Burr & Forman

03.2.2017   |   Blog Articles, Consumer Finance Litigation, Eleventh Circuit

Eleventh Circuit: (1) Mere Procedural Violation Insufficient for Article III Standing and (2) Certified Return Receipt Sufficient Under Regulation X

Since  Spokeo v. Robins, 136 S. Ct. 1540 (2016), as revised (May 24, 2016), the consumer finance industry has continued to refine what it means to allege a concrete injury in fact and to meet Article III case and controversy requirements where statutory rights are alleged to have been violated. In Spokeo, the Supreme Court made clear that a “concrete” injury is necessary to confer Article III standing yet, the palpability of the injury alone does not dictate whether the injury is sufficiently concrete to confer standing–leaving room for “concrete” yet intangible injuries as a basis for statutory damages. Additionally, as to procedural violations, the Spokeo court elected not to take a conclusive position on the issue. Instead, it determine that such violations “can be sufficient in some circumstances to constitute injury in fact; in such a case, a plaintiff need not allege any additional harm beyond the one identified by Congress.” Id. Rather than deeming procedural violations sufficient across the board, courts have been left to make the determination as to whether plaintiffs with characteristically intangible injuries, or plaintiffs with nothing more than procedural violations have Article III standing, on a case by case basis.

The most recent opinion on the sufficiency of a procedural violation to confer Article III standing came on March 1, 2017, from the Eleventh Circuit in Meeks v. Ocwen Loan Servicing LLC. Meeks filed a complaint in the Southern District of Florida against Ocwen Loan Servicing (“Ocwen”) for alleged violations of 12 C.F.R §1024.36(c), Regulation X of RESPA. Specifically, Meeks alleged that Ocwen failed to properly or timely acknowledge receipt of his Request for Information (“RFI”) resulting in actual damages of less than one hundred dollars relating to mailing and attorney’s fees and costs, and statutory damages. Meeks did not dispute Ocwen’s receipt of the RFI, and even attached a certified return receipt, signed by Ocwen’s agent, to his complaint. Rather, Meeks disputed the form of the acknowledgement of receipt–contending that a signed certified return receipt was insufficient under Regulation X to constitute “acknowledgement of receipt”. The district court rejected this argument and found that a signed return receipt satisfies the requirements 12 C.F.R §1024.36(c), and that Meeks had not alleged a sufficiently concrete injury to confer Article III standing to merit entitlement to statuary damages, and granted Ocwen’s motion to dismiss with prejudice.

On appeal, the Eleventh Circuit affirmed the lower court’s determination that Meeks did not suffer a concrete injury in fact and relying on Spokeo, found that Meeks lacked Article III standing to claim statutory damages. Notably, the court went on to state that Meek’s allegations were at most “a bare procedural violation” that do not give rise to a real, concrete injury. This decision is consistent with the decision in Hancock v. Urban Outfitters, Inc., 830 F.3d 511 (D.C. Cir. 2016), wherein the court found that the dissemination of an incorrect zip code–a mere procedural violation of the District of Colombia’s Consumer Protection Procedures Act–without more, is insufficient to satisfy the concreteness element of an injury in fact and thus, does not confer Article III standing.

Although Spokeo left a great deal of room for courts to broadly construe the sufficiency of an injury for purposes of Article III standing, the court’s decision in Meeks evidences that despite the potential for procedural violations alone to stand as a basis for statuary damages, courts are somewhat hesitant to stretch Spokeo to such bounds.

It’s important to note that while Meeks reinforces that a procedural violation alone is not sufficient to confer Article III standing, the significance of Meeks is two-fold–it is also the first Circuit Court opinion to stand for the proposition that a certified return receipt is sufficient to satisfy the acknowledgement and receipt requirement under Regulation X [12 C.F.R §1024.36(c)], which provides: “[w]ithin five days (excluding legal public holidays, Saturdays, and Sundays) of a servicer receiving an information request from a borrower, the servicer shall provide to the borrower a written response acknowledging receipt of the information request.” The sufficiency of a certified return receipt has been a frequent topic of litigation before the district courts, and now finally settled by the Eleventh Circuit.  Armed with Meeks, the consumer finance industry can effectively stifled future claims against servicers for failure to comply with Regulation X’s “acknowledgement of receipt” requirement in instances where a signed return receipt was received by the claimant.

Download the full 11th Circuit Opinion.

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