Collector - April 2021 - 43

IAF

Article III standing in the context of federal
consumer-protection claims. (The degree
to which that's true varies some measure
by district and circuit.) As the Supreme
Court famously held in Spokeo, " Article III
standing requires a concrete injury even
in the context of a statutory violation. "
For many courts, this came as a welcome
opportunity to dismiss those frivolous
consumer lawsuits in which no actual harm
has befallen a consumer.
Historically, in many of the cases fitting that
pattern, the consumer bar had merely seized
on some ambiguity in the law and attempted
to leverage it-using the liberal presumptions
that courts must grant remedial statutes
-into some cognizable statutory harm.
After Spokeo, however, courts appear
to feel more comfortable finding that the
injuries that consumers have been alleging-
or, perhaps stated more accurately, the
injuries that consumers' attorneys have been
using them to allege-do not satisfy the
concreteness prong of the standing test, i.e.,
that the injuries are " abstract, " " hypothetical, "
" speculative, " or otherwise not " real, " as the
Constitution requires.
Over the past three years, for example,
federal circuit courts in the 5th, 6th, 7th
and 11th Circuits have published opinions
holding that:
*	 Consumers' claims that collection
letters they received had created a risk
that unsophisticated consumers might
be misled into making unnecessary or
even harmful payments on time-barred
debt failed to establish a concrete injury
cognizable under Article III principles
because, first, the plaintiffs did not
allege that the collection letters posed
any risk of harm to themselves as
individuals, and, second, any risk that
the letters may have posed to them had
dissipated by the time they filed suit.
See Trichell v. Midland Credit Mgmt.,
Inc., 964 F.3d 990 (11th Cir. 2020).
*	 A debt collector's letter that failed to
specify that the consumer's request for
verification must be sent in writing did
not, without additional allegations of
resultant harm based on prospective

COLLECTOR 04.21

reliance, for example, satisfy concreteness
requirement under Article III
jurisprudence. Casillas v. Madison Ave.
Assocs., Inc., 926 F.3d 329 (7th Cir. 2019).
*	 A consumer's allegations that two letters,
sent by a debt collector law firm, " made
him feel anxious and fear that [the
law firm] would sue him if he did not
promptly pay " because fear of future
harm was speculative harm and plaintiff 's
alleged injury looked like " a self-inflicted
injury. " Buchholz v. Meyer Njus Tanick,
PA, 946 F.3d 855, 866 (6th Cir. 2020).

THE " WHY? "
While the data cited at the beginning of
this article show that debt collectors today
face fewer consumer lawsuits than they did
just a few years ago and that courts have
begun to find reasons to dismiss frivolous
" no harm, no foul " consumer lawsuits at an
increasing rate, it's difficult to pinpoint the
reason for these changes.
One could cite a number of variables in
play for the precipitous rise in the incidence
of consumer lawsuits and the recent fall.
The rise could be attributed to financial
crisis of 2007-2008, the passage of the DoddFrank Act in 2010 and the steep rise in lawschool graduates through 2014.
The fall could be the result of the drop in
law school graduation rates between 2014
and 2019. (Fewer lawyers, particularly fewer
young associates, meant fewer bodies to
churn claims at paper-mill consumer law
firms.) Or it could be because the consumer
bar has exhausted its " experimentation "
phase. Or perhaps courts have simply gotten
tired of dockets clogged with frivolous or
speculative consumer claims.
At the same time, though, it's clear that the
consumer bar has found that where, in years
past, it could monetize federal consumer
protection statutes, the " low hanging fruit "
had largely been plucked. And where they
had once targeted and baited collection
agents into putative violations, agencies
have responded by investing in compliance,
becoming more compliance-focused and
vigilant than ever before. And, accordingly,
where debt collection agencies that had been

targeted had previously opted to settle-not
to avoid liability but rather to avoid the high
costs of litigation-they were now pushing
back, confident in their new compliance
policies and procedures, which diminished
the relative benefit of these frivolous and
speculative claims for the consumer bar.

Keep striving for
excellence in
compliance. Keep
pushing back against
frivolous consumer
claims. Keep pressing
for the development
of positive case law
in every jurisdiction.
These are the steps we must continue
to take. Keep striving for excellence in
compliance. Keep pushing back against
frivolous consumer claims. Keep pressing for
the development of positive case law in every
jurisdiction. Keep building strong policies
and procedures to document bona fide error.
Slowly but surely, we'll continue to erode
the mountain of detrimental case law that
developed in the 2000s and early 2010s, and
we'll continue to show courts, regulators and
consumers alike that we, too, value consumer
protections and that we're not shakedown
artists, as we're so often portrayed, but rather
a legitimate and critical part of America's
credit economy.
Colin Winkler is ACA International's
corporate counsel. 
For more information about the IAF,
visit www.acainternational.org/industryadvancement-fund.

43


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