Opinion ID: 662461
Heading Depth: 2
Heading Rank: 1

Heading: Exemption for Kaplan's Purely Legal Activity

Text: 16 Expressing concern that Kaplan may have violated the venue provision, the district court stated in its order that the FDCPA does not reach a pure legal action. Of course, as a general matter, 15 U.S.C. Sec. 1692i plainly reaches legal actions, specifying that actions by debt collectors against consumers must be brought in judicial districts to which the consumer has a specified tie. It is clear from the record, however, that what the district court had in mind was that attorneys engaged in activity of a purely legal nature were exempted from the statutory prohibitions. That is the theory upon which Kaplan relied. The argued exemption has its roots in the now-defunct all-purpose FDCPA attorney exemption. 17 As originally enacted in 1977, the FDCPA specifically excluded from the definition of debt collector any attorney-at-law collecting a debt as an attorney on behalf of and in the name of a client. 15 U.S.C. Sec. 1692a(6)(F) (repealed 1986). In 1986, however, concerned that attorneys have increasingly entered the debt collection business and used the exemption to evade compliance with the Act, Congress deleted the attorney provision. H.Rep. No. 405, 99th Cong., 1st Sess. 1-2 (1985), reprinted in 1986 U.S.C.C.A.N. 1752, 1752. Kaplan argues that, in repealing the provision, the legislature intended that the statute would thereafter apply to attorneys engaged in traditional collection practices of a non-legal nature but not to those engaged in purely legal activities--activities that can only be performed by an attorney--such as the filing of an application for a writ of garnishment. 18 Kaplan relies upon two district court decisions interpreting the legislative history of the 1986 attorney-exemption repeal. See Firemen's Ins. Co. v. Keating, 753 F.Supp. 1137, 1141-44 (S.D.N.Y.1990); National Union Fire Ins. Co. v. Hartel, 741 F.Supp. 1139, 1140-41 (S.D.N.Y.1990); see also Green v. Hocking, 792 F.Supp. 1064, 1065-66 (E.D.Mich.1992). These cases conclude that the Congress did not intend to expose to FDCPA liability those attorneys acting in the role of legal counsel while representing clients. Keating, 753 F.Supp. at 1142; see also Green, 792 F.Supp. at 1065 (concluding that literal application of debt collector definition is at odds with legislative intent). On the basis of this perceived congressional intent, these cases hold that attorneys engaged in activities only of a purely legal nature are not debt collectors under the FDCPA. Hartel, 741 F.Supp. at 1141. 19 We decline to adopt this phantom limb theory of statutory interpretation--allowing an excised provision to continue to determine the scope of a statute. We are unwilling to assume that the Congress acted contrary to its intentions when it repealed the attorney exemption and enacted no substitute. Like the only other circuit to consider this creative residual attorney-exception, we conclude that it simply does not exist. The plain language of the statute unambiguously precludes any continued doctrine of special treatment for attorneys under the FDCPA. See Scott v. Jones, 964 F.2d 314 (4th Cir.1992). 20 In short, the attorney exemption is no longer a part of the statute; the fact that it was once a part of the statute does not alter the required approach to statutory construction. Applying our general rules of statutory construction to the FDCPA freed from the repealed limitation, neither the plain language of the Act nor its structure supports any exemption for attorneys' purely legal debt collection activities. See, e.g., Sacramento Regional County Sanitation Dist. v. Reilly, 905 F.2d 1262, 1268 (9th Cir.1990) (plain language is starting point of statutory construction); Seldovia Native Ass'n v. Lujan, 904 F.2d 1335, 1341 (9th Cir.1990) (to determine plain meaning court must look to language and design of statute as whole). There is simply no mention of attorneys in the current definition of debt collector or its exceptions; nor is there any distinction drawn between legal and non-legal activities. Nothing currently in the text of the FDCPA hints at the conspicuous solicitude for the legal profession that Kaplan proposes. 21 Looking to the legislative history of the 1986 repeal, we do not find the clearly-expressed contrary intention necessary to overcome the strong presumption that Congress expresses its intent through the language it chooses. INS v. Cardoza-Fonseca, 480 U.S. 421, 432 n. 12, 107 S.Ct. 1207, 1214 n. 12, 94 L.Ed.2d 434 (1987). The district court decisions cited by Kaplan rely primarily upon an individual legislator's statements that the repeal would not interfere with the practice of law. See Keating, 753 F.Supp. at 1142-43; Hartel, 741 F.Supp. at 1141. These isolated statements, however, cannot reintroduce what the Congress has eliminated; if the legislature intended some residuum of the attorney exemption to remain valid, it is very unlikely that it would have entirely excised the provision without enacting any substitute. Moreover, Congress was almost certainly aware that the general definition of debt collector, requiring that debt collection be either a principal purpose or a regular part of the collector's business, would protect a substantial percentage of attorneys in ordinary legal practice, and that adding a special protection for purely legal activity would undermine its efforts to curb the unfair practices of those engaged in the business of debt collection. 22 Indeed, other portions of the legislative history make it clear that Congress intended purely legal activities of attorneys who fall within the definition of debt collector to be subject to the FDCPA. Specifically, Kaplan's proposed exemption would effectively immunize attorneys from liability under the venue provision, which solely applies to legal actions; however, the Congress intended that attorneys in the business of collecting debts be subject to all provisions of the Act, if they meet the definition of debt collector. House Report 405, at 3, 1986 U.S.C.C.A.N. at 1754. Moreover, in describing the need for repeal of the attorney exemption, the House Committee excerpted, as an example of attorneys' unfair competitive advantage over lay collectors, an advertisement by a lawyer emphasizing his ability, as a result of his exemption from the venue provision, to file suits in courts more convenient for the creditor. See House Report 405, at 5. The committee's interest in eliminating the type of unfair competition exemplified by this advertisement is inconsistent with the residual exemption urged by Kaplan. 23 Of somewhat more concern than the equivocal legislative history of the 1986 FDCPA amendment is commentary issued by the Federal Trade Commission (FTC) concluding that attorneys that engage in traditional debt collection activities (sending dunning letters, making collection calls to consumers) are covered by the FDCPA, but those whose practice is limited to legal activities are not covered. 53 Fed.Reg. 50,097, 50,100 (1988). Initially, we note that this commentary supports the exemption adopted by the trial court only obliquely. There is a distinction between the contention that any attorney is exempt from FDCPA liability for a purely legal act and the contention that an attorney is exempt from all FDCPA liability only if he never engages in any acts other than purely legal actions. We address the former, which is the argument made by Kaplan and accepted by the district court, while the FTC commentary seems to endorse the latter. Kaplan did not contend nor present evidence that he never engages in debt collection activities that are not purely legal. Nonetheless, even if the FTC commentary offers some support for Kaplan's contention, we join the Fourth Circuit in declining to adopt the position in the FTC commentary because it conflicts with the plain language of the statute. 4 See Scott, 964 F.2d at 317. 24 We thus reject the district court's conclusion that Kaplan is not covered by the FDCPA because the filing of an application for a writ of garnishment is a pure legal action. Attorneys, like all other persons, are subject to the definition of debt collector in 15 U.S.C. Sec. 1692a(6). Here, there is no question that Kaplan regularly collects or attempts to collect, directly or indirectly, debts owed or due ... another. 5 Kaplan falls within the definition of debt collector under the FDCPA.