## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 10

- 3184 G EANIE CE D. C ART ER, Plai nt i f f

-Appe l l ant, v. AM C, LLC , D efend a nt-A pp ellee
.

A pp eal from the United S t ates Di strictC ourt fo r the N o rthernDi stricto f Illino is, Eas tern Divisi on. No . 09 C7181

—Robert W . G ettleman, Ju dge .
S UB MI TT ED M AR CH 23, 2011

— D ECI DE D M AY 13, 2011

Befo re E A S T E R B R OO K, Chi e f Judg e, a nd K ANN E a nd S YKES, C ircu it Judges . E A S T E RB R OO K, Chi e

f Judge
. Geani ece Carte r re nted an apart m ent a t Ri ver sto ne A p ar tm ents i n Bol ingbr oo k, I l l i noi s. A M C , LLC , m anage d the bui l ding on be hal fo f its ow n er , Jac ks o n S q u ar e P ro p er tie s. A M C filed su it in st at e co ur t to ha ve Ca r te re vi ct ed. ( AM C’ s nam e a t th e t i me wa s Ame r i c a n Ma n ag e me n tC o n s u l t a n t s , L L C ; we us e its curren t nam e in this op in io n . ) T he tri al court2 N o. 10

- 3184

en tered an eviction ord er bu t the a p p ell ate cou rt re ver sed, hol ding that A M C had not gi ven a notic e req u i r e d b y s t a t e l a w. A m erica n M a na gem ent C o nsu lta nts, LL Cv. C a rter, 39 2 I l l
. A pp . 3d 39 , 915 N
. E.2 d 411 ( 2009 ) ( re l y i ngo n 7 3 5 I LCS5 / 9

- 2 1 1 )
. On e j ud g e c o nc l ud e d tha t A M C a l s o h a d v i o l a t e d the F a i rDeb tCo l l e c t i o n Practi ces A ct, 15 U
. S.C . §§ 1 692– 1692 p. S ee 392 I l l
. A pp . 3d at 4 8

– 5 2 , 9 1 5 N
. E
. 2 d a t4 2 0

– 2 4 ( Mc D a d e , J
. )
. T h e o th e rme mbe r s o f th e p an eldi d no t j o i n tha t po r ti o n o fthe o pi ni o n. 3 92 I ll
. A p p . 3 d a t 65 –6 6, 9 15 N. E. 2d at4 34 ( W r i g ht & Schm idt, JJ. , conc urring sp ecially). H a v i n g p re va iled in s ta te co u rt, C ar te r filed th is fede r als ui t se ek i ngda m ag es f o rthe v i o l at i o n o fthe F D C P A th a tJ u s t i c e Mc D a d e b e l i e v e d h a d o c c u r r e d. Cart e r c o nt e nd s tha t AM C v i o l a t e d the Act i n t wo ways: byt el l i nga c r edi t bur ea u tha t sh e ow ed r en t wi th o uti nf o r mi ngi ttha ts he di s pu t e d tha tp o s i t i o n, s e e 1 5 U
. S. C. §169 2e( 8) , and by m i sr epres enti ng the st atu s of the debt d u rin g th e s ta te litiga tio n , s ee §1 69 2e (2)( A ). C f. Thom as v. Si m ps on & Cyb ak, 39 2 F
. 3d 914 ( 7th Ci r. 20 04) ( en banc) ( hol ding th at the A ct a pp l i es to som e docum ents fi l ed i n sta te cour t, though the concl usi on o fThom as that l aw yer s m ust s end a ve ri fi cati on not i ce b ef or e o r w i th a co m pla i nt was und one by an am endm ent in 200 6; se e 15 U
. S. C
. §1692 g(d)). A M C m igh t hav e r epl i ed that the s tat e co urt w as the r i ght for um f orCart er ’s co ntenti ons. But i t di d not c on te n d th ata c laim u n d er th e F D C P A w as a c om p u lsory c ounter cl ai m i n the sta te case o r that pri nci ple s o f cl ai m pre cl usi on (r es j ud i cata ) o ther w i se bl ocka federa lN o. 10

- 3184 3

su it. P re c lu sio n is an affirm at ive d efe n se t h a t d eb t c oll e c t o r s f o r fe i t b y f a i l i ng t o i nv o k e i t i n the di s t r i c tco urt. Se e Bel e rv. Bla t t, Has e nm i l l er, Le i b s ke r& M oore, LL C, 48 0 F. 3d 470, 472 ( 7th Ci r. 20 07)
. ( C ar terdoes notwant to up setthe sta te j ud gm ent, f orshe preva i l ed i n sta te c o u r t ; o u r s u i t th e r e f o r e d o e s n o t p r e s e n t a n y i ss ue unde rthe Rooke r–Fe l dm an doc trine, w hich a fed eral court m ust r ai se on i ts own bec ause i t curtai l s s ubj ectm att erj u ris dict i on. S ee Kel l ey v . M e d- 1 S ol ut i ons, LL C, 54 8 F.3 d 60 0 (7 th C ir. 20 08 ); Epps v. Cr e di t ne t, Inc . , 32 0 F.3 d 75 6 (7 th C ir. 20 03 ).) F o rhe rpa r t, Ca r te rdo es inv o k e pr ec l us i o n: S he c o nte n d s t h atth e s ta te co u rtres olv ed th e F D C P A cla im in her fav or, and that the federa lco urt’ s o nl y r ol e i s t o su ppl y the r emed y. Thati sn ’ t so . The o pi ni o n o fo ne m embe ro fa thr ee -j udge p aneldo es no t r es o l ve a ny iss u e; it ta ke s a m ajorit y t o m ak e a n au th or ita tiv e ru li ng. A nd ev en i fano therm em b er o fthe panel had j oi ned thi s par t o fJ usti ce M cDad e’ s op in ion, i t would notbe concl usi ve. The doctr i ne o fi ssue precl usi on ( col l ate ra l es to p p el) a p p lies on ly w h en an iss u e is a c tu ally and n ec es sari lyd ec id ed in t h e e ar lier s u it. Res t at e m e nt (Se con d ) o

f Judgm ents §2 7 (1 98 2); In re A .W
. , 23 1 I l l
. 2d 92 , 99, 89 6 N
. E.2 d 316, 32 1 ( 2008 ) . Just i ce M cDad e s tat ed th at he r vi ew ab o ut th e F DCPA was no t ne ce ss ary to the cour t’ s deci si on

— and the o therm em ber s o fthe panel ag r ee d wi th th at as se ss m en t when th ey co nc ur r ed wi th

out express i ng an opi ni on o n the topi c. The fede r aldi st r i ctj ud g e as su m ed th atAM C o wns Ri ve r sto ne Apar tment s an d thus i s Car te r ’ s l es so ra nd4 N o. 10

- 3184

c r e di t o r . J us t i c e McD a de , w ho ma de the s a me a s s umpti on, con c lu d ed that l ess or s a re “debt col l ecto rs ” co ver ed bythe F DCPA
. The di st r i ctj udg e di sa g r ee d, o bs er ving that a “ debt co l l ecto r” i s s om eone w h o re gul ar l y c ol l ects , orat tem pts to co l l ect, “debts o w ed ordue orasser ted to be o wed o rdue an o ther .” 1 5 U .S.C . §16 92 a(6 ) (em p h as is add ed )
. A n enti ty that tr i es to col l ect m oneyo w ed to i tse l fi s o utsi de the FDC PA
. Thi s l ed the dis tri ct j ud ge to dism i ss Carte r’ s co m pla i nt. 20 10 U
. S. Dis t. L EXIS91 729 (N
. D
. I ll
. Sept
. 2, 2010). There’ s no thi ng wrong w i th the di str i ct court ’ s l ega l a n a l y s i s , b u ti t s f a c tu a la s s u mp t i o n i s i n c o r r e c t
. A MC d oes n o t o w n R iverston e A p artm en ts an d i s not C arter’s l andlord. The l eas e, wh i ch i s in the re cor d, i s e xpli ci t: J ac k so n S qua r e Pr o per ti es , a Cal i f o r ni a co r po r at i o n, o wns the b ui l di nga nd i s Ca r t e r ’ s c r e di t o r ; AM C i s J a ckso n Squ ar e’ s ag en t. AM C de sc r ibe d i ts el fa s ana g en t i n the sta te- cour t paper s. W hy J usti ce M c Dad e t re ate d i t a s th e o w n er is m ys t e r iou s. W h y Ju d ge G et tle m an d id so i s e asi erto understa nd
. Carter n am ed “A m er i can M anage m ent Consul tants LLC /Ri ver sto ne A partm ents” as the de fen dan t an d r el i ed on Justi ce M cDa de’ s o pi ni o n. AM C’ s l a wy e r di d no t di s ab us e J ud g e Ge t t l e mano f the m i sta ke that the c om pla i nt shar ed w i th J usti ce M c Da de
. And i n thi s c o ur t, c o un s e lfi l e d a c o r po r a te di sc l o sure s ta te m en t na m i ng“ AM C, LLC/Ri ve r st o ne A p artm en ts” as h is cl ient. Th ere is n o su ch entity. R ivers t o ne Apa r t men t s i s a b ui l di ng, a nd p e r ha ps a t r a de na m e to o , b uti t i s no t a per so n o ro r g an i za ti o n. I t i s no m or e p os sib le t o s u e “ R ive rs to n e A p ar tm en ts ” t h an it w oul d be t o sue the M i ssi ssi pp iRi ver . S ee Sc hi avon ev. For t une, 477 U
. S. 21 (1986).N o. 10

- 3184 5 W e k no w f r o m the l ea se thatAM C i s th e l es so r ’ s ag en t r athe r th an th e bui l di ng ’ s o wner . Thi s se ts up an ar g um en t f o rCa r te r, b ec au se AM C i s no t he rc r edi to ra nd thus pote nti al l y i s a debt col l ector , a s § 1692 a( 6) defi nes th at ter m . W e s ay “pote nti al l y” because notal lag ents ar e deb t co l l ec to r s. The Acte xc l ude s no t o nl y the or i gi nalcr edi to r but al so any per son w ho t ri es to col l ect a debt that “ w as not i n def aul t a t the ti m e i t was o btained by suc h p erson . ” 15 U
. S. C
. §1692 a(6)( F)(i ii) . If a m an ag ementfi r m “ obta ins” a deb t, i t do es s o whenthe l eas e be gi ns, w hi ch n eces sar i l y precedes defa ult, or w hen th e agen cy relat io n begins (ifthat hap p en s after a giv en ap ar tm en t h as be en let ). Th e h a r d er qu es tio n is w he th er an agen t “obta ins” th e d e bt at all, or th at w ord in stead denotes o nl y o w ners hi p. S ee Ru t h v . Tr i um ph Part ne rs hips , 577F.3d 7 90 , 7 96 –9 7 (7t h C ir. 20 09 ); M cK inn ey v. Cadl e way Pro pe r t i e s , Inc . , 54 8 F
. 3d 496, 50 0–01 ( 7th C ir. 20 08 ); Sc hlo sser v. Fairb a nk s C a pit a l C o rp . , 3 23 F. 3d 53 4, 53 6– 37(7t h C ir. 20 03 ); Whit a k er v. A m eritech C o rp . , 12 9 F.3d 952 , 958–5 9 (7th C ir. 1997). A t l eas t four cour ts ofappeal s, i ncl ud i ng o urs, have concl ud ed that a s er vi ci ng ag ent for a m or tga ge l oan “obt ai n s” t h e d ebt eve n though the b ank o w ns the not e. Se e B a iley v
. Secu rity Na tio na l Serv icin g C o rp . , 15 4 F
. 3d 384, 387– 88 ( 7th Ci r. 19 98) ; Ali b randiv. Fi nan ci al O uts our ci ng Se r vi ces , Inc ., 33 3 F .3d 82 , 84 –8 5 (2 d C ir. 20 03 ); Wadl i ngt on v. C redit A ccep ta nc e C o rp . , 76 F. 3d 103, 1 0 7 (6th Cir. 1996); Pe r ry v. Ste war tTi t l eCo
. , 756 F.2d 119 7, 1208 ( 5th Cir. 19 85 )
. Appar en tly the q uest i o n whe th erthi s i s al so t r ue o fthe s er vi cinga g en t f o ra l es so r has ne ve ra r i se n in a c ou rtof ap p ea ls

— at l eas t, has not l ed to a prece denti al6 N o. 10

- 3184 deci si on. But i t has co m e up fre quentl y in dis tr i ct co ur ts , whi chha ve c o nc l ude d uni f o r m l y tha t a servi cing a g e nt“ o b t a i ns ” the deb twh e n the l e ase i s s i g ne d. Rey nolds v. Gab l e s Re s i de nt i al Se r vi ces , Inc . , 42 8 F
. S up p. 2d 12 60 , 126 4 (M .D
. Fla . 200 6); Wi l l i am s v. Ede l m an , 40 8 F. Su p p . 2d 12 61 , 12 65 –6 6 (S .D . Fla. 20 05 ); Kvassay v . Hasty, 23 6 F . Su p p . 2d 12 40 , 1 2 6 9– 70 (D . K an . 200 2); Alexand e rv. O m ega M anag e m e nt, Inc . , 67F. S up p. 2d 10 52, 10 55–5 6 (D . M in n . 199 9); Franc e s ch i v. M aut ne r - Gli ckC o rp . , 22 F. Su p p . 2d 25 0, 25 3– 54 (S.D .N .Y . 1 9 9 8 ) ; A z a r v. Ha yter, 874 F. S up p. 13 14, 13 19 ( N
. D. Fl a. 19 95), affi rm ed w ithou t op inion, 66 F.3d 34 2 (11th C ir. 1995). The Feder alTra de Com m i ssi on hol ds som e inter preti ve a nd e nf o r ce m en t au th o r i tywi thr es pec t to the FDC PA
. S ee 15 U
. S. C. §§ 1692 k( e) , 16 92 l , 16 92 o . I t has n otiss u ed reg u lat ion s o r ad vis or y op i n i o n s o n th is su bj ec t o rc o m m en ce d a n a dm i ni st r at i ve a dj udi ca ti o n. Butthe s ta ffo fi ts Di vi si o n o fCr edi t Pr ac ti ce s has c o nclud ed that the m a n a g ing an d servicing agen t for a l ess oro r condom i ni um as soc i ati on “ obt ai ns” the debt w hen i t be com es the c re dit or ’ s a gent , a nd thus i s no t a “deb t co l l ec to r ” unl es s a g i ve n de btwas i n a rrears w hen the age nt a ssum ed that ro l e. S ee the l ett er s o f Aug us t 3 1 , 1 9 9 2 , a nd No v e mbe r 6 , 1 9 9 5 , a v a i l ab l e at http: //www . ftc. gov/o s/ sta tutes /fdcp a/l ett er s/ sheehan. htm and http: //w w w . ftc. gov/o s/ sta tutes/fd cpa/l etter s/goo dacre. htm
. These l ett er s don’ t r ecei ve Che vron d efe rence, se e U nited Sta tes v. M ead C o rp . , 53 3 U.S
. 21 8 ( 2001 ) , but they ar e e nti tl ed to r espect ful consi dera ti on a nd sho w that th e d ist ric t jud ge s a n d th e re sp on sib le a ge n c y a re in agr eem ent.N o. 10

- 3184 7 W e co ncl ud e that, al though o ne usual l y “ obt ai ns” a debt b y p u rc h as in g it, th is is n otth e o n ly w ay to d o s o. A ser vi ci ng ag ent “ ob tains” a debt i n the sense thati t a cquir es the a uthor i ty to col l ect th e m oneyo n behal fo f an ot h er . C f. Sp rint C o m m un ica tio ns C o . v. AP C CServi ces, Inc . , 55 4 U.S
. 26 9 ( 2008 ) ( disc ussi n g as si gnm ents f or c olle c tio n ); CW Capi t al As s e tM anag e m e nt, LLC v
. Chi cago Prop e r t i e s , LL C, 61 0 F
. 3d 49 7 ( 7th Ci r . 2010) ( di sc us sing ser vi cer s o fm or tga ge pool s)
. I t fol l ow s th at A M C “obtained ” a n inte rest in C arter’s de bt to Jackson Squ are Pr o per ti es whenAM C b ec ame J ac k so n S qua r e’ s ag en t

— w hich oc cu rred before Carte r got behin d i n h er rent (i f, ind eed , that ever occu rred , a qu estion th at t h e state’s c ou rtof ap p ea ls d id n otrea c h ). Sec tio n 16 92 a(6 )(F)(iii) thus te l l s us that A M C i s not a debt col l ecto r and does not owe Carte r any duti es und er t h e F DC PA
. (J usti ce M cD ade r ea ch ed a co nt r ary c o nc l us i o n wi th o utmenti oni ng §1 692a ( 6) o r the F TC ’ s o pini on l ett er s; her op in ion ac c or d in gly lac ks th e p ow er to p er su ad e.) Carte r’ s br i efco ntends thatA M C’s att or n eys vi ol ate d the Act eve n i fA M C i tse l fi s no t co ver ed by the s tatute. A ttorn ey s can be debt co l l ecto rs , se e He i ntz v. Je nki ns , 514 U
. S. 29 1 ( 1995 ) , but none i s a p ar ty to thi s s uit, so th is possibili ty ne ed not be d iscus sed furt he r. A FFI RMED

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