Judge Grants MTD For Lack of Standing Over Hunstein Claim

Judge Cathy Seibel of the District Court for the Southern District of New York gets it. Judge Seibel is the latest in a growing line of judges across the country who are ruling that plaintiffs filing Hunstein claims do not have standing to sue in federal court because they did not suffer a concrete injury. In Judge Seibel’s case, she understands why collection agencies use third-party vendors to print and mail envelopes, and she understands the process in which that operation is completed, which is why she granted the defendant’s motion to dismiss in the case in question.

A copy of the ruling in the case of Sputz v. Alltran Financial can be accessed by clicking here.

The plaintiff alleged that the defendant violated Section 1692c(b) of the Fair Debt Collection Practices Act by sending information about him and his debt to a third-party, which printed and mailed the collection letter that the plaintiff received — otherwise known as a Hunstein claim.

In the first case, Judge Seibel notes, the information that was communicated to the vendor was not disclosed to the public, which is “essential” to determining liability for public disclosure of private information. The plaintiff argued that as long as people who were not entitled to have the information came into possession of it, a statutorily unlawful disclosure has occurred. But, as Judge Seibel writes, the plaintiff’s claim makes it “seem clear” that the vendor “used automated systems” to print and mail the letter. “Plaintiff has not alleged that a single person read or perceived his information, just that it was processed by a machine,” she wrote.

Even the amount of the debt — $14,715.61 — was not enough to sway Judge Seibel that a public disclosure took place.

“While accumulating debt that one does not repay might expose one to opprobrium if it became known to others in society, it does not expose one to any additional opprobrium if that fact becomes known to a debt collector’s mailing vendor, rather than just the debt collector – or, more accurately, to a debt collector’s mailing vendor’s computer, rather than just the debt collector,” she wrote.

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