Friday, July 26, 2013

Attorney Reports on Jurisdiction Abuses in Marion County Small Claims Court

The Indianapolis Business Journal reports:
An attorney’s report examining more than 7,700 lawsuits filed by an Indianapolis-based trucking school in just two Marion County township small-claims courts alleges systemic abuses that resulted in thousands of judgments against people who may never have stepped foot in the county or the state.

“I tried to get as much data as I could to establish there are real problems here,” said Jeffrey C. Boulden, who provided copies of his report this week to key judges, Supreme Court justices, the Indiana attorney general’s office and media outlets.

Boulden asserts Driver Solutions LLC filed 7,711 suits in Franklin and Warren township small-claims courts from 2008 through April 30, 2012. That total equals about 148 cases per month – or more than six cases per business day – predominantly against driver trainees nationwide. The company has campuses around the country.

Boulden reviewed 25 percent of those case files as a sample and found 93 percent of the sample cases were filed against defendants who lived outside Indiana, which he claims violates the Fair Debt Collections Practices Act. The federal law regarding venue requires such collection actions be filed in the jurisdiction where a contract was signed or where a consumer resides.

The report also claims defendants in numerous cases were improperly served notice through standard U.S. mail, and that about 70 percent of judgments exceeded the statutory small-claims cap of $6,000. Boulden says any such judgments should be voided.
Warren Township Small Claims Judge Garland Graves said he had seen the report and was reviewing Driver Solutions cases filed after he took the bench in 2011.

“I am concerned,” Graves said, and he noted the township no longer allows service via regular mail. But he has concerns, too, about Boulden’s report. “A lot of incomplete information was put forth,” Graves said. For instance, he said some suits might have been properly served, but notice of service could be confidential because it contained Social Security numbers.

“He never contacted me as a judge to address any concerns he may have,” Graves said.

Graves noted Driver Solutions contracts carried a venue clause in which parties agree that any litigation would be filed in a Marion County township court. But he said he couldn’t say whether that provision might violate federal collections law.

“The federal (Fair) Debt Collection (Practices) Act is something I don’t have jurisdiction over,” Graves said. That’s an issue someone could bring in federal court, he said.
With all due respect to Judge Graves, he is wrong.  FDCPA claims can be brought in state court.  You don't have to be in federal court for a federal law to apply.

It is inexcusable that these cases are allowed to proceed in Marion County Small Claims Courts.   Could it be though that the business from Driver Solutions helps the bottom line?  At an average of 148 cases per month, that's about $13,000 a month in filing fees from one filer alone.  That is precisely why we need to take profit making out of the Marion County Small Claims Court system.

Special thanks to Attorney Boulden for his tireless work in researching and publicizing this problem with the Indianapolis small claims courts.


Unigov said...

"That’s an issue someone could bring in federal court" - right, that's simple and inexpensive.

Graves is unfit to serve.

Paul K. Ogden said...

You can make FDCPA claims in state court. I'm not sure why he would think federal law only applies when you're in federal court.

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Neil said...

The law regarding venue requires collection actions to be filed in the jurisdiction where a consumer resides. These cases should have been dismissed for lake of jurisdiction.

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