Oliva v. Blatt, Hasenmiller, Leibsker & Moore LLC
2017 U.S. App. LEXIS 13328
7th Cir.2017Background
- Blatt Hasenmiller filed a debt-collection suit (2013) in Cook County’s first municipal district against Ronald Oliva; Oliva lived in a different municipal district.
- At the time Blatt sued, Seventh Circuit precedent (Newsom v. Friedman) treated Cook County as a single "judicial district" under the FDCPA venue provision, permitting suit in any municipal district within the county.
- The en banc Seventh Circuit later overruled Newsom in Suesz v. Med‑1 (2014), holding that the relevant “judicial district or similar legal entity” is the smallest venue-relevant geographic unit used by the court system (i.e., municipal districts), and Suesz was applied retroactively.
- Oliva sued under the FDCPA alleging improper venue; the district court and a panel of this court held Blatt was protected by the FDCPA’s bona fide (good-faith) error defense, §1692k(c), because Blatt had relied on Newsom.
- On rehearing en banc, the Seventh Circuit held that reliance on controlling circuit precedent (Newsom) does not transform a legal mistake into a nonlegal one; Jerman v. Carlisle bars §1692k(c) for mistakes of law, so Blatt cannot avoid liability by relying on precedent later overruled. Judgment vacated and remanded.
Issues
| Issue | Plaintiff's Argument (Oliva) | Defendant's Argument (Blatt Hasenmiller) | Held |
|---|---|---|---|
| 1) Should Suesz be applied retroactively to suits filed before Suesz? | Suesz should apply retroactively to vindicate statutory venue rights. | If Suesz is retroactive, defendants who relied on Newsom should still be protected by the bona fide error defense. | Suesz’s rule is retroactive; overruling prior circuit precedent does not shield defendants from liability. |
| 2) Does the FDCPA safe-harbor (§1692k(c)) cover good-faith reliance on controlling circuit precedent later overruled? | Oliva: reliance on precedent doesn’t avoid liability once precedent is overruled and Suesz applies. | Blatt: following controlling precedent is a bona fide legal mistake and §1692k(c) therefore bars liability. | The safe-harbor does not cover mistakes of law, including reliance on controlling precedent that misinterpreted the statute; Jerman controls. |
| 3) Is a municipal department/municipal district within a county a "judicial district or similar legal entity" under §1692i(a)(2)? | Oliva: yes — the smallest venue-relevant unit must be used. | Blatt (pre-Suesz): Newsom said the county is the unit; Blatt relied on that. | Suesz overruled Newsom: the smallest geographic venue-relevant unit (e.g., municipal district) is the correct "judicial district." |
| 4) Remedy/remand: What follows after finding no §1692k(c) defense? | Oliva: vacate and permit damages consistent with the FDCPA (including consideration of intent). | Blatt: judgment should be affirmed because §1692k(c) protects it. | Vacated the district court judgment and remanded for proceedings consistent with holding that §1692k(c) does not excuse legal mistakes; court may consider intent when assessing damages. |
Key Cases Cited
- Suesz v. Med-1 Solutions, LLC, 757 F.3d 636 (7th Cir. 2014) (en banc) ("judicial district" = smallest venue-relevant geographic unit; retroactive application)
- Newsom v. Friedman, 76 F.3d 813 (7th Cir. 1996) (prior Seventh Circuit rule treating Cook County as a single judicial district)
- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, 559 U.S. 573 (2010) (FDCPA bona fide error defense does not apply to mistakes of law)
- Davis v. United States, 564 U.S. 229 (2011) (exclusionary-rule exception for objectively reasonable reliance on binding appellate precedent)
- Reynoldsville Casket Co. v. Hyde, 514 U.S. 749 (1995) (Supreme Court rejected prospectivity-only application in certain contexts)
- Heintz v. Jenkins, 514 U.S. 291 (1995) (FDCPA applies to lawyers who use litigation to collect debts)