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7th Circuit Holds Forum Shopping a Violation of the FDCPA

On Behalf of | Aug 12, 2014 | Consumer Protection

In October of last year, the 7th Circuit decided an issue about
choice of venue for a collection agency in Mark Suesz v. Med-1
Solutions, LLC.  In the opinion the Court held that under the

Fair Debt Collection Practices Act
(“FDCPA”), small claims
courts were not considered judicial districts for purposes of the
statute and a collection agency could file claims in any location
regardless of the hardship it posed for its debtors, a practice
more commonly referred to as “forum shopping”.  On appeal,
earlier this month, the 7th Circuit reversed its opinion, holding
that small claims courts were considered judicial districts for
purposes of the FDCPA.  The FDCPA contains a venue provision
requiring collection agencies to file suit against debtors in the
judicial district when the contract for the original debt was
signed or in the location where the consumer resides. 15 U.S.C. §

In Suesz v. Med-1 Solutions, LLC, the plaintiff Mark Suesz
(“Suesz”), a resident of Hancock County Indiana, incurred a debt
with Community Hospital North located in Lawrence Township.
After failing to pay his debt, Med-1 Solutions began pursing Suesz
for the debt and eventually filed suit in Pike Township Small
Claims Court, a practice known as “forum shopping”, likely because
it had a connection to the judicial system or specific judge in
that location and a judgment was entered against Suesz for
$1,280.  In response to the judgment, Suesz filed suit against
Med-1 for
violations of the FDCPA alleging the collection agency filed
suit against him in a county that neither party resided in and that
had no connection to the debt.  Suesz claimed that Med-1 filed
in its court of choice because it had a better relationship with
the judge and was granted judgments on a regular basis.  The
case was dismissed and Suesz appealed to the 7th Circuit.

In response to Suesz’s appeal, the Court applied
section 1692i
, stating that under the FDCPA, a debt collector
is required to file suit in the judicial district where the debtor
resides or where the contract was signed.  Suesz argued that
Defendant Med-1 Solutions, LLC filed suit in the Pike Township of
Marion County Small Claims Court to collect his debt when he did
not reside in that county and his debt was not incurred
there.  Suesz further argued that it was the practice of the
collection agency to file suit in this court posing a hardship for
debtors who could not make it to this distant location, allowing
the Small Claims Court to enter default judgments against debtors
making it easier to collect on

In 1996 the 7th Circuit was faced with a similar decision in
Newsom v. Friedman and adopted an opinion holding that intra-county
districts did not constitute separate judicial districts for the
purposes of the FDCPA.  The 7th Circuit abandoned this 1996
rule adopting a stricter approach moving forward to avoid the
practice of forum shopping conducted by many creditors.  If
you believe your rights have been violated under the FDCPA and
would like to speak with a licensed attorney, contact SmithMarco P.C. for a completely free case review.