On November 7, the U.S. Supreme Court heard oral arguments in Marx v. General Revenue Corp, a case arising out of a consumer’s charge that General Revenue Corp violated the Fair Debt Collection Practices Act by contacting her employer and requesting employment verification. A U.S. District Court found that General Revenue Corp did not violate the FDCPA, and ruled that the consumer had to pay General Revenue Corp $4,543 in costs. Marx appealed the fee ruling, arguing that the fee-shifting provisions of the FDCPA take precedence over the Federal Rule of Civil Procedure 54(d), which allows courts to award costs to the prevailing party unless a federal law states otherwise. The FDCPA enables debt collection agencies to be awarded costs if a consumer brings a suit in bad faith or to harass the collection agency. There were no allegations of bad faith or harassment in the Marx case. The appellate court rejected Marx’s argument, and the Supreme Court agreed to hear the case.
The SCOTUS Blog provides an excellent review of the briefs submitted to the Supreme Court. Essentially, Marx argues that the FDCPA does “state otherwise” by providing a bad faith and harassment standard. In addition, Marx argues that if Rule 54 were applicable to FDCPA cases, any reference to costs in the FDCPA statute would be superfluous.
General Revenue Corp argues that there are many statutes where it explicitly states that costs cannot be awarded to prevailing parties, but that the FDCPA is not one of those statutes. It also argues that there are other provisions of the Consumer Credit Protection Act that do not protect consumers from being liable for costs to prevailing parties, and that Congress surely did not intend to give FDCPA plaintiffs special protections.
During oral arguments, Marx’s attorney was most closely questioned by Justices Sotomayor and Scalia, who closely examined the legislative intent behind the specific wording in the FDCPS. The Assistant to the Solicitor General, who appeared on behalf of Marx, was most closely questioned by Justice Breyer, who said, “…I don’t just look at the language, I look at the context, I look at the purpose….” Justice Breyer points out that those who draft legislation aren’t aware of the wording of every statute and so aren’t always consistent. General Revenue Corp’s attorney was most closely questioned by Justices Kagan and Breyer.
A transcript of the oral arguments can be found on the Supreme Court’s website: http://www.supremecourt.gov/oral_arguments/argument_transcripts.aspx
The Supreme Court will issue its ruling before it adjourns in June 2013.