FDCPA Violation

Listen to this article

7^th Circuit Court of Appeals

Case Name: Iwona Portalatin v. Blatt, Hasenmiller, Leibsker & Moore, LLC,

Case No.: 16-1578; 17-3335

Officials: BAUER, FLAUM, and MANION, Circuit Judges.

Focus: FDCPA Violation

Iwona Portalatin allegedly owed $1,330.75 in consumer debt. In October 2013 the law firm of Blatt, Hasenmiller, Leibsker & Moore, LLC (“Blatt”) on behalf of its client Midland Funding, LLC (“Midland”) filed a debt‐collection suit against Portalatin in downtown Chicago at the Richard J. Daley Center Courthouse, which serves the Circuit Court of Cook County’s First Municipal District. Our then‐governing precedent interpreting the Fair Debt Collection Practices Act (“FDCPA”) allowed Blatt to file suit against Portalatin in that forum even though at the time of filing she lived in the Fourth Municipal District, served by the Maywood Courthouse.

But in July 2014, we overruled our precedent and held the FDCPA requires debt collectors to file suits in the smallest venue‐relevant geographic unit where the debtor signed the contract or resides at commencement of suit. Suesz v. Med‐1 Solutions, 757 F.3d 636, 638 (7th Cir. 2014). This meant Blatt should have filed Midland’s suit in the Fourth Municipal District where Portalatin lived. Blatt quickly complied with Suesz, but because we made our ruling retroactive, Blatt’s earlier filing was frozen in place for purposes of FDCPA liability. As a result, Portalatin sued Blatt and Midland for violating the FDCPA, and she sued Midland for violating the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”).

Eventually, Portalatin settled with Midland and expressly abandoned all claims against Blatt except her claim for FDCPA statutory damages. Blatt moved for relief on various grounds, including an argument that Portalatin’s settlement with Midland mooted her claim for FDCPA statutory damages against Blatt. The district court denied these motions. The jury awarded Portalatin $200 in statutory damages against Blatt. For this achievement, the court awarded Portalatin $69,393.75 in attorney’s fees and $772.95 in costs against Blatt. Blatt appeals. We conclude the settlement with Midland mooted Portalatin’s claim for FDCPA statutory damages against Blatt. As a result, the district court should have dismissed her claim, and she is not entitled to attorney’s fees or costs from Blatt.

Vacated and Remanded

Full Text

Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.