Plaintiff in a Hunstein Copycat Class Action Does Not Have Standing to Sue in Federal Court, NDIL Judge Rules

In a case that is being defended by David Schultz and the team at Hinshaw Culbertson, a District Court judge in Illinois has granted a plaintiff’s motion to remand a Hunstein class action lawsuit back to state court, disagreeing with the Eleventh Circuit Court of Appeals’s ruling in the case and determining that the plaintiff lacked standing to pursue his claim in federal court.

A copy of the ruling in the case of Quaglia v. SN Servicing and McCalla Raymer Leibert Pierce can be accessed by clicking here.

The plaintiff accused the defendants of violating Section 1692c(b) of the FDCPA when it used a third-party letter vendor to print and mail collection letters to the plaintiff and the other members of the class. Conveying the information to the vendor constituted a communication under the FDCPA and was made to an unauthorized third party, the plaintiff claims. The claims are similar to hundreds that have been made around the country in the months following the Eleventh Circuit’s ruling in Hunstein v. Preferred Collection & Management Services.

The plaintiff originally filed his lawsuit in state court, but the defendants had the case removed to federal court, which led the plaintiff to file his motion to remand the case back to state court. Judge Charles Kocoras of the District Court for the Northern District of Illinois, Eastern Division, had no problem sending the case back to state court, because the plaintiff did not have standing to sue in federal court. Why? Because Congress didn’t intend to block collectors from using mail vendors when it enacted the FDCPA in 1977.

“But is difficult to imagine Congress intended for the FDCPA to extend so far as to prevent debt collectors from enlisting the assistance of mailing vendors to perform ministerial duties, such as printing and stuffing the debt collectors’ letters, in effectuating the task entrusted to them by the creditors — especially when so much of the process is presumably automated in this day and age,” Judge Kocoras wrote. “In the Court’s view, such a scenario runs afoul of the FDCPA’s intended purpose to prevent debt collectors from utilizing truly offensive means to collect a debt.”

When looking at the ruling from the Supreme Court in TransUnion v. Ramirez, Judge Kocoras became even more certain of his position. “Simply put, the Complaint does not sufficiently allege a concrete and particularized injury-in-fact sufficient to satisfy Article III standing for Plaintiffs’ Section 1692c(b) claim,” he wrote.

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