Collector - March 2021 - 38

GOVERNMENTAFFAIRS

Six Rulings Clarifying Standing Under the FDCPA
The 7th Circuit has aligned itself with the 11th and D.C. Circuits in requiring a plaintiff to plead and provide " competent
proof " of a concrete injury in fact to establish Article III standing.
By Jamie N. Cotter and Jacob Hollers

S

etting up the potential for the
U.S. Supreme Court to confirm
and strengthen its 2016 opinion
in Spokeo v. Robins, the U.S. Court of
Appeals for the 7th Circuit issued six
rulings in December that clarify Article III
standing issues related to claims under the
Fair Debt Collection Practices Act.
Through these opinions, the 7th Circuit has
unequivocally aligned itself with the 11th and
D.C. Circuits in requiring a plaintiff to plead
and provide " competent proof " of a concrete
injury-in-fact to establish Article III standing.
Industry players should consider whether
these decisions could bolster a motion to
dismiss in pending cases. 
Here is a brief analysis of each opinion as
it relates to a plaintiff 's burden to survive a
motion to dismiss for lack of standing.

GUNN V. THRASHER,
BUSCHMANN & VOELKEL, P.C.
The court dismissed plaintiffs' claims
for lack of standing where they asserted
a substantive violation of the FDCPA
and alleged feelings of annoyance and
intimidation. The court rejected the
plaintiffs' distinction between " substantive "
and " procedural " FDCPA violations,
holding that alleged " substantive " violations
do not automatically confer standing. 
In short, the plaintiff must still allege and
ultimately present evidence of a concrete
injury no matter whether the alleged
violation is " substantive " or " procedural. "

LARKIN V. FINANCE SYSTEM OF
GREEN BAY, INC.
The court dismissed plaintiffs' cases for lack
of standing, confirming that " it's not enough
for an FDCPA plaintiff to simply allege a
statutory violation; he must allege (and later
establish) that the statutory violation harmed

38

him or presented an appreciable risk of harm
to the underlying concrete interest that
Congress sought to protect. "
Specifically, a plaintiff cannot simply
allege that a communication was " false,
deceptive, or misleading, or unfair and
unconscionable. "  Rather, a plaintiff must
establish an injury-in-fact by proving that he
or she took some action to their detriment
in response to the communication such as
paying a debt they did not owe or pursuing
a different course of action had they not
received the communication.

BRUNETT V. CONVERGENT
OUTSOURCING, INC.
The court dismissed the plaintiff's putative
class action because she did not establish an
injury-in-fact as a result of the defendant's
collection letter. The court explained that the
plaintiff was not injured because " she did not
pay something she does not owe (or, indeed,
anything at all) ... Although [plaintiff]
asserted that she was confused by the letter's
language, she did not tie that confusion to
an injury. "  That is, " [a] debtor confused by

a dunning letter may be injured if she acts,
to her detriment, on that confusion-if,
for example, the confusion leads her to pay
something she does not owe, or to pay a debt
with interest running at a low rate when the
money could have been used to pay a debt
with interest running at a higher rate. But
the state of confusion is not itself an injury. "

SPUHLER V. STATE COLLECTION
SERV., INC.
The court dismissed plaintiffs' complaint
and explained that the FDCPA envisions
that debtors will use accurate, nonmisleading information in choosing how to
respond to collection attempts and how to
manage and repay their debts. This means
that for a concrete injury to result from a
dunning letter's exclusion of a statement
about accruing interest, that exclusion
must have detrimentally affected the
debtors' handling of their debts. The record
contains no evidence that the absence of a
statement about interest had any effect on
how the [plaintiffs] responded to the letters
or managed their debts. The [plaintiffs]

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