Not Reading Collection Letter Leads Judge to Remand FDCPA Case Back to State Court

The threshold for establishing that you suffered a concrete injury in violation of the Fair Debt Collection Practices Act upon receiving a collection letter may be higher than its ever been for a plaintiff, but I think everyone can agree that claiming you did not even appear to read it is going to cause problems for your case. A District Court judge in New Jersey has ruled a plaintiff lacked standing to sue and remanded a case back to state court after both the plaintiff and the defendant attempted to prove the plaintiff had standing to sue in federal court after receiving a collection letter.

A copy of the ruling in the case of Daye v. GC Services Partnership can be accessed by clicking here.

The plaintiff received a collection letter from the defendant, attempting to collect on an unpaid student loan. According to the ruling from Judge Michael A. Shipp of the District Court for the District of New Jersey, what did the plaintiff do after receiving the letter? Nothing at all, he wrote. Based on the complaint, it does not appear as though the plaintiff ever read it. Nonetheless, the plaintiff filed suit, saying the letter violated the FDCPA because it did not detail the default date of the debt, whether the statute of limitations had expired or not, and the plaintiff’s legal liability, should he decline to pay the debt.

The plaintiff retained a lawyer and filed suit in New Jersey state court. What is missing from the plaintiff’s “grievances,” according to Judge Shipp are whether the plaintiff “suffered external consequences from receiving the letter, any allegations that he paid part of the debt, or suffered reputational harm.”

The plaintiff did attempt to introduce a new theory for standing, following the Supreme Court’s ruling in TransUnion v. Ramirez — that the Supreme Court left the FDCPA “untouched because the statute already requires particularized and distinctive harm to plaintiffs bringing these suits.” Unfortunately for the plaintiff, Judge Shipp disagreed. “Without reading the Letter, Daye did not suffer any harm and therefore he lacks standing,” he wrote.

Even if the plaintiff had read the letter, he still would not have had standing to sue, Judge Shipp ruled. “The Court does not suggest that all FDCPA claims are doomed,” he wrote. “But Daye needs to allege some form of concrete injury that accompanies the statutory violation; some consequence that stemmed from Daye’s reliance on the Letter; some adverse occurrence that arose from the Letter; or some parallel harm caused by a third party receiving the Letter. Here, Daye fails to allege any of these events.”

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