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7th Circuit redefines districts for purposes of FDCPA for Indiana Collection Attorneys
For Indiana collection attorneys and subrogation attorneys, the Fair Debt Collections Practices Act is a 100 pound gorilla that permeates everything we do. There are many nuances for which Indiana collection attorneys and subrogation attorneys counsel clients and must abide by in order to be in compliance. The 7th Circuit just issued a ruling in Mark Suez v. Med-1 Solutions, LLC that has changed the game for everyone.
For years, the Fair Debt Collections Practices Act was interpreted to allow Indiana attorneys and debt collectors to file lawsuits in any court residing in a judicial district. In the State of Indiana that meant that small claims cases could be filed in any of the township small claims courts. Indiana collection attorneys would often pick a township small claims court and file all of his/her cases in that court for convenience. Under Newsom v. Friedman, 76 F.3d 813 (7th Cir. 1996), this was not only appropriate but even encouraged.
Under Suez, the 7th Circuit changed everything. Not only did the 7th Circuit redefine districts, but it allowed its interpretation to be retroactive affecting a significant number of Indiana attorney’s practices and their cases. A judicial district or similar legal entity under Section 1692i of the Fair Debt Collection Practices Act is now defined as the smallest geographic area that is relevant for determining venue in the court system where a case could be filed. The Court ruling now requires Indiana collection attorneys, subrogation attorneys and debt collectors to file their lawsuits in either the township where the contract was signed or the township in which the defendant resides. Suez went further in remanding the case back for a determination of whether a class action should be certified against the medical collection agency defendant in the case.
Based on the Suez ruling, it is now important for Indiana collection attorneys, subrogation attorneys and debt collectors to file lawsuits against debtors in the proper township or county instead of where it is most convenient for them. This will certainly change the practice of many Indiana collection attorneys and subrogation attorneys that have chosen his or her own convenience over the convenience of the debtor. This Indiana collection attorney and subrogation attorney learned early on that the Fair Debt Collections Practices Act is designed to make things as convenient for the debtor as possible and already employed this practice so for me no change will be necessary. For those that do not change their practices though, there will be dire consequences and a likely damages claim for clients under the Fair Debt Collections Practices Act.