Opinion ID: 1238683
Heading Depth: 3
Heading Rank: 4

Heading: Constitutionality of the FDCPA

Text: In the district court, Great Seneca and Javitch argued that the complaints that they filed in state court were protected by the First Amendment and that the FDCPA is unconstitutionally vague and overbroad when applied to pleadings that are not baseless. [7] The United States intervened to address these arguments. Great Seneca and Javitch argue that they are immune from suit based on statements made during judicial proceedings and that permitting such suits as brought here under the FDCPA would violate their constitutional right to petition granted in the First Amendment. Similarly, Great Seneca and Javitch urge us to use the Noerr-Pennington doctrine to limit the application of the FDCPA. The Ninth Circuit has explained that [u]nder the Noerr-Pennington rule of statutory construction, we must construe federal statutes so as to avoid burdening conduct that implicates the protections afforded by the Petition Clause unless the statute clearly provides otherwise. Sosa v. DIRECTV, Inc., 437 F.3d 923, 931 (9th Cir.2006). However, there are various indications that the First Amendment and any common-law privilege that applied to statements made during judicial proceedings do not foreclose the current actions. First, the Supreme Court's conclusion in Heintz v. Jenkins, 514 U.S. 291, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995), indicates that the FDCPA is intended to burden debt-collectors even when they are engaged in litigation. An unpublished opinion of this court recently considered the constitutionality of the FDCPA and concluded: With respect to litigation immunity, Javitch maintains that [t]he Right to Petition under the First Amendment has been construed by Courts to afford qualified immunity [to lawyers engaged in litigation] (JA 38) (emphasis added), and, at the same time, [l]awyers possess an absolute privilege [under common law] concerning statements they make which are reasonably related to and made in the course of judicial proceedings, and are likewise absolutely immune from suit for claims which are based on such statements. (JA 54) (emphases added.) Accepting these propositions as true as applied to Javitch would, of course, undercut Heintz v. Jenkins where the Supreme Court held that the Act applies to attorneys who `regularly' engage in consumer-debt-collection activity, even when that activity consists of litigation.  514 U.S. at 299, 115 S.Ct. 1489 (emphasis added); see also 15 U.S.C. § 1692a(6). Javitch does not dispute that it `regularly' engage[s] in consumer-debt-collection activity. See Heintz, 514 U.S. at 299, 115 S.Ct. 1489. So any discussion of litigation immunity as applied to lawyers in general (those who do not regularly engage in consumer-debt-collection activity) is of no help to Javitch. The Supreme Court has already said that lawyers, in their function as debt collectors, are covered by the Act. Gionis v. Javitch, Block & Rathbone, LLP, 238 Fed.Appx. 24, 26 (6th Cir.2007) (unpublished). Given the Supreme Court's detailed analysis and clear conclusion in Heintz that the FDCPA does apply to litigation-related activity, we believe that Gionis correctly concluded that the First Amendment does not shield lawyers engaged in litigation from FDCPA liability. See Heintz, 514 U.S. at 294, 115 S.Ct. 1489. The opposite conclusion, that the First Amendment prohibits FDCPA suits based on statements made during judicial proceedings, would negate the Supreme Court's holding that the FDCPA does apply to lawyers engaged in litigation.  Heintz, 514 U.S. at 294, 115 S.Ct. 1489 (emphasis added). Most of the other circuits that have considered this question have reached the same conclusion. Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 232 (4th Cir.2007) (All circuits to consider the issue, except for the Eleventh, have recognized the general principle that the FDCPA applies to the litigation activities of attorneys who qualify as debt collectors under the statutory definition.). Heintz did not consider, however, whether the application of the FDCPA to statements made during judicial proceedings would violate the Constitution. Even assuming that the First Amendment provides some protection from FDCPA suits based on conduct and statements during litigation, we believe that the First Amendment would not protect the conduct at issue in this case. The Supreme Court has explained that the Petition Clause of the First Amendment does not provide an absolute right to petition. McDonald v. Smith, 472 U.S. 479, 105 S.Ct. 2787, 86 L.Ed.2d 384 (1985). Instead, the Petition Clause protects legitimate petitioning but not sham petitions, baseless litigation, or petitions containing intentional and reckless falsehoods. Id. at 484, 105 S.Ct. 2787. In the context of defamation suits, the Supreme Court has explained that there is no constitutional value in false statements of fact. Neither the intentional lie nor the careless error materially advances society's interest in `uninhibited, robust, and wide-open' debate on public issues. Gertz v. Robert Welch, Inc., 418 U.S. 323, 340, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974) (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 270, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964)). Hartman and Rice assert that Great Seneca and Javitch intentionally misrepresented that Exhibit A was an account, and under the cases cited, it is clear that even assuming that there is some First Amendment protection relevant to the FDCPA, such an allegedly false statement is not immunized by the Petition Clause. Great Seneca and Javitch next argue that the FDCPA is unconstitutionally vague and overbroad because if they can be punished for their behavior here, it would lead to strict liability for what is protected petitioning activity.... Mem. in Supp. of Claim of Unconstitutional Fed. Stat. at 3. A statute can be impermissibly vague for either of two independent reasons. First, if it fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct it prohibits. Second, if it authorizes or even encourages arbitrary and discriminatory enforcement. Hill v. Colorado, 530 U.S. 703, 732, 120 S.Ct. 2480, 147 L.Ed.2d 597 (2000). There is no assertion here that the statute leads to arbitrary enforcement, and this statute provides adequate notice. Great Seneca and Javitch overstate their case when they complain of strict liability for non-frivolous state-court petitions. A debt collector who made literally true representations in a petition that violated the FDCPA because the representations were misleading would be protected from liability by the BFE defense if the collector could show that the mistake was unintentional, made in good faith, and that the collector had procedures to avoid such a mistake. See Jerman, 538 F.3d at 476-77. The FDCPA does, however, punish a debt collector who makes a misleading or deceptive representation intentionally, in bad faith, or in the absence of procedures intended to avoid that type of error. That Great Seneca and Javitch may fall into the second category does not indicate that the FDCPA is an unconstitutional restriction on the right to petition. The overbreadth doctrine is manifestly, strong medicine that should be employed `only as a last resort.' Sensations, Inc. v. City of Grand Rapids, 526 F.3d 291, 300 (6th Cir.2008) (quoting Broadrick v. Oklahoma, 413 U.S. 601, 613, 93 S.Ct. 2908, 37 L.Ed.2d 830 (1973)). An overbreadth challenge requires the party challenging the statute to show that there is `a realistic danger that the statute itself will significantly compromise recognized First Amendment protections of parties not before the Court.' Id. (quoting Members of City Council v. Taxpayers for Vincent, 466 U.S. 789, 801, 104 S.Ct. 2118, 80 L.Ed.2d 772 (1984)). Great Seneca and Javitch have not made the significant showing required, and we decline their request to affirm the district court's judgment on these alternate grounds. Great Seneca and Javitch also argue that this application of the FDCPA violates their rights to substantive due process. However, the Supreme Court has repeatedly cautioned that the concept of substantive due process has no place when a provision of the Constitution directly addresses the type of illegal governmental conduct alleged.... Montgomery v. Carter County, 226 F.3d 758, 769 (6th Cir. 2000). Here it seems that any substantive-due-process argument Great Seneca and Javitch have is encompassed by their First Amendment claims. Accordingly, we will not independently consider their assertion of a violation of substantive due process. Great Seneca and Javitch finally assert that this application of the FDCPA violates the Commerce Clause because it would involve the interference of the federal government with state rules of civil procedure. This argument is misdirected. Holding Great Seneca and Javitch liable under the FDCPA has no effect on Ohio state law. Instead, it punishes Great Seneca and Javitch for acting in a misleading and deceptive manner while using the Ohio court system. Ohio law is implicated in making this determination, but Ohio law is not altered by the federal prohibition on false, deceptive, or misleading debt collection. Accordingly, we refuse to affirm the district court's grant of dismissal on this alternate ground.