Midland Funding, LLC v. Johnson

Case Updates

The Supreme Court held that the filing of a proof of claim in a bankruptcy proceeding cannot be the basis for a claim under the Fair Debt Collection Practices Act (“FDCPA”). Reversing the Eleventh Circuit’s decision, the Court held that the filing of a proof of claim in bankruptcy that is obviously time barred is not a “false,” “deceptive,” “misleading,” “unfair,” or “unconscionable” debt collection practice within the meaning of the FDCPA.

The U.S. Chamber urged the Supreme Court to reverse an Eleventh Circuit decision holding that certain bankruptcy creditors are subject to liability under the Fair Debt Collection Practices Act (“FDCPA”) for filing proofs of claim on time-barred debts in full compliance with the Bankruptcy Code and Rules.

The Chamber’s brief argues that the Eleventh Circuit’s ruling misinterprets both the FDCPA and the Bankruptcy Code, needlessly pitting one statute against the other and causing untold damages to the bankruptcy system. The brief explains that the decision below—if left unchecked—will harm the very debtors the FDCPA was designed to protect, generate a number of additional conflicts between the FDCPA and the Bankruptcy Code, and spur a rash of litigation that seeks not to remedy any actual harm to debtors but instead to benefit the FDCPA bar.

Helgi C. Walker, Alex Gesch, and Nick Harper of Gibson, Dunn & Crutcher LLP served as counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.