Appeals Court Vacates Dismissal of FDCPA Case to Give Plaintiff Chance to Replead

The Second Circuit Court of Appeals has vacated a lower court’s dismissal of a Fair Debt Collection Practices Act case and remanded it back to the District Court to give the plaintiff the opportunity to replead her claims because three days after the original case was dismissed, the Supreme Court issued its ruling in TransUnion v. Ramirez, which has significantly impacted the standing that plaintiffs have to sue in federal court, even though standing never came up in the original case.

A copy of the ruling in the case of Faehner v. Webcollex can be accessed by clicking here.

The plaintiff initially filed a class-action lawsuit against the defendant, accusing it of violating the FDCPA because the “charge-off” balance in a collection letter was different than what was listed as the “total balance” in an itemized list at the top of the letter. In between the “charge-off” amount and the “total balance” amount were three line items — post charge-off interest, post charge-off charges or fees, and payments, credits or adjustments — which were all listed as $0.00. The plaintiff accused the defendant of violating Sections 1692e, 1692e(10), and 1692g of the FDCPA because of the discrepancy in the amounts.

The defendant filed a motion to dismiss, arguing that the plaintiff failed to state a claim because even a least sophisticated consumer would understand that the total balance was what the plaintiff owed. Ultimately, the District Court judge ruled that the “mere absence of information” that would have explain the discrepancy was not enough for the plaintiff to state a claim.

The plaintiff appealed the ruling, but never raised the issue of standing in her brief.

In vacating the lower court’s ruling, the Second Circuit said:

“Three days after the district court dismissed the amended complaint, the Supreme Court decided TransUnion LLC v. Ramirez, which narrowed the grounds for asserting standing where the injury is primarily statutory. Given the change in standing doctrine that TransUnion has brought about, we remand to allow plaintiff an opportunity to replead her claims to comport with the pleading standards set out in TransUnion, and to give the district court an opportunity to address any standing questions in the first instance.”

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