Judge Grants Motion to Remand FDCPA Class Action Back to State Court, Orders Defendant to Pay Attorneys’ Fees

I don’t know if the dance that defendants in Fair Debt Collection Practices Act cases have to do around the issue of standing is a tap dance or more of a soft-shoe number, but there is definitely some graceful movements that are required. One defendant is being required to pay for trying to remove an FDCPA case from state court to federal court, with a District Court judge in Wisconsin granting the plaintiff’s motion to remand the case back to state court and ordering the defendant to pay the plaintiff’s attorneys’ fees to fight the removal.

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

The plaintiff filed a class action in Wisconsin state court, claiming the defendant violated the FDCPA when it offered a “permanent hardship” to the plaintiff in a collection letter. Included was a permanent hardship form that required the plaintiff to provide certain information, such as the last four digits of his Social Security number, his employment status, whether he was receiving any benefits from the government — such as unemployment insurance or Social Security — and a description of the hardship. The plaintiff claimed the form was a ploy, intended to gather information about whether the defendant should file a lawsuit against the plaintiff to collect on the unpaid debt.

The defendant answered the complaint, asserting that the “Plaintiff has not incurred an injury in fact, and Plaintiff does not therefore have standing under Article III of the United States Constitution to bring the instant claims.” The defendant then removed the case to federal court. The plaintiff filed a motion to remand the case back to state court. In arguing against remanding the case, the defendant cited the plaintiff’s claim for actual damages as satisfying the injury prong for Article III standing, and that the class claims made remand improper.

For Judge Pamela Pepper of the District Court for the Eastern District of Wisconsin, the issue of standing came down to the plaintiff’s claim that he was “confused, misled, and spent time and money investigating” the communication. “If hiring an attorney or spending money to litigate do not constitute concrete injuries-in-fact sufficient to confer Article III standing, ‘spend[ing] time and money investigating [a communication] and the possible consequences of responding to [that communication]’ do not suffice,” she ruled.

Then, Judge Pepper noted that the removal in the first place was “curious” because the defendant asserted in its affirmative defense that the plaintiff did not incur an injury in fact. “The defendant’s assertion that the plaintiff could have crafted his complaint to avoid federal court is not persuasive or relevant,” Judge Pepper wrote. “The defendant’s argument that an allegation of damages coupled with an intent to pursue those damages constitutes concrete injury is unsupported. The defendant’s failure to address any of the Seventh Circuit’s decisions finding no concrete injury in similar cases — Casillas, Larkin, Brunett, Markakos and many others — is troubling.”

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