A nice win today for attorney Kelly Jones and my colleague Adam Pulver in McAdory v. DNF Associates:
Reversing the district court’s dismissal of an action under the Fair Debt Collection Practices Act and remanding, the Ninth Circuit held that a business that bought and profited from consumer debts, but outsourced direct collection activities, qualified as a “debt collector” subject to the requirements of the Act. Joining the Third Circuit, the panel held that an entity that otherwise meets the “principal purpose” definition of debt collector under 15 U.S.C. § 1692(a)(6) (defining debt collector as “any business the principal purpose of which is the collection of any debts”) cannot avoid liability under the FDCPA merely by hiring a third party to perform its debt collection activities.
Dissenting, Judge Bea wrote that the complaint failed to allege that defendant acted directly in any way to violate plaintiff’s rights under the FDCPA; plaintiff did not adequately allege that defendant’s “principal purpose” was the “collection of any debts;” and the word “collection” must, in context, describe the action of collecting.