Supreme Court Case Study

Justin Borne
Professor Preston
May 10, 2014
BUSI 2301-4005
Karen L. JERMAN, Petitioner,
v.
CARLISLE, McNELLIE, RINI, KRAMER & ULRICH LPA, et al.No. 08-1200.
United States Court of Appeals for the Sixth Circuit
Supreme Court of the United States
Decided April 21, 2010.Page(s) 890-891
Karen L. Jerman had a mortgage with Countrywide Home Loans and was contacted by the law firm Carlisle, McNellie, Rini, Kramer & Ulrich LPA, on behalf of Country Wide, seeking a foreclosure on Jerman’s property.
The notice from Carlisle stated that, unless dispute was made in form of writing, the debt would be assumed valid. Jerman’s attorney followed up the notice with letter stating that the debt had already been paid in full. Carlisle contacted
Countrywide and it was confirmed through them that the dispute letter sent by Jerman’s attorney was true. Carlisle withdrew foreclosure lawsuit upon this revelation. However, Jerman followed with a lawsuit of her own, claiming violations and seeking class certification and damages under the FDCPA.

Jerman accused Carlisle of violating Section 1692k(c) of the FDCPA by requesting dispute of debt “in writing.” Jerman sought class certification and damages in the counter suit.
Carlisle claimed defense of being shielded by Section 1692k(c) stating they were not liable because the violation was not intentional.
The District Court that initially handled the lawsuit determined that the violation made by Carlisle was a “bona fide” error and sided with Carlisle stating the act was not intentional resulting in judgment in favor of the defendant. The lawsuit was appealed by Jerman and escalated to The Court of Appeals for the Sixth Circuit, who affirmed The District Court’s decision. The appeal was decided in favor of the defendant and no damages were rewarded to the plaintiff.
Jerman claimed that a debt collector’s misinterpretation of the legal requirements of the FDCPA can ever be “not intentional” under Section 1692k(c). Due to the general rule that mistake or ignorance of law is no defense, Jerman contends that Carlisle’s misunderstanding of what Act requires should not clear them of wrongdoing. On the other hand, Carlisle argued that nothing in the text excludes legal errors from the category of “bona fide error[s]” covered by Section 1692k(c). Furthermore, Carlisle contends that Congress’ intent was to impose liability only when party knows its conduct is unlawful. The expansive reading of Section 1692k(c) was declined by Judge with evidence that mistake-of-law defense
may be included in FTC Act’s administrative penalty provisions, but there is an absence of similar language in Section 1692k(c).
It is suggested that procedures maintained by debt collector should be reasonably adapted to avoid such error. The judgment of the United States Court of Appeals for the Sixth Circuit is reversed by Supreme Court Justice Sotomayor’s opinion. In addition, the case is remanded for further proceedings consistent with this opinion.
I feel that the final opinion is the correct one because there should not be some broad interpretation of law that allows debt collector to be protected against accusation of wrongdoing or violations of policies that intend to protect the consumer. Any such establishment should be fully aware of the rules that are set to limit their practices that lead to violations or wrongdoing against the consumer. The Act could possibly be re-worded to clear up any confusion that debt collector may have in regards to the purpose of the Act itself.