Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, L.P.A.

Background

Petitioner Karen Jerman sued a law firm that filed a mortgage foreclosure and sent a notice saying the debt would be assumed valid unless disputed in writing. Jerman disputed the debt, the mortgage company confirmed it was paid, and the firm withdrew the case. Jerman then sued under the Fair Debt Collection Practices Act (FDCPA), arguing the notice violated the statute’s notice rules.

Reasoning

The core question was whether the FDCPA’s “bona fide error” defense (which shields a debt collector who shows an error was unintentional and resulted despite procedures to avoid it) covers mistakes about what the FDCPA itself requires. The Court held it does not. The majority relied on the long-standing rule that ignorance of the law is not a defense, contrasted the FDCPA text with harsher FTC penalty language that does require knowledge, and pointed to the statute’s history and the phrase about maintaining “procedures reasonably adapted” as suggesting the defense was meant for clerical and factual errors, not errors of law.

Real world impact

The decision means debt collectors and lawyers cannot avoid FDCPA liability simply by saying they misunderstood the statute’s legal requirements. Courts retain discretion over damages and fees, and the FTC advisory-opinion safe harbor remains available though it has been used rarely. Congress could amend the law if it wants to treat legal mistakes differently.

Dissents or concurrances

Justice Kennedy’s dissent warned the ruling will chill lawyer advocacy and encourage costly suits over technical violations. Justice Breyer concurred, stressing the FTC advisory option; Justice Scalia concurred in the judgment but criticized some of the majority’s legislative-history reasoning.