Alert June 12, 2012

Supreme Court Grants Certiorari to Debt Collector in FDCPA Suit

The United States Supreme Court indicated that it will review an opinion from the United States Court of Appeals for the Tenth Circuit awarding “costs of suit” to a prevailing debt collector in a Fair Debt Collection Practices Act action. Initially brought in district court, the district court dismissed a lawsuit alleging that defendant debt collector had sent unlawful debt collection “communications” to plaintiff’s place of employment in violation of the FDCPA. Upon dismissal of the case, the district court awarded costs of suit—but not attorney’s fees—to the prevailing debt collector. On appeal, the Tenth Circuit affirmed the lower court’s decision, interpreting the FDCPA as distinguishing the award of costs to a prevailing defendant from an award of attorney’s fees. The Tenth Circuit held that the latter requires a finding that the plaintiff filed suit “in bad faith,” whereas costs could be awarded to a prevailing defendant regardless of the plaintiff’s motives in bringing suit.

The Supreme Court granted certiorari to decide whether a prevailing defendant in an FDCPA case may be awarded costs where the lawsuit was not “brought in bad faith for the purpose of harassment,” a question that has divided the various circuit courts of appeal.