Mark Suesz v. Med-1 Solutions, LLCMark Suesz v. Med-1 Solutions, LLC
Lead Opinion
Thе federal Fair Debt Collection Practices Act (“FDCPA”) requires a collector of consumer debts to file its debt-collection suit in the “judicial district or similar legal entity” where the contract was signed or where the debtor resides.
Defendant Med-1 Solutions, LLC filed suit in the Pike Township of Marion County Small Claims Court to collect a consumer debt from plaintiff Mark Suesz. The plaintiff alleges that the defendant violated § 1692i by filing in that court because the
In Newsom v. Friedman,
We conclude that the correct interpretation of “judicial district or similar legal entity” in § 1692i is the smallest geographic area that is relevant for determining venue in the court system in which the cаse is filed. See Hess v. Cohen & Slamowitz LLP,
I. The Factual Allegations
Because the district court dismissed this action under
Mark Suesz, who resides in Hancock County, which is immediately east of Marion County, owed money to Community North Hospital. The hospital, which is located in Lawrence Township in the northeast corner of Marion County, turned the debt over to Med-1 Solutions for collection. Med-1 sued Suesz in the Pike Township Small Claims Court. Pike Township is in the northwest corner of Marion County. The court issued a judgment against Suesz for $1,280. The validity of that judgment is not questioned in this federal lawsuit.
Suesz then filed this action under the Fair Debt Collection Practices Act, asserting that Med-1 has a practice of filing collection lawsuits in Marion County in small claims courts located in townships where the debtor defendants neither live nor signed the contracts on which they are being sued. Suesz moved to certify a plaintiff class, but the district court dismissed the case without acting on the motion. On the basis of our decision in Newsom, the district court concluded that the townships of Marion County are not “judicial districts” for purposes of § 1692i and so dismissed Suesz’s suit. Suesz v. Med-1 Solutions, LLC, No. 1:12-cv-1517-WTL-MJD,
II. The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act seeks “to eliminate abusive debt collection practices by debt collectors.”
As this case illustrates, one common tactic for debt collectors is to sue in a court that is not convenient to the debtor, as this makes default more likely; or in a court perceived to be friendly to such claims; or, ideally, in a court having both of these characteristics. In short, debt collectors shop for the most advantageous forum. By imposing an inconvenient forum on a debtor who may be impecunious, unfamiliar with law and legal processes, and in no position to retain a lawyer (and even if he can afford one, the lawyer’s fee is bound to exceed the debt itself), the debt collector may be able to obtain through default a remedy for a debt that the defendant doesn’t actually owe.
The FDCPA is designed to protect consumer debtors against unscrupulous methods of consumer debt collection. Thus in Phillips v. Asset Acceptance, LLC,
Unfortunately the key statutory term— “judicial district” — is vague. The FDCPA does not define it, and as we explain below the phrase has no general definition or meaning that can resolve this dispute. In Indiana, Illinois, and most other states, state trial courts usually are organized by county for purposes of both court administration and venue. When that is so, it may seem natural to interpret the statutory term as referring to the county in which the debtor lives or the contract giving rise to the debt was signed. But terms that seem plain and easy to apply to some situations can become ambiguous in other situations. This statutory term was drafted broadly — indicated by the phrase “or similar legal entity” — presumably so that it could be applied with appropriate flexibility to court systems around the country, which vary in structure and nomenclature. We believe that the term describes the township small claims courts in Marion County, which we examine next with a particular eye to the relevance of venue rules for interpreting and applying the statutory term “judicial district or similar legal entity.”
The alternative approach, favored by the panel majority, would be for the court in an FDCPA case to defer to each state’s definition of “judicial district.” One problem with that approach is that “judicial district” is not a defined term in state law. A deeper problem is that, had Congrеss been content to adopt the states’ rules governing jurisdiction and venue, there
This is not to suggest that the federal law alters state rules governing jurisdiction and venue. Federal law merely imposes a limit on which state courts having jurisdiction and venue over a debt collector’s claim the debt collector may sue in, consistent with the policy of the federal law. There is nothing unusual or untoward about requiring compliance with both state and federal rules. Next we explain why the township small claims courts in Marion County must be regarded as occupying separate judicial districts in order to enforce the policy of the federal law.
III. The Township Small Claims Courts in Marion County
Most trial courts in Indiana are countywide circuit or superior courts of general jurisdiction. The small claims courts serving the nine townships in Marion County (which is coterminous with Indianapolis) are important, high-volume exceptions. Pursuant to the system established by the Northwest Ordinance of 1787, the nearly square county is divided into a grid of nine nearly square townships.
State law makes the small claims courts of Marion Country nine separate courts, each designated the “_ Township of Marion County Small Claims Court,”
These smaller judicial districts were established for the convenience of litigants and the avoidance of docket congestion, but the panel’s decision gave debt collectors suing in Marion County the choice of which of the nine courts to sue in, just as if the nine were one. The debt collector thus could choose the township court that was most inconvenient for the defendant, friendliest to creditors, or both. To adopt this interpretation would undermine the venue provision of the Fair Debt Collection Practices Act. It would amount to saying that Congress had created the provision with one hand and simultaneously nullified it with the other.
Indiana’s current statute determining venue, Indiana Code § 33-34-3-1, makes venue depend on townships in a small claims suit in Marion County.
(A) Proper venue. Proper venue for a case filed in the small claims docket of a Circuit, Superior, or County Court shall be in the county where the transaction or occurrence actually took place or where the obligation was incurred or is to be performed, оr where one of the defendants resides or has his or her place of employment at the time the complaint is filed.
Proper venue of any claim between landlord and tenant ... filed in county small claims courts created pursuant to IC 33-34-1-2 [i.e., township courts in Marion County] shall be in the county and township division of the Small Claims Court where the real estate is located.
The differences between the venue court rule and the venue statute reflect significant changes in the small claims courts that were made in 1999 to settle a Voting Rights Act lawsuit, but to which the court rules were not conformed until much later.
Before 1999, the small claims courts in the nine townships had been organized as divisions of the Marion Superior Court, and both the venue statute and the venue rule specified venue by township rather than by county only for landlord-tenant claims. For all other cases venue was countywide. The problem under the Voting Rights Act was that the nine judges of those small claims divisions of the Marion Superior Court were each elected by only one township, but all exercised authority over disputes arising throughout the county. The nine townships differed dramatically in terms of overall population and racial composition. The combination of election-by-township and countywide authority substantially diluted the voting power of African-Americans.
After a federal district court denied the defendants’ motion for summary judgment in Anderson v. Mallamad, No. IP94-1447-C H/G,
But. even after the 1999 statutory changes a defendant sued in the wrong township court had to appear in that court (within just ten days) in order to move for a change of venue. If he missed the deadline, he was stuck in that court, however inconvenient for him. Moreover, as the panel opinion in this case pointed out,
An investigation of the township courts by a task force of two Indiana Court of Appeals judges identified serious venue problems in those courts. Small Claims Task Force, Report on the Marion County Small Claims Courts, pp. 13-14 www.in. gov/judiciary/files/pubs-smelaims-rept-2012.pdf (visited July 2, 2014). Many defendants are unaware of their right to ask the courts to transfer a case to the townships where they live. Id. at 13. And paradoxically, although township courts were intended to be more convenient for parties, they could be less convenient than if the venue were countywide. The combination of the size of the county, the nine court locations, limited public transportation other than to and from the center of the county, and the debt collectors’ ability to file in any township made it harder for many small claims defendants in Marion County to get to court than it was for defendants in counties in which the courts were centrally located. Id. at 14.
The task force also acknowledged concerns that “large-volume filers appear to file their cases in township courts that appear to provide outcomes favorable to them or provide less oversight for settlement negotiations and settlement agreements,” and that townships have an incentive to pressure judges to “favor large-volume filers in order to generate revenue for the township from filing fees.” Id. Without specifically endorsing those concerns, the task force found that judges who “have made efforts to review settlement terms, as opposed to judges who allegedly rubber-stamp settlement agreements, have seen dramatic declines in new filings in their township courts,” as shown by state judicial statistics. Id.
IV. “Judicial District or Similar Legal Entity ”
The key statutory term that we must interpret — “judicial district” — is not a term of art. It has no statutory definition, and it is inherently flexible, enabling it to
The few cases dealing with unusual court structures such as found in Marion County or in Cook County, Illinois, take three different approaches to deciding what is a judicial district or similar legal entity. First, in Newsom we relied on what was said to be the plain language of the statute,
The third approach, which we adopt, focuses on the state court venue rules faced by parties and lawyers, and the relevant geographic unit for applying those rules. Under this approach the relevant judicial district or similar legal entity is the smallest geographic area relevant to venue in the court system in which the case is filed. This interpretation of the statutory term discourages abusive forum-shopping by debt collectors rather than enabling it. In addition to better serving the debtor-protective policy of the FDCPA than the alternative approaches, this venue-based approach should be more predictable and easier to apply than Newsom’s multi-factor test, which requires consideration of numerous details of court administration.
A. Plain Language?
Newsom held that a “municipal department district” of the Cook County Circuit Court in Illinois is not a “judicial district or similar legal entity” under
Newsom asserted that “judicial district” in the FDCPA has a plain meaning that prevents classifying a “municipal department district” in Cook County as a judicial district. The opinion relied heavily on the edition of a legal dictionary dating from when the FDCPA was enacted, which defined “judicial district” as
one of the circuits or precincts into which a state is commonly divided for judicial purposes; a court of general original jurisdiction being usually provided in each of such districts, and the boundaries of the district marking the territorial limits of its authority; or the district may include two or more counties, having separate and independent county courts, but in that case they are presided over by the same judge.
For two reasons this dictionary definition does not provide a “plain language” resolution of the issue we face. First, its content is too vague to provide meaningful guidance. Dictionaries can be useful in interpreting statutes, see, e.g., Octane Fitness, LLC v. ICON Health & Fitness, Inc., — U.S. —,
Second, even if the definition were narrow and specific enough to support New-som and the defendant’s position in the present case, the critical question would be what weight to give it in interpreting the venue provision of the FDCPA. The dictionary definition has no solid basis in law that helps us with our question. Nor is there any link to the enactment of the FDCPA.
A law dictionary differs from an ordinary dictionary, one would suppose, in basing its definitions on legal rather than ordinary usage. So where did Black’s get its definition of “judicial district”? That’s not easy to say. The second edition of Black’s cited at the end of the definition three cases, presumably believed to be the sources of the definition or to explain or illustrate it: Ex parte Gardner,
The later editor may have realized that the four cases cited in the earlier editions did not support the definition. The definition, interpreted as favorably as it could be to the decision in Newsom, might be thought to imply that a judicial district is created by the legislature and encompasses one or more counties. But the dictionary’s case citations undermine that implication. The Lindsley and Hoar cases enforced the division of counties into smaller judicial districts. Consolidated Flour Mills (the only twentieth-century case of the four) rejected a foolish challenge to a court’s power to act after the forum county had been reassigned from one multi-county district to another. The court in that case defined “judicial district” very broadly (semantically, rather than geographically): “The term ‘judicial district’ is but a political and convenient arrangement for electing judges of the district court and prescribing primarily the territorial jurisdiction of the district judge, or where he may lawfully preside without special authority from the Supreme Court.”
Gardner is delphic: “A judicial district is simply a political division, provided for by the constitution, but arranged by the legislature, for the purpose of economizing in the number of judges. In fact, the inclusion of any two counties in the same district may almost be said to be acciden
The loose definition of “judicial district” in Black’s Law Dictionary thus had no real basis in law, as implied by the editor’s deletion first of the case citations (in the 1979 edition) and finally of the definition itself (in the 1999 edition).
There is also no indication that the drafters of the Fair Debt Collection Practices Act were aware of the dictionary definition, let alone that they viewed it as helpful, particularly in light of the catch-all extension of
the problem of “forum abuse,” an unfair practice in which debt collectors file suit against consumers in courts which are so distant or inconvenient that consumers are unable to appear. As a result, the debt collector obtains a default judgment and the consumer is denied his day in court. In response to this practice, the bill adopts the “fair venue standards” developed by the Federal Trade Commission. A debt collector who files suit must do so either where the consumer resides or where the underlying contract was signed_ The Commission reports that this standard is effective in curtailing forum abuse without unreasonably restricting debt collectors.
S. Rep. 95-382, at 5, 1977 U.S.C.C.A.N. 1695, 1699. The Senate report is entitled to more weight than a vague dictionary entry. Although the report offers no guidance for our case more specific than a reminder of the statutory goal of рreventing abusive forum-shopping, that goal deserves great weight in interpreting an uncertain statutory term.
B. The Judicial Administration Approach in Newsom
Newsom did not rely on the statutory language and the law dictionary alone. It also focused on court administration. The opinion recognized that some orders of the Cook County Circuit Court seemed to reflect a venue requirement that small claims cases be filed in particular subdistricts of the county. But relying on another order of that court, the opinion held that the entire county was the relevant judicial district for purposes of venue under the FDCPA.
The panel majority in the present case was understandably reluctant, for reasons of stare decisis, to depart from the reasoning of Newsom. The panel opinion thus reasoned that even though the township small claims courts in Marion County had limited venue, the power of each township
But Newsom’s focus on an array of details of judicial administration lost sight of the purposе of
The Newsom approach, which is indifferent to distance and inconvenience even where the state courts use smaller units to decide venue, has even graver implications for counties larger than Cook (land area 1635 square miles) or Marion (403 square miles). There are many much larger counties. The area of the nation’s 100th largest county, Eureka County in Nevada, is 4180 square miles — twice the combined area of Cook and Marion Counties. The largest county in the United States is San Bernardino County in southern California. With more than 20,000 square miles, it’s more than twelve times larger than Cook County and almost fifty times larger than Marion County.
Like Cook County, San Bernardino County has divisions, each with its own courts, and like Marion County it has small claims courts. But all the courts are part of the Superior Court of San Bernar-dino County, which corresponds to the Cook County Circuit Court. See Small Claims, Superior Court of California, County of San Bernardino, www.sbeourt. org/Divisions/SmallClaims.aspx (visited July 2, 2014). The logic of Newsom would allow a debt collector to sue a debtor in any court in San Bernardino County, regardless of distance. And distances in San Bernardino County can indeed be long. The county is more than 200 miles from east to west at its widest point, and 150 miles from north to south.
There are differences between the Cook County Circuit Court in Newsom and the township small claims courts in Marion County in terms of judicial administration, as plaintiff Suesz argues. The township small claims courts have greater independence than Cook County’s municipal department district courts, all nine courts having been as we’ve pointed out established as separate courts with separate election districts, administration, staffing, and funding, and even separate seals, and their separate status and the accompanying venue rules having been created in order to remedy a problem of constitutional dimensions under the Voting Rights Act. Our dissenting colleagues do not find these differences persuasive. These special circumstances might enable us to distinguish Newsom’s treatment of the municipal department districts of Cook County. We do not follow that path, however, because the differences in judicial administration between Cook County and Marion County have nothing to do with the purpose of
C. The Venue Approach
Our approach is similar to that of the Second Circuit in Hess v. Cohen & Slamowitz LLP,
Because the court system of which [the collector] availed itself is governed by laws that limit the territorial extent of those courts based on, inter alia, a defendant’s contacts with the forum, we hold that those laws delimit the ‘judicial district’ by which compliance with the FDCPA’s venue provisions must be measured.
* * * * * *
Where, as here, a state law outlines the required nexus between the residence or activities of the consumer and the location of the court, we hold that such a law sets forth the appropriate ‘judicial district’ for purposes of the FDCPA with respect to debt collection actions brought in that court, regardless of whether that provision is styled as jurisdictional or otherwise.
The court made clear that it was focusing on geographic divisions for purposes of determining venue rather than jurisdiction. The geographic limits of the Syracuse City Court’s power were not jurisdictional, for they could be waived by the parties. See
Focusing on the geographic unit that is relevant for venue in the court system where the case was filed adapts the FDCPA venue provision in
What we are calling the “venue approach” should avoid the confusion that would be likely to result if we distinguished between small claims courts that are divisions of a larger court and those that are independent, or if we relied on an ill-defined mixture of administrative details such as whether cases can be transferred for the convenience of the parties among smaller districts within a county or whether judges can substitute for each other, let alone how the courts are managed, funded, and staffed. Such details are not easy for either debt collectors or debtors to learn, and there is no predictable formula for applying them. But more fundamentally, they have nothing to do with preventing
D. The Relationship Between Federal and State Law
The Fair Debt Collection Practices Act does not tell states how to organize or operate their court systems. Nor does it directly control court procedures such as venue rules. A debt collector for consumer debts may comply with state law, obtain a perfectly valid state court judgment, and simultaneously violate the FDCPA by suing in the wrong venue.
Suppose, for example, that state law allowed venue in the township where the plaintiff does business, and suppose a debt collector filed all its consumer debt collection suits in that township regardless of where the defendants lived or where the contracts giving rise to the alleged debts had been signed. Those suits would comply with state law but would violate the FDCPA. Such violations would not undеrmine the validity of state court judgments in favor of a debt collector, but they would provide the basis for federal remedies against the debt collector.
In essence, then, the FDCPA takes state courts as states choose to structure and operate them.
At the same time, and for the same reasons, we do not think it matters for purposes of
One implication of our analysis is that a consumer debt collector filing suit in Marion County still retains a limited choice of venue, at least in theory and as a matter of federal law. The jurisdiction of the township small claims courts over small claims cases is concurrent with the jurisdiction of the county’s circuit and superior courts.
In practice, though, the potential for confusion or misuse should be minimal. The judges of the circuit and superior courts can transfer any small claims case to an appropriate township small claims
V. Retroactivity
Our interpretation of
As a general matter, adopting a new rule while refusing to apply it to the parties before us would raise serious constitutional concerns. We exercise judicial authority rather than the prospective authority of a legislature. See Harper v. Virginia Dep’t of Taxation,
The Supreme Court has left itself some room to give its rulings in civil cases only prospective effect, at least “to avoid injustice or hardship to civil litigants who have justifiably relied on prior law.” See Harper v. Virginia Dep’t of Taxation, supra,
The Supreme Court’s reservation of such a power does not persuade us to make the present decision effective only prospectively; and this for two reasons: First, reliance on prior law is insufficient in itself to justify making a new judicial ruling prospective. See Reynoldsville Casket Co. v. Hyde,
So suppose we affirmed the dismissal of this case and the Supreme Court then granted certiorari and reversed. Neither our prior decision in Newsom nor the panel’s decision in this case would have justified giving the ruling only prospective effect on the basis of justified reliance by (in this case) debt collectors in Marion County-
The judgment of the district court dismissing this action is REVERSED and the case is REMANDED to the district court for further proceedings consistent with this opinion.
Notes
. Indiana Code § 33-34-3-1 reads in its entirety:
(a) Except for a claim between landlord and tenant, a case within the jurisdiction of a small claims court may be:
(1)venued;
(2) commenced; and
(3) decided;
in any township small claims court within the county. However, upon a motion for change of venue filed by the defendant within ten (10) days of service of the summons, the township*641 small claims court shall determine in accordance with subsection (b) whether required venue lies with the court or with another small claims court in the county in which the small claims court action was filed.
(b)The venue determination to be made under subsection (a) must be made in the following order:
(1) In an action upon a debt or account, venue is in the township where any defendant has consented to venue in a writing signed by the defendant.
(2) Venue is in the township where a transaction or occurrence giving rise to any part of the claim took place.
(3) Venue is in the township (in a county of the small claims court) where the greater percentage of individual defendants included in the complaint rеsides, or, if there is not a greater percentage, the place where any individual named as a defendant:
(A) resides;
(B) owns real estate; or
(C)rents an apartment or real estate or where the principal office or place of business of any defendant is located.
(4)Venue is in the township where the claim was filed if there is no other township in the county in which the small claims court sits in which required venue lies.
(c) Venue of any claim between landlord and tenant must be in the township where the real estate is located.
(d) If a written motion challenging venue is received by the small claims court, the court shall rule whether required venue lies in the township of filing.
. Small Claims
. For skeptical views of dictionaries as guides to statutory interpretation, see, e.g., Jordan v. De George,
. The prospect that a venue choice could comply with state law while violating federal law does not depend on the size of the judicial district or on how the statutory term is interpreted. That tension is inherent in
Concurrence Opinion
concurring.
This case concerns the proper interpretation of the so-called “venue provision” in the Fair Debt Collection Practices Act (“FDCPA”). Here’s the full text of the statute, with the key language italicized:
§ 1692i . Legal actions by debt collectors
(a) Venue
Any debt collector who brings any legal action on a debt against any consumer shall—
(1) in the case of an action to enforce an interest in real property securing the consumer’s obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or
(2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity—
(A) in which such consumer signed the contract sued upon; or
(B) in which such consumer resides at the commencement of the action.
By its terms,
In Newsom v. Friedman,
I agree with much of what Judges Hamilton and Posner have written for the en banc court, as well as the court’s decision to overrule Newsom. But I also share some of the concerns expressed by Judge
Of course, when Congress creates a cause of action over which the state courts have concurrent jurisdiction, the state courts are bound by the Supremacy Clause to adjudicate the claim, see Testa v. Katt,
The Court has also held that state procedural rules may be displaced when they conflict with or unnecessarily burden the substance of a federal cause of action being litigated in state court. See, e.g., Felder v. Casey,
But these cases involved federal claims being adjudicated in state court. It’s an open question whether Congress has the power to prescribe procedural rules for state-law claims in state court. The Supreme Court has twice noted the issue but declined to decide it. In Jinks v. Richland County,
In Pierce County v. Guillen,
No constitutional argument is raised here; this case presents only a question of statutory interpretation. Still, our statutory interpretation inquiry should be informed by important background principles of federalism. See Bond v. United States, — U.S. —,
My colleagues seem to acknowledge this point, if only implicitly. For example, they say that
So as applied to debt-collection actions in state court,
My colleagues note that “[t]he presence of the venue provision in the Act shows congressional dissatisfaction with allowing state law to determine where suits to collect consumer debts can be filed.” Majority op. at 640. No doubt that’s true, but this just highlights the constitutional question about the limits on Congress’s authority to regulate venue in the state courts. They say that
Sometimes Congress can do indirectly what it lacks the power to do directly. See, e.g., South Dakota v. Dole,
At a minimum
Returning to the interpretive problem at hand, to avoid liability under the FDCPA for violation of
I agree with Judges Hamilton and Pos-ner that the Black’s definition of “judicial district” — an interpretive tool prominently featured in Newsom — doesn’t help resolve the ambiguity. When the FDCPA was adopted, Black’s defined the term by reference to the territorial boundaries of the court’s authority and the presence of a court of general subject-matter jurisdiction. Judges Hamilton and Posner explain at length why this definition is not useful. I concur and have nothing to add to this discussion.
I agree as well that state venue rules play an important role in determining the appropriate “judicial district” under
This construction of
One final point before I conclude. Looking to state venue rules at the “system” level is important. In deference to the State’s right to set its own procedural rules for litigation in its courts,
There may be practical and administrative impediments to filing a small-claims action in the Marion County circuit or superior courts, see Majority op. at 648-49, and debt collectors apparently prefer to use the township courts, see id. at 642-43, 649. But sensitivity to federalism sug
Accordingly, with these limitations and additional observations, I agree with the court’s interpretation of
. I’ve used the term "judicial subdivision,” whereas my colleagues use the phrase “smallest geographic unit,” but I think we mean the same thing.
Dissenting Opinion
dissenting.
The court’s new rule — defining “judicial district” in
When Congress does not define a statutory term or phrase, courts normally use its ordinary meaning. See, e.g., Sebelius v. Cloer, — U.S. —,
But instead of deferring to the state’s definition of its districts, the majority replaces congressional silence in
To take a step back:
The majority holds that the judicial district referenced in
First, under my interpretation of
Second, my reading of
Where I part with the majority is its sole emphasis on venue rules to define the scope of a judicial district or similar legal entity. Judicial districts are products of positive law — they exist because a governmental entity established courts and then divided them into units. But states need not set the boundaries of their judicial districts by their venue rules alone. It is perfectly appropriate for a state to choose to consider other factors, like geography, administrability, convenience, or subject-matter specialization — as I believe Indiana has done in Marion County. Indeed, the evidence of congressional intent regarding
We simply have no basis to conclude that Congress would have thought it unfair or abusive if a debt collector files suit within the state-defined judicial district, but in a venuе that is not closest to the debtor. If Congress had wanted to impose a new federal concept of a judicial district — one more exacting than the existing units created by state law — Congress would have had to do so far more clearly. Cf. BFP v. Resolution Trust Corp.,
I continue to believe that Newsom’s virtue lies in the way it balances the protection of debtors with the realities of varied and unique state-court systems. Newsom has us look to state law — and more specifically tо court rules and administration — to discover how the state defines its judicial districts.
Judge Kanne thoroughly explains why the county, and not the township, is the proper judicial district when we focus on Indiana specifically. But I hasten to add that in many cases, the analysis under either Newsom or the court’s new rule will be the same. For example, if an Indiana debt collector files in the superior court — a county-level trial court of general jurisdiction that is found throughout the state— the analysis is straightforward and the debt collector need only file in the proper county. The new rule is satisfied because the county is the smallest area for determining venue in the superior court. And the county is the judicial district under Newsom because the superior court is the court of general jurisdiction and the common division statewide.
The majority opinion deconstructs the historical bona fides behind the Black’s Law definition of judicial district and concludes that there is no common-law definition of the phrase. But I do not find this analysis particularly illuminating. In Newsom, we turned to Black’s in part because its definition took a commonsense tack to defining a judicial district. What is important about Newsom’s definition is that it gives courts valuable guidance while also рroviding leeway to decide what states consider to be their own judicial districts.
I close by noting that I believe Newsom is consistent with the Second Circuit’s decision in Hess,
The court’s new rule, contrary to Hess and Newsom, does not give appropriate deference to the way a state chooses to structure its own court system. For this reason, I would uphold Newsom, and I respectfully dissent from the majority’s decision to overrule it.
Dissenting Opinion
dissenting.
This is a simple statutory interpretation case. The parties ask us to determine the meaning of the words “judicial district or similar legal entity” as they appear in the venue provision of the Fair Debt Collection Practices Act, and the majority is happy to oblige. But there is a problem: This court has already answered that question. In Newsom v. Friedman,
One of the circuits or precincts into which a state is commonly divided for judicial purposes; a court of general original jurisdiction being usually provided in each of such districts, and the boundaries of the district marking the territorial limits of its authority; or the district may include two or more counties, having separate and independent county courts, but in that case they are presided over by the same judge.
Newsom,
We have said, too many times to count, that we require a “compelling” reason to overturn circuit precedent, as the principle of stare decisis requires that we give considerable weight to prior decisions of this court. United States v. Lara-Unzueta,
[I]f the fact that a court considers one of its previous decisions to be incorrect is a sufficient ground for overruling it, then stare decisis is out the window, because no doctrine of deference to precedent is needed to induce a court to follow the precedents that it agrees with; a court has no incentive to overrule them even if it is completely free to do so. The doctrine of stare decisis imparts authority to a decision, depending on the court that rendered it, merely by virtue of the authority of the rendering court and independently of the quality of its reasoning. The essence of stare decisis is that the mere existence of certain decisions becomes a reason for adhering to their holdings in subsequent cases.
Or so I thought. Despite the fact that the principle of stare decisis carries “special force” in the statutory interpretation context, John R. Sand & Gravel Co. v. United States,
What reason is given? The majority opinion complains that the New-som/Black’s definition is too vague, and that the sources cited by Black’s are underwhelming. Those are not sufficient reasons to abandon existing law; they are just another way of saying the majority believes that Newsom was decided incorrectly. After casting that decision aside, the majority then moves immediately to the policy objectives underlying the FDCPA, and summarily redefines the phrase “judicial district or similar legal entity” to mean “the smallest geographic area that is relevant for determining venue in the court system in which the case is filed.” Even if I leave the stare decisis issue behind, that definition is wrong because the process that led to it disregarded the established canons of statutory construction, and it is wrong because it cannot be usefully or consistently applied to the court systems in our jurisdiction. I write seрarately to address each of those points, and I ultimately join the dissent of Judge Flaum.
I.
I will begin by noting the most obvious flaws in the majority’s process. As I have mentioned, the core of this case is a simple question of statutory construction. The first canon of statutory construction is that we begin with the text itself. Connecticut Nat’l Bank v. Germain,
First, not only was the original panel’s reference to Black’s Law Dictionary consistent with existing law as set out in Newsom, it was consistent with usual interpretive practice. “Without a statutory
Second, the Black’s definition is not “vague” at all, at least not in the context of this case. Black’s tells us to look for “one of the circuits or precincts into which a state is commonly divided for judicial purposes.” In Indiana, that is easy to do. The “circuit or precinct” into which Indiana is “commonly divided for judicial purposes” is the “judicial circuit.”
It is just as easy to see that the Marion County Small Claims Courts do not qualify. The Marion County Small Claims Courts are unique in the State of Indiana in terms of their structure and function. And Marion County, obviously, falls within the Indiana Judicial System. The Marion County Small Claims Courts are therefore not a common division in the state court system in which they exist. They are the exact opposite.
There is nothing vague about any of this. And yet the majority tosses the Newsom/.Black’s definition aside, claiming it is too vague and unfounded to be useful. Next, it immediately turns to the policy
For one thing, casting aside the New-som/Black’s definition — if I were willing to go that far with the majority — does not mean there can be no “plain meaning.” It is not comprehensible to me to suggest that we have no idea what Congress means when it says the words “judicial district.” We know exactly what a “judicial district,” in the common parlance of the law, is. Our job is to hear appeals from seven of them. If we read the words “judicial district” to refer to judicial districts as they exist in the federal court system and as they are so frequently referenced throughout the United States Code,
But the majority opinion never stops to consider the possibility that the words “judicial district” may just not be that great a puzzle. Why? Because “terms that seem plain and easy to apply to some situations can become ambiguous in other situations.” Op. at 639. That is an inadequate justification for a finding of ambiguity.
Moreover, even if the statute were ambiguous, I do not see how the majority’s chosen definition falls within the range of that ambiguity. Statutory ambiguity presents us with an opportunity to choose from among equally legally justified options. It is not a creative license. I do not see the majority presenting competing common understandings of what a “judicial district or similar legal entity” could be. I see the majority replacing the words “judicial district or similar legal entity” with an entirely new phrase, “smallest geographic area that is relevant for determining venue in the court system in which the case is filed,” because those new words produce the result most consistent with the purpose of the statute in this particular case. That may be an equitable outcome, but it is legally improper: “Ambiguity sometimes justifies resort to legislative history, but it is used to decipher the ambiguous language, not to replace it.” Peterson v. Somers Dublin Ltd.,
II.
I have made my concern with the majority’s analytical process clear: I believe the majority too casually tosses aside principles of stare decisis and the canons of statutory construction to arrive at a result consistent with its understanding of the policy aims undergirding the FDCPA. Now I will briefly address why I believe the majority’s result is just plain wrong. I believe it is wrong because it leads to bizarre and inconsistent results irreconcilable with the statutory text and the intent behind it, and because the outcome reached by the majority defeats its own stated purpose.
First, the majority’s definition means that many federal judicial districts are not “judicial districts,” but divisions of those federal judicial districts are. Many federal judicial districts are broken up into smaller geographical units: divisions. A quick internet search confirms that at least some of those judicial districts’ local rules require civil actions to be filed in the division of the district court in which proper venue lies. See, e.g., Northern and Southern Districts of Iowa Local Rule 3(b); District of Montana Local Rule 3.2(b); Western District of Virginia Local Rule 2(b). It cannot be meaningfully argued that the divisions are not “geographic areas” in the first place; their boundaries are tied to county lines.
In these judicial districts, the divisions are therefore the “smallest geographic area that is relevant for determining venue in the court system in which the case is filed.” The only possible way the majority could expand its definition of a “judicial district” to include the districts themselves is to resort to “details of court administration” — same judges, same administrative staff, same court seal, etc. But even where that works (and it will not work everywhere), it is exactly the approach the majority ostensibly eschews in abandoning Newsom. Op. at 638. That is a problem.
Second, the majority’s definition leads to inconsistent results within the same judicial systems. Putting aside the problem
I understand that the majority outcome is a boon to Marion County residents who have trouble getting from one township to another to defend against a case. Perhaps this is especially true for the typical small claims defendant, who is likely a person of limited means. But at least public transportation exists in Marion County in a meaningful way. There are poor people in rural Indiana, too, and their county seats are often just as far away from them, if not farther, than the distance between the two Marion County townships at issue in this case
That leads me to my greatest concern. The majority opinion is sprinkled throughout with language suggesting that its goal is to establish a rule honoring Congress’s intent to impose consistent federal limitations on debt collectors’ choice of venue when filing in state courts. See, e.g., Op. at 640 (“The presence of the venue provision in the Act shows congressional dissatisfaction with allowing state law to determine where suits to collect consumer debts can be filed.”).
Finally, none of this is meant to suggest that forum-shopping by debt collectors in Marion County is not a problem, or that nothing should be done to fix it. It is a problem, and Indiana is already taking steps to fix it. But the majority disregarded the principle of stare decisis without even paying lip service to any of the established justifications for doing so, then proceeded to shortchange the first step of the
. By way of comparison, the United States Supreme Court sits "en Banc " in every case that it hears, and it has the authority to overturn its own prior decisions in every case that it hears. And yet Supreme Court opinions are littered with references to the doctrine of stare decisis.
. The General Assembly has authorized the Office of Judicial Administration to break the state up into a number of larger "judicial districts,"
. It is true that the vast majority of collection actions take place in state courts, but we would do well to remember that debt collection actions can and do take place in federal court, as well. The FDCPA by its terms applies to those actions, too, and Congress knew that when it passed the law. Moreover, the impact of the FDCPA on federal court debt collection actions is an issue of growing concern. Student debt has surpassed all but mortgage debt as the largest bit of baggage in our nation’s consumer inventory, and we are witnessing an uptick in federal court collection actions as the default rate on federal student loans increases. See Halah Touryalai, $1 Trillion Student Loan Problem Keeps Getting Worse, Forbes (Feb. 21, 2014), http:// www.forbes.com/sites/halahtouryalai/2014/02/ 21/1 -trillion-student-loan-problem-keeps-getting-worse/; Scott Travis, Feds crack down on South Florida student loan defaulters, Sun-Sentinel (May 12, 2012), http://articles.sun-sentinel.com/2012-05-12/news/fl-student-loan-lawsuits-20120510_1 _student-loan-default-rate-federal-stafford-loans. Suits founded on debts owed to the federal government may be filed in federal court regardless of the amount-in-controversy. These suits are exempt from FDCPA coverage when initiated by the federal government itself,
. The relevant question, at that point, is how do we identify an appropriate comparator in a state court system? I would begin by noting the salient characteristics of our model: a federal judicial district, something we can all agree should fall within any sensible interpretation of the words “judicial district or similar legal entity.” I will not generate an exhaustive list here, but it would likely turn out to look a great deal like the Newsom!Black's definition: lowest-level common division for judicial purposes in the system in which it exists, etc. Next, I would search for a level of division in Indiana’s court system that is analogous in most respects. It would again be easy to see that the constitutionally authorized judicial circuits meet nearly every criteria we could put forward; the Marion County Small Claims Courts would meet none.
. Marion County encompasses 396 square miles and is nowhere near the largest county in the state. Allen County, home to Fort Wayne, Indiana’s second most populous city, covers 657 square miles. Jasper County, home to the undersigned, covers 560.
. I share some of Judge Sykes’s concerns about the propriety of that consideration in light of general principles of federalism, although I do not understand that issue to be directly before us.