Suesz v. Med-1 Solutions, LLC

• Citation: 734 F.3d 684
• Decision Date: 31 October 2013
• Docket Number: No. 13–1821.,13–1821.
• Parties: Mark SUESZ, individually and on behalf of a class, Plaintiff–Appellant, v. MED–1 SOLUTIONS, LLC, Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

734 F.3d 684

Mark SUESZ, individually and on behalf of a class, Plaintiff–Appellant,

v.MED–1 SOLUTIONS, LLC, Defendant–Appellee.

No. 13–1821.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 3, 2013.

Decided Oct. 31, 2013.

Cathleen M. Combs, Attorney, Daniel A. Edelman, Attorney, Edelman Combs Latturner & Goodwin, Chicago, IL, for Plaintiff–Appellant.

Peter A. Velde, Mark D. Gerth, Nicholas Levi, Attorneys, Kightlinger & Gray LLP, Indianapolis, IN, for Defendant–Appellee.

Before POSNER, FLAUM, and WILLIAMS, Circuit Judges.

FLAUM, Circuit Judge.

Defendant-appellee Med–1 Solutions bought the medical debt of Mark Suesz and filed a collection action in the Marion County Small Claims Court for Pike Township. Med–1 obtained a favorable judgment, but Suesz then filed suit in federal district court seeking damages under the Fair Debt Collection Practices Act. The FDCPA contains a venue provision requiring debt collectors to bring suit in the “judicial district” where the contract was signed or where the consumer resides. Suesz asserts that Med–1 violated this provision because he lives in a neighboring county and the debt was incurred in a township other than Pike. The district court dismissed Suesz's claim after finding Marion County Small Claims Courts were not judicial districts for the purposes of the FDCPA. We agree, and affirm the dismissal of Suesz's complaint.

I. Background

Med–1 is in the business of buying delinquent debts. It purchased Suesz's debt from Community Hospital North in Indianapolis. In March 2012 it filed a collection suit in the Pike Township small claims court, located in Marion County.¹ Med–1 prevailed in the small claims action, and received a judgment against Suesz for $1,280.

Suesz lives one county over from Marion. Though he incurred the debt in Marion County, he did so in Lawrence Township, where Community North Hospital sits, and not in Pike Township. Suesz says that it is Med–1's practice to file claims in Pike Township regardless of the origins of the dispute.²

Suesz filed a putative class action ³ alleging that Med–1's suit in Pike Township violated the FDCPA's venue provision. The district court granted Med–1's motion to dismiss. It reasoned that the Pike Township small claims court did not constitute an FDCPA judicial district, but was instead an administrative subset of the Marion County Circuit Court. The court was guided by our decision in Newsom v. Friedman, 76 F.3d 813 (7th Cir.1996). It noted that the township courts were not courts of record and did not use juries, that litigants could file suit in any of the township courts in the county, that the Marion County Circuit Court judge could transfer cases between township courts for administrative convenience, and that the circuit court judge aided the township courts, including by establishing uniform township court rules. Suesz now appeals the dismissal of his complaint.

II. Discussion

We review the district court's dismissal of a complaint de novo. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir.2008).

A. The policy behind § 1692i of the FDCPA

Congress enacted the FDCPA to curb abusive practices by debt collectors, and § 1692i of the law punishes the “unfair practice” of filing against consumers in “distant or inconvenient forums that can make it difficult for debtors to appear.” Hess v. Cohen & Slamowitz LLP, 637 F.3d 117, 120 (2d Cir.2011) (quoting S.Rep. No. 95382, at 5 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699). To that end, debt collectors are permitted to bring collection actions “only in the judicial district or similar legal entity in which such consumer signed the contract sued upon; or in which such consumer resides at the commencement” of the action. 15 U.S.C. § 1692i.

Congress did not specially define “judicial district” in the statute, but that does not make the phrase vague. We simply construe it according to its common meaning. Newsom, 76 F.3d at 817;see also Whitfield v. United States, 543 U.S. 209, 213, 125 S.Ct. 687, 160 L.Ed.2d 611 (2005) (noting the “settled principle of statutory construction that, absent contrary indications, Congress intends to adopt the common law definition of statutory terms”). Thus, in Newsom, we first turned to the definition of “judicial district” found in Black's Law Dictionary at the time the FDCPA was enacted. Id. at 817.⁴ As we shall fully detail below, that definition framed our § 1692i analysis, and required a detailed look at the details of the Cook County Circuit Court and Illinois's broader judicial system.

We took this approach because debt collectors almost always bring collection actions in state courts, and the specifics of state judicial structures differ. Section 1692i's check on forum shopping thus requires us to consider these structures as a whole. See, e.g., Newsom, 76 F.3d at 817–18. The dissent would impose a one-factor test asking only which court with original jurisdiction over the collection action is closest to the debtor. ⁵ But if Congress had intended this, it could easily have enacted such a provision. We continue to believe the FDCPA requires a more searching analysis of the structure and function of the state's judicial organization. Although Congress sought to aid unsophisticated parties who are the target of unfair debt collection methods, it was aware that it was imposing the FDCPA on our patchwork federal framework. Section 1692i may have been the legislature's attempt to balance its desire to aid debtors against the realities of our varied state court systems.

At any rate, we see no reason to depart from our existing approach in § 1692i cases. That requires us to undertake a detailed examination of the structure of Indiana's judiciary before we can determine what units are FDCPA judicial districts.

B. The Indiana court system

Indiana has constitutionally established its courts of general and original jurisdiction: the circuit courts. Ind. Const. art. 7. Layered on top is a patchwork of statutorily created courts. These include superior courts, city and town courts, and the Marion County Small Claims Courts (what we have referred to as the “township courts”).

With the exception of one circuit, the circuit courts are divided along county lines. Ind.Code § 33–28–1–2(a)(1)–(2). Each county contains only one circuit court. For this reason the General Assembly created superior courts as trial-level courts to lessen the circuit court's caseload. Ind.Code § 33–29–1–1.5. The number and functioning of superior courts and their relationship with the circuit court varies from county to county. But cases can typically be transferred between the two courts as necessary and agreed upon by the various judges. Ind.Code § 33–29–1–9. Many counties, especially the smaller ones, feature a so-called “standard superior court” as provided for in Indiana Code § 33–29–1–1. Standard superior courts contain a special small claims docket for civil actions where the amount or value of the property sought is no more than $6,000. Ind.Code § 33–29–2–4. Both the superior courts and the circuit court may exercise appellate de novo review over the decisions of town or city courts within the circuit or, in the case of Marion County, the township courts. Ind.Code § 33–34–3–15.

Another species of tribunal in Indiana is the city and town courts. Cities and towns are authorized to establish these courts by ordinance. Ind.Code § 33–35–1–1. City courts are helmed by a judge who is tasked with adopting rules for the court's functioning, and enjoys all the powers incident to a court of record (though they are not courts of record themselves). Ind.Code § 33–35–2–1. City courts enjoy jurisdiction over all city ordinance violations, all misdemeanors, and some small claims. Ind.Code § 33–35–2–4, 2–5. Once a case is filed in city court, the venue cannot be changed. Ind.Code § 33–35–5–2. Judges serve as triers of fact until a jury demand is made, in which time six jurors from the community decide the case. Ind.Code § 33–35–5–5.

Finally, there are the township courts in Marion County. These courts are unique in the state. They are established by statute but supported by the nine townships, which are responsible for providing facilities and paying the salaries of officials. Ind.Code § 33–34–6–1. All fees generated by these courts are returned to the township coffers. Like the small claims dockets of the superior courts, the township courts have original and concurrent jurisdiction over civil actions seeking up to $6,000, though they are limited in subject matter jurisdiction to contract and tort cases. Ind.Code § 33–34–3–2. The Marion County Superior Court does not have a devoted small claims docket (as many of its analogs do). Such a docket would largely mirror the jurisdiction of the township courts if it existed. Cf. John G. Baker & Betty Barteau, Marion County Small Claims Courts Task Force, Report on the Marion County Small Claims Courts 7 (2012), available at www. in. gov/ judiciary/ 3844. htm (noting that “[i]n Indiana's other counties [that is, other than Marion], small claims are heard by ... superior courts as part of a small claims/minor offenses docket....”). The township courts have countywide jurisdiction, and litigants are free to file small claims cases in any of the townships in the county. There is therefore no bar to the courts' hearing the cases where they are brought—but if the defendant objects to venue, and the court finds that “required venue” lies elsewhere, it must transfer the case to another township. Ind.Code § 33–34–3–1(a). For debts, like the one in this case, the preferred venue is the place where the contract was signed, followed in priority by the township where the transactions giving rise to the claim took place, or where the defendants reside or do business. Ind.Code § 33–34–3–1(b).

The township courts are also distinct in their functioning. They are not courts of record and claims may not be tried to a jury—if a...