559 U.S. 573 (2010), 08-1200, Jerman v. Carlisle

Docket Nº:08-1200.
Citation:559 U.S. 573, 130 S.Ct. 1605, 176 L.Ed.2d 519, 78 U.S.L.W. 4301
Opinion Judge:Sotomayor, Justice.
Party Name:Karen L. JERMAN, Petitioner, v. CARLISLE, McNELLIE, RINI, KRAMER & ULRICH LPA, et al.
Attorney:Kevin K. Russell, Bethesda, MD, for petitioner, by William M. Jay, for United States as amicus curiae, by special leave of the Court, supporting the petitioner. George S. Coakley, Cleveland, OH, for respondents. George S. Coakley, Counsel of Record, Clifford C. Masch, Brian D. Sullivan, Martin T....
Judge Panel:SOTOMAYOR, J., delivered the opinion of the Court, in which ROBERTS,C. J., and STEVENS, THOMAS, GINSBURG, and BREYER, JJ., joined. BREYER, J., filed a concurring opinion. SCALIA, J., filed an opinion concurring in part and concurring in the judgment. KENNEDY, J., filed a dissenting opinion, in wh...
Case Date:April 21, 2010
Court:United States Supreme Court
 
FREE EXCERPT

Page 573

559 U.S. 573 (2010)

130 S.Ct. 1605, 176 L.Ed.2d 519, 78 U.S.L.W. 4301

Karen L. JERMAN, Petitioner,

v.

CARLISLE, McNELLIE, RINI, KRAMER & ULRICH LPA, et al.

No. 08-1200.

United States Supreme Court

April 21, 2010

Argued January 13, 2010

On writ of certiorari to the united states court of appeals for the sixth circuit.

[130 S.Ct. 1606] Syllabus[*]

The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §1692 et seq., imposes civil liability on "debt collector[s]" for certain prohibited debt collection practices. A debt collector who "fails to comply with any [FDCPA] provision . . . with respect to any person is liable to such person" for "actual damage[s], " costs, "a reasonable attorney's fee as determined by the court, " and statutory "additional damages." §1692k(a). In addition, violations of the FDCPA are deemed unfair or deceptive acts or practices under the Federal Trade Commission Act (FTC Act), §41 et seq., which is enforced by the Federal Trade Com­mission (FTC). See §1692l. A debt collector who acts with "actual knowledge or knowledge fairly implied on the basis of objective cir­cumstances that such act is [prohibited under the FDCPA]" is subject to civil penalties enforced by the FTC. §§45(m)(1)(A), (C). A debt col­lector is not liable in any action brought under the FDCPA, however, if it "shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error [176 L.Ed.2d 525] notwithstanding the maintenance of procedures reasonably adapted to avoid any such er­ror." §1692k(c).

Respondents, a law firm and one of [176 L.Ed.2d 523] its attorneys (collectively Car­lisle), filed a lawsuit in Ohio state court on behalf of a mortgage com­pany to foreclose a mortgage on real property owned by petitioner Jerman. The complaint included a notice that the mortgage debt would be assumed valid unless Jerman disputed it in writing. Jerman's lawyer sent a letter disputing the debt, and, when the mort­gage company acknowledged that the debt had in fact been paid, Car­lisle withdrew the suit. Jerman then filed this action, contending that by sending the notice requiring her to dispute the debt in writing, Carlisle had violated §1692g(a) of the FDCPA, which governs the contents of notices to debtors. The District Court, acknowledging a division of authority on the question, held that Carlisle had violated §1692g(a) but ultimately granted Carlisle summary judgment under §1692k(c)'s "bona fide error" defense. The Sixth Circuit affirmed, holding that the defense in §1692k(c) is not limited to clerical or fac­tual errors, but extends to mistakes of law.

Page 574

Held:

The bona fide error defense in §1692k(c) does not apply to a viola­tion resulting from a debt collector's mistaken interpretation of the legal requirements of the FDCPA. Pp. 1611-1625, 176 L.Ed.2d, at 527-542..

(a) A violation resulting from a debt collector's misinterpretation of the legal requirements of the FDCPA cannot be "not intentional" un­der §1692k(c). It is a common maxim that "ignorance of the law will not excuse any person, either civilly or criminally." Barlow v. United States, 32 U.S. 404, 7 Pet. 404, 411, 8 L.Ed. 728.[130 S.Ct. 1607] When Congress has intended to provide a mistake-of-law defense to civil liability, it has often done so more ex­plicitly than here. In particular, the administrative-penalty provi­sions of the FTC Act, which are expressly incorporated into the FDCPA, apply only when a debt collector acts with "actual knowledge or knowledge fairly implied on the basis of objective circumstances" that the FDCPA prohibited its action. §§45(m)(1)(A), (C). Given the absence of similar language in §1692k(c), it is fair to infer that Con­gress permitted injured consumers to recover damages for "inten­tional" conduct, including violations resulting from a mistaken inter­pretation of the FDCPA, while reserving the more onerous administrative penalties for debt collectors whose intentional actions reflected knowledge that the conduct was prohibited. Congress also did not confine FDCPA liability to "willful" violations, a term more of­ten understood in the civil context to exclude mistakes of law. See, e.g., Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 125-126, 105 S.Ct. 613, 83 L.Ed.2d 523. Section 1692k(c)'s requirement that a debt collector maintain "proce­dures reasonably adapted to avoid any such error" also more natu­rally evokes procedures to avoid mistakes like clerical or factual er­rors. Pp. 1611-1615, 176 L.Ed.2d, at 527-531.

(b) Additional support for this reading is found in the statute's context and history. The FDCPA's separate protection from liability for "any act done or omitted in good faith in conformity with any [FTC] advisory opinion, " §1692k(e), is more obviously tailored to the con­cern at issue (excusing civil liability when the FDCPA's prohibitions are uncertain) than the bona fide error defense. Moreover, in enact­ing the FDCPA in 1977, Congress copied the pertinent portions of the bona fide error defense from the Truth in [176 L.Ed.2d 524] Lending Act (TILA), §1640(c). At that time, the three Federal Courts of Appeals to have considered the question interpreted the TILA provision as referring to clerical errors, and there is no reason to suppose Congress dis­agreed with those interpretations when it incorporated TILA's lan­guage into the FDCPA. Although in 1980 Congress amended the de­fense in TILA, but not in the FDCPA, to exclude errors of legal judgment, it is not obvious that amendment changed the scope of the TILA defense in a way material here, given the prior uniform judicial interpretation of that provision. It is also unclear why Congress would have intended the FDCPA's defense

Page 575

to be broader than TILA's, and Congress has not expressly included mistakes of law in any of the parallel bona fide error defenses elsewhere in the U.S. Code. Carlisle's reading is not supported by Heintz v. Jenkins, 514 U.S. 291, 292, 115 S.Ct. 1489, 131 L.Ed.2d 395, which had no occasion to address the overall scope of the FDCPA bona fide error defense, and which did not depend on the premise that a misinterpretation of the requirements of the FDCPA would fall under that provision. Pp. 1615-1620, 176 L.Ed.2d, at 531-536.

(c) Today's decision does not place unmanageable burdens on debt-collecting lawyers. The FDCPA contains several provisions expressly guarding against abusive lawsuits, and gives courts discretion in cal­culating additional damages and attorney's fees. Lawyers have re­course to the bona fide error defense in §1692k(c) when a violation results from a qualifying factual error. To the extent the FDCPA im­poses some constraints on a lawyer's advocacy on behalf of a client, it is not unique; lawyers have a duty, for instance, to comply with the law and standards of professional conduct. Numerous state con­sumer protection and debt collection statutes contain bona fide error defenses that are either silent as to, or expressly exclude, legal [130 S.Ct. 1608] errors. To the extent lawyers face liability for mistaken interpretations of the FDCPA, Carlisle and its amici have not shown that "the result [will be] so absurd as to warrant" disregarding the weight of textual authority. Heintz, 514 U.S., at 295, 115 S.Ct. 1489, 131 L.Ed.2d 395. Absent such a showing, arguments that the FDCPA strikes an undesirable balance in assigning the risks of legal misinterpretation are properly addressed to Congress. Pp. 1620-1625, 176 L.Ed.2d, at 537-542.

538 F.3d 469, reversed and remanded.

Page 576

SOTOMAYOR, J., delivered the opinion of the Court, in which ROBERTS,C. J., and STEVENS, THOMAS, GINSBURG, and BREYER, JJ., joined. BREYER, J., filed a concurring opinion. SCALIA, J., filed an opinion concurring in part and concurring in the judgment. KENNEDY, J., filed a dissenting opinion, in which ALITO, J., joined.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Kevin K. Russell, Bethesda, MD, for petitioner, by William M. Jay, for United States as amicus curiae, by special leave of the Court, supporting the petitioner.

George S. Coakley, Cleveland, OH, for respondents.

George S. Coakley, Counsel of Record, Clifford C. Masch, Brian D. Sullivan, Martin T. Galvin, James O'Connor, Reminger Co., L.P.A., Cleveland, OH, for respondents.

Stephen R. Felson, Cincinnati, OH, Edward Icove, Icove Legal Group, Ltd., Cleveland, OH, Kevin K. Russell, Counsel of Record, Amy Howe, Howe & Russell, P.C., Bethesda, MD, Pamela S. Karlan, Jeffrey L. Fisher, Stanford Law School, Supreme Court Litigation Clinic, Stanford, CA, for petitioner.

OPINION

Sotomayor, Justice.

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, 15 U.S.C. §1692k(c), 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

Page 577

the question whether the "bona fide error" defense in §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.

I

A

Congress enacted the FDCPA in 1977, 91 Stat. 874, to eliminate abusive debt collection practices, to ensure that debt collectors who abstain from such practices are not competitively disadvantaged, and to promote consistent state action to protect consumers. 15 U.S.C. §1692(e). The Act regulates interactions between consumer debtors and "debt collector[s], " defined to include any person...

To continue reading

FREE SIGN UP