Collector - July/Aug 2021 - 64

PERSPECTIVES
Last Word
N o Harm, No Foul
This interview is an excerpt from a recent episode of the ACA Huddle on the steady drip of
standing decisions impacting the accounts receivable management industry.
Following signifi cant court decisions
impacting the accounts receivable management
industry, such as the 11th Circuit Court of Appeals'
opinion on letter vendors in Hunstein v.
Preferred Collection and Management Services
Inc., ACA International member attorneys
are reviewing the doctrine of standing in the
context of consumer litigation.
In this episode of the ACA Huddle, Jessica
Klander, shareholder at Bassford Remele,
Mark Rooney, partner at Hudson Cook LLP,
and David Schultz, partner at Hinshaw
& Culbertson LLP, discuss recent litigation
trends. Th is is an edited and condensed excerpt
from their presentation.
Rooney: We all know the many compliance
pitfalls surrounding collection letters
and the diff erences in diff erent circuits. It
can be treacherous. Plaintiff s can be creative
in fi ling complaints alleging diff erent technical
violations.
What the courts are essentially saying is
that, even if you have violated the FDCPA
in some technical way, it does not matter if
the plaintiff is not injured.
In an important case from last year, Frank
v. Autovest, the D.C. Circuit Court held that
a consumer's confusion and other informational
injuries, without more, fail to meet the
injury-in-fact requirement of standing. Th e
11th Circuit discussed in Trichell v. Midland
Credit Management -another 2020 case -the
plaintiff 's allegation that there was a risk of
being defrauded based on some alleged misinformation
in the collection letter. Because that
threat never materialized, the allegation failed
to meet the standing requirement.
Th e 9th Circuit also got into the action
in 2020. Th at court held that a plaintiff
64
acainternational.org
lacked standing where he made " a bare
allegation of confusion and didn't rely,
to his detriment, on any allegedly lawful
statement in our collection letter. " So, on
the whole, we're seeing a trend in the right
direction. Courts are giving increased scrutiny
to standing issues in a way that could
result in decreased litigation risk.
Klander: Our fi rm has handled some
of the standing cases recently addressed in
the 7th Circuit. We've been trying for years
since the Spokeo decision (as has everyone)
to pick away at standing under the FDCPA.
We were beginning to lose a little bit
of hope because many of the initial postSpokeo
decisions addressing standing under
the FDCPA simply concluded, " Yes, it's a
statutory violation. Th at's enough. Let's go
to the next one. "
As Mark pointed out, we started picking
up some steam in the last couple of years,
specifi cally in the 7th Circuit, where the
court over the last year seemed to lock in on
the lack of standing issue and disposed of
several FDCPA cases on that basis. Two of
the cases our fi rm handled were letter cases
initiated by the same plaintiff s' fi rm. Th ey
were " creative " claims, to the say the least.
In one of them, Larkin v. Finance System
of Green Bay, Inc., the plaintiff sued based
on a letter involving an underlying medical
debt. Th e letter included some innocuous
statements like being " worthy of the faith
put in you by your creditor. " Th e plaintiff
glommed on to those statements and
argued there was a violation of the FDCPA
because they " threatened " the patient/doctor
relationship. We attacked it on multiple
fronts. We argued it should be dismissed
because the plaintiff lacked standing and
Title: Litigation Landscape Update
Participants: Jessica Klander,
shareholder at Bassford Remele,
David Schultz, partner at
Hinshaw & Culbertson LLP,
and Mark Rooney, partner
at Hudson Cook LLP
Air date: 4/28/2021
also, that the challenged statements were
not a violation of the FDCPA.
Th e district court kicked it on the merits.
Th e plaintiff appealed, and then on the
appeal, we again argued standing and
failure to state a claim. Th e 7th Circuit took
particular interest in the standing issue,
and during oral argument asked a lot of
questions of the plaintiff 's side about the
alleged harm along the lines of: What is it
that the plaintiff is claiming actually made
a diff erence in how the plaintiff was going
to respond to this letter? Th e plaintiff 's side
had no good answer.
Ultimately, the 7th Circuit decided that
there was no actual harm and dismissed the
case for lack of standing. Th e court pointed
out in its decision that it took great pains to
allow the plaintiff to articulate some kind of
harm but he failed to do so.
To listen to the complete
episode, members can visit
www.acainternational.org/
about/aca-recordings-shop.
http://www.acainternational.org/about/aca-recordings-shop http://www.acainternational.org

Collector - July/Aug 2021

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