7th Circuit affirms rejected costs award in debt collector suit

The 7^th Circuit Court of Appeals has affirmed judgment for a man who claimed he was wrongly accused of owing money to a debt collector but declined to award him the more than $25,000 he had requested.

In Norman Peck v. IMC Credit Services, 19-3187, the U.S. District Court for the Southern District of Indiana entered judgment for Norman Peck under Federal Rule of Civil Procedure 68 after he sued IMC Credit Services for mailing him a letter to collect a debt that he argued he did not owe.

Specifically, the letter’s envelope had a clear pane that revealed a barcode containing Peck’s personal information, which prompted Peck to sue IMC for violating the Fair Debt Collection Practices Act. He argued the act was violated in numerous ways, including by revealing his personal information on the envelope and by failing to verify that Peck owed the debt after he disputed it.

Peck sought a range of damages and the “costs of the action.” But while he accepted IMC’s offered judgment of $1,101, plus costs to be awarded by the court, the district court rejected Peck’s requests for  $25,293.65 in costs, as well as $47,425.02 in punitive damages.

Finding none of Peck’s costs were recoverable under 28 U.S.C. § 1920, the district court denied his bill of costs and entered a separate final judgment order awarding Peck $1,101.

On appeal, Peck argued the 7^th Circuit does not yet have jurisdiction over the appeal because no final judgment had been entered and many issues remained to be resolved in his suit. Particularly, he claimed the district court had not yet sufficiently articulated a rationale for denying his requested costs and contends the district court “prematurely forwarded” his appeal to the 7^th Circuit.

But the 7^th Circuit declared it did have jurisdiction over the appeal, noting the district court entered an order quantifying the award of costs, which was a final decision.

“This final decision on costs was appealable separately from the merits,” the 7^th Circuit wrote in a per curiam June 5 order, which was issued without hearing oral arguments. “… And even if we treated this as an appeal from the entry of judgment, we would have jurisdiction because the notice of appeal came after the district court entered a final judgment order, … and the district court has ruled on any motions that could affect appellate jurisdiction.”

The circuit court further rejected Peck’s argument that the judgment of “$1,101.00, plus costs” included anything that he could recover under § 1692k(a) of the act.

“Without a special definition in the Act, the ‘costs’ it contemplates are simply those awardable under Federal Rule of Civil Procedure 54(d), which ‘codifies a venerable presumption that prevailing parties,’ such as Peck, ‘are entitled to costs.’ … A statute must set forth a standard for awarding costs that is different from Rule 54(d)(1) to displace the rule; section 1692k(a)(3) does not,” the 7^th Circuit wrote.

“The ‘costs’ recoverable under Rule 54(d) are enumerated in 28 U.S.C. § 1920. … They do not include any kind of damages, nor the compensation Peck seeks for his time and mailing expenses. Therefore, the district court correctly denied Peck’s bill of costs,” the court concluded.