News

December 12, 2012

Marx v. General Revenue Corporation

Olivea Marx filed a complaint under the federal Fair Debt Collection Practices Act after General Revenue Corporation sought to collect a student loan. Marx said she was subjected to threatening phone calls and a fax sent to her employer seeking information about her employment status. A trial court agreed with GRC that the fax to her employer did not violate the law. Pursuant to Federal Rules of Civil Procedure 54(d), the court ordered Marx to pay GRC's court costs. AARP's friend-of-the-court brief in this case argues that the FDCPA prevents the costs from being shifted to a losing FDCPA plaintiff unless the lawsuit was filed in bad faith and for the purposes of harassment.

Elenea Marx defaulted on her student loans. In September 2008, her guarantor, EdFund, a division of the California Student Aid Commission, hired the General Revenue Corporation (“GRC”) to collect on the account. That same month, a GRC agent faxed Marx's employer a form displaying basic contact information for GRC. It also left blanks for the employer to fill in information about the employee’s employment status and other related information.

The Fair Debt Collection Practices Act (“FDCPA”) prohibited communications with third parties in connection with the collection of debt. It also allowed courts to award costs to prevailing defendants in actions brought in bad faith and for the purpose of harassment. Rule 54(d) of the Federal Rules of Civil Procedure, however, prevented courts from awarding courts if a statute provided otherwise. Marx sued GRC in October 2008, alleging abusive and threatening phone calls in violation of the FDCPA. She amended her complaint in March 2009 to add a claim that GRC violated the FDCPA by sending the fax to her workplace to request employment information.

The district court dismissed her complaint, holding that the fax was not a “communication” within the meaning of the act, and ordering Marx to pay court costs. The United States Court of Appeals, Tenth Circuit, affirmed with one dissent, holding that the fax was not a communication. The Tenth Circuit also held that the act did not prevent courts from awarding costs to prevailing defendants. Marx’s petition for an en banc rehearing was denied.
Question

Did the Fair Debt Collection Practices Act prevent the district court from awarding costs to the General Revenue Corporation unless Marx filed her claim in bad faith and for the purpose of harassment?

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The above statements do not represent those of Weston Legal or Michael Weston and they have not been reviewed for accuracy. The statements have been published by a third party and are being linked to by our website only because they contain information relating to debt. Nothing in this article should be construed as legal advice given by Weston Legal or Michael Weston. To view the source of the article, please following the link to the website that published the article. Articles written by Michael W. Weston can be viewed here: To report any problem with this article please email studentloan@westonlegal.com

 

 

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