U.S. Supreme Court

Supreme Court to Decide Whether Losing Plaintiffs Must Pay Costs in Fair Debt Collection Cases

The U.S. Supreme Court has agreed to decide whether a collection agency that wins dismissal of a federal fair debt collection suit can collect costs without a showing of bad faith or harassment by the plaintiff.

The Supreme Court granted cert today, SCOTUSblog reports.

The plaintiff, student debtor Olivea Marx, had contended that the General Revenue Corp. violated federal law by faxing her employer a form seeking employment information with “Sallie Mae” listed in the subject line, according to the cert petition (PDF). The Denver-based 10th U.S. Circuit Court of Appeals found the form did not violate the law and affirmed an award of costs to GRC as the prevailing party under Rule 54(d) of the Federal Rules of Civil Procedure.

The case turns on the interplay between the federal rule and this provision of the Fair Debt Collection Practices Act: “On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.”

The case is Marx v. General Revenue Corp.

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