Marx v. General Revenue Corp.

Background

A woman who defaulted on a student loan sued a private debt collector under the Fair Debt Collection Practices Act (FDCPA), claiming repeated harassing calls and false threats. The collector defended, made a Rule 68 settlement offer that the plaintiff did not accept, and prevailed at a bench trial. The collector then sought court costs and the trial court ordered the plaintiff to pay many of those costs. The plaintiff argued that the FDCPA allows costs for defendants only when the suit was brought in bad faith and for harassment, so the court lacked authority to award costs here.

Reasoning

The Justices examined Federal Rule of Civil Procedure 54(d)(1), which says courts may award costs to the prevailing party “unless a federal statute . . . provides otherwise,” and the FDCPA provision that allows courts to award fees and costs when a suit was brought in bad faith for harassment. The Court held that the FDCPA sentence does not displace the Rule because it describes one situation where costs may be awarded, but does not prohibit awarding costs in other circumstances. The majority relied on the ordinary background rules about attorney fees and costs, the statute’s context, and examples of other laws that expressly limit costs when Congress intends to do so. The Court therefore affirmed the appeals court’s judgment allowing costs under Rule 54(d)(1).

Real world impact

After this decision, debt collectors who win FDCPA cases can seek costs under the general federal rule even when a judge does not find bad faith, though trial judges keep discretion and may consider a plaintiff’s finances before ordering costs. The Court did not resolve other FDCPA questions.

Dissents or concurrances

A dissent argued the statute’s plain text limits costs to bad-faith harassment suits and would bar costs otherwise; that view would have reversed the appeals court.