Judge Remands FDCPA Case Back to State Court

Standing, with respect to Fair Debt Collection Practices Act lawsuits these days, is not necessarily always a black-and-white situation. Whether a plaintiff suffered a concrete injury sufficient enough to have standing to sue in federal court is a moving target, but judges have generally indicated that in order to have standing, a plaintiff needs to have suffered some form of financial injury, such as paying a debt that he or she did not owe. But isn’t it true, one defendant attempted to argue, that judges should accept that a plaintiff must have done something different upon receiving a collection letter alleged to be misleading and deceptive, and that something is enough to confer standing? Not so, ruled a District Court judge in New York, who remanded a case back to state court after ruling that the plaintiff did not have standing to sue in federal court.

A copy of the ruling in the case of Wolkenfeld v. Portfolio Recovery Associates can be accessed by clicking here.

The plaintiff filed suit in state court after receiving a collection letter from the defendant that attempted to collect on an unpaid debt. The letter indicated that the statute of limitations had expired and that the plaintiff could no longer be sued and that the original creditor had charged off the debt and sold it to the defendant less than three years prior to the sending of the letter. The letter included documentation showing the most recent date of default by the plaintiff. In his suit, the plaintiff alleged to have been concerned and confused by the letter and expended time and money to determine the proper course of action. Had it not been for the defendant’s statutory violations, the plaintiff claimed, he would have pursued a different course of action.

The defendant remanded the case to federal court, and was then ordered by Judge Pamela K. Chen of the District Court for the Eastern District of New York to show cause why the case should be kept in federal court.

The plaintiff appeared to say all the right things in his complaint to make sure he did not claim to have standing to sue in federal court. But, the defendant argued, the plaintiff must have “did something different than he otherwise would have and that he incurred injuries in the process.” The plaintiff should be instructed to explain what he did in response to the statements in the letter so that a determination could be made if he suffered a concrete injury or not. Not going to happen, ruled Judge Chen. “The  question here, however, is not whether the claim arises under federal law, but whether Plaintiff has suffered an injury-in-fact sufficient to confer jurisdiction on this Court,” Judge Chen wrote. “Accordingly, because Plaintiff has not alleged any concrete injury and does not have Article III standing, the Court lacks subject matter jurisdiction over this matter, and it must be remanded to state court.”

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