Judge Grants Motion to Remand Hunstein Class Actions Back to State Court

A District Court judge in Illinois has granted motions in two separate Fair Debt Collection Practices Act class-action lawsuits to remand the cases back to state court, ruling the plaintiffs lacked standing to sue in federal court.

Copies of the rulings in Navarroli v. Medicredit and Maldonado v. Credit Control Services can be accessed by clicking here and here.

In both cases, the plaintiffs claimed the defendants violated Section 1692c(b) of the FDCPA by using a third party vendor to print and mail collection letters. The plaintiffs alleged that the defendant shared information about the individuals — their names, addresses, statuses as debtors, details of their accounts, and other personal information — with the vendors without the permission of the plaintiffs.

Both lawsuits were filed in Illinois state court and removed to federal court by the defendants. The plaintiffs then moved to remand both class actions back to state court because the plaintiffs lacked standing.

The defendants attempted to argue that the alleged violations bore a “close relationship” to invasion of privacy and thus reached the threshold of a concrete injury, but looking at the rulings in Hunstein v. Preferred Collection & Management Services as well as other cases across the country, Judge Robert M. Dow, Jr., of the District Court for the Northern District of Illinois disagreed. In order for an invasion of privacy to have occurred, the information in question needed to be made public, and the plaintiffs did not allege that this occurred. Because the plaintiffs claimed that the information was only shared with a single party — the letter vendor — that is not a public disclosure of private facts, Judge Dow ruled.

In addition, the alleged violations “run afoul” of the FDCPA’s intended purpose of preventing abusive collection tactics, like sharing information with the friends and neighbors of individuals with unpaid debts. “… a violation like Plaintiff’s lies well outside the scope of the FDCPA,” Judge Dow noted.