The United States District Court for the Northern District of Illinois recently held that the filing of a debt collector’s lawsuit in a then-proper venue did not constitute a violation of the Fair Debt Collection Practices Act (“FDCPA”).  See Oliva v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 2015 WL 4253795 (N.D. Ill. July 14, 2015).  Pursuant to the FDCPA, a debt collector must bring an action in the “judicial district or similar legal entity” where either the consumer signed the contract at issue or where the consumer resides.  See 15 USC 1692i.  In 1996, the Seventh Circuit interpreted this provision to mean that a debt collector could sue a Cook County, Illinois resident anywhere within the county, even though the county was broken up into numerous judicial districts.  See Newsom v. Friedman, 76 F.3d 813 (7th Cir. 1996).  In 2014, however, the Seventh Circuit overturned its previous decision and interpreted “judicial district or similar legal entity” as “the smallest geographic area relevant to venue in the court system in which the case is filed.”  Suesz v. Med-1 Solutions, LLC, 757 F.3d 636 (7th Cir. 2014).

In February, the United States District Court for the Northern District of Illinois held that Suesz applied retroactively and that a debt collector who filed a lawsuit in reliance on Newsom and pre-Suesz may still be liable under the FDCPA, and allowed the parties to proceed to discovery to determine if the debt collector’s filing was a bona fide error, a defense under the FDCPA.  See Glazewski v. CKB Firm, P.C., 2015 WL 661278 (N.D. Ill. 2015).  In Oliva, however, the Court found the opposite, holding that Suesz did not apply retroactively and that the debt collector could not be punished for filing a complaint in reliance of what was then good case law.  It stated, “[n]othing in Suesz suggests that the Seventh Circuit intended to (1) make its holding retroactive to debt collectors, like Defendant, who relied on Newsom when deciding where to sue Cook County residents and (2) unleash a torrent of FDCPA suits in which those same debt collectors would be held liable for doing something that Newsom expressly permitted.”

The analysis of the Glazewski decision can be found by clicking here.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.