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Argument recap: Court mulls statutory construction in dispute over “costs” of litigation

Last week’s oral argument in Marx v. General Revenue Corporation devolved into a relaxed examination of a small nugget of statutory interpretation.  The case is a simple one.  Marx sued General Revenue Corporation (GRC), claiming that GRC’s efforts to collect a debt from her had violated the Fair Debt Collection Practices Act (FDCPA).   When Marx lost after a bench trial, GRC submitted a bill to Marx seeking payment of its costs (excluding attorney’s fees).  Federal Rule of Civil Procedure 54(d) provides that a prevailing party can recover its costs “[u]nless a federal statute . . . provides otherwise.” Marx protested, pointing out that the FDCPA authorizes an award of fees and costs if the case was brought for bad faith and harassment.  Because this case was not brought in bad faith, Marx contended, she should not have to pay GRC’s costs.

Allison Zieve from Public Citizen appeared on behalf of Marx.  As soon as she stated her position – that the FDCPA bars an award of costs to prevailing parties because it “provides otherwise,” she was greeted by a blizzard of skepticism.  First, Justice Scalia intervened, characterizing her argument as one of repeal by implication (which is of course disfavored).  When Zieve responded that her construction was necessary to give any meaning to the reference to “costs” in the FDCPA, Justices Ginsburg and Sotomayor both jumped in to challenge her.  Justice Ginsburg asked about GRC’s argument that the statute needed to mention costs to insure that defendants get both fees and costs in harassment cases.  Justice Sotomayor suggested that there was statutory surplusage under any reading, because the courts could award costs and fees for bad faith without regard to the FDCPA.  Justice Ginsburg was also concerned that Zieve’s reading would leave defendants under the FDCPA worse off than defendants under similar statutes (like the Truth in Lending Act).  Zieve responded to the last point at length, emphasizing the disparate drafting history of the various statutes and also the evidence that malfeasance by debt collectors is sufficiently serious that her more onerous interpretation of the statute is sensible.

Assistant to the Solicitor General Eric Feigin appeared in support of Marx.  He portrayed the case as an example of the specific governing the general.  The Court allowed him to present that argument at length, but eventually Justice Breyer interrupted, suggesting almost apologetically that the problem for him is that he cares about the legislative history.  Because the legislative history of the FDCPA provision plainly portrays this as a provision designed to protect defendants from harassing litigation, he was dubious about reading it to prevent them from benefiting from the “baseline” rule that prevailing parties can recover their costs.  He quipped: “What do you do with some obstreperous judge who doesn’t just look at the language?”

The most amusing point of the argument came when Feigin suggested that the drafters would not have needed to refer to costs in the FDCPA to ensure they were awarded, because the drafter would have known about Rule 54’s treatment of costs.   Supporting Justice Breyer, Justice Scalia produced considerable laughter in the courtroom with his suggestion that “we have to assume ignorance of the drafter.  As a general principle.”  As typically happens when an advocate tries to resist the jokes the Justices tell among themselves, Feigin seemed to make little headway when he pressed on with his argument that the statute is best read on the assumption that the FDCPA drafters were aware of Rule 54.

Supreme Court veteran Lisa Blatt appeared for GRC.  On her side, she was greeted with immediate skepticism by Justice Kagan, who offered the view that the FDCPA is most naturally read as “providing otherwise” than Rule 54.  Taking the chance to confront her opponent head-on, and presumably matching her tone to Justice Kagan’s academic background in federal courts, Blatt argued that Zieve’s position amounted to treating the FDCPA as field preemption.  Justice Kagan, however, remained unpersuaded, emphasizing her view that the FDCPA conclusively describes the rules for awarding fees and costs.  Repeatedly throughout Blatt’s argument, Justice Kagan came back to her view that the statute conclusively describes the circumstances for awarding costs and fees, and that their exclusion of “mere” prevailing party status meant that Blatt’s client should not receive fees.  Blatt held her own, sticking to her view despite repeated rejection by Kagan.

Probably the best way to describe the argument is that the parties seem to have battled to a draw.  At least at this point in time, some of the Justices seem firmly committed to each side of the case.  What will happen when they discuss the case privately, of course, remains to be seen.

Recommended Citation: Ronald Mann, Argument recap: Court mulls statutory construction in dispute over “costs” of litigation, SCOTUSblog (Nov. 15, 2012, 11:42 AM),