Court: District Court, N.D. Illinois; July 23, 2015; Federal District Court
On November 15, 2013, Blitt. Gaines, P.C., a debt collection law firm, filed a lawsuit against Patrick Gillespie in the First Municipal District of the Cook County Circuit Court, representing Citibank, N.A., over a claimed $3,200 debt. Gillespie, residing in River Grove, Illinois, did not respond, leading to a default judgment against him. Under the Fair Debt Collection Practices Act (FDCPA), debt collectors must initiate actions within the judicial district where the debtor resides or where the contract was signed. At the time of the lawsuit, a Seventh Circuit ruling allowed such suits to be filed in a municipal district other than where the debtor lived. However, six months later, the Seventh Circuit's decision in Suesz v. Med-1 Solutions, LLC, overruled the prior ruling, stating that the definition of 'judicial district' should reflect the smallest relevant geographic area for venue determination and applied this interpretation retroactively. Following this change, Gillespie filed an FDCPA suit against Blitt, claiming violations based on the improper venue. Blitt acknowledged the violation of the FDCPA and conceded liability, leading to a summary judgment in favor of Gillespie on that issue. The current matter before the court concerns Blitt's motion for summary judgment regarding damages, asserting that Gillespie's damages should be zero. Gillespie, through his attorney, is seeking $1,000 in statutory damages along with reasonable attorney fees and costs.
Gillespie previously stated he would not pursue actual damages, yet Blitt's motion for summary judgment argues for entitlement to such damages, supported by an uncontested Local Rule 56.1(a)(3) statement. Blitt highlights that Gillespie has not filed an appearance or any motions regarding the Collection Action despite his counsel's regular presence at the Daley Center. Blitt asserts that there are no genuine issues of fact regarding damages, as Gillespie has not demonstrated that he incurred any actual damages from the FDCPA violation. Citing Seventh Circuit precedent, Blitt emphasizes that actual damages must result from harm caused by the FDCPA violation. Gillespie's claim that he should be allowed to prove actual damages contradicts his earlier position. Moreover, to recover actual damages, he must provide evidence showing that he suffered losses due to the FDCPA violation. Blitt argues that Gillespie has not shown any harm from the allegedly improper filing location. The burden is on Gillespie to present evidence that could support a jury finding in his favor, which he has failed to do. Although he claims the inconvenient forum denied him his day in court, he has not specified any actual damages suffered or provided evidence linking the violation to his alleged harm.
Gillespie failed to substantiate his claims of actual damages resulting from Blitt's alleged violations of the Fair Debt Collection Practices Act (FDCPA). He admitted the assertions in Blitt's Local Rule 56.1(a)(3) statement, which contradict his claims. Gillespie did not file a Local Rule 56.1(b)(3)(C) statement to provide evidence, such as an affidavit, to support his assertions of damages. The court emphasized that assertions in briefs are not considered evidence, and unsupported arguments from counsel cannot be given any weight. Although the Suesz case tightened the definition of 'judicial district' due to concerns regarding convenience for debtors, it does not imply that every FDCPA venue violation results in actual damages. Gillespie's lack of evidence means Blitt's summary judgment motion regarding actual damages is granted.
Regarding statutory damages, the FDCPA allows awards up to $1,000, considering factors such as the frequency and intent of noncompliance by the debt collector. The Seventh Circuit has determined that the statutory damages under 15 U.S.C. 1692k(a)(2) warrant a jury trial. While Blitt's actions may not appear intentional, the discretionary nature of statutory damages allows for consideration of various factors. Previous cases indicate that even minimal violations of the FDCPA do not automatically preclude statutory damages, as awarding them is ultimately a matter of discretion.
In Graziano v. Harrison, the court has discretion to not award statutory damages for a single, trivial, and unintentional violation of the Fair Debt Collection Practices Act (FDCPA). The case of Pipiles v. Credit Bureau supports the notion that a defendant's lack of intent to deceive and absence of persistent violations can justify a $0 award in statutory damages. While the FDCPA includes a bona fide error defense, the Supreme Court has clarified that it does not apply to mistakes of law, suggesting that such mistakes do not automatically prevent statutory damages. The Seventh Circuit allows courts to adjust statutory damages for good-faith misinterpretations of law, stating that material disputes or discretionary financial awards necessitate a jury's involvement. Conversely, if there is no material dispute, summary judgment may be permitted. The court acknowledges concerns about awarding statutory damages without actual harm, as articulated in Dixey v. Idaho First Nat’l Bank, but notes that the FDCPA does not require proof of actual damages for statutory recovery. This principle is reinforced by multiple Seventh Circuit cases, which affirm that statutory damages can be awarded without evidence of injury, paralleling the standing established in Sterk v. Bureaus Investment Group.
Congress cannot lower the standing threshold below constitutional minimums; however, it can create legal rights through statutes that establish standing, even if no injury exists without those statutes. A relevant case, Matmanivong v. Nat’l Creditors Connection, Inc., upheld this principle against an Article III challenge regarding statutory damages under the FDCPA. The Supreme Court's pending review in Spokeo, Inc. v. Robins may address similar standing issues, but current precedents, specifically Sterk and Keele, affirm Gillespie's standing. Additionally, BMG Music and Kobs indicate that summary judgment is inappropriate due to the jury's discretion over statutory damages.
Blitt's lawsuit against Gillespie was permissible under then-binding Seventh Circuit precedent, but subsequent developments revealed that liability was conceded by Blitt. A recent case, Oliva v. Blatt, Hasenmiller, Leibsker, Moore, LLC, although related, does not impact the current summary judgment motion as it addresses a different aspect—namely, liability rather than damages. Consequently, Blitt's summary judgment motion is partially granted: Gillespie cannot claim actual damages but may seek statutory damages and potentially recover costs and attorney fees under 1692k(a)(3) if successful.
