The National Association of Retail Collection Attorneys (NARCA) has filed an amicus brief with the United States Supreme Court in the case of Marx v. General Revenue Corp. The issue before the Court is whether a defendant who prevails in a FDCPA lawsuit can be awarded its costs associated with defending the lawsuit.
In most types of lawsuits, the losing party is responsible for paying costs that the winning party incurred to defend the lawsuit. The Federal Rules of Civil Procedure have been interpreted as creating a presumption that the winning party will recover its costs unless there is federal law that provides otherwise. NARCA argues that the FDCPA does not address the ordinary circumstance when a defendant prevails in defending a lawsuit, and that in such cases costs should be awarded to the successful defendant. As stated in NARCA’s brief:
Technical violations seeking presuit demands of $3,000 to $5,000 are routinely made to NARCA members. When the demands are accompanied by patently unsustainable claims, debt collectors may choose to litigate in an effort to stem the tide of obscene FDCPA demands. When debt collectors do prevail in contesting these specious cases, they should not be penalized by denying them their taxable costs, especially when the entire suit was frivolous. . . If [the FDCPA] provides a free pass to maintain harassing suits without consequence, FDCPA plaintiffs’ lawyers will continue to advance their exaggerated demands without fear of any repercussion. Because there is no concern with the imposition of costs, the result is the multiplication of FDCPA lawsuits which have transformed Federal Courts into small claims courts tasked to resolve outrageous demands concerning nominal claims.
NARCA has previously participated as amicus curiae in other cases involving the interpretation of the FDCPA. (See, e.g., Jerman v. Carlisle, 130 S. Ct. 1605 (2010); Heintz v. Jenkins, 514 U.S. 291 (1995); Ellis v. Solomon & Solomon, P.C., 591 F.3d 130 (2d Cir. 2010); Guerrero v. RJM Acquisitions, L.L.C., 499 F.3d 926 (9th Cir. 2007). This brief was prepared by members of NARCA’s Amicus Brief Committee and was filed by Committee Member Donald S. Maurice, Jr., of the New Jersey law firm Maurice & Needleman, P.C.
The National Association of Retail Collection Attorneys (NARCA) is a nationwide trade association of over 700 skilled debt collection law firms, many of which collect debt on behalf of local, state and federal government entities. Members are required to adhere to NARCA’s Code of Professional Conduct and Ethics, and attorneys employed by NARCA member law firms are committed to the fair and ethical treatment of all participants in the debt collection process. They are required to practice law in a manner consistent with their responsibilities as officers of the court and must adhere to applicable state and federal laws, rules of civil procedure, state bar association licensing and certification requirements, and their respective rules of professional conduct.