No Harm, No Foul: Seventh Circuit Again Demands Concrete Harm in FDCPA Cases
Whether there is a connection to the near end of another exciting National Basketball Association season is unknown, but in a recent ruling issued by the U.S. Court of Appeals for the Seventh Circuit, the court began its opinion by invoking a phrase credited to legendary Los Angeles Lakers broadcaster Chick Hearn in finding that without harm having been suffered by the plaintiff, there would be no foul called.
Seventh Circuit Decision
In Casillas v. Madison Avenue Associates, No. 17-3162 (7th Cir. June 4, 2019), the Seventh Circuit upheld entry of judgment in favor of the defendant debt collector on the grounds that the plaintiff lacked standing to pursue a claim. The alleged Fair Debt Collection Practices Act (FDCPA) violation was the failure of the collection notice to inform the consumer, as the FDCPA requires, that she or he needs to give the debt collector written notice contesting the purported debt. Succinctly put, the Court held that because "[t]he only harm that Casillas claimed to have suffered ... was the receipt of an incomplete letter" that she lacked standing under Article III, as interpreted by the U.S. Supreme Court in Spokeo, to establish federal jurisdiction over her claim.
Under the FDPCA, a consumer may notify the debt collector that the consumer disputes the debt by submitting a dispute "in writing." In Casillas, the debt collection notice the plaintiff received contained all of the information required by the FDCPA except that it did not state that any disputes must be made in writing. Although the parties had agreed to settle the matter on a classwide basis, while the settlement approval motion was pending, the Seventh Circuit issued Groshek v. Time Warner Cable, 865 F.3d 884 (7th Cir. 2017), where the Court held that a plaintiff in a Fair Credit Reporting Act (FCRA) suit lacked standing on Spokeo grounds. As a result of Groshek, the district dismissed Casillas' claim, leading to her appeal.
The Seventh Circuit held that merely "pointing to Madison's procedural violation" was not enough under Spokeo and, at minimum, there needed to be a plausible showing that she either suffered harm or there was an "appreciable risk of harm" to the underlying concrete interest that Congress sought to protect through the FDCPA. Given that the FDCPA seeks to prevent deceptive and abusive debt collection practices, Casillas' failure to allege any facts in support of her claim (i.e., an intent to exercise her right to dispute the debt) – she had alleged only the existence of the notice's failure to comply with the letter of the statute – was fatal to her claim: "Madison's mistake didn't put Casillas in harm's way," the court said.
The court distinguished its decision from yet another Seventh Circuit decision, Robertson v. Allied Solutions, 902 F.3d 690 (7th Cir. 2018), where the court held that the defendant's failure to provide the plaintiff with information that the FCRA intended to be provided (an employment screening report), precluded the plaintiff from potentially exercising a specific right under FCRA that Congress sought to provide. The court also rejected the argument that Casillas had suffered an "informational injury," holding that the case lacked the necessary public interest to invoke the informational injury doctrine.
Conclusion and Considerations
The Casillas decision thus reaffirms that, especially in the Seventh Circuit, critical to any purported violation of a disclosure statute will be whether the omission or inaccuracy caused a "sufficiently concrete injury to confer standing." The fact that Casillas "did not allege that she even read the disclosure, much less relied on it to her detriment" also teaches that in disclosure cases involving any number of consumer statutes, it may be premature to consider settlement without having taken the deposition of the plaintiff to determine whether there is a factual record sufficient to confer standing. Otherwise, the case may very well be, to again invoke Chick Hearn, just an air ball.
Holland & Knight has extensive experience counseling clients in regards to the FDCPA. For litigation needs, contact Andrew Soven. For questions regarding regulatory issues, contact Leonard Bernstein or Bob Jaworski.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.