The battle lines have been drawn. When it hears arguments in Hunstein v. Preferred Management & Collections — during the week of February 21, 2022 — the Eleventh Circuit Court of Appeals wants to hear from both sides on whether the plaintiff actually has standing to bring his lawsuit in the first place.
The Eleventh Circuit announced its desired focus for the question this morning. Briefs from the appellant — Hunstein — will be due by December 23. Briefs from the appellee — Preferred Management & Collections — will be due by January 18, 2022.
A copy of the memorandum that was circulated by the Eleventh Circuit this morning can be accessed by clicking here.
The topic of standing has become very popular in Fair Debt Collection Practices Act cases recently, following a string of rulings from the Seventh Circuit Court of Appeals and the Supreme Court’s ruling in TransUnion v. Ramirez. In order for a plaintiff to have standing to sue, he or she must have suffered a concrete injury. It appears as though the Eleventh Circuit will focus on whether the appellee suffered such an injury when the appellant used a third-party to print and mail a collection letter that was sent to the appellee. It was the topic of standing that Judge Gerald Tjoflat of the Eleventh Circuit focused on in his dissent as part of a second ruling that was issued in this case back in October. The TransUnion ruling, which was issued after the Eleventh Circuit issued its first ruling in Hunstein and while an en banc petition was pending, changed his mind that the appellee did not have standing to sue.
The original three-judge panel ruled unanimously back in April that using the letter vendor constituted a communication under the FDCPA. When it issued a sua sponte ruling in October, the vote was two-to-one, with Judge Tjoflat dissenting on the appelee’s lack of standing.
In this case, the plaintiff/appellee incurred a medical debt that was placed with the defendant/appellant for collection. The defendant electronically transmitted information about the plaintiff, including his status as a debtor, the exact balance of the debt, the entity to whom the debt was owed, that the debt concerned his son’s medical treatment, and his son’s name to a third-party company that specializes in printing and mailing letters. That information was added to a collection letter and sent to the plaintiff.
The plaintiff sued, alleging that the disclosure of the information to the letter vendor violated the third-party disclosure provisions of the FDCPA. A District Court judge disagreed and dismissed the suit, which was appealed to the Eleventh Circuit.
Standing has become a double-edged sword for companies in the accounts receivable management industry. While plaintiffs not having standing to sue in federal court may seem like a good thing, the recent rulings have instead sent plaintiffs to file their suits in state courts instead. State courts can be far less predictable than federal courts.