In Anarion Investments LLC v. Carrington Mortgage Services, LLC et al, plaintiff Anarion, a Delaware LLC, alleged that defendant Carrington made false representations in foreclosure notices, a violation of the FDCPA. The district court dismissed the complaint on the grounds that the LLC was not a “person” under the FDCPA — which states that a debt collector’s failure to comply with the FDCPA “with respect to any person is liable to such person” – and was therefore ineligible for any civil recovery.
The Sixth Circuit reversed and remanded the district court’s ruling, holding that the term “person” as used in the FDCPA statute applies to entities as well as individuals per the federal Dictionary Act that states the word “person” can be determined to mean artificial entities unless “the context indicates otherwise.”
Responding to defendant’s argument that the extension of FDCPA rights to entities is not consistent with the purpose of the statute, the court said that “two aspects of the FDCPA alleviate that concern.” Those two aspects include:
- The statute’s definition of “debt” as obligations that are incurred primarily for personal, family or household purposes would prevent “any person–natural or artificial–from filing a lawsuit over an attempt to collect a debt owed by a business.”
- Nothing in the court’s opinion would prevent the plaintiff from filing suit under the FDCPA as the court’s decision only answered the question of whether the LLC was a person under the FDCPA.
In a dissenting opinion, Judge Bernice Bouie Donald noted that the FDCPA’s purpose and legislative history was to protect natural persons from unfair debt collection practices, and that Congress did “indicate otherwise” that it was inappropriate to include artificial entities as persons under the FDCPA. She faulted the majority for relying on the federal Dictionary Act presumption, saying that it was a “more context-appropriate interpretation” for artificial entities not to be considered as “persons” for purposes of bringing suit under the FDCPA.
In addition, she noted, the majority’s opinion “potentially opens the door to a new class of plaintiffs under the FDCPA and effectively provides a new cause of action in foreclosure appeals.”
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