ACA Submits Amicus Brief to Supreme Court in Important Debt Collection Case

ACA International, the association of credit and collection professionals, Monday announced that it has filed an amicus brief with the United States Supreme Court in the case of Marx vs. General Revenue Corp. in support of the respondent.  At issue is the awarding of litigation costs to the prevailing defendant in a lawsuit alleging a violation of the Fair Debt Collection Practices Act (FDCPA).

“Beyond the fairness of awarding justifiable costs to the prevailing party, either the plaintiff or the defendant, a negative outcome in this case could mean an increase the number of meritless FDCPA lawsuits,” ACA International Chief Executive Officer Pat Morris said.  “Debt collectors that follow the law in recovering consumer debt would be punished simply because they won a legal case, and will be encouraged to settle cases that have no merit to avoid the high cost of successfully defending a lawsuit.”

ACA disagrees with the plaintiff’s interpretation of the FDCPA and believes that nothing within the language of the FDCPA preempts an award of court costs to a prevailing defendant under the Federal Rules of Civil, even if a court action was not brought in bad faith.

Secondly, it is ACA’s contention that denying costs to prevailing defendants would undermine the purpose of the FDCPA and would encourage meritless lawsuits against debt collectors by a growing number of predatory plaintiffs’ attorneys looking to make money while providing little to no tangible relief to consumers.

“The potential for cost-shifting to prevailing parties serves as a modest—but important—check on meritless lawsuits,” Morris said.  “By removing incentive to sue more often regardless of merit, we can better focus on legitimate meritorious actions that actually do provide relief for consumers.”

The collection of consumer debt is a vital function for the health of the national and state economies, and also helps to maintain the health of America’s credit based system. If debt is not repaid negative impacts may include an increase in prices for goods and services, more expensive and less available consumer credit, higher taxes from governments unable to recover taxpayer dollars, and lost jobs as businesses fail that can no longer recover what they are duly owed.

Consumers have important rights under federal and state law governing the collection of debt.  For more information or to ask questions visit www.askdoctordebt.org, a helpful and free resource for consumers.