FDCPA Class Action Decision for Defendant Reversed; Summary Judgment for Plaintiffs

Having authored the Credit & Collections Chapter of the Minnesota Business Torts Deskbook (focusing on the Federal Debt Collection Practices Act (FDCPA), the Truth-in-Lending Act, et al.), I again reach a bit beyond Minnesota and Eighth Circuit law to report an outside development — a Seventh Circuit U.S. Court of Appeals decision reversing summary judgment for the debt collector defendant and awarding it, instead, to the plaintiffs’ class.

The decision is most noteworthy in its highlighting issues related to the “bona fide error defense” under the FDCPA. First, the decision points to an intercircuit split and pending case before the U.S. Supreme Court to decide the issue, Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA (6th Cir., cert. granted 6/29/09). Second, the Court considered what steps the debt collector took to ensure that a particular mailer it sent out was consistent with federal law and found, as a matter of law, that those steps did not deserve the bona fide error FDCPA defense.