Brian Beggs and Jennifer Beggs v. Robert v. Rossi Leslie Marcarelli and Rossi Law Ofcs., Ltd.
Docket: 97-9438
Court: Court of Appeals for the Second Circuit; May 27, 1998; Federal Appellate Court
Brian and Jennifer Beggs, former residents of Exeter, Rhode Island, filed a lawsuit against Robert V. Rossi, Leslie Marcarelli, and Rossi Law Offices for alleged violations of the Fair Debt Collection Practices Act (FDCPA) and the Connecticut Unfair Trade Practices Act (CUTPA) related to the collection of personal property taxes on their vehicles. The U.S. District Court for the District of Connecticut ruled that personal property tax obligations do not qualify as "debts" under the FDCPA, which defines a debt as an obligation arising from a consumer transaction primarily for personal or household purposes. The court based its decision on the Third Circuit's ruling in Staub v. Harris, which emphasized that a debt must arise from a transaction involving the exchange of goods or services, a condition not met in the relationship between a taxpayer and a taxing authority. The plaintiffs argued that their personal property tax was a transaction-based tax, but the court clarified that the tax is levied on ownership rather than on a transaction involving the vehicle's purchase or registration. Additionally, the Federal Trade Commission's (FTC) interpretation of the FDCPA, which excludes unpaid taxes from the definition of debt, was acknowledged and deemed persuasive. Consequently, the district court dismissed the FDCPA claim and declined to pursue the state law claim, leading to the affirmation of the lower court's judgment by the Second Circuit Court of Appeals.