United States District Court, N.D. Illinois, Eastern Division
July 23, 2015
PATRICK GILLESPIE, Plaintiff,
BLITT & GAINES, P.C., Defendant
Patrick Gillespie, Plaintiff: Paul Mathew Bach, LEAD
ATTORNEY, Ahmad Tayseer Sulaiman, First, Daniel John McGarry,
Matthew H. Hector, Mohammed Omar Badwan, Sulaiman Law Group,
Ltd., Oak Brook, IL.
Blitt & Gaines, P.C., Defendant: Michael L. Starzec, LEAD
ATTORNEY, Blitt and Gaines, P.C., Wheeling, IL.
Opinion and Order
SCOTT FEINERMAN, United States District Judge.
November 15, 2013, Blitt & Gaines, P.C., a debt collection
law firm, sued Patrick Gillespie in state court on behalf of
its client, Citibank, N.A., over an alleged $3,200 debt. Doc.
1-1. Blitt filed the suit in the Richard J. Daley Center
Courthouse in Chicago, Illinois, which is part of the First
Municipal District of the Circuit Court of Cook County,
Illinois. Doc. 27 at 1; Doc. 35; Doc. 1-1 at 2. Gillespie,
though, lived in River Grove, Illinois, which lies in the
Fourth Municipal District. Doc. 27 at 1; Doc. 35; Doc. 1-2 at
2. Gillespie did not appear in the collection suit, and Blitt
obtained a default judgment. Doc. 27 at 1; Doc. 35.
Fair Debt Collection Practices Act (" FDCPA" )
requires debt collectors to file collection actions in the
" judicial district or similar legal entity" where
the contract was signed or where the debtor resides. 15
U.S.C. § 1692i(a)(2). When Blitt sued Gillespie in
November 2013, Newsom v. Friedman, 76 F.3d 813 (7th
Cir. 1996), explicitly permitted a debt collector to file a
collection suit in a municipal district of the Cook County
Circuit Court other than the one where the debtor resided.
Id. at 819 (holding that because " the
Municipal Department districts are neither defined as
judicial districts, nor ... function as judicial
districts," they " do not fit within the definition
of 'judicial district' as employed by the FDCPA"
). Just two weeks before Blitt filed its suit, in fact, a
panel of the Seventh Circuit, " see[ing] no reason to
depart from [the court's] existing approach in §
1692i cases," adhered to Newsom. Suesz v. Med-1
Solutions, LLC, 734 F.3d 684, 686 (7th Cir. 2013).
months later, however, the Seventh Circuit reversed course,
vacating the panel opinion in Suesz ; overruling
Newsom ; holding 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 case is filed" ; and, critically for this
case, giving its new interpretation of § 1692i
retroactive effect, even though debt collectors " ha[d]
relied on Newsom to allow them to choose venue
anywhere in the appropriate county." Suesz v. Med-1
Solutions, LLC, 757 F.3d 636, 638, 649 (7th Cir. 2014)
(en banc). For Blitt, this was very bad luck or, depending on
your perspective, proof that karma exists. Taking advantage
of this opportunity for litigation arbitrage, Gillespie
promptly sued under the FDCPA. Doc. 1. His lawyers--bereft of
shame or, again depending on your perspective, serving as
karma's logistics department--have brought twenty-one
other suits against Blitt and dozens more against other debt
collectors, all for collection suits initiated prior to the
en banc decision in Suesz. Doc. 26 at 10-11 & nn.9 &
light of Suesz, Blitt admitted that it had violated
§ 1692i by filing in the First Municipal District and
therefore conceded that the Gillespie was entitled to summary
judgment as to liability. Doc. 22; 3/10/2015 Tr. (Doc. 36-1)
at 2-3. Now before the court is Blitt's motion for
summary judgment as to damages, which contends that under the
particular facts and circumstances of this case,
Gillespie's damages should be nil. Doc. 26.
FDCPA allows the recovery of actual damages and statutory
damages. See 15 U.S.C. § 1692k(a). At the
hearing where Blitt conceded liability, Gillespie represented
that he would be seeking only statutory damages, as well as
attorney fees and costs:
THE COURT: ... The plaintiff, by agreement of the parties, is
granted summary judgement ... solely as to liability on the
FDCPA claim. And then the only issue is damages.
And what's the plaintiff looking for here?
MS BLACH: We're looking for statutory [damages] of $1,000
and reasonable attorney's fees and costs.
* * *
THE COURT: ... And what's your plan going to be with
respect to damages?
MS. BLACH: As I stated just a couple of moments ago,
we'll file an accounting,
and we're seeking $1,000 of statutory [damages] for the
3/10/2015 Tr. (Doc. 36-1) at 4-5.
Gillespie's representation that he would not seek actual
damages, Blitt's summary judgment motion nonetheless
argues that it is entitled to summary judgment as to actual
damages. Doc. 26 at 2-3. In support, and citing its
uncontested Local Rule 56.1(a)(3) statement, Blitt notes that
" [a]lthough Gillespie's Counsel regularly appears
at the Daley Center where the Collection Action was filed,
Gillespie has not filed an appearance, a motion to vacate or
a motion to transfer." Id. at 3; see
Doc. 27 at 1 (Blitt's Local Rule 56.1(a)(3) statement,
which asserts that " Gillespie never filed an appearance
in the Collection Case" ); Doc. 35 (Gillespie's
Local Rule 56.1(b)(3)(B) response, which states, "
Plaintiff agrees with Defendant's Local Rule 56.1
statement of material facts" ). Blitt adds that "
Gillespie does not contend that he would have appeared had
the Collection Case been filed in the 4th Municipal District,
ten (10) miles closer to his residence." Doc. 26 at 3.
Blitt concludes: " Accordingly, there is no genuine
issue of fact, Gillespie incurred no actual damages and
therefore, Blitt is entitled to an order of summary judgment
in its favor as to actual damages as a matter of law."
response, and contrary to what he had said in open court,
Gillespie argues that he should be allowed to " proceed
to trial to prove actual damages." Doc. 34 at 3. Even
putting aside Gillespie's earlier representation that he
was not seeking actual damages, summary judgment as to actual
damages is warranted.
damages may be recovered only if the FDCPA violation caused
harm to the plaintiff. As the Seventh Circuit put it, "
only losses flowing from an FDCPA violation are recoverable
as actual damages." Thomas v. Law Firm of Simpson &
Cybak, 244 Fed.Appx. 741, 743 (7th Cir. 2007). This
holding is consistent with subsequent decisions
characterizing actual damages as damages caused in some way
by the FDCPA violation. See Harold v.
Steel, 773 F.3d 884, 886 (7th Cir. 2014) (noting that a
debt collector who violates § 1692i " inflicts an
injury measured by the costs of travelling or sending a
lawyer to the remote court and moving for a change of
venue" ); Muha v. Encore Receivable Mgmt.,
Inc., 558 F.3d 623, 629 (7th Cir. 2009) (" Were the
plaintiffs seeking actual damages rather than just statutory
damages, they would have to present some evidence that they
were misled to their detriment." ). The holding also is
consistent with decisions construing the actual damages
provision in the Truth in Lending Act (" TILA" ),
15 U.S.C. § 1601 et seq. , see
Vallies v. Sky Bank, 591 F.3d 152, 157 (3d Cir.
2009) (collecting cases), which courts often consult for
guidance when applying parallel provisions in the FDCPA,
see, e.g., Jerman v. Carlisle, McNellie, Rini,
Kramer & Ulrich LPA, 559 U.S. 573, 588-89, 130 S.Ct.
1605, 176 L.Ed.2d 519 (2010), Zagorski v. Midwest Billing
Servs., Inc., 128 F.3d 1164, 1166 n.3 (7th Cir. 1997).
noted above, Blitt argues with record support that Gillespie
did not suffer any harm due to its unlawful (in retrospect)
filing of the collection suit in the wrong (in retrospect)
Cook County courthouse. Where, as here, the movant meets its
burden of " showing ... that there is an absence of
evidence to support to nonmoving party's case," the
non-movant has the burden to " go beyond the pleadings
... to demonstrate that there is evidence upon which a jury
could properly proceed to find a verdict in [his]
favor." Sterk v. Redbox Automated Retail, LLC,
770 F.3d 618, 627 (7th Cir. 2014) (internal quotation marks
omitted). Although Gillespie argues that the FDCPA's
actual damages provision
covers more than the costs of " an attorney appearing in
a remote incorrect venue," Doc. 34 at 4, he fails to
identify which actual damages he actually suffered,
much less adduce evidence from which a jury could conclude
that the § 1692i violation caused him actual harm.
brief does contend that " by virtue of being sued in an
inconvenient forum," he " was denied his day in
court" and " [a]s a result ... took a default
judgment." Id. at 8. But Gillespie does not
support this contention with evidence. As noted above,
Gillespie admits the assertions in Blitt's Local Rule
56.1(a)(3) statement--which, insofar as it speaks to the
point, refutes rather than supports the proposition that he
suffered actual damages--and he failed to file a Local Rule
56.1(b)(3)(C) statement that could have put evidence
regarding actual damages, such as an affidavit from Gillespie
himself, before the court. Gillespie does not need discovery
from Blitt to show that he suffered damages; he is in the
best position to make that showing. Accordingly, the
assertion in Gillespie's brief that he suffered a default
judgment as a result of Blitt's FDCPA violation, standing
alone and without supporting evidence, cannot forestall
summary judgment. See Mitze v. Colvin, 782
F.3d 879, 882 (7th Cir. 2015) (" assertions in briefs
are not evidence" ); In re Morris Paint & Varnish
Co., 773 F.2d 130, 134 (7th Cir. 1985) (" Arguments
and factual assertions made by counsel in a brief,
unsupported by affidavits, cannot be given any weight."
enough, Suesz tightened the definition of "
judicial district" in part due to the concern that
Newsom made it too easy for debt collectors to
" sue in a court that is not convenient to the debtor,
as this makes default more likely." 757 F.3d at 639. But
Suesz dealt only with liability; the decision does
not say or even imply that every violation of the
§ 1692i venue requirement causes actual damages. Nor
does Suesz relieve FDCPA plaintiffs from having to
adduce evidence of actual harm once a defendant moving for
summary judgment meets its initial burden. Because Gillespie
never goes beyond his pleadings and his unsupported
assertions to prove that he suffered any actual damages
flowing from the FDCPA violation, Blitt's summary
judgment motion is granted with respect to actual damages.
statutory damages, the FDCPA authorizes plaintiffs to collect
such damages " as the court may allow, but not exceeding
$1,000." 15 U.S.C. § 1692k(a)(2)(A). In determining
the amount of statutory damages to award, " the court
shall consider, among other relevant factors ... the
frequency and persistence of noncompliance by the debt
collector, the nature of such noncompliance, and the extent
to which such noncompliance was intentional." 15 U.S.C.
§ 1692k(b)(1). Although the statute says " the
court," the Seventh Circuit has held that " §
1692k(a)(2) of the FDCPA provides for trial by jury in
determining statutory additional damages." Kobs v.
Arrow Serv. Bureau, Inc., 134 F.3d 893, 898 (7th Cir.
1998); see also Sibley v. Fulton DeKalb
Collection Serv., 677 F.2d 830, 832 (11th Cir. 1982).
The district court's decision in Dewey v. Associated
Collectors, Inc., 927 F.Supp. 1172, 1176 (W.D. Wis.
1996), which Blitt cites as supplemental authority, Doc. 42
at 3, concluded otherwise, but it of course must yield to
three factors enumerated in § 1692k(b)(1) might be
thought to disfavor an award of substantial statutory damages
here. In particular, one could not reasonably say that Blitt
intentionally violated the FDCPA, for at the time it filed
the collection suit, Newsom permitted it to file at
the Daley Center. Nevertheless, § 1692k(b) is
multifaceted and open-ended,
granting the factfinder considerable discretion to set
statutory damages. Even those circuits where district judges
decide statutory damages without a jury have never suggested
that statutory damages must be disallowed for very
marginal violations of the FDCPA; rather, it is a matter of
discretion. See Lester E. Cox Med. Ctr. v.
Huntsman, 408 F.3d 989, 993-94 (8th Cir. 2005) (finding
no abuse of discretion in declining to award statutory
damages because, " [f]or de minimis or
technical violations, some courts refuse to award
statutory damages" ) (emphasis added); Graziano v.
Harrison, 950 F.2d 107, 114 (3d Cir. 1991) (" in
the instance of a single, trivial, and unintentional
violation of the Act, it is within the court's
discretion to decline to award statutory damages at
all" ) (emphasis added); Pipiles v. Credit Bureau of
Lockport, Inc., 886 F.2d 22, 27-28 (2d Cir. 1989)
(holding that " ample discretion" permits an award
of $0 in statutory damages where the defendant " did not
intend to deceive or harass [the plaintiff] and there is no
contention that [the defendant] has frequently or
persistently violated the Act" ).
the FDPCA contains a bona fide error defense, 15 U.S.C.
§ 1692k(c), the Supreme Court has held that it does not
apply when the mistake is one of law. See
Jerman, 559 U.S. at 604-05 (" the bona fide
error defense ... does not apply to a violation of the FDCPA
resulting from a debt collector's incorrect
interpretation of the requirements of that statute" ).
It follows that mistakes of law do not categorically preclude
statutory damages, either. As Jerman stated, "
we see no conflict ... in reading the Act to permit
a court [in the Seventh Circuit, read: 'a jury'] to
adjust statutory damages for a good-faith misinterpretation
of law, even where a debt collector is not entitled to the
categorical protection of the bona fide error defense."
Id. at 594 (emphasis added). Jerman then
reiterated that § 1692k(b) merely " vests courts
with discretion to adjust [statutory] damages where
a violation is based on a good-faith error."
Id. at 598 (emphasis added).
a problem for Blitt's motion, for as the Seventh Circuit
has explained--with reference to 17 U.S.C. § 504(c), a
statutory damages provision in the Copyright Act--"
[w]hen there is a material dispute of fact to be resolved
or discretion to be exercised in selecting a
financial award, then either side is entitled to a
jury." BMG Music v. Gonzalez, 430 F.3d 888, 892
(7th Cir. 2005) (emphasis added). By contrast, only " if
there is no material dispute and a rule of law
eliminates discretion in selecting the remedy, then summary
judgment is permissible." Id. at 892-93
(emphasis added). Section 1692k(b) channels, but does not
eliminate in any circumstance, the jury's discretion to
award statutory damages. Accordingly, summary judgment is not
appropriate for statutory damages.
court recognizes that sending the question of statutory
damages to the jury, with a maximum recovery of $1,000, may
cause a waste of private and public resources that is
difficult to justify. Indeed, some judges have suggested that
awarding statutory damages absent any hint of actual damages
may pose jurisdictional problems under Article III. As
then-Judge Kennedy put it in a TILA case: " The
judiciary must not be used as a mechanical device for
enforcing sanctions when no real harm has been done to a
cognizable legal interest. If a violation is de
minimis, to insist that statutory penalties be awarded
may contravene the constitutional rule that our jurisdiction
is limited to a case or controversy." Dixey v. Idaho
First Nat'l Bank, 677 F.2d 749, 753 (9th Cir. 1982)
(Kennedy, J., concurring).
the Seventh Circuit has held that " the [FDCPA] does not
require proof of actual damages as a precursor to the
recovery of statutory damages. In other words, the Act is
blind when it comes to distinguishing between plaintiffs who
have suffered actual damages and those who have not."
Keele v. Wexler, 149 F.3d 589, 593-94 (7th Cir.
1998) (citations omitted); see also Phillips v.
Asset Acceptance, LLC, 736 F.3d 1076, 1083 (7th Cir.
2013) (" Proof of injury is not required when the only
damages sought are statutory." ); Schlueter v.
Latek, 683 F.3d 350, 356 (7th Cir. 2012) (" There
are ... plenty of statutes that provide bounty-like relief in
the form of statutory damages to which a plaintiff is
entitled without proof of injury." ). Although
Keele, Phillips, and Schlueter do not
address Article III specifically, the Seventh Circuit has
held that plaintiffs have Article III standing to sue under
the Video Privacy Protection Act, 18 U.S.C. § 2710,
regardless of whether they suffered any actual injury.
See Sterk, 770 F.3d at 623. The reasoning
in Sterk applies equally to the FDCPA: "
Congress may not lower the threshold for standing below the
minimum requirements imposed by the Constitution, but
Congress does have the power to enact statutes
creating legal rights, the invasion of which creates
standing, even though no injury would exist without the
statute." Ibid. (internal quotation marks
omitted and emphasis added); see also
Matmanivong v. Nat'l Creditors Connection, Inc.,
79 F.Supp.3d 864, 2015 WL 536635, at *2-4 (N.D. Ill. Feb. 9,
2015) (rejecting an Article III challenge to a statutory
damages lawsuit under the FDCPA).
Supreme Court recently granted certiorari to consider a
similar Article III issue in Spokeo, Inc. v. Robins,
135 S.Ct. 1892, 191 L.Ed.2d 762 (2015). Unless and until the
Supreme Court says otherwise, however, Sterk and
Keele compel the conclusion that Gillespie has
standing, and BMG Music and Kobs that
summary judgment is not proper given the jury's residual
discretion over statutory damages. Unfortunately for Blitt,
this is so even though when it sued Gillespie at the Daley
Center, then-binding Seventh Circuit precedent explicitly
allowed it to do so.
briefing on this motion concluded, Blitt brought to this
court's attention an FDCPA case recently decided by
another judge in this District, Oliva v. Blatt,
Hasenmiller, Leibsker & Moore LLC, 2015 WL 4253795 (N.D.
Ill. July 14, 2015). Doc. 42 at 1-2. Oliva is
another of Gillespie's lawyers' lawsuits against debt
collectors who filed a collection action at the Daley Center
pre- Suesz. The Oliva court granted summary
judgment to the defendant, finding that it was not liable for
filing in the wrong municipal district because,
notwithstanding Jerman, the debt collector's
" reliance on Newsom was not a legal error that
would preclude application of the FDCPA's bona fide error
defense." 2015 WL 4253795 at *4. Whether or not it was
correctly decided, Oliva is inapposite. As noted
above, Blitt has already conceded liability. Doc. 22;
3/10/2015 Tr. (Doc. 36-1) at 2-3. And Oliva says
nothing about damages, which is the only issue raised by
Blitt's summary judgment motion.
foregoing reasons, Blitt's summary judgment motion is
granted in part and denied in part. Gillespie cannot recover
actual damages, but he may proceed as to statutory damages
and, if successful, may attempt to recover his costs and
attorney fees under § 1692k(a)(3).