Case 18.3
JERMAN V. CARLISLE, McNELLIE, RINI, KRAMER & ULRICH L.P.A.
Supreme Court of the United States
559 U.S. 573; 130 S. Ct. 1605; 2010 U.S. LEXIS 3480 [April 21, 2010]
FACTS:
The Fair Debt Collection Practices Act (FDCPA or Act) imposes civil liability on “debt collector(s)” for
certain prohibited debt collection practices.
Section 813(c) of the Act, provides that a debt collector is not liable in an action brought under the
Act if she can show “the violation was not intentional and resulted from a bona fide error
notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.”
Respondents in this case are a law firm (Carlisle, McNellie, Rini, Kramer & Ulrich) and one of its
attorneys, Adrienne S. Foster.
In April 2006, Carlisle filed a complaint in an Ohio state court on behalf of a client, Countrywide
Home Loans, Inc.
Carlisle sought foreclosure of a mortgage held by Countrywide in real property owned by petitioner
Karen L. Jerman.
The complaint included a “Notice,” later served on Jerman, stating that the mortgage debt would
be assumed to be valid unless Jerman disputed it in writing,
Jerman’s lawyer sent a letter disputing the debt, and Carlisle sought verification from Countrywide.
When Countrywide acknowledged that Jerman had, in fact, already paid the debt in full, Carlisle
withdrew the foreclosure lawsuit.
Jerman then filed her own lawsuit seeking class certification and damages under the FDCPA,
contending that Carlisle violated the Act by stating that her debt would be assumed valid unless she
disputed it in writing.
PROCEDURE: The District Court granted summary judgment to Respondents, Carlisle. The Court of
Appeals for the Sixth Circuit affirmed.
ISSUE: Whether the “bona fide error” defense applies to a violation from a debt collecting law firm’s
mistaken interpretation of the legal requirements of the FDCPA?
RULE: “The bona fide errors in Section 813(c) do not include mistaken interpretations of the FDCPA,
from the requirements that a debt collector maintain ‘procedures reasonably adapted to avoid any
such error.’”
REASONING:
1. “A debt collector may not be held liable in any action brought under the FDCPA if the debt collector
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.”
2. The Court has long recognized the “common maxim, familiar to all minds, that ignorance of the law
will not excuse any person, either civilly or criminally. Our law is therefore no stranger to the
possibility that an act may be “intentional” for purposes of civil liability, even if the actor lacked
actual knowledge that her conduct violated the law.”
3. The Court found force in the suggestion by the Government that the broad statutory requirement
of procedures reasonably designed to avoid “any” bona fide error indicates that the relevant
referring to clerical errors; no such court interpreted TILA to extend to violations resulting from a
mistaken legal interpretation of the Act.
ADDITIONAL INFORMATION:
The FDCPA also provides that “any debt collector who fails to comply with any provision of the Act
with respect to any person is liable to such person.” Successful plaintiffs are entitled to “actual
damages,” plus costs and “a reasonable attorney’s fee as determined by the court.” A court may
also award “additional damages,” subject to a statutory cap of $1,000 for individual actions, or for
class actions, “the lesser of $500,000 or 1 per centum of the net worth of the debt collector.” In
awarding additional damages, the court must consider “the frequency and persistence of the debt
collector’s noncompliance,” “the nature of such noncompliance,” and “the extent to which such
noncompliance was intentional.”
An attorney uncertain about what the FDCPA requires must choose between, on the one hand,
exposing herself to liability and, on the other, resolving the legal ambiguity against her client’s
client is limited by an equally solemn duty to comply with the law and standards of professional
conduct.” Lawyers face sanctions, among other things, for suits presented “for any improper
purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation.”