Center Township. Decatur Township. Franklin Township. Lawrence Township. Perry Township. Pike Township. Warren Township. Washington Township. Wayne Township. These are the small claims courts that together comprise the Marion County Small Claims Court. For years, anyone who had any dealings with these courts knew what was going on: creditors and debt collectors would file all of their debt collection cases in a single township, regardless of where the consumer who was being sued lived. Court rules permit this “forum shopping.” There were many reasons for it, but the reasons all had to do with providing an advantage to the debt collector plaintiffs and a disadvantage to the consumer defendants. Some of the reasons are detailed in a July 18, 2011 article in the Wall Street Journal titled “In Debt Collecting, Location Matters.” The article can be found here: http://online.wsj.com/news/articles/SB10001424052702303365804576433763597389214. Despite some “reforms” occasioned by the Wall Street Journal article, Indiana law still permits this forum shopping to the detriment of Indiana consumers.
Federal law – namely, the Fair Debt Collection Practices Act, or “FDCPA,” now, however, has put significant restrictions on the ability of debt collectors (unfortunately, the FDCPA does not apply to most original creditors) to file in whatever township small claims court they choose.
Let me explain. The FDCPA has, for a long time, said that it is an unfair collection practice for a debt collector to sue a consumer in any “judicial district” other than where the contract was signed or the consumer lives. In Indiana, “judicial district” is typically a county. So, the FDCPA prohibits a debt collector from suing a consumer in any county other than were the consumer lives or the contract creating the debt was entered into. Using this provision, Indiana consumer Mark Suesz sued debt collector Med-1 Solutions and contended that in Marion County Small Claims Court, “judicial district” meant township small claim court. If this were true, argued Suesz, suing in any township small claims court other than where the consumer lived or entered into the contract would violate the FDCPA. The district court disagreed. The district court thought “judicial district” meant county and therefore a debt collector could pick any small claims court in Marion County and it would not be unfair. Mr. Suesz appealed to the Seventh Circuit Court of Appeals. Initially, a three judge panel of the Seventh Circuit agreed with the district court. Undaunted, Mr. Suesz asked for a rehearing en banc (before all the judges of the Seventh Circuit) and it was granted. On rehearing, the Seventh Circuit ruled on July 2, 2014 that the term “judicial district” under the FDCPA means the “the smallest geographic area that is relevant for determining venue in the court system in which the case is filed.” What that means in practical terms is that, because the small claims court in Marion County is broken down into various townships (unlike all other small claims courts in Indiana), “judicial district” in Marion County Small Claims Court means the township. The citation to this case is Suesz v. Med-1 Solutions, LLC, 2014 WL 2964771 (7th Cir. July 2, 2014).