The key litigated issue in Marx v. General Revenue Corp. was whether Section 1692k(a)(3) of the Fair Debt Collection Practices Act (FDCPA) displaced the district court's discretion to award costs under FRCP 54(d)(1) in the absence of bad faith.

This case arose out of a dispute between Olivea Marx, who defaulted on a student loan, and General Revenue Corporation (GRC), who was hired to collect this debt. Marx alleged that GRC violated the FDCPA, a consumer protection statute, by harassing her with phone calls and threats. The district court found in favor of GRC and ordered Marx to pay GRC $4,543.03 in costs under FRCP 54(d)(1). In a motion to vacate the award, Marx argued that the court lacked authority to award costs because Section 1692k(a)(3) of the FDCPA provides that a court can only award costs if it finds the action was brought in bad faith and for purposes of harassment. Marx contended that Section 1692k(a)(3) was the exclusive basis for awarding costs in FDCPA cases. The district court rejected this argument and the US Court of Appeals for the Tenth Circuit affirmed.

On February 26, 2013, in Marx v. General Revenue Corp., the US Supreme Court issued an opinion, holding that Section 1692k(a)(3) of the FDCPA did not displace the district court's discretion to award costs under FRCP 54(d)(1) despite the absence of bad faith.

In a 7-2 decision, the Supreme Court relied on the ordinary meaning and context of the statutory language to determine the relationship between Section 1692k(a)(3) and FRCP 54(d)(1). FRCP 54(d)(1) states that the court has discretion to award costs unless a statute or court order "provides otherwise." The majority found that a statute "provides otherwise" when it is "contrary" to the rule.

Although Section 1692k(a)(3) is silent about a court's discretion to award attorney's fees when bad faith and harassment are absent, as was the case here, the majority found that this silence did not displace the court's discretion to award costs under FRCP 54(d)(1). Rather, the statute is best read as codifying the court's preexisting authority to award both attorney's fees and costs.

The court therefore concluded that Section 1692k(a)(3) of the FDCPA is not contrary to FRCP 54(d)(1) and the district court was permitted to award costs.

Counsel should be mindful that a court has the discretion to award costs and fees in FDCPA cases, even when the plaintiff lacks bad faith and an intent to harass.