Portalatin v. Blatt, Hasenmiller, Leibsker & Moore, LLC
125 F. Supp. 3d 810
N.D. Ill.2015Background
- Blatt, Hasenmiller, Leibsker & Moore (Blatt) sued Iwona Portalatin on behalf of Midland Funding in Cook County state court to collect a consumer debt; Portalatin resided in Cook County’s Fourth Municipal District but Blatt filed in the First Municipal District (Daley Center).
- A default judgment was entered against Portalatin; she later brought this federal suit under the Fair Debt Collection Practices Act (FDCPA) § 1692i(a), alleging suit was filed in the wrong judicial district.
- At the time Blatt filed, Seventh Circuit precedent (Newsom) permitted filing anywhere in Cook County; after Blatt’s filing the Seventh Circuit, en banc, overruled Newsom in Suesz, defining “judicial district or similar legal entity” as the smallest venue-relevant unit (e.g., municipal district).
- Blatt conceded it may be a debt collector and that it filed in a district other than Portalatin’s residence, but defended on affirmative statutory grounds: the §1692k(c) bona fide error defense (reliance on controlling precedent) and the §1692k(e) safe-harbor for reliance on CFPB advisory opinions; Blatt also argued Suesz should not apply retroactively.
- The court denied Blatt’s summary judgment motion, granted Portalatin summary judgment only as to Blatt’s affirmative defenses (rejecting both bona fide error and safe-harbor defenses), and otherwise denied Portalatin’s motion because she had not established the consumer-purpose element of the debt.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Blatt is shielded by the FDCPA "bona fide error" defense for relying on prior circuit precedent (Newsom) | Jerman bars bona fide-error protection for legal misinterpretations; Blatt’s reliance is a non-protected legal error | Reliance on controlling Seventh Circuit precedent is not a mistake of law for which §1692k(c) bars relief; Blatt merely followed binding precedent | Denied for Blatt; court held Jerman forecloses treating a circuit precedent-based misinterpretation of the FDCPA as a bona fide error, and Blatt exercised its own judgment in filing downtown rather than proper municipal district |
| Whether §1692k(e) safe-harbor for reliance on CFPB advisory opinions protects Blatt | N/A (Portalatin argues defenses invalid) | §1692k(e) protects actions taken in good-faith reliance on CFPB advisory opinions; Blatt analogizes reliance on controlling case law | Denied for Blatt; §1692k(e) is limited to CFPB advisory opinions and does not cover reliance on judicial precedent |
| Whether Suesz should be applied retroactively to Blatt’s conduct | Portalatin: Suesz applies; Blatt violated §1692i(a) | Blatt: retroactive application is unfair because it followed then-controlling precedent; decision should be prospective | Suesz applies retroactively; court declined prospective-only application and rejected Blatt’s retroactivity argument |
| Whether Portalatin established all elements of an FDCPA §1692i(a) claim for summary judgment | Portalatin: facts show Blatt is a debt collector who sued her in wrong district | Blatt: contests consumer-status and actual damages | Portalatin did not obtain full summary judgment; she failed to prove the debt was primarily for personal, family, or household purposes (consumer element) |
Key Cases Cited
- Newsom v. Friedman, 76 F.3d 813 (7th Cir. 1996) (original Seventh Circuit framing of "judicial district or similar legal entity" as entire Illinois circuit courts)
- Suesz v. Med-1 Sols., LLC, 757 F.3d 636 (7th Cir. 2014) (en banc) (overruled Newsom; defined the term as the smallest venue-relevant geographic unit and applied retroactively)
- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (Supreme Court held §1692k(c) does not shield legal misinterpretations of the FDCPA)
- Kort v. Diversified Collection Servs., Inc., 394 F.3d 530 (7th Cir. 2005) (discussed reliance on governmental agency directions and limits of bona fide-error defense)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (standard for summary judgment)