On May 9, 2014, U.S. Representative Matt Cartwright introduced H.R. 4624 to amend the Fair Debt Collections Practices Act to prohibit a court from awarding costs to a prevailing defendant in the absence of a finding that an action was brought in bad faith.
This legislation is in response to the United States Supreme Court’s February 2013 decision in Marx v. General Revenue Corp., which, as we previously discussed, held that a district court may award a prevailing defendant its costs incurred in defending against a FDCPA lawsuit without a finding that the plaintiff brought the lawsuit in bad faith and for the purpose of harassment. This decision resolved a conflict among the Circuit Courts of Appeal.
“Due to the Supreme Court’s unfortunate decision [in Marx], consumers, particularly those who are economically vulnerable, may choose to forego legal action when subjected to abusive and illegal debt collection practices given the potential high costs of losing a suit,” said Rep. Cartwright. “My legislation would correct the Court’s decision and restore the original intent of the FDCPA.”
The legislation has no co-sponsors and has been referred to both the House Financial Services Committee and Committee on the Judiciary for consideration. The following organizations already have endorsed the bill: the American Association for Justice, Americans for Financial Reform, Public Citizen, the National Association of Consumer Advocates, and the National Consumer Law Center.