[JURIST] The US Supreme Court [official website] heard oral arguments [hearing list, PDF] on Tuesday in Kokesh v. Securities and Exchange Commission and Henson v. Santander Consumer USA, Inc. [SCOTUSblog backgrounders]. In Kokesh, the court is asked to decide whether the five-year statute of limitations in 28 U.S.C. § 2462 [text] applies to claims for “disgorgement.” Under this statute of limitations, “enforcement of any civil fine, penalty, or forfeiture” be “commenced within five years from the date when the claim first accrued.” The Securities and Exchange Commission (SEC) [official website] for decades has been suing violators of federal securities laws for disgorgement of their “ill-gotten gains,” though legislative history reveals no explicit creation of a disgorgement remedy or whether this statute of limitation applies. The question will turn on whether disgorgement is considered one of either a penalty or forfeiture. This case was appealed from a decision [opinion, PDF] by the US Court of Appeals for the Tenth Circuit [official website].

In Henson, the court is asked to determine whether a company that regularly attempts to collect debts it has purchased after falling into default is considered a “debt collector” and thus subject to the Fair Debt Collection Practices Act (FDCPA) [text]. These “debt buyers” only collect on the debts they purchase, rather than providing collection services to the lenders that originated the loans or credit. The FDCPA defines debt collector as “any person who regularly collects…debts owed or due…another.” The question will turn on who is owed the debts and who the debts are due to. Either the debts are due and owing to the debt buyers that purchased them-which would make the debt buyers free from regulation under the FDCPA-or the debts are owed to the entity that originated them but due to the debt buyer who acquired them. This case was appealed from a decision [opinion, PDF] by the US Court of Appeals for the Fourth Circuit [official website].

This marks the first week of oral arguments in which newly-appointed [JURIST report] Justice Neil Gorsuch [SCOTUSblog profile] will sit on the bench of the Supreme Court.