In a recent opinion, Marx v. General Revenue Corp., the United States Supreme Court dealt a bit of a blow to consumers bringing lawsuits for violations of the federal Fair Debt Collection Practices Act. The Court ruled that a prevailing defendant in a FDCPA lawsuit can collect costs from the plaintiff without proving that the plaintiff brought the lawsuit in bad faith or to harass the defendant.
Here’s what this all means.
The FDCPA is a federal law that prohibits debt collectors from using unfair, deceptive and harassing tactics while collecting debts. If you bring a FDCPA lawsuit and win, you can get damages as well as recover attorney fees, court costs, and other costs of bringing the lawsuit.
(Learn more about FDCPA lawsuits in Nolo’s Illegal Debt Collection Practices area.)
When the Plaintiff Loses a FDCPA Lawsuit
But what happens if you bring a FDCPA lawsuit and lose? Can the defendant collect attorneys fees and costs against you?
The FDCPA makes clear that if the plaintiff brought the lawsuit in bad faith, or with the purpose of harassment, then the defendant debt collector can recover attorneys fees and costs.
However, a separate federal law, Federal Rule of Civil Procedure 54(d)(1) allows the court to award to a prevailing defendant (that is, a defendant that successfully defends the the case) the costs it incurred in bringing the lawsuit.
The question for the U.S. Supreme Court in this case was whether the FDCPA’s requirement that the defendant prove bad faith meant that FRCP 54(d)(1) did not apply.
Prevailing FDCPA Defendants Can Be Awarded Costs
The Court ruled that a court may award costs to a prevailing defendant under FRCP 54(d)(1). However, keep in mind:
- the key word is may; the court doesn’t have to award costs and might not if it finds the plaintiff is indigent
- this opinion applies to costs only; in order to get attorneys fees, the defendant must still prove that the action was brought in bad faith, and
- costs can be more than just the court filing fee; costs may include deposition costs and other things associated with the lawsuit.
You can read the full opinion here: Marx v. General Revenue Corp.