Supremes To Decide Whether Attorney Screw-Up When Pursuing Foreclosure Action Is Defensible As "Bona Fide Error" Under FDCPA

Inside ARM reports:

• In June 2009, the U.S. Supreme Court accepted a writ of certiorari to consider whether 15 U.S.C. Section 1692k(c) of the Fair Debt Collection Practices Act (FDCPA), otherwise known as the bona fide error defense, applies to mistakes of law. The Supreme Court accepted review of Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, in which the Sixth Circuit Court of Appeals concluded the bona fide error defense available under Section 1692k(c) of the FDCPA applies to mistakes of law. After setting the brief scheduling order, on Nov. 2, 2009, the Court scheduled oral arguments in the case for Jan. 13, 2010.(1)

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• In Jerman, the defendant law firm filed a complaint seeking foreclosure of real property owned by the consumer plaintiff. The complaint included a validation notice that provided the debt would be assumed valid unless the consumer disputed the debt in writing within 30 days. The plaintiff filed a complaint alleging the defendant violated the FDCPA because it compelled consumers to dispute the debt in writing when the FDCPA imposes no such requirement.

For more, see U.S. Supreme Court Oral Arguments Scheduled for FDCPA Case (The U.S. Supreme Court will hold oral arguments on Jan. 13, 2010, to decide whether the bona fide defense under the Fair Debt Collection Practices Act applies to mistakes of law).

(1) The case docket is available on the Supreme Court's Web site. The argument calendar states the case will be heard at 11 a.m.

All briefs are available here (from the homeowner, debt collector, as well as amici (ie. friends of the court)), courtesy of the American Bar Association. Friend of the court briefs in support of the homeowner's position have been filed by the U.S. Department of Justice and the Federal Trade Commission (go here), the Office of New York Attorney General Andrew M. Cuomo, as lead counsel for 21 state attorneys general (go here), and Public Citizen Litigation Group, as lead counsel for various consumer advocacy groups (go here). A number of credit and collection industry trade associations have also submitted amicus briefs supporting the debt collector's position.