The Supreme Court Wednesday made it easier for consumers to sue debt collectors for sending erroneous collection notices.
The high court, in a 7-2 opinion by Justice Sonia Sotomayor, ruled that debt collectors can't shield themselves from such lawsuits by arguing that they made a legal error when sending a collection notice.
"We have long recognized the common maxim, familiar to all minds, that ignorance of the law will not excuse any person, either civilly or criminally," Justice Sotomayor wrote in a 30-page opinion.
At issue were the actions of an Ohio law firm that initiated foreclosure proceedings on behalf of Countrywide Home Loans Inc.
The homeowner, Karen Jerman, disputed that the debt existed. Countrywide later acknowledged that Ms. Jerman had in fact paid the debt, and the law firm withdrew the foreclosure lawsuit.
Ms. Jerman then sued the law firm, arguing that it violated federal debt-collection law by stating in its foreclosure suit that Ms. Jerman's alleged debt would be assumed to be valid unless she contested in writing.
A lower court agreed with Ms. Jerman that the firm violated the federal Fair Debt Collection Practices Act, but ruled that the law firm was shielded from liability because the violation wasn't intentional and was the result of a bona fide legal error.
Justice Sotomayor and the court disagreed, ruling that Congress hadn't explicitly provided a mistake-of-law defense to debt collectors.
Justice Anthony Kennedy, joined by Justice Samuel Alito, dissented, saying the court's ruling could allow abusive litigation by plaintiffs' lawyers.