by NCBRC filed an amicus brief on behalf of the NACBA membership in the case of Garfield v. Ocwen Loan Servicing, No. 15-527 (2d Cir. filed June 13, 2015). The brief seeks reversal of a district court finding that the Bankruptcy Code precludes application of the FDCPA in any case involving a discharged debt. Overlapping federal statutory schemes are presumed to be non-preclusive unless the plain text of one or the other explicitly creates preclusion or where there is an irreconcilable conflict between the two. Morton v. Mancari, 417 U.S. 535, 550 (1974).
Because both the FDCPA and the Code are silent on preclusion, preclusion would be appropriate only where compliance with both statutes is impossible. But here, where the creditor’s demand of payment of a discharged debt violates both the FDCPA and the Bankruptcy Code, there is no conflict, irreconcilable or otherwise. The fact that debtors may choose between two remedies for the same misconduct, is not evidence of a “conflict.” Congress often permits a choice of remedies and, absent language of preclusion, that choice alone does not support a finding of preclusion.
In fact, the FDCPA supplements the Code with respect to “debt collectors,” a class of creditors Congress deemed in need of heightened attention, without contradicting Code’s discharge protections.
Daniel L. Geyser wrote the brief on behalf of the NACBA membership.
Unfortunately, the district court misread the narrow decision in Simmons v. Roundup Funding LLC, 622 F.3d 93, 96 (2d Cir. 2010), to effectively eliminate debtors’ rights to invoke Congress’s fundamental protection in the FDCPA.
This issue is the subject of a split of authority between the Seventh and Ninth Circuits. Compare Randolph v. IMBS, Inc., 368 F.3d 726 (7th Cir. 2004) (refusing to find the FDCPA “repealed by implication”); and Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th Cir. 2002) (holding the FDCPA claims “precluded”).
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