Judge Dismisses FDCPA Class Action for Lack of Standing

A District Court judge in New Jersey has dismissed a Fair Debt Collection Practices Act case, ruling the plaintiff does not have standing to sue after accusing the defendant of adding a collection charge to the amount owed before the debt was collected and because the defendant’s logo could be seen through the glassine window of the envelope used to send the communication.

A copy of the ruling in the case of Rodriguez-Ocasio v. I.C. System can be accessed by clicking here.

The plaintiff incurred a debt to a pet hospital that was not paid. The pet hospital placed the debt with the defendant for collection and the defendant sent the plaintiff a collection letter. The letter stated the principal due and then assessed a collection charge that resulted in a total balance that was due.

The plaintiff filed suit, accusing the defendant of violating Sections 1692e, 1692e(2),1692e(2)(A), 1692e(5), 1692e(10), 1692f, 1692f(1), 1692f(8), 1692g, and 1692g(4) because the collection charge is technically not incurred until the defendant collects on the debt and because the defendant’s logo could be viewed through the window of the envelope. The suit was filed back in 2019, before the Supreme Court issued its ruling in TransUnion v. Ramirez, which led the judge to issue show cause orders to determine if the plaintiff suffered a concrete injury and thus had standing to sue in federal court.

The plaintiff claimed to have suffered a concrete injury because “when someone is attempting to manage their finances but lacks sufficient funds to pay all debts in full, that person must make rational decisions about which debts to pay and how much to pay,” and if the information that person receives is false or misleading, it “skews the consumer’s decision making process.”

But the issue that Judge John Michael Vazquez of the District Court for the District of New Jersey had with the plaintiff’s argument is that the allegations claim that only a least sophisticated consumer would have been harmed in receiving such a communication, not the plaintiff himself. “In short,” Judge Vazquez wrote, “Plaintiff appears to assert consumer confusion (although not necessarily confusion by Plaintiff).”

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