The Spokeo defense that the ARM industry thought would be a shield against frivolous and arbitrary lawsuits had another hole poked in it this week, when a federal judge in Illinois ruled against a collection agency and a law firm’s motion to dismiss a lawsuit brought by a plaintiff who accused the two companies of violating the Fair Debt Collection Practices Act by inferring that the amount owed may be higher than the unpaid balance on the account.
A copy of the ruling can be accessed here.
In this case, a woman, Carmen Aguirre, had an unpaid balance of $515.13 on her Capital One credit card. Aguirre received a letter from a law firm, Blatt, Hasenmiller, Leibsker & Moore, LLC, which identified Absolute Resolutions Corp. as the creditor on the account. The collection letter included the sentence:
“Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater.”
The plaintiff is alleging a violation of Sections 1692(e) and Sections 1692(f) of the FDCPA, which prohibit making false or misleading representations and engaging in unfair practices. The plaintiff argued that the defendants did not have permission nor did they ever plan to make good on the threat of adding additional charges onto her account and that the threat amounts to a violation of the FDCPA.
The Spokeo defense relates to a Supreme Court ruling (Spokeo v. Robins), in which the court ruled that a plaintiff must suffer a “concrete” injury in order to sue in federal court. The defendants in this case argued that the plaintiff did not suffer any concrete injury as a result of the alleged violation and moved to have the suit dismissed. A judge disagreed.
The defendants argued that the plaintiff was only seeking the statutory damages allowed under the FDCPA and did not identify any actual loss as a result of the potential violation. As well, the defendants referenced a deposition given by the plaintiff in which “defeat her assertion that she was actually intimidated” by the letter.
Because the defendants allegedly lied and threatened the plaintiff, which are some of the very tactics that the FDCPA was enacted to prohibit, and because other courts have ruled “that plaintiffs claiming intangible injuries from allegedly predatory debt collection practices do in fact have Article III standing to sue for statutory damages under the FDCPA,” federal judge Rebecca Pallmeyer denied the motion to dismiss.
