The Court of Appeals for the Sixth Circuit has denied a request for an en banc hearing and instead chosen to uphold a ruling issued in February by a three-judge panel that said an error in a letter sent by a law firm to a married couple letting them know that they did not have to pay the balance on a loan and that no other remedies would be pursed did not rise to meet the necessary standard of a concrete injury and upheld a lower court’s dismissal of the suit.
Calling the law firm “star crossed” in its ruling because litigation has lasted six years in this case, the Sixth Circuit used the Supreme Court ruling in Spokeo v. Robins to rule that since no actual harm was done to the plaintiffs, there was no concrete injury suffered, and therefore, no right to sue in federal court.
A copy of the ruling in the case of James Hagy & Patricia Hagy v. Demers & Adams can be accessed here.
The plaintiffs obtained a loan to purchase a mobile home and some property on which to park it. Eight years later, the plaintiffs defaulted on the loan. The wife called a law firm representing the creditor and agreed to sign over the deed to the mobile home and property. In exchange, the creditor agreed to waive any deficiency balance on the account.
Once the deed in lieu was executed, the law firm sent another letter to the plaintiffs confirming the details and that the creditor would not be seeking any other money from the plaintiffs. That letter did not include a warning that the communication was being sent on behalf of a debt collector. The plaintiffs subsequently sued the law firm for violating the FDCPA.
The case has gone back and forth for the past six years. In its (hopefully final) ruling, the Sixth Circuit said:
Because Congress made no effort to show how a letter like this would create a cognizable injury in fact and because we cannot see any way in which that could be the case, we must dismiss this claim for lack of standing.
Following the ruling, the plaintiffs filed an appeal seeking an en banc hearing before the entire Court of Appeals. That request was denied last week.