Industry Seizes Footnote in SCOTUS Ruling on Standing to Make Case for Rehearing in Hunstein Lawsuit

Both the defendant in the Hunstein v. Preferred Collection and Management Services case as well as ACA International jumped on the Supreme Court’s ruling in TransUnion v. Ramirez to add to their arguments why the Eleventh Circuit Court of Appeals should grant the petition for an en banc rehearing of the Hunstein case, referring to a specific footnote that could make all the difference for the accounts receivable management industry.

Copies of the letters sent to the Clerk of the Court for the Eleventh Circuit by Preferred and ACA International are available by clicking here and here.

EDITOR’S NOTE: Sign up for a webinar on Wednesday, June 30 at 3pm ET to hear a panel of legal experts — Brent Yarborough from Maurice Wutscher, Lauren Campisi from Hinshaw Culbertson, and Jason Tompkins from Balch & Bingham — discuss the TransUnion ruling and its implications for the industry, for consumer litigation, and for Hunstein. This webinar is being sponsored by Maurice Wutscher. Click here to register.

On Friday, the Supreme Court ruled that every member of a class must have Article III standing in order to be eligible to recover damages, dealing a blow to class-action plaintiffs across the country. The ruling in TransUnion v. Ramirez is being seen to be as important the ruling in Spokeo v. Robins to determine whether a plaintiff has standing to pursue a lawsuit in federal court.

The footnote in question that could help make the industry’s case in Hunstein is Footnote 6, which says:

For the first time in this Court, the plaintiffs also argue that TransUnion “published” the class members’ information internally—for example, to employees within TransUnion and to the vendors that printed and sent the mailings that the class members received. That new argument is forfeited. In any event, it is unavailing. Many American courts did not traditionally recognize intra-company disclosures as actionable publications for purposes of the tort of defamation. See, e.g., Chalkley v. Atlantic Coast Line R. Co., 150 Va. 301, 326–328, 143 S. E. 631, 638–639 (1928). Nor have they necessarily recognized disclosures to printing vendors as actionable publications. See, e.g., Mack v. Delta Air Lines, Inc., 639 Fed. Appx. 582, 586 (CA11 2016). Moreover, even the
plaintiffs’ cited cases require evidence that the defendant actually “brought an idea to the perception of another,” Restatement of Torts §559, Comment a, p. 140 (1938), and thus generally require evidence that the document was actually read and not merely processed, cf. Ostrowe v. Lee, 256 N. Y. 36, 38–39, 175 N. E. 505, 505–506 (1931) (Cardozo, C. J.). That evidence is lacking here. In short, the plaintiffs’ internal publication theory circumvents a fundamental requirement of an ordinary defamation claim—publication—and does not bear a sufficiently “close relationship” to the traditional defamation tort to qualify for Article III standing.

Both ACA and Preferred seized the footnote and sent it to the Eleventh Circuit. ACA’s letter said that the Supreme Court’s ruling in TransUnion “undercuts” the Eleventh Circuit’s analysis on standing and “makes clear that rehearing is warranted.” In his letter, Rick Perr of Kaufman Dolowich & Voluck, one of the lawyers representing Preferred, said, “The Supreme Court implicitly recognized that providing information to a letter vendor is not a ‘publication’ and does not cause an injury-in-fact sufficient to provide standing.”

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