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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. I expressed my thought in the title, long as it was. I am shocked that there is ever immunity from accountability for ANY Government agency. That appears to violate every principle in the US Constitution, which exists to limit Government power and to ensure Government accountability. I don't know how many cases of legitimate child abuse exist, but in the few cases in which I knew the people involved, in every example an anonymous caller used DCS as their personal weapon to strike at innocent people over trivial disagreements that had no connection with any facts. Given that the system is vulnerable to abuse, and given the extreme harm any action by DCS causes to families, I would assume any degree of failure to comply with the smallest infraction of personal rights would result in mandatory review. Even one day of parent-child separation in the absence of reasonable cause for a felony arrest should result in severe penalties to those involved in the action. It appears to me, that like all bureaucracies, DCS is prone to interpret every case as legitimate. This is not an accusation against DCS. It is a statement about the nature of bureaucracies, and the need for ADDED scrutiny of all bureaucratic actions. Frankly, I question the constitutionality of bureaucracies in general, because their power is delegated, and therefore unaccountable. No Government action can be unaccountable if we want to avoid its eventual degeneration into irrelevance and lawlessness, and the law of the jungle. Our Constitution is the source of all Government power, and it is the contract that legitimizes all Government power. To the extent that its various protections against intrusion are set aside, so is the power afforded by that contract. Eventually overstepping the limits of power eliminates that power, as a law of nature. Even total tyranny eventually crumbles to nothing.

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