Judge Grants MTD in FDCPA Overshadowing Case

A District Court judge in Kentucky has granted a defendant’s motion to dismiss and denied a plaintiff’s request for leave to file an amended complaint after filing a Fair Debt Collection Practices Act lawsuit against a collection law firm for allegedly overshadowing the validation notice by mentioning in a collection letter that a lawsuit might be filed if the debt was not paid.

A copy of the ruling in the case of Spillman v. Mason, Schilling & Mason Co. can be accessed by clicking here.

The plaintiff received a collection letter that included the following disclosure:

Our client has referred the above matter to our office. Please note that our client has already authorized us to file a lawsuit to collect the balance due. We will wait until the expiration of the 30 day period below, before considering whether we should file a lawsuit. If a lawsuit is filed, you may be held liable for interest and court costs, which would increase the balance due indicated herein. Please submit your check directly to this office, made payable to Mason Schilling & Mason Co., L.P.A., Attorneys for PROSCAN IMAGING.

The letter was signed by an attorney for the defendant. Under the signature was the validation notice disclosure.

Five months later, the creditor — represented by the defendant — filed a lawsuit against the plaintiff. The plaintiff filed suit of her own, alleging the letter she received violated Section 1692e(10) by threatening legal action it did not intend to take and Section 1692g(b) by overshadowing the validation notice disclosures when it mentioned it had been authorized to file a lawsuit to collect on the debt.

The defendant argued in its motion to dismiss that the plaintiff lacked standing to sue because she did not allege an injury in fact and did not suffer a concrete injury.

The plaintiff attempted to prove she had standing to sue by claiming that the lawsuit that was filed was the type of “abusive” collection practices that the FDCPA was designed to prevent. Possibly so, but the plaintiff never alleged to have suffered an injury as a result of that action, noted Judge David J. Hale of the District Court for the Western District of Kentucky. “But even if the Court accepted this argument, Spillman has not pointed to any traditional or common-law injuries that resemble her alleged anxiety and confusion, which is required when claiming that a statutory violation establishes standing,” Judge Hale wrote. “Thus, the Court cannot find that Spillman has demonstrated that she has standing based on MSM’s alleged FDCPA violations and will deny leave to amend.”

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