High court rulings on debt collection and attorney’s fees

NICK EICHER, HOST: It’s Tuesday the 17th of December, 2019. Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. The Supreme Court handed down two opinions in cases argued in October. 

First, victory for a debt collection firm. 

In this case, a man failed to pay his credit card debt. A collection company sued him for the money, but the wrong person accepted the lawsuit papers. 

The man lost his case by default judgment, but he didn’t learn about it until years later, when he applied for a mortgage.

So he sued, arguing federal law doesn’t allow for serving the wrong person lawsuit papers. 

The justices disagreed, overwhelmingly, 8 to 1, reasoning that the law’s one-year limit in which to sue was long past. Exceptions to the law exist, but the man didn’t raise those in time.

EICHER: The second opinion is unanimous. It upholds the so-called “American Rule”—that is, who pays the attorney’s fees. The context is a drawn-out dispute in which an inventor contested the U.S. Patent Office’s decision to deny his request to register a patent. He appealed several times, and in the course of doing so racked up massive attorney’s fees for both sides. 

The Patent Office thought he should have to pay its legal bill, but the justices said differently: The American Rule says each litigant must pay for his own lawyer, win or lose. And it’ll stay that way unless Congress says otherwise and writes a law saying so.

(AP Photo/Evan Vucci) A view of the Supreme Court in Washington, Wednesday, June 27, 2012.

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