Appeals Court Denies En Banc Request in FDCPA Case, While Dissenting Opinion Says Court Has ‘Strayed Far’ from Standing Threshold

The Court of Appeals for the Seventh Circuit has denied an en banc hearing request from a plaintiff after a panel of judges overturned a $350,000 award against a collector in a Fair Debt Collection Practices Act case, but a quartet of judges wrote a dissenting opinion arguing how the Court has “strayed far” from rulings issued by the Supreme Court on the threshold of what it takes for an individual to have standing to sue in federal court.

A copy of the ruling, and the dissenting opinion, in the case of Pierre v. Midland Credit Management can be accessed by clicking here.

The plaintiff defaulted on a credit card debt, which was purchased by the defendant. The defendant filed a collection lawsuit against the plaintiff seeking to recover the unpaid balance, but then voluntarily dismissed the suit. Five years later, the defendant sent the plaintiff a collection letter. The letter included a disclosure that, because of the age of the debt, the defendant would not sue or credit report the debt and payment or non-payment would not affect the plaintiff’s credit score. The plaintiff filed suit, alleging the letter violated Sections 1692e(2), 1692e(10), and 1692f of the FDCPA. A District Court judge certified the class and granted summary judgment in favor of the plaintiff. A jury awarded the class $350,000 in damages. The defendant twice sought dismissal of the case on the grounds that the plaintiff lacked standing to sue.

At the end of the day, the Appeals Court initially ruled, the plaintiff never made a payment as a result of receiving the letter, nor did she make a promise to do so or otherwise “act to her detriment in response to anything in or omitted from the letter.” Calling the collector to dispute the debt and then contacting an attorney is not enough to be the “basis for a lawsuit,” the Appeals Court wrote.

A majority of judges on the Seventh Circuit agreed with the panel’s ruling and voted not to hold an en banc rehearing of the case. But that did not stop the four judges from sharing their opinion on how the plaintiff’s claims “should easily satisfy” the requirements for standing that have been set by the Supreme Court through rulings issued in Spokeo v. Robins and TransUnion v. Ramirez.

“The emotional distress, confusion, and anxiety suffered by Pierre in response to this zombie debt collection effort fit well within the harms that would be expected from many of the abusive practices,” the judges wrote in their dissenting opinion. “That’s true regardless of whether the debtor actually made a payment or took some other tangible action in response to them.”

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