Kavanaugh Sworn in as U.S. Supreme Court Justice, May Impact ARM-Related Cases

On Saturday, Justice Brett Kavanaugh, formerly of the Court of Appeals for the District of Columbia Circuit, was confirmed and sworn in as an Associate Justice of the U.S. Supreme Court. The Supreme Court now has a firm conservative-leaning majority, which will likely impact several collections-related cases that are or have the potential to be on the court’s docket in the near future.

Definition of “Debt Collection”

The new Supreme Court roster will likely impact the decision in Obduskey v. Wells Fargo, 138 S. Ct. 2710 (2018), which is on the court’s docket for the term currently in session. As previously published by insideARM, Obduskey questions the definition of “debt collection” and whether it encompasses actions where payment is never requested or demanded from the consumer. The case stems from a 10th Circuit decision that affirmed the district court’s ruling finding that the Fair Debt Collection Practices Act (FDCPA) does not apply to non-judicial foreclosure proceedings. However, as the 10th Circuit noted, not all courts agree with this opinion, and the Supreme Court will now have the final say. 

Constitutionality of BCFP Structure

If the Supreme Court decides to hear it, a case that will certainly feel the impact of having Justice Kavanaugh on the bench is State National Bank of Big Spring, et al. v. Steven Mnuchin, et al. Currently, a petition for writ of certiorari -- or a request for the Supreme Court to hear the case -- has been filed and is pending before the court. State National Bank questions the constitutionality of the structure of the Bureau of Consumer Financial Protection (BCFP), an issue that has come up several times in the past year or so.

If the Supreme Court decides to hear this case, Justice Kavanaugh’s opinion would almost assuredly be that the structure of the BCFP is unconstitutional. While still on the D.C. Circuit, Justice Kavanaugh found as much when he authored the panel decision in PHH v. Consumer Financial Protection Bureau, 839 F.3d 1 (2016) and a dissenting opinion in the court’s en banc review of the case.

Definition of ATDS

Another issue that has the potential to find itself on the Supreme Court’s docket is the definition of an automatic telephone dialing system (ATDS) according to the Telephone Consumer Protection Act (TCPA). While businesses, consumers, and consumer advocates alike await guidance from the Federal Communications Commission (FCC) on the issue, the question of whether a device that dials from a list of numbers falls under the definition of the ATDS is making its way up the ladder in the judicial system.

Currently, there is a jurisdictional split between circuit courts of appeal on the answer to that question. In June 2018, the Third Circuit found that a device that dials from a list of numbers falls outside the definition of an ATDS in Dominguez v. Yahoo, Inc., No. 17-1243 (3d Cir. June 26, 2018). Meanwhile, the Ninth Circuit recently found the exact opposite in Marks v. Crunch San Diego, LLC, No. 14-56834 (9th Cir. Sept. 20, 2018). Crunch filed a petition for en banc review of the panel decision by the Ninth Circuit. It is uncertain whether the parties will take the issue all the way to the Supreme Court or stop short of seeking Supreme Court review -- as happened in the PHH case referenced above -- but the new roster of the Supreme Court is likely to impact the court’s decision if the issue does arise.