Jackson v. Blitt & Gaines, P.C.
2016 U.S. App. LEXIS 15129
| 7th Cir. | 2016Background
- Plaintiffs (Jackson and Etro) had default judgments entered in Cook County state court after failing to appear; debt collector Blitt & Gaines (B&G) then filed affidavits for wage deductions and served summonses on their employers in the First Municipal District (downtown Chicago).
- Plaintiffs sued under the FDCPA venue provision, 15 U.S.C. § 1692i(a)(2), claiming the wage-garnishment filings were "legal action[s] on a debt against any consumer" and thus had to be brought in the municipal district where the consumer resided (the Sixth Municipal District in Markham), not where their employers were located.
- B&G moved to dismiss, arguing Illinois wage-garnishment proceedings are actions against employers (third parties), not against the consumer (judgment debtor), so § 1692i(a)(2) does not apply; the district courts granted dismissal.
- The Seventh Circuit reviewed de novo whether Illinois wage-garnishment actions are "legal action[s] on a debt against any consumer" under the FDCPA and whether Plaintiffs’ claims were timely given the one-year FDCPA statute of limitations.
- The court analyzed the ordinary meaning of "legal action," the nature of Illinois wage-deduction proceedings (summons issued to employer, employer must answer under oath, employer may be penalized, actions must be filed where employer resides), and concluded the proceedings are directed at employers, not consumers.
- Because the wage-garnishment actions were against employers, not consumers, the filings did not violate § 1692i(a)(2); the district courts’ dismissals were affirmed. The court also noted prior circuit precedent (Newsom) made municipal-district venue non-actionable at the time such suits were filed and that Suesz postdated the limitations period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether filing an affidavit for wage deduction in Illinois is a "legal action on a debt against any consumer" under 15 U.S.C. § 1692i(a)(2) | Wage-garnishment is directed at the debtor because the statute gives the debtor notice and opportunity to contest employer answers | Illinois wage-garnishment proceedings are aimed at compelling the employer to answer/act; the summons is issued to the employer and the employer’s response drives the process | Not a legal action "against" the consumer; § 1692i(a)(2) does not apply |
| Whether Illinois wage-garnishment character requires filing in the debtor's municipal district under FDCPA venue rules | Plaintiffs: wage-garnishment should be treated as an action against the consumer, so municipal-district venue rules govern | B&G: Illinois rules require filing where employer resides; proceedings are against the employer | Filing where employer resides is proper because the action targets the employer |
| Whether applying Suesz (requiring municipal-district venue) revives these FDCPA claims | Plaintiffs: Suesz means the original suits were in wrong municipal district, so enforcement actions are improper | B&G: At the time suits were filed Newsom controlled and municipal districts did not matter; Suesz came too late and statute of limitations expired | Suesz cannot revive time-barred claims; Newsom governed at relevant time |
| Whether interpreting § 1692i to bar wage-garnishments when employer is in different district would frustrate Illinois law | Plaintiffs: similar out-of-circuit decisions suggest garnishment targets the debtor | B&G: Adopting that view would create conflicts where creditors could neither comply with FDCPA nor Illinois procedure | Court rejects Plaintiffs’ hybrid theory to avoid untenable conflicts with Illinois law |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (legal standard for pleading)
- S&M Inv. Co. v. Tahoe Reg’l Planning Agency, 911 F.2d 324 (term "legal action" commonly means litigation)
- Fox v. Citicorp Credit Svcs., Inc., 15 F.3d 1507 ("legal action" includes judicial proceedings enforcing prior adjudications)
- Smith v. Solomon & Solomon, P.C., 714 F.3d 73 (Massachusetts wage-deduction scheme geared to employer, not debtor)
- Hageman v. Barton, 817 F.3d 611 (Eighth Circuit holding Illinois garnishment not an action against consumer)
- Newsom v. Friedman, 76 F.3d 813 (Seventh Circuit pre-Suesz: county-level filing satisfied § 1692i)
- Suesz v. Med-1 Solutions, LLC, 757 F.3d 636 (en banc decision requiring proper municipal-district venue within Cook County)