U.S. Supreme Court Rejects FDCPA Liability in Bankruptcy Proceeding

On Monday insideARM reported the breaking news of the SCOTUS decision in Midland Funding, LLC v. Johnson. At the end of that article we suggested that we'd likely see more detailed analysis from some of our respected industry attorneys. This article, co-authored by Joann Needleman and Beth Slaby of ClarkHill, is one of them.

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On Monday, May 15, 2017, the Supreme Court put to rest a theory of liability under the Fair Debt Collections Practices Act (FDCPA or Act) that had a major impact not only upon the credit and collection industry, but bankruptcy practitioners who represent creditors as well. In the matter of Midland Funding, LLC v. Johnson,  __ U.S. ___, (2017), the Court, in a 5-3 decision, found that "the filing of a proof of claim that is obviously time-barred is not a false, deceptive, misleading, unfair or unconscionable debt collection practice" under the FDCPA, reversing the judgment of the Eleventh Circuit.