Obduskey v. McCarthy & Holthus LLP
In 2007, Colorado resident Dennis Obduskey obtained a $329,940 home loan. Two years later, he defaulted on the loan, and his creditor retained respondent—a law firm—to initiate a non-judicial foreclosure, a process by which a trustee is authorized to take and sell a consumer’s home to fulfill an unpaid home mortgage. Obduskey filed a complaint with the Consumer Financial Protection Bureau and sued in federal district court, alleging that respondent violated the FDCPA by, among other things, failing to provide the written verification of the debt to which he was entitled under the FDCPA. The district court held that Obduskey failed to state a claim because the FDCPA does not apply to non-judicial foreclosure. The U.S. Court of Appeals for the Tenth Circuit affirmed the district court’s ruling. In March 2018, Obduskey asked the Supreme Court to hear his case, and the Supreme Court agreed to do so.
CAC filed a friend-of-the-court brief in the Supreme Court on behalf of members of Congress in support of Obduskey. In our brief, we explained that under the plain text of the FDCPA, non-judicial foreclosures qualify as debt collection. After all, a home mortgage is a debt, and non-judicial foreclosure is a means of obtaining payment for that debt, either by prompting a consumer to pay the debt in order to avoid foreclosure, or by selling the home through the foreclosure process and using the proceeds to pay the debt. Moreover, holding that non-judicial foreclosure is debt collection accords with Congress’s plan in passing the FDCPA. Congress passed the FDCPA to prevent debt collectors from engaging in deceptive and harassing practices in their communications with consumers, and these practices are at least as common in communications regarding non-judicial foreclosure as they are in other types of debt collection communications. Finally, while some courts have suggested that treating non-judicial foreclosure as debt collection would undermine state foreclosure laws, our brief explains that these laws do not conflict with the FDCPA. Moreover, if a state law did conflict with the FDCPA, the FDCPA explicitly preempts that state law. Thus, purported conflicts with state law provide no reason to interpret the Act in a manner that is inconsistent with its text and Congress’s plan in passing it.
June 28, 2018
Supreme Court grants certiorari
September 17, 2018
CAC files amicus briefU.S. Sup. Ct. Amicus Brief
January 7, 2019
The Supreme Court hears oral arguments