Law

Gorsuch's First Opinion Comes With a Hat-Tip to Scalia

The justice's interpretation of a debt-collection law is based on its text alone, not Congress's intention to protect consumers.

One opinion down, more to follow.

Photographer: Chip Somodevilla/Getty Images

Justice Neil Gorsuch’s maiden opinion was superficially easy, a decision interpreting a consumer protection statute for the unanimous Supreme Court. Beneath the surface, the opinion has historic significance -- and not just because of the unusual way that Gorsuch got on the court.

The case gave Gorsuch the chance to apply pure textual analysis of the law, ignoring policy interests and deciding in favor of big banks that buy up debts and then try to collect them. The fact that all the justices, even the liberal ones, were on board, symbolizes the emerging victory of Justice Antonin Scalia’s practice of ruling on a law’s text alone over approaches that interpret Congress’s purpose in passing the law. That development is unfortunate -- because it rests on an unrealistic assumption about Congress’s ability and willingness to amend ambiguous statutes.

QuickTake U.S. Supreme Court

The case decided Monday, Henson v. Santander Consumer USA, turned on the interpretation of the Fair Debt Collection Practices Act of 1977, an important consumer-protection law that limits what debt collectors can do in the course of trying to recover money owed.

As written, the law clearly covers debt collectors who are acting on behalf of third parties. And it’s also pretty clear that the law doesn’t cover the collection efforts by someone who himself originates a loan and then tries to collect that debt himself when it comes due.

The issue before the court was the in-between case: whether the law covers actors like Santander, which purchases debts from others and then tries to collect them.

The law applies to “debt collectors.” And it defines a debt collector as someone who “regularly collects or attempts to collect ... debts owed or due ... another.”

One reason this matters in the real world is that Santander and other businesses like it do engage in debt collection on behalf of third parties. Indeed, there is surely an economy of scale for a large bank in buying up some debt to collect when it already has the mechanics for debt collection in place.

But the court said it would not address that real-world issue, restricting itself to the meaning of the law’s language as applied to debts that Santander has bought to collect.

Gorsuch handled that issue neatly. He said that the words “owed … another” decided the case. If you have bought the debt, Gorsuch reasoned, then it isn’t owed to another. It’s owed to you.

On a purely linguistic level, that makes some sense. The counterargument made by the debtor was that “owed” is past participle. Thus, the debtor claimed, any debt that at one time in the past was owed to someone else must be treated as the kind of debt covered by the statute. This would have brought Santander’s practice under the consumer protection statute.

Gorsuch reasonably answered that past participles are sometimes used in the present tense -- like burnt toast or a fallen branch. He cited the Cambridge Guide to English Usage in support.

This is noteworthy primarily because it shows how slippery the theory of textualism can be. Justice Scalia liked to cite the dictionary to pin down a precise meaning. Here, Gorsuch used the “authoritative” reference work to show that the precise, literal definition should be ignored.

In truth, of course, the best argument for including Santander in the reach of the statute is that a company that buys up debt in order to collect it has almost precisely the same interests -- and will likely use almost the same questionable practices -- as a third-party debt collector. If the goal of the statute is to protect consumers against what Gorsuch alliteratively called “disruptive dinnertime calls” and “downright deceit,” it makes logical sense to include debt purchasers.

In turn, it makes almost no logical sense to allow Santander to harass debtors whose debt it has purchased more than debtors who still owe a third party that has hired Santander to collect the debts. From the standpoint of the debtor, the calls are indistinguishable.

This form of pragmatic reasoning is what Gorsuch dismissed as “policy” and treated as irrelevant to the act of statutory interpretation.

When the debtor pointed out that in 1977, when the law was passed, it was not yet common for banks to buy third-party debt to collect themselves, Gorsuch responded harshly. “All this seems to us quite a lot of speculation,” he wrote. And he insisted that “it is never our job to rewrite a constitutionally valid statutory text under the banner of speculation about what Congress might have done had it faced a question that, on everyone’s account, it never faced.”

The “us” and “our” are nice touches, efforts by the new justice to feel like a part of the team but also to implicate his colleagues in the idea that it would be inappropriate to read the law in the light of what must have been its purposes.

Justice Stephen Breyer still believes in reading statutes in the light of their purposes. He and the other liberals joined Gorsuch’s opinion because it is indeed harder to make the case for statutory purpose where Congress didn’t anticipate a change in market norms. The debtor couldn’t rely on legislative intent, because there wasn’t specific evidence that Congress thought about the problem.

In an earlier era of statutory interpretation, however, it wasn’t unknown for the courts to ask what was the underlying goal of the statute’s writers -- what was once called the “mischief of the statute,” or the trouble the statute was intended to fix. Under that approach, the mischief of the consumer law was harassment and deceit by professional debt collectors, which logically includes Santander.

In the post-Scalia era, American judges don’t talk that way. Gorsuch will be writing lots more statutory interpretation decisions that focus on the text in the future. That’s Scalia’s legacy -- and it’s fitting, if unfortunate, that Gorsuch’s first opinion paves the way.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Noah Feldman at nfeldman7@bloomberg.net

    To contact the editor responsible for this story:
    Stacey Shick at sshick@bloomberg.net

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