Over a dissent, the Sixth Circuit held that a debt collector’s failure to identify itself accurately does not give the plaintiff constitutional standing to file suit for violation of the federal Fair Debt Collection Practices Act, or FDCPA, 15 U.S.C. § 1692-1692p.
The August 16 opinion is the latest example of courts striving to understand the Supreme Court’s recent rulings about constitutional standing in Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016), and TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). To read ABI’s reports, click here and here.
The trend is not favorable for consumers who file suits based on statutory violations and not much more.
The Simple Facts
The essential facts underpinning the appeal to the Sixth Circuit are few and simple.
A consumer owed a small debt to a hospital. The hospital turned over collection to an outfit that was allegedly a debt collector whose activities would be regulated by the FDCPA.
The debt collector sent a handful of letters to the consumer asking for payment. The letters correctly identified the debt collector. The consumer did not allege that the letters violated the FDCPA.
The debt collector also left several voicemail messages that did not state the debt collector’s full corporate name. The failure to give the full name could have been confusing because there was another company with a similar name.
After receiving three or four voicemail messages, the consumer contacted a lawyer and sent a cease and desist letter to an entity that was not the debt collector who had left the voicemail messages. After the letter, the consumer received one more voicemail message, indicating that the cease and desist letter may not have accomplished its purpose.
A few months later, the consumer sued the alleged debt collector, claiming violations of the FDCPA. After the close of discovery, the defendant filed a motion for summary judgment. The district court granted the motion and dismissed the suit, having decided that the defendant was not a debt collector subject to the FDCPA.
The Majority’s Opinion
The consumer appealed. In an eight-page opinion for the majority, Circuit Judge R. Guy Cole, Jr. vacated the order granting summary judgment and remanded with instructions to dismiss the suit for lack of jurisdiction.
The circuit court raised standing for the first time on appeal because, as Judge Cole said, a court has an independent duty to establish its own jurisdiction, and a plaintiff’s lack of Article III standing is jurisdictional.
Under Spokeo, Judge Cole explained that a plaintiff has constitutional standing under Article III if there was an injury in fact that was “fairly traceable” to the defendant’s conduct and that is likely to be redressed by a favorable court ruling.
To establish injury in fact, Spokeo decreed that the injury must be “particularized” and “concrete.” The parties agreed that the injury was particularized but disagreed about whether the consumer had suffered a concrete injury.
The consumer contended that his harm was concrete because he was confused about the identity of the caller, consulted a lawyer, sent a cease and desist letter to the wrong entity and then received another call.
On that score, Judge Cole cited Spokeo for teaching that a statutory violation is a violation of a procedural right that by itself may not satisfy the requirement of injury in fact. He went on to cite TransUnion for the proposition that the mere risk of future harm by itself does not qualify as concrete harm.
Judge Cole therefore said that the consumer was required to show that the procedural violation itself was a concrete injury “of the sort traditionally recognized” or caused an independent concrete injury.
For Judge Cole, the defendant’s failure to identify itself accurately was not close enough to an invasion of privacy to bestow standing.
With regard to independent concrete injury, the consumer claimed he was harmed because he was confused, hired counsel, sent a cease and desist letter to the wrong entity and received another voicemail.
Judge Cole ruled that the consumer could not show concrete harm simply by having hired counsel. If that were enough, he said, hiring “counsel to affirmatively pursue a claim would nullify the limits created under Article III.”
In conclusion, Judge Cole said the consumer had shown nothing more than “a bare procedural violation of the FDCPA” and therefore lacked constitutional standing to mount suit. He reversed and remanded with instructions to dismiss the suit for lack of jurisdiction.
The Dissent
Circuit Judge Karen Nelson Moore “respectfully” dissented. For her, confusion about the debt collector’s proper corporate name and the resulting voicemail message was a “sufficiently concrete” injury to confer standing, constitutionally speaking.
Judge Moore said that misidentification of the debt collector and the subsequent voicemail “resembles a harm recognized under the common-law tort of intrusion upon seclusion.” In her view, the “difference between one unwanted call and many is one of degree, not of kind.” A single unwanted call, she said, “is a concrete harm” conferring standing.
“We may think that Congress has elevated a relatively insignificant harm, but that was Congress’s decision to make, and it is not a reason to hold that [the plaintiff] lacks standing to sue,” Judge Moore said.
“In sum,” Judge Moore said, there was constitutional standing, and therefore jurisdiction, in view of the “single unwanted voicemail.” Although one voicemail “may seem trivial or insignificant, . . . it is concrete and that is all that we are to decide under the Court’s standing precedent.”
Observations
Much like substantive due process violations found by the Supreme Court during the Franklin Roosevelt administration, the lack of Article III jurisdiction flowing from a statutory violation isn’t something Congress can address through legislation.
Lawyers for consumers must hope that federal courts will follow Judge Moore’s dissent and find constitutional standing even for “trivial” injuries.
Even if trivial injury suffices to establish standing, it doesn’t mean that a court or jury would find liability for violating the FDCPA.
This case is an example. Even if the consumer had standing, the district court still dismissed on summary judgment after ruling that the defendant was not a debt collector.
Over a dissent, the Sixth Circuit held that a debt collector’s failure to identify itself accurately does not give the creditor constitutional standing to file suit for violation of the federal Fair Debt Collection Practices Act, or FDCPA, 15 U.S.C. § 1692-1692p.
The August 16 opinion is the latest example of courts striving to understand the Supreme Court’s recent rulings about constitutional standing in Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016), and TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). To read ABI’s reports, click here and here.
The trend is not favorable for consumers who file suits based on statutory violations and not much more.
The Simple Facts
The essential facts underpinning the appeal to the Sixth Circuit are few and simple.
A consumer owed a small debt to a hospital. The hospital turned over collection to an outfit that was allegedly a debt collector whose activities would be regulated by the FDCPA.
The debt collector sent a handful of letters to the consumer asking for payment. The letters correctly identified the debt collector. The consumer did not allege that the letters violated the FDCPA.
The debt collector also left several voicemail messages that did not state the debt collector’s full corporate name. The failure to give the full name could have been confusing because there was another company with a similar name.
After receiving three or four voicemail messages, the consumer contacted a lawyer and sent a cease and desist letter to an entity that was not the debt collector who had left the voicemail messages. After the letter, the consumer received one more voicemail message, indicating that the cease and desist letter may not have accomplished its purpose.
A few months later, the consumer sued the alleged debt collector, claiming violations of the FDCPA. After the close of discovery, the defendant filed a motion for summary judgment. The district court granted the motion and dismissed the suit, having decided that the defendant was not a debt collector subject to the FDCPA.
The Majority’s Opinion
The consumer appealed. In an eight-page opinion for the majority, Circuit Judge R. Guy Cole, Jr. vacated the order granting summary judgment and remanded with instructions to dismiss the suit for lack of jurisdiction.
The circuit court raised standing for the first time on appeal because, as Judge Cole said, a court has an independent duty to establish its own jurisdiction, and a plaintiff’s lack of Article III standing is jurisdictional.
Under Spokeo, Judge Cole explained that a plaintiff has constitutional standing under Article III if there was an injury in fact that was “fairly traceable” to the defendant’s conduct and that is likely to be redressed by a favorable court ruling.
To establish injury in fact, Spokeo decreed that the injury must be “particularized” and “concrete.” The parties agreed that the injury was particularized but disagreed about whether the consumer had suffered a concrete injury.
The consumer contended that his harm was concrete because he was confused about the identity of the caller, consulted a lawyer, sent a cease and desist letter to the wrong entity and then received another call.
On that score, Judge Cole cited Spokeo for teaching that a statutory violation is a violation of a procedural right that by itself may not satisfy the requirement of injury in fact. He went on to cite TransUnion for the proposition that the mere risk of future harm by itself does not qualify as concrete harm.
Judge Cole therefore said that the consumer was required to show that the procedural violation itself was a concrete injury “of the sort traditionally recognized” or caused an independent concrete injury.
For Judge Cole, the defendant’s failure to identify itself accurately was not close enough to an invasion of privacy to bestow standing.
With regard to independent concrete injury, the consumer claimed he was harmed because he was confused, hired counsel, sent a cease and desist letter to the wrong entity and received another voicemail.
Judge Cole ruled that the consumer could not show concrete harm simply by having hired counsel. If that were enough, he said, hiring “counsel to affirmatively pursue a claim would nullify the limits created under Article III.”
In conclusion, Judge Cole said the consumer had shown nothing more than “a bare procedural violation of the FDCPA” and therefore lacked constitutional standing to mount suit. He reversed and remanded with instructions to dismiss the suit for lack of jurisdiction.
The Dissent
Circuit Judge Karen Nelson Moore “respectfully” dissented. For her, confusion about the debt collector’s proper corporate name and the resulting voicemail message was a “sufficiently concrete” injury to confer standing, constitutionally speaking.
Judge Moore said that misidentification of the debt collector and the subsequent voicemail “resembles a harm recognized under the common-law tort of intrusion upon seclusion.” In her view, the “difference between one unwanted call and many is one of degree, not of kind.” A single unwanted call, she said, “is a concrete harm” conferring standing.
“We may think that Congress has elevated a relatively insignificant harm, but that was Congress’s decision to make, and it is not a reason to hold that [the plaintiff] lacks standing to sue,” Judge Moore said.
“In sum,” Judge Moore said, there was constitutional standing, and therefore jurisdiction, in view of the “single unwanted voicemail.” Although one voicemail “may seem trivial or insignificant, . . . it is concrete and that is all that we are to decide under the Court’s standing precedent.”
Observations
Much like substantive due process violations found by the Supreme Court during the Franklin Roosevelt administration, the lack of Article III jurisdiction flowing from a statutory violation isn’t something Congress can address through legislation.
Lawyers for consumers must hope that federal courts will follow Judge Moore’s dissent and find constitutional standing even for “trivial” injuries.
Even if trivial injury suffices to establish standing, it doesn’t mean that a court or jury would find liability for violating the FDCPA.
This case is an example. Even if the consumer had standing, the district court still dismissed on summary judgment after ruling that the defendant was not a debt collector.