Law-Enforcement Officers and Self-Help Repossession: A State-Action Approach

Repossession of secured collateral is a fundamental component of the consumer credit industry. The Uniform Commercial Code authorizes a secured party to engage in self-help repossession of secured collateral under section 9-609, so long as the repossession takes place without "breach of the peace." While that term is undefined, several courts have adopted a counterintuitive rule, holding that a law-enforcement officer's presence during a self-help repossession-regardless of purpose or level of involvement-creates a breach of the peace. The Official Comments to the Code have seemingly endorsed this position as well. This Note rejects the primary justifications courts have offered to justify a bright-line rule and makes clear that an officer's involvement in self-help repossession is unrelated to breach of the peace. The correct approach to law-enforcement-officer involvement in self-help repossessions asks whether the officer's presence constitutes state action. An officer's involvement should only invalidate a repossession where it is deemed state action sufficient to trigger a constitutional violation under section 1983. In such cases, the repossession is not of the sort authorized by section 9-609 and would therefore be wrongful, rather than a breach of the peace. In accordance with this approach, this Note concludes with a proposal for a modified Official Comment to section 9-609.IntroductionThe repossession industry is dangerous. Tensions frequently run high, and when an unsuspecting car owner learns that his vehicle is being repossessed, his reaction is unpredictable and can be violent.1 Sensationalist portrayals of repossessions in television shows such as Operation Repo can attract violent personalities to the repossession industry,2 further contributing to the likelihood of violence during repossessions. The sheer number of vehicle repossessions far exceeds home mortgage defaults.3 Despite the risk of violence, repossession is a vital aspect of the consumer credit industry. Of the various rights triggered upon debtor default, repossession is paramount.4 It provides a secured party5 with an avenue of recourse to collect at least part of a debt owed to him, which also provides some assurance that a debtor will comply with repayment obligations.6The Uniform Commercial Code ("UCC") provides a secured party with the right to repossess its collateral upon default in two ways: repossession by judicial process and repossession by self-help.7 Because of the financial and time-related costs associated with reducing a claim to judgment, secured parties prefer instead to engage in self-help repossession.8 The UCC only imposes one statutory limitation on self-help repossession: it may not result in a "breach of the peace."9 Typically, independent contractors, popularly known as "repo men," perform such repossessions. Even though a repo agent is an independent contractor, a secured party who hires one will still be held personally liable for a breach of the peace.10 The most commonly repossessed goods are automobiles, as they are frequently purchased with credit and are easy to transport. Section 9-609, however, applies to any collateral in which a lender has a security interest.Despite its importance as the sole statutory limitation on self-help repossession, the UCC does not define "breach of the peace" or explain how one can avoid doing so during a repossession. Some scholars have called for the UCC to clearly define the contours of breach of the peace,11 though the drafters of revised Article 9 considered and rejected these proposals.12 Accordingly, in the Official Comment to revised section 9-609, the drafters explain that they intentionally chose not to define the term "breach of the peace," instead leaving it open to judicial determination.13 Though the breach-of-the-peace inquiry implicates several considerations, the essential question that often underlies courts' decisions regarding breach of the peace in this context is whether the repossession created an unreasonable risk of violence. …