Seventh Circuit Dismisses FDCPA Claim for Lack of Standing

In Pierre v. Midland Credit Management, Inc., — F.4th —, 2022 WL 986441 (7th Cir. Apr. 1, 2022), the Seventh Circuit affirmed the dismissal of a claim under the Fair Debt Collection Practices Act (“FDCPA”), finding that the plaintiff and the putative class which she represented suffered no concrete injury and therefore lacked Article III standing under the framework set out in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) and TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). Plaintiff Renetrice Pierre filed a class action lawsuit, seeking to represent a class of Illinois residents who had received letters from the defendant offering to resolve debts long after the statute of limitations on the debt had run. The letters at issue notified the consumers that the time to sue on the debt had passed, and that “we will not sue you for it, we will not report it to any credit reporting agency, and payment or non-payment of this debt will not affect your credit score.” The District Court for the Northern District of Illinois had denied dismissal, finding a risk of “real harm to the interests that Congress sought to protect with the FDCPA.” After the court certified the class and entered summary judgment for the plaintiffs, a jury awarded statutory damages of $350,000.

On appeal, the Seventh Circuit vacated and remanded the case, directing the district court to dismiss the case due to a lack of Article III standing. The plaintiff argued that the letter she received created a risk that she might make a payment on a time-barred debt, which could restart the statute of limitations. However, because the plaintiff sought monetary damages rather than injunctive relief, the Seventh Circuit stated that such a risk was insufficient to create a legally cognizable harm. Critically, the plaintiff had not made a payment in response to the letter and had not taken any action in response to the letter other than contacting a lawyer and filing the present lawsuit, which was not a sufficient harm to create standing. Further, the Seventh Circuit rejected the plaintiff’s claim that the letter caused her confusion, stating that such confusion was insufficient under the Spokeo and TransUnion analysis.

Judge Hamilton filed a lengthy dissent, asserting that the plaintiff’s confusion and emotional harm was sufficient to create Article III standing. He analogized the plaintiff’s claim to those under the common law for defamation and invasion of privacy, and further compared it to the difference between assault and battery, which he characterized as “fear and emotional distress.” Judge Hamilton also raised concerns about the separation of powers, stating that the courts should grant “due respect” to Congress and the policy choices that were made in providing for private enforcement of technical violations of the FDCPA.

Pierre is only one of a series of recent cases grappling with the standing doctrine in the wake of the recent TransUnion opinion. As a circuit split begins to emerge, the question arises of whether the Supreme Court will consider clarifying the standing doctrine in the wake of TransUnion so soon after the opinion was published. Until there is further clarification, we will likely continue to see more developments of this doctrine as it pertains to technical violations of the consumer protection statutes in the near future.

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