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7th Circuit splits over Marion County Small Claims debt collection suit

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Are Marion County Township courts “judicial districts” under the Fair Debt Collection Practices Act, thus allowing a man to sue a debt collector for bringing an action in an inconvenient township court? Depends on who you ask on the 7th Circuit Court of Appeals, as the majority ruled in favor of the debt collector Thursday.

Judges Joel Flaum, Ann Claire Williams and Richard Posner decided Mark Suesz, individually and on behalf of a class v. Med-1 Solutions LLC, 13-1821. Med-1 Solutions bought the medical debt of Hendricks County resident Mark Suesz that stemmed from treatment in Lawrence Township in Marion County. The company filed a collection action in Marion County Small Claims Court in Pike Township, on the other side of Marion County. Suesz then filed this lawsuit, seeking damages under the Fair Debt Collection Practices Act, which requires debt collectors to bring suit in the judicial district where the contract was signed or where the consumer resides.

U.S. Judge William Lawrence tossed Suesz’s lawsuit in March after finding the small claims courts were not judicial districts for the purposes of the Act.  Flaum and Williams agreed, relying on Newsom v. Friedman, 76 F.3d 813 (7th Cir. 1996). Using a similar approach as in Newsom, the majority looked at the makeup of courts in Indiana and what should be considered judicial districts here.

“[T]he township courts fall short of constituting freestanding judicial districts for several reasons. First, they fall short under our definition, because the limitations on their authority are not coterminous with township boundaries. We find it especially significant that the statute permits debt collectors to file actions anywhere in the county, rather than limiting the township courts’ reach to township borders. This filing flexibility suggests that the proper judicial district is Marion County as a whole, rather than the individual townships,” Flaum wrote.

“It is also noteworthy that the Marion County Superior Court lacks a small claims docket—which every other superior court in Indiana has. This suggests that the township courts, superior court, and circuit court are meant to function as a symbiotic whole, with the township courts obviating the need for a superior court small claims docket.”

Posner wrote a 10-page dissent, believing Newsom is unsound and needs to be overruled. He pointed out that the majority interpreted the relevant portion of the Act in a vacuum instead of against the background of debt collectors seeking to file actions in the courts that are inconvenient to debtors or where judges are unsympathetic to debtors.

“What’s true is that a debt collector is free to choose a court system (federal, county, city, or township, depending on jurisdictional requirements) in which to file. But once it makes its choice, section 1692i requires it to pick the most convenient court within the system’s territorial limits. That would be Lawrence Township court in this case,” Posner wrote.
 

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  1. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

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