City.
As noted supra, the FDCPA is a remedial statute and the disputed provision addressed in the motion presently before the Court, § 1692a(6)(C), is an exclusionary provision. "Following traditional canons of statutory interpretation, remedial statutes should be construed broadly to extend coverage and their exclusions or exceptions should be construed narrowly." Cobb v. Contract Transport, Inc., 452 F.3d 543, 559 (6th Cir. 2006). See also Wukelic v. United States, 544 F.2d 285, 288 (6th Cir. 1976) ("Because of this purpose, its provisions are remedial in nature and as such should be construed liberally; conversely, exceptions to its remedial provisions should be construed narrowly.").
Keeping this tenet in mind, the Court turns to an analysis of § 1692a(6)(C). This statutory interpretation properly begins with the language of the Act. See, e.g., Brilliance Audio, Inc. v. Haights Cross Commc'n, Inc., 474 F.3d 365, 371 (6th Cir. 2007) ("As with any question of statutory interpretation, we must first look to the language of the statute itself."); Pittsburgh Conneaut Dock Co. v. Director, Office of Workers' Compensation Programs, 473 F.3d 253, 266 (6th Cir. 2007) ("In all cases of statutory construction, the starting point is the language employed by Congress.") (citing Appleton v. First Nat'l Bank of Ohio, 62 F.3d 791, 801 (6th Cir. 1995) (internal quotation marks omitted)); Limited, Inc. v. C.I.R., 286 F.3d 324, 332 (6th Cir. 2002) ("[W]e look first to the plain language of the statute."). The Court's inquiry is complete if the statutory language is clear. See, e.g., Brilliance Audio, Inc., 474 F.3d at 371; Pittsburgh Conneaut Dock Co., 473 F.3d at 266 ("Moreover, where the statute's language is plain, the sole function of the courts is to enforce it according to its terms.") (citing Chapman v. Higbee Co., 319 F.3d 825, 829 (6th Cir. 2003) (internal quotation marks omitted)).
In analyzing statutory language, the Court presumes that Congress acted intentionally when including particular words in a statute. See, e.g., Russello v. United States, 464 U.S. 16, 23 (1983). Therefore, the question is not what Congress "would have wanted," but what Congress actually enacted. Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 618 (1992). Accordingly, a court must, if possible, give effect to every word of a statute and not disregard any words in a statute. See, e.g., In re American HomePatient, Inc., 414 F.3d 614, 618 (6th Cir. 2005); Jordan v. Paccar, Inc., No. No. 95-3478, 1996 U.S. App. LEXIS 253, at *20 (6th Cir. Sept. 17, 1996). A court should read the statute as a whole and avoid a construction that renders a statutory word superfluous. See, e.g., Grable Sons Metal Prods. v. Darue Eng'g Mfg., 377 F.3d 592, 596-97 (6th Cir. 2004). "Normal principles of statutory construction require that [a court] give effect to the subtleties of language that Congress chose to employ[.]" Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 222 (1986). "When the text of a statute contains an undefined term, that term receives its ordinary and natural meaning." Limited, Inc., 286 F.3d at 332.
"If the plain meaning of the statute only supports one interpretation, the statute is not ambiguous." California v. Montrose Chem. Corp., 104 F.3d 1507, 1514 (9th Cir. 1997). See also Guardian Alarm Co. of Michigan v. May, No. 00-1489, 24 Fed.Appx. 464, at *469 (6th Cir. Dec. 11, 2001). Similarly, a "mere disagreement among litigants over the meaning of a statute does not prove ambiguity; it usually means that one of the litigants is simply wrong." Bank of Am. Nat'l Trust Sav. Ass'n v. 203 N. Lasalle St. P'ship, 526 U.S. 434, 461 (1999) (Thomas, J., concurring). The Court should not give words a strained or unnatural meaning in order to create an ambiguity. See, e.g., Ex parte Collett, 337 U.S. 55, 61 (1949). "Only if the statute is 'inescapably ambiguous' should a court look to other persuasive authority [such as legislative history and interpretations by other courts] in an attempt to discern legislative meaning." Brilliance Audio, Inc., 474 F.3d at 371-72 (citing Garcia v. United States, 469 U.S. 70, 76 n. 3 (1984) (emphasis added)). See also Pittsburgh Conneaut Dock Co., 473 F.3d at 266-67 ("resorting to legislative history is only appropriate when the statutory language at issue is not clear"). The party claiming that the statute is ambiguous must bear the burden of establishing that ambiguity. Cf. Montrose Chem. Corp., 104 F.3d at 1514.
The FDCPA does not define the terms "officer" or "employee" of the United States or State. See 15 U.S.C. § 1692a(6). Accordingly, these words must be accorded their ordinary meaning. See, e.g., Limited, Inc., 286 F.3d at 332. A dictionary may be an appropriate source for determining a word's ordinary meaning. See, e.g., Koyo Seiko Co. v. United States, 36 F.3d 1565, 1571 n. 9 (Fed. Cir. 1994); IBM v. United States, 201 F.3d 1367, 1372 (Fed. Cir. 2000). "Officer" has been defined as a
"State," however, is defined as "any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the foregoing." 15 U.S.C. § 1692a(8).
person who holds an office of trust, authority or command. In public affairs, the term refers esp. to a person holding public office under a national, state, or local government, and authorized by that government to exercise some specific function. In corporate law, the term refers esp. to a person elected or appointed by the board of directors to manage the daily operations of a corporation, such as a CEO, president, secretary, or treasurer.
BLACK'S LAW DICTIONARY 1117 (8th ed. 2004). Within the context of this definition, the ordinary meaning of "officer" would extend only to a natural individual. Therefore, an "officer" of the United States or State is a specific, natural individual who holds public office.
An "employee" is defined as a "person who works in the service of another person (the employer) under an express or implied contract of hire, under which the employer has the right to control the details of work performance." BLACK'S LAW DICTIONARY 564 (8th ed. 2004). Again, this definition comports with the common understanding that an employee is a natural person. Thus, an "employee" of the United States or State is a natural person who works for the federal or state government, which entity has the right to control the details of the individual's work performance.
Accordingly, the Court finds that the plain meaning of the terms "officer" and "employee" as used in § 1692a(6)(C) is clear: those terms refer only to an individual, or natural person, and cannot include governmental entities or political subdivisions.
The City concedes that officers and employees are individuals employed by a political subdivision such as the City of Columbus, Motion for Summary Judgment, at 5. It argues, however, that the political subdivision should be accorded the same protection provided by § 1692a(6)(C) to the individuals employed by it because the City can act only through these employees and officers. Id.; Reply, at 2-3. As the party claiming exemption to a remedial statute, the City bears the burden of proof of its construction of the statute. See, e.g., NLRB v. Ky. River Cmty. Care, Inc., 532 U.S. 706, 711 (2001) ("[T]he general rule of statutory construction that the burden of proving justification or exemption under a special exception to the prohibitions of a statute generally rests on one who claims its benefits.") (citing FTC v. Morton Salt Co., 334 U.S. 37, 44-45 (1948)). The City has not met its burden.
Of the six categories of exceptions to liability listed under 15 U.S.C. § 1692a(6), the term "officer or employee" appears in only two. 15 U.S.C. § 1692a(6)(A), (C). The term "person" appears in three other categories, 15 U.S.C. § 1692(a)(6)(B), (D) and (F), and the term "nonprofit organization" appears in yet another, 15 U.S.C. § 1692a(6)(E). When Congress uses particular language in one section of a statute, such as "officer or employee," and different terms in another section, the Court must presume that Congress acted intentionally to refer to different persons or things and to expand or narrow the scope of the exception accordingly. See, e.g., I.N.S. v. Cardoza-Fonseca 480 U.S. 421, 432 (1987) (citing Russello v. United States, 464 U.S. 16, 23 (1983) ("'[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.'"); Cunningham v. Scibana 259 F.3d 303, 307-08 (4th Cir. 2001) ("Although the two terms are quite similar, we must assume that Congress made a deliberate choice to use different language.").
The term "person" ordinarily includes not only a human being but also "[a]n entity (such as a corporation) that is recognized by law as having the rights and duties of a human being. In this sense, the term includes partnerships and other associations, whether incorporated or unincorporated." BLACK'S LAW DICTIONARY 1178 (8th ed. 2004). Therefore, the plain meaning of "person," as used in other subsections of 15 U.S.C. § 1692a(6), suggests that Congress intended to extend immunity from liability to entities other than individuals. However, in constructing 15 U.S.C. § 1692a(6)(C), upon which the City relies, Congress did not use the term "person," but rather chose the term "officer or employee." It follows that, in doing so, Congress intended that this exclusion from the definition of "debt collector" would apply only to individuals, not to a governmental subdivision or agency. The City's proposed interpretation would disregard Congress's use of the word "person" in § 1692a(B), (D) and (F), but apparently intentional use of different words in § 1692a(6)(C). See, e.g., First American Title Co. v. Devaugh, 480 F.3d 438, 452 (6th Cir. 2007). This Court "must assume that Congress made a deliberate choice to use different language," see Cunningham v. Scibana 259 F.3d 303, 308 (4th Cir. 2001), and therefore concludes that the phrase "officer or employee" as used in 15 U.S.C. § 1692a(6)(C) serves to exclude only individuals from the definition of "debt collector," not governments or governmental subdivisions. This construction also comports with the canon of statutory construction requiring that exceptions to remedial statutes be construed narrowly. See, e.g., Cobb, 452 F.3d at 559; Wukelic, 544 F.2d at 288. Conversely, the City's proposed interpretation would impermissibly broaden the scope of the exclusion created by 15 U.S.C. § 1692a(6)(C) from only natural individuals to "persons," including governments or governmental subdivisions.
Interestingly, "person" is defined elsewhere in Chapter 41, which deals with consumer credit protection, to include a "government or governmental subdivision or agency." See, e.g., 15 U.S.C. §§ 1681a(b), 1691a(f).
In reaching this conclusion, and in so construing § 1692a(6)(C), this Court is mindful that other courts have reached contrary conclusions. See Motion for Summary Judgment, at 3-6 (citing Georgeodis v. County of Fairfield, No. C-2-99-204, 2000 U.S. Dist. LEXIS 21724, at *6-7 (S.D. Ohio Sept. 25, 2000); Parrish v. City of Highwood, No. 95 C 4438, 1998 U.S. Dist. LEXIS 17470, at *16 (N.D. Ill. Oct. 30, 1998); Jones v. Intuition, 12 F. Supp.2d 775, 779 n. 3 (W.D. Tenn. 1998); Albanese v. Portnoff Law Assoc. Ltd., 301 F. Supp.2d 389, 398 (E.D. Pa. 2004)). However, because the Court has, for the reasons stated supra, concluded that the term "officer or employee" is unambiguous and must be given its plain meaning, the Court need not look to external authority, such as legislative history and interpretations by other courts, in construing that term. See, e.g., Brilliance Audio, Inc., 474 F.3d at 372.
The City also argues that construing the exclusion to extend to individual officers or employees of the City but not to the City itself leads to a result that is both absurd and contrary to the intent of Congress. Motion for Summary Judgment, at 5-6; Reply, at 2-4. Particularly is this so, the City contends, where the so-called debt collector receives no compensation for its so-called debt collection services. Reply, at 4. "A result, however, is not absurd merely because it does not comport with one's notion of what constitutes good policy." Chapman v. Higbee Co., 319 F.3d 825, 832 (6th Cir. 2003). To warrant a departure from the plain language of a statute in order to avoid an absurd result, "the absurdity must be so gross as to shock the general moral or common sense." Crooks v. Harrelson, 282 U.S. 55, 59 (1930). See also Public Citizen v. U.S. Dept. of Justice 491 U.S. 440, 470-71 (1989) (Kennedy, J., concurring) (the absurdity exception to the plain meaning tenet of statutory construction should be limited to situations "where the result of applying the plain language would be, in a genuine sense, absurd, i.e., where it is quite impossible that Congress could have intended the result . . . and where the alleged absurdity is so clear as to be obvious to most anyone"). This departure from traditional tenets of statutory construction is warranted "only under rare and exceptional circumstances." Crooks, 282 U.S. at 59. As plaintiff aptly puts it, that Congress should conclude "that the individuals who simply carry out a government's debt collection activities should be protected from personal liability while the government entity directing those activities remains answerable to consumers" is not so shocking as to warrant a departure from the standard rules of statutory construction. Memo. in Opp., at 11-12.
Certainly, in other contexts, an employer may be held liable for the acts of its individual employees acting within the scope of their employment, even when the employee is not held liable. See, e.g., Wathen v. General Elec. Co., 115 F.3d 400 (6th Cir. 1997) (Title VII of the Civil Rights Act of 1964).
4. Plaintiff's argument that the class FDCPA claims are not unfairly asserted against the City
Plaintiff also argues that it is not unfair to apply the FDCPA to the City. Memo. in Opp., at 16-23. In light of this Court's conclusion that the City does not qualify for the exclusion established by § 1692a(6)(C), the Court need not address this argument.
B. The Ohio Consumer Sales Practices Act
The OCSPA makes it unlawful for a supplier to engage in an unfair, deceptive, or unconscionable act or practice in regard to a consumer transaction. O.R.C. § 1345.02; Hanlin v. Ohio Builders and Remodelers, Inc., 212 F. Supp. 2d 752, 755 (S.D. Ohio 2002). The OCSPA defines a "supplier" as a "person engaged in the business of effecting or soliciting consumer transactions, whether or not he deals directly with the consumer." O.R.C. § 1345.01(B). The City argues that, because it does not qualify as a debt collector, it cannot have violated the OCSPA. Motion for Summary Judgment, at 6. However, for the reasons stated supra, the City does not qualify for exclusion from the definition of "debt collector" under the FDCPA. Accordingly, the Motion for Summary Judgment on plaintiff's OCSPA claim is likewise DENIED.
C. Section 1983
To state a claim under 42 U.S.C. § 1983, a plaintiff must allege the violation of a right secured by the Constitution or laws of the United States by a person acting under color of state law. West v. Atkins, 487 U.S. 42, 48 (1988); Street v. Corr. Corp. of Am., 102 F.3d 810, 814 (6th Cir. 1996). Because § 1983 is a method for vindicating federal rights, not a source of substantive rights itself, the first step in an action under Section 1983 is to identify the specific constitutional right or federal law allegedly infringed. Albright v. Oliver, 510 U.S. 266, 271 (1994).
Section 1983 provides in relevant part:
Every person who, under color of any statute, ordinance, regulation, custom, or usages, of any State . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured. . . .42 U.S.C. § 1983.
In the instant action, the City argues that, because it is excluded from liability under the FDCPA, it has infringed no federal law and plaintiff's claim under § 1983 must fail. Motion for Summary Judgment, at 6. However, because plaintiff's FDCPA claim survives summary judgment, the Motion for Summary Judgment on plaintiff's § 1983 claim is DENIED.
D. Fraudulent misrepresentation
The City acknowledges that its status as a debt collector controls plaintiff's fraudulent misrepresentation claims. Motion for Summary Judgment, at 2. Because this Court has previously concluded that the City meets the definition of a debt collector under the FDCPA, Opinion and Order, Doc. No. 118, and concludes herein that the exclusion from that definition established by § 1692a(6)(C) does not extend to the City, plaintiff's fraudulent misrepresentation claims survive summary judgment. Thus, the Motion for Summary Judgment on plaintiff's fourth and fifth claims for relief is DENIED. WHEREUPON, in light of the foregoing analysis, the Defendant City of Columbus' Second Motion for Summary Judgment, Doc. No. 122, is DENIED.