A MASSIVE decision from the US Supreme Court

Foreclosure Mills are
covered by the Fair Debt Collection Act.

April 22nd, 2010 · MattWeidnerLaw dot com

While we were busy railing away in front of the Florida Supreme Court
yesterday…THE SUPREME COURT….the US SUPREME COURT issued a massive
ruling that will send shock waves through all foreclosure mills. This
April 21, 2010 decision found that foreclosure mill law firms are
subject to the Fair Debt Collection Practices Act. The full decision is
found here. The mills can ignore the itty bitty ‘ole Florida Supreme Court, but
what about the “Real” Supreme Court?

JERMAN v. CARLISLE, MCNELLIE, RINI, KRAMER & ULRICH LPA ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SIXTH CIRCUIT

No. 08–1200.  Argued January 13, 2010—Decided April 21, 2010

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 notwithstanding the
maintenance of procedures reasonably adapted to avoid any such error.” 
§1692k(c).

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. 6–30. 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, 7 Pet. 404, 411. 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.

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