Why make a federal case out of a $1,300 debt?  And why should hospitals care—especially those in the Seventh Circuit, which covers a large part of the Midwest?

Indiana is divided into counties; the counties, into townships.  Mark Suesz lived one county over from Marion County.  He was treated at a hospital in Marion County’s Lawrence Township.  The hospital turned his unpaid debt over to a debt-collection company, Med-1 Solutions.  Med-1 filed a collection action in Marion County’s Pike Township.  Suesz defaulted, and Med-1 got a $1,280 judgment.

Suesz sued [try saying that three times, really fast] in federal court.  He claimed that by suing in a county that he didn’t reside in and in a township other than the one where the hospital was located, Med-1 had violated the Fair Debt Collection Practices Act (FDCPA) and was guilty of forum-shopping in an effort to make it burdensome for debtors to get to court to defend themselves.  The federal district court ruled against Suesz, and he appealed to the Seventh Circuit.  Last year that court ruled against him, two to one, reasoning that the FDCPA did not limit collection actions to a particular township—only to a particular county.

Then yesterday, the Seventh Circuit Court reheard the case, with all ten judges present.  And based on the judges’ questions—especially those of Judge Posner, who had dissented in the earlier decision—Med-1 should be concerned.  But, of course, we won’t know anything with certainty until a decision is issued.

Now, why should hospitals be concerned?  Two reasons.  First, Suesz is trying to have his case certified as a class action.  If he’s successful, every debtor with the same sort of geographic fact pattern (i.e., sued in a county he doesn’t live in and not in the township where the debt was incurred) may have a case.  Second, although the wrong—if there was a wrong—was committed by the debt collector and not the hospital, the publicity around cases like this tends to focus on the fact that the underlying debt arose out of medical treatment, and the hospital industry gets a black eye.

The case is Suesz v. Med-1 Solutions, Seventh Circuit, case no. 13-1821.