Monday, December 19, 2005

Camacho v. Bridgeport Financial, Inc. (9th Cir. - Dec. 12, 2005)

Circuit splits. Who doesn't love 'em? Lawyers think that they may get their case in front of the Supreme Court as a result of them. Academics have fun launching attacks on them. And they provide fertile grounds for law students who want to write law review comments. Okay, from a policy perspective, they're almost assuredly not good things. But policy smolishy. The more the merrier. Bring 'em on.

Anyway, if you like circuit splits, you'll like this opinion by Judge Tashima. Here's the scoop. Section 1692g of the Fair Debt Collection Practices Act (FDCPA) requires debt collectors to inform debtors of certain things, including their right to dispute the debt. Lots of the rights in the FDCPA are expressly activated by "written" disputes, but Section 1692g(a)(3) doesn't make any reference to the need for a "written" dispute -- rather, any form of dispute (e.g., an oral communication) would seem to suffice. So, pursuant to that statutory language, does a debt collector violate the FDCPA when it tells the debtor (as Bridgeport Financial did here) that it will presume that the debt is valid unless the debtor notifies it "in writing" that the debtor disputes the debt?

Back in 1991, the Third Circuit, in Graziano v. Harrison, said "No." But, now, the Ninth Circuit, in a unanimous opinion by Judge Tashima, says "Yes."

There's your circuit split. Ordinarily, I'd predict intervention by the Supreme Court at some point to resolve the issue. But, here, I think that Congress will actually get into the act first and change the statute to overrule the Ninth Circuit's rule legislatively. Which I'm sure Judge Tashima would be fine with. But that's my guess as to what will (at least eventually) happen. We'll see.