Supreme Court to CountryWide: Ignorance of the Law is No Excuse
Ignorantia juris non excusat or Ignorantia legis neminem excusat.
One case decided by the Supreme Court this week had a decidedly everyman theme to it. First there is the maxim the majority, written by Justice Sonia Sotomayor, uses to define its opinion: "ignorance of the law is no excuse." Justice Sotomayor puts it in slightly more formal terms, but that is the basis for the majority holding that debt collectors may be sued for wrongly pursuing debt collection, even if their case is based on a bona fide legal error.
The second element that might sound like a bit of good luck for the little guy, is the underlying case. The Wall Street Journal reports that in the case of Jerman v. Carlisle, the homeowner, Karen Jerman had foreclosure proceedings initiated against her by one of everyone's favorite companies, CountryWide Home Loans, Inc. Jerman disputed that the debt existed and Countrywide later had to acknowledge that was indeed the case. Carlisle, McNellie, Rini, Kramer & Ulrich, the law firm representing ContryWide, withdrew their suit. Jerman then sued the firm for violating federal debt collection practices when they told her they would assume her debt was valid unless she disputed it in writing.
According to the Journal, Justice Sotomayor disagreed with the lower court who ruled in favor of the law firm because they had made a legal mistake. "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." The majority noted that Congress did not appear to write in an exception to the law for anyone who makes an error.
Justice Anthony Kennedy, joined by Justice Samuel Alito dissented. They argued the decision would open the floodgates of litigation by debtors against any debt-collector who makes an error. Justice Sotomayor rejected that criticism. "We do not foresee that our decision today will place unmanageable burdens on lawyers practicing in the debt collection industry," she wrote.
Little guy 1, big bad debt-collectors, 0. For once.
Related Resources:
- Debt Collectors Can Face Lawsuits for Mistakes, Court Says (Wall Street Journal)
- Opinion, Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, et al. (pdf, SupremeCourt.gov)
- The Fair Debt Collection Practices Act (FindLaw)
- Credit - Debt Collection (FindLaw)
- Collections and Consumer Rights FAQ (provided by Boyle, Neblett & Wenger)
- Creditors' Legal Remedies to Help Collect Debts (provided by Law Offices of Barry Levinson)
