Seventh Circuit Issues Another Ruling on Standing; ‘Stress and Confusion’ Not Enough to Sue

The Court of Appeals for the Seventh Circuit is back with another ruling on standing to sue in a Fair Debt Collection Practices Act lawsuit, remanding a case back to the District Court for it to be dismissed after a debt collector was sued for sending a letter to an individual who had notified a previous creditor that she was represented by counsel and was refusing to pay a debt, because the previous creditor did not inform the subsequent collector of the notification.

A copy of the ruling in the case of Pennell v. Global Trust Management can be accessed by clicking here.

This is the latest in a series of rulings that have come out of the Seventh Circuit in the past three months aimed at redefining the standard under which plaintiffs have standing to sue under the FDCPA.

A District Court judge had granted summary judgment for the defendant, but the case never should have made it passed the stage where the judge ensures the plaintiff has standing to sue, the Appeals Court ruled. Even though the plaintiff claimed she suffered from “stress and confusion” when she received the letter from the subsequent debt collector, and thinking that she had no rights under the FDCPA to refuse to repay a debt or that she could demand not to hear from a collector, other than filing the suit against Global Trust, the plaintiff did not do anything to respond to the letter, and that is where her case fell apart.

“Pennell failed to show that receiving Global Trust’s dunning letter led her to change her course of action or put her in harm’s way,” the Appeals Court wrote. “Instead, she merely pointed to a statutory violation, which is not enough to establish standing under Article III.”

The plaintiff tried to argue that the letter invaded her privacy, referencing another landmark case from the Seventh Circuit — Gadelhak v. AT&T Services — but the Appeals Court wouldn’t hear that argument because she did not make that claim in her suit against the defendant. “The only injuries Pennell included in her complaint were stress and confusion, and those do not suffice for standing,” the Court wrote.

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