Desfassiaux v. Blatt, Hasenmiller, Leibsker & Moore, LLC
142 F. Supp. 3d 667
N.D. Ill.2015Background
- Blatt, a debt-collection firm, sued Desfassiaux in May 2014 in the First Municipal District (Daley Center, Cook County) on behalf of TD Bank for an alleged $3,536.43 debt; Desfassiaux lived in the Fourth Municipal District (Maywood).
- Desfassiaux was not served; she later filed bankruptcy and the state collection action was dismissed.
- Seventh Circuit precedent at the time (Newsom) allowed filing anywhere in Cook County; the en banc decision in Suesz (July 2014) overruled Newsom and held venue must be in the smallest relevant judicial area, and Suesz was given retroactive effect.
- Desfassiaux sued Blatt under 15 U.S.C. § 1692i(a)(2) for improper venue; both parties moved for summary judgment; the court denied plaintiff’s motion earlier and here denies Blatt’s motion.
- Key defenses raised by Blatt: lack of service means no §1692i(a)(2) violation; the bona fide error defense (§1692k(c)); the CFPB advisory-opinion safe harbor (§1692k(e)); and a due-process challenge to retroactive application of Suesz.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a §1692i(a)(2) violation requires the debtor to have been served before liability attaches | Venue filing itself harms debtors and statutory damages are available without proof of concrete injury; liability may attach pre-service | Venue provision aims to prevent default judgments obtained via forum shopping; because default requires service, no violation unless served | Court held a violation can occur even if the debtor was not served, relying on Phillips and the rationale that filing itself can cause harm and statutory damages need no proof of concrete injury |
| Whether Blatt can invoke the bona fide error defense for relying on pre-Suesz precedent (Newsom) | Blatt relied on then-controlling Seventh Circuit precedent, so any mistake was reasonable and procedural safeguards existed | Jerman bars reliance-on-law errors from §1692k(c); Blatt exercised its own legal judgment in filing downtown despite public signs (en banc grant) that Newsom might be overruled | Court denied the defense: Jerman forecloses legal-error reliance when the collector made an independent legal judgment (Blatt was on notice of risk and chose to file in Daley Center) |
| Whether §1692k(e) safe harbor for CFPB advisory opinions extends to reliance on appellate precedent like Newsom | If Congress allowed CFPB advisory-opinion reliance, similar reliance on circuit precedent should be protected | Statutory text confines the safe harbor to CFPB advisory opinions; courts cannot judicially expand the listed exception | Court rejected an expanded safe-harbor; §1692k(e) covers only CFPB advisory opinions, not appellate rulings |
| Whether applying Suesz retroactively to pre-Suesz filings violates due process | Retroactive application is unfair to defendants who relied on then-prevailing law and had no notice of change | Suesz explained that reliance on an intermediate appellate decision (Newsom) does not justify prospective-only overruling; public en banc review put collectors on notice | Court held retroactive application to Blatt is permissible; Blatt had notice of the risk and Suesz’s retroactivity rule applies generally |
Key Cases Cited
- Newsom v. Friedman, 76 F.3d 813 (7th Cir. 1996) (held municipal-district venue in Cook County did not qualify as the FDCPA’s “judicial district”)
- Suesz v. Med-1 Solutions, LLC, 757 F.3d 636 (7th Cir. 2014) (en banc) (overruled Newsom; interpreted “judicial district or similar legal entity” as the smallest venue unit and applied the new rule retroactively)
- Phillips v. Asset Acceptance, LLC, 736 F.3d 1076 (7th Cir. 2013) (held pre-service filings can cause cognizable harm and supported liability under FDCPA provisions even without service)
- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (bona fide error defense does not cover mistakes of law interpreting the FDCPA)
- Kort v. Diversified Collection Servs., Inc., 394 F.3d 530 (7th Cir. 2005) (outlines elements of the bona fide error defense)