Summary
The Ninth Circuit denied rehearing and rehearing en banc in this putative class action, amending its opinion to clarify that ratification of a debt collector's actions can create an agency relationship under federal common law, even if none existed before. The court distinguished *Batzel v. Smith*, which applied California law, and held that the Restatement (Third) of Agency § 4.01 permits ratification of acts by a non-agent who pretends to be an agent. Key topics: ratification, agency, debt collection, federal common law, and class action.
Topics
Practice areas
Questions Presented
- Whether USA Funds could have ratified the actions of the debt collectors when there was no pre-existing agency relationship.
Holdings
- Ratification can create an agency relationship even if none existed before, under the Restatement (Second) of Agency, and Batzel v. Smith is distinguishable because it applied California law.
Key quotations
“done by an actor . . . who is not an agent but pretends to be.” (at 11)
Factual background
This is a class action against United Student Aid Funds, Inc. concerning debt collection practices. The order does not provide additional factual background beyond the ratification issue.
Procedural history
The case was appealed from the United States District Court for the Southern District of California. The panel issued an opinion. The defendant-appellee filed a petition for rehearing and rehearing en banc. The court now denies the petition and amends the opinion.