900 F.3d 377
7th Cir.2018Background
- In Oct. 2013 Blatt (a law firm) sued Portalatin in Cook County's First Municipal District (downtown Chicago) on behalf of Midland to collect a consumer debt; Portalatin lived in the Fourth Municipal District.
- At filing Newsom v. Friedman allowed venue in the circuitwide unit (Cook County), but Suesz v. Med-1 Solutions (July 2014) overruled Newsom and required suit in the smallest venue-relevant unit (municipal district); Suesz was made retroactive.
- Portalatin sued Blatt and Midland in federal court under the FDCPA (seeking statutory/additional damages, actual damages, fees, costs); she later settled with Midland for $5,000 and release of the debt and dismissed all claims against Midland.
- Portalatin abandoned all claims against Blatt except for FDCPA statutory (additional) damages capped at $1,000; at trial a jury awarded $200 against Blatt.
- The district court denied Blatt’s motions to dismiss or set off the Midland settlement and awarded Portalatin $69,393.75 in attorney’s fees and $772.95 in costs against Blatt.
- The Seventh Circuit reversed: it held Portalatin’s settlement with Midland mooted her FDCPA statutory-damages claim against Blatt (single-recovery rule and $1,000 cap per action), vacated the judgments against Blatt, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Portalatin’s settlement with Midland mooted her FDCPA statutory-damages claim against Blatt | Settlement did not moot Blatt claim because Portalatin sought other forms of relief from Midland and did not allocate settlement funds to specific claims | Settlement resolved the single indivisible injury; absent allocation, settlement satisfies the FDCPA recovery and moots the claim against Blatt (or requires setoff) | Settlement mooted the claim; district court erred by not dismissing it |
| Whether FDCPA statutory ("additional") damages can be recovered separately against multiple defendants for a single indivisible injury | Portalatin argued she could recover statutory damages from each defendant | Blatt argued statutory damages are capped at $1,000 per action (not per defendant) for an indivisible harm | FDCPA additional damages are capped at $1,000 per action and are not multiplied across defendants for a single indivisible injury |
| Whether Blatt was entitled to a setoff credit for the Midland settlement against the $200 verdict | Portalatin claimed settlement funds plausibly allocated to other claims, so no setoff | Blatt argued settlement satisfies the single recovery and requires setoff or moots claim | Court found settlement (no allocation) covers FDCPA additional damages and precludes separate recovery from Blatt; setoff/mootness applies |
| Whether Portalatin is entitled to attorney's fees and costs from Blatt under 15 U.S.C. § 1692k(a)(3) | Portalatin argued she prevailed and therefore is a prevailing party entitled to fees and costs | Blatt argued mootness of statutory-damages claim means no prevailing claim against Blatt and no entitlement to fees/costs | Because settlement mooted the statutory-damages claim, Portalatin is not entitled to fees or costs from Blatt |
Key Cases Cited
- Suesz v. Med-1 Solutions, 757 F.3d 636 (7th Cir. 2014) (interpreting §1692i venue as the smallest venue-relevant geographic unit; overruling Newsom and made retroactive)
- Oliva v. Blatt, Hasenmiller, Leibsker & Moore, 864 F.3d 492 (7th Cir. 2017) (bona fide error defense excludes legal errors; courts should consider intent when assessing damages)
- Newsom v. Friedman, 76 F.3d 813 (7th Cir. 1996) (prior precedent treating a county-wide circuit court as the unit for §1692i venue)
- Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (U.S. 2016) (Article III requires an actual controversy throughout litigation)
- Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66 (U.S. 2013) (settlement can moot a plaintiff's claim if it deprives plaintiff of a personal stake)
- Smith v. Greystone All., LLC, 772 F.3d 448 (7th Cir. 2014) (statutory damages cap of $1,000 applies per suit)
- Harper v. Better Bus. Servs., Inc., 961 F.2d 1561 (11th Cir. 1992) (reading §1692k(a)(2)(A) as $1,000 per action)
- Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647 (2d Cir. 1994) (Congress intended statutory damages limit per proceeding, not per violation)