Seventh Circuit Attacks Standing Again, but Judges Now Wondering if The Court Went Too Far

The Court of Appeals for the Seventh Circuit has weighed in on standing in yet another case, this time affirming a lower court’s dismissal of a Fair Debt Collection Practices Act lawsuit against a collector, but, for the first time, judges within the Seventh Circuit are showing signs that maybe the Court has overstepped in determining how and when an individual has suffered a concrete injury required to pursue a federal lawsuit.

A copy of the ruling in the case of Markakos v. Medicredit can be accessed by clicking here.

The plaintiff received a collection letter that sought to collect $1,830.56 on behalf of a creditor identified as “Northwest Community 2NDS.” The plaintiff, through her attorney, sent a letter back to the defendant disputing the debt because the services rendered were inadequate. The defendant sent a letter back to the plaintiff seeking more information and warned, “Please be aware that if the additional information is not provided in a timely manner, you may be held responsible for the full balance due.” The letter also included a different balance — $407.00 — than was noted in the original letter. That led the plaintiff to file suit, arguing that the name of the creditor was not a legal name and because the two letters had different amounts owed. A District Court judge granted the motion, ruling that the plaintiff had to know who the creditor was because she claimed the service was inadequate and could not make a claim about the differing balances because she never saw the second letter — it was sent to her attorney.

The Seventh Circuit has issued a number of rulings (here, here, here, here, and here) in the past six months that address the issue of whether a plaintiff has standing to sue. Like the other cases, the Seventh Circuit determined that the plaintiff in this suit lacked standing because she never alleged the deficient information harmed her in any way. But, in separate concurring opinions, two of the three judges in this case indicate that the Court may gone too far with its “no harm, no foul” approach to determining standing.

“The result of our flurry of recent decisions is that, at least in this circuit, a debt collector may send a letter demanding payment on an overstated debt, and the recipient lacks standing to enforce the FDCPA unless the debt collector’s deceit is successful in one way or another,” wrote Judge Kenneth Francis Ripple in one of the opinions. “In other words, we now view the receipt of an inflated payment demand as simply ‘receipt of a noncompliant collection letter.’ This is a long way from an incorrect zip code on a credit report. We are now traveling far out in front of our Spokeo-provided headlights and directly frustrating the congressional determination as to when and how commerce must be regulated.”

Added Judge Ripple, “I fear we have given Congress’s judgment too little attention and erected an unnecessary constitutional barrier to enforcement of the FDCPA.”

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