The Seventh Circuit Court of Appeals continued its assault on standing in Fair Debt Collection Practices Act cases yesterday, affirming a District Court ruling that a plaintiff lacked standing to sue a debt collector because she did not try to show an intent to dispute a debt while suing because she was confused about how to dispute it.
A copy of the ruling in the case of Smith v. GC Services LP can be accessed by clicking here. This is actually the second time that the Seventh Circuit has weighed in on this particular case, previously ruling that the defendant had waived its right to enforce an arbitration clause because it waited too long to do so. On remand back to the District Court, a judge ruled the plaintiff lacked standing to sue, which was appealed.
The Seventh Circuit has been on a tear recently, issuing rulings in a handful of cases — here, here, and here — ruling that plaintiffs lacked standing to sue for various reasons. In this case, the plaintiff received a collection letter from the defendant that included the following statement:
If you dispute this balance or the validity of this debt, please let us know in writing. If you do not dispute this debt in writing within 30 days after you receive this letter, we will assume this debt is valid.
The plaintiff claimed the letter violated Section 1692g(a)(3) of the FDCPA because that provision of the FDCPA does not say that a debt has to be disputed in writing. Consumers, the plaintiff alleged, should be allowed to dispute a debt however they choose.
Rather than take up the question of whether a collector violates Section 1692g(a)(3) of the FDCPA by telling consumers to dispute debts in writing, the Seventh Circuit ruled the plaintiff lacked standing to sue in the first place.
The Seventh Circuit focused on a declaration made to the District Court when the plaintiff’s standing was questioned. Whether the plaintiff intended to dispute the debt could not be said “at this point in the litigation.”
“If she had not made up her mind even after filing suit, she cannot have had an intent to dispute the debt within 30 days of receiving the letter,” the Appeals Court wrote.
The Appeals Court did clarify that it was not saying all alleged 1692g(a)(3) violations lacked standing, only that the plaintiff in this case “did not allege an injury, because she did not try to show what good a dispute would have done her. She is no worse off than if the letter had told her that she could dispute the debt orally.”