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Neither a borrower nor a lender be ... 
 -Shakespeare
 

Recent federal court decision reinterprets the Fair Debt Collection Practices Act (FDCPA) and may create venue defense for current or future debtor defendants in debt collection suits.

In Suesz v. Med-1 Solutions, LLC, 2014 U.S. App. LEXIS 12562 (7th Cir. 2014), the Seventh Circuit recently reinterpreted the venue provision of the federal Fair Debt Collection Practices Act (“FDCPA”). The issue for the court was whether township small claims courts in Marion County, Indiana (Indianapolis) constituted separate  “judicial districts or similar legal entities” for purposes of section 1692i of the FDCPA. The en banc majority held that debt collectors must file collection actions in the “smallest geographic area that is relevant for determining venue in the court system in which the case is filed.”

Implications For Cook County Lawyers
In doing so, the Seventh Circuit not only overruled its own 1996 precedent in
Newsom v. Friedman, 76 F.3d 813 (7th Cir. 1996), but also applied the en banc
Suesz decision retroactively. Debt collectors previously relied on Newsom to file
collection actions in a court in the debtor’s county — but not in the township or
intra-county small claims court in the area where the debtor resided or where the
debtor contract was signed. Per Suesz, for those of us in Cook County, collection
lawsuits should be filed in the Municipal District where the debtor resides or where
the contract was signed. For lawsuits that are already pending, an immediate
motion to transfer to the appropriate Municipal District is most prudent.

Seventh Circuit Debt Collection Decision Will Be Applied Retroactively
In Suesz, a debt collector had filed a collection action against a debtor in the Pike
Township of Marion County Small Claims Court, one of nine small claims courts in
Marion County. The hospital which was trying to collect debt was located in Marion
County. However, the debtor lived in Hancock County and the hospital was located
in Lawrence Township, Marion County rather than Pike Township, Marion County.
The debtor then filed suit alleging that the debt collector violated section 1692i of
the FDCPA because the contract from which the debt arose was not signed in Pike
Township, and the debtor did not live there either.

This retroactively applied decision may cause a real problem for debt collectors and
debt collecting firms which had relied on Newsom as good law and filed collection
actions in a debtor’s home county or the county where the contract was signed, but
failed to file in the debtor’s township, municipal district, or other intra-county small
claims court or intra-county small claims court where the contract was signed.
Those concerned by this ruling should also pay close attention to the case which
has been remanded back to the Southern District Court of Indiana (Case No. 1:12-
cv-1517) where the debtor plaintiff is likely to again move for class certification.