(CN) - Attorneys cannot hide behind an honest mistake should they violate federal debt-collection laws when chasing down debt, the Supreme Court ruled Tuesday.
The ruling comes after the law firm of Carlisle, McNellie, Rini, Kramer & Ulrich filed suit in Ohio state court in 2006 on behalf of Countrywide Home Loans to foreclose on the mortgage for property owned by Karen Jerman.
The lawsuit included a notice that the mortgage debt would be assumed valid unless Jerman disputed it in writing. Jerman's attorney sent a letter disputing the debt, and Countrywide confirmed that the debt had been paid in full.
The law firm withdrew its foreclosure lawsuit.
Jerman fired back with a lawsuit, seeking class certification and damages for violating the Fair Debt Collection Practices Act. She contended that the firm broke the law by stating that her debt would be assumed valid unless she disputed it in writing.
The district court found that the woman's rights had been violated, but concluded that the law firm was shielded from liability because the violation was not intentional and "resulted from a bona fide error.
The 6th Circuit found that the fair-debt law extends to "mistakes of the law."
In writing the decision, Justice Sonia Sotomayor said the court declines "to adopt the expansive reading" of the law. "We have long recognized the 'common maximum, familiar to all minds, that ignorance of the law will not excuse any persons, either civilly or criminally.'"
In his dissent, Justice Anthony Kennedy said the decision "aligns the judicial system with those who would use litigation to enrich themselves at the expense of attorneys who strictly follow and adhere to professional and ethical standards."
He continued: "When the law is used to punish good-faith mistakes... the court, by failing to adopt a reasonable interpretation to counter these excesses, risks compromising its own institutional responsibility to ensure a workable and just litigation system."
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