Supreme Court rules legal error no defense against fair debt collection violation

[JURIST] The US Supreme Court [official website; JURIST news archive] on Wednesday ruled [opinion, PDF] 7-2 in Jerman v. Carlisle [Cornell LII backgrounder; JURIST report] that a debt collector's legal error does not qualify for the bona fide error defense under the Fair Debt Collection Practices Act (FDCPA) [15 USC § 1692 text, PDF]. The US Court of Appeals for the Sixth Circuit ruled [opinion, PDF] that although the defendants violated the FDCPA by giving erroneous legal advice, they qualified for the FDCPA bona fide error defense. In reversing the decision below, Justice Sonia Sotomayor wrote for the court:


The Fair Debt Collection Practices Act (FDCPA or Act) imposes civil liability on "debt collector[s]" for certain prohibited debt collection practices. Section 813(c) of the Act provides that a debt collector is not liable in an action brought under the Act if she can show "the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error." This case presents the question whether the "bona fide error" defense in &setc; 1692k(c) applies to a violation resulting from a debt collector's mistaken interpretation of the legal requirements of the FDCPA. We conclude it does not.

Justice Antonin Scalia filed a concurring opinion. Justice Anthony Kennedy filed a dissenting opinion, joined by Justice Samuel Alito.

Petitioner Karen Jerman filed an action challenging the debt collection practices of the Carlisle law firm, claiming that they violated the FDCPA when they used allegedly deceptive forms to notify her of a foreclosure on her home. Specifically, Jerman claims that defendants violated the FDCPA by representing to Jerman that her debt would be assumed valid unless she disputed the debt "in writing" even though the FDCPA does not require a written dispute.


 

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