Page:Dennis Obduskey v. McCarthy & Holthus LLP.pdf/1

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Law firm McCarthy & Holthus LLP was hired to carry out a nonjudicial foreclosure on a Colorado home owned by petitioner Dennis Obduskey. McCarthy sent Obduskey correspondence related to the foreclosure. Obduskey responded with a letter invoking a federal Fair Debt Collection Practices Act (FDCPA or Act) provision, 15 U. S. C. §1692g(b), which provides that if a consumer disputes the amount of a debt, a “debt collector” must “cease collection” until it “obtains verification of the debt” and mails a copy to the debtor. Instead, McCarthy initiated a nonjudicial foreclosure action. Obduskey sued, alleging that McCarthy failed to comply with the FDCPA’s verification procedure. The District Court dismissed on the ground that McCarthy was not a “debt collector” within the meaning of the FDCPA, and the Tenth Circuit affirmed.

Held: A business engaged in no more than nonjudicial foreclosure proceedings is not a “debt collector” under the FDCPA, except for the limited purpose of §1692f(6). Pp. 6–14.
 * (a) The FDCPA regulates “‘debt collector[s].’” §1692a(6). Relevant here, the definition of debt collector has two parts. The Act first sets out the primary definition of the term “debt collector”: a “ ‘debt collector,’ ” it says, is “any person… 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.” Ibid. The Act then sets forth the limited-purpose definition, which states that “[f]or the purpose of section 1692f(6)… [the] term [debt collector] also includes any person… in any business the principal purpose of which is the enforcement of security interests.” It is undisputed that McCarthy is, by virtue of its role enforcing security interests, at least subject to the specific prohibitions contained in §1692f(6). But only if McCarthy