In Reynolds v. Credit Management Services, Inc., 2016 WL 756469, at *3-4 (D.Neb., 2016), Judge Strom denied summary judgment to a debt collection agency owner on the basis that a triable issue of fact existed on whether he met the FDCPA’s definition of “debt collector”.
The Court here notes a split of authority between the United States Courts of Appeals as to whether individuals can be held personally liable under the FDCPA. Compare White v. Goodman, 200 F.3d 1016, 1019 (7th Cir. 2000) (stating the FDCPA “is not aimed at the shareholders of debt collectors operating in the corporate form unless some basis is shown for piercing the corporate veil.”) and Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1059 (7th Cir. 2000) (“the extent of control exercised by an officer or shareholder is irrelevant to determining his liability under the FDCPA.”) with Kristner v. Law Offices of Michael P. Margelefsky, LLC, 518 F.3d 433, 437 (6th Cir. 2008) (collecting cases, discussing split, and concluding “the FDCPA will require proof that the individual is a ‘debt collector,’ but does not require piercing the corporate veil.”). The United States Court of Appeals for the Eighth Circuit has yet to affirmatively rule on this issue. However, the Eighth Circuit did provide some guidance in its recent decision in Powers v. Credit Mgmt. Servs., Inc., 776 F.3d 567 (8th Cir. 2015). In Powers, the Eighth Circuit reversed the district court’s decision to grant plaintiff’s motion for class certification. Powers, 776 F.3d at 569. The Eighth Circuit indicated a likelihood that individual “collectors” could be held personally liable. See id. at 572 (stating “[e]ach class member may have a stronger claim against the individual attorney who signed the pleadings in that consumer’s collection lawsuit.”). Within this district, Judge Joseph Bataillon has determined that individual “collectors” can be held personally liable under the FDCPA. See, Henggeler v. Brumbaugh & Quandahl, P.C., LLO, No. 8:11CV334, 2012 WL 2855104, at *3 (D. Neb. July 5, 2012) (“Subjecting a member of a limited liability corporation to individual liability requires proof that the individual is a ‘debt collector,’ but does not require piercing of the corporate veil.”) (citing Kristner, 518 F.3d at 437-38). Furthermore, a plain reading of the statutory language seems to lead to the conclusion that “debt collectors” can be held personally liable under the FDCPA without piercing the corporate veil. See generally, 15 U.S.C. § 1692 et seq.; see also Brumbelow v. Law Offices of Bennett and Deloney, P.C., 372 F. Supp. 2d 615, 618-19 (D. Utah 2005) (providing “[t]his holding appears to be faithful to the plain language of the FDCPA.”). Based on: (1) the Eighth Circuit’s language in Powers; (2) Judge Bataillon’s holding in Henggeler; and (3) the Court’s reading of Congress’s statutory language, the Court finds that individuals can be held personally liable under the FDCPA without piercing the corporate veil if they fit within the statute’s definition of “debt collector.” The Court finds that summary judgment is inappropriate at this time with respect to Michael Morledge because a genuine issue of material fact exists as to whether Michael Morledge fits under the FDCPA’s definition of “debt collector.” Whether plaintiff can establish that Michael Morledge is a debt collector under the definition outlined in the FDCPA is a question of fact.
The district court went on to deny Plaintiff’s class certification motion due to multiple questions of fact inherent in the class definition.