In a case that was defended by David Schultz at Hinshaw Culbertson, the Court of Appeals for the Seventh Circuit on Friday affirmed the dismissal of a Fair Debt Collection Practices Act lawsuit on the grounds the plaintiff lacked standing to sue — again — even though the plaintiff hired an attorney and paid an appearance fee, but a familiar voice also issued a dissenting opinion that the Court has strayed too far in how it interprets whether a plaintiff has suffered a concrete injury in FDCPA case.
A copy of the ruling in the case of Choice v. Kohn Law Firm and Unifund CCR can be accessed by clicking here.
The plaintiff defaulted on a credit card debt that was purchased by one of the defendants, which hired the other defendant to sue the plaintiff to collect on the unpaid debt. The suit indicated the defendant was seeking to recover the unpaid debt was well as “statutory attorney fees.” But attached to the complaint was an affidavit from the defendant that it was not seeking additional amounts after the charge-off date, including attorney’s fees. The plaintiff filed suit, alleging the two statements contradicted each other and constituted a false or misleading communication from the defendant.
The plaintiff claimed he became concerned and worried as a result to the reference that statutory attorney fees were being sought and that he was confused about how much he might have to pay. The plaintiff alleged he hired an attorney to help him ascertain the amount of the alleged debt owed, whether attorney’s fees could be imposed, and in what amount. The plaintiff paid an appearance fee to the attorney to appear in the underlying collection suit.
Where this case turns is during discovery, however, which is when the plaintiff denied that he owed any debt. The defendant sought to dismiss the case on the grounds the plaintiff lacked standing, and a District Court judge granted the motion.
Ultimately, the plaintiff’s contradictory statements did him in, according to the Appeals Court.
“Choice also contends, however, that the statement about statutory attorney’s fees led him to take a detrimental step by choosing to litigate the debt and paying an appearance fee, as opposed to paying or settling the debt,” the Appeals Court wrote. “But this factual allegation is contradicted by others in his complaint. Although Choice claimed he ‘would’ have ‘paid or settled’ the debt instead of litigating had the statement about statutory attorney’s fees not been made, he also alleges the statement ’caused him to … consider paying a debt that he would rather have chosen to dispute’ and ‘could have led to a decision to pay a debt that he would have preferred to contest.’ These contradictory allegations show that instead of being induced into hiring an attorney and litigating, the statement about statutory attorney’s fees left Choice confused about the proper course of action. As we have consistently explained, confusion leading one to hire a lawyer is insufficient to establish standing. We also see no material distinction between hiring a lawyer and paying an appearance fee for purposes of Article III standing.”
In a dissenting opinion, Judge David Hamilton wrote that hiring a lawyer should be enough for a plaintiff to have standing to sue. “That expense is virtually identical to injuries compensable in a common-law tort claim for malicious prosecution or abuse of process,” Judge Hamilton wrote.