FDCPA Plaintiffs Dealt Setback by U.S. Supreme Court

One of the bulwarks against abusive debt collectors’ behaviors is the federal Fair Debt Collection Practices Act (FDCPA). The FDCPA allows debtors to sue debt collectors in federal court if they can show the collector broke the law. Examples include phone calls after 9:00 PM or at your workplace, threatening debtors with violence or imprisonment, lying about their identities, and using foul language. Violations can result in a statutory penalty of $1,000 for the collector.

Debtors suing under the FDCPA were dealt a setback in a case before the U.S. Supreme Court. In Marx v. General Revenue Corp., the debtor lost her case against the collector in federal trial court, but the court ruled that she would be required to pay for the defendant’s court costs, which are not attorneys’ fees. The defendant claimed that the trial court was right to do so because it was exercising its discretionary power under Federal Rule of Civil Procedure 54(d)(1) because the FDCPA does not supersede the rule. The plaintiff argued that §1692k(a)(3) of the FDCPA applied to the case because it allows the court to assign costs to the plaintiff when the case is frivolous and her case was not frivolous.

The Supreme Court disagreed. It held that because the plaintiff’s case was not frivolous, the FDCPA section did not supersede Rule 54(d)(1), so the trial court was justified in assigning costs to the plaintiff.

The result of this ruling is that debtors will have to be more careful when suing debt collectors under the FDCPA. If their case is non-frivolous, but they lose nonetheless, they might still be required to pay the defendant’s court costs.

If you are having debt problems, a Las Vegas bankruptcy lawyer can help you file bankruptcy and create strategies for dealing with debt collectors.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation.