Marshall Spiegal v. Michael C. Kim

The Fair Debt Collection Practices Act (“FDCPA”) covers debts “arising out of” certain transactions. Does “arising out of” require a “direct” connection to the transaction? Similarly, is the conduct of a debtor relevant to whether the FDCPA applies? If so, can a court take “judicial notice” of filings in other proceedings to establish facts relating to any alleged misconduct if the requirements of collateral estoppel are not met? Here, the debt collector relied on a contract to seek a debt. However, the Seventh Circuit held the debt collector’s allegations of debtor misconduct severed the “nexus” necessary for FDCPA coverage. Did the Seventh Circuit correctly interpret ‘debt,’ ‘arise out of’ and ‘transaction’ as written and intended by the FDCPA?