In one fell swoop on Friday, a District Court judge in New York dismissed six Hunstein cases for lack of standing, ruling that a recent Supreme Court decision “casts significant doubt on the continued viability of Hunstein” cases, but giving the plaintiffs time to amend their complaints, either in federal or state court.
A copy of the ruling from Judge Gary Brown of the District Court for the Eastern District of New York can be accessed by clicking here.
In each of the six cases, a plaintiff alleged a debt collector violated the Fair Debt Collection Practices Act by using a third-party mail vendor to print and mail collection letters that were sent to the plaintiffs. The claims mirror the one made in Hunstein v. Preferred Collection & Management Services, in which the Eleventh Circuit Court of Appeals ruled that the defendant’s use of a letter vendor constituted a violation of Section 1692c(b) of the FDCPA by communicating information about a debt with a third party. In the three months since the Eleventh Circuit issued its Hunstein ruling — which the defendant is seeking an en banc rehearing of the case — hundreds of similar lawsuits have been filed across the country.
For these cases, Judge Brown looked to the ruling issued by the Supreme Court in TransUnion v. Ramirez, in which the Court confirmed that plaintiffs must suffer a concrete injury in order to have standing to sue in federal court. Comparing the injury suffered in TransUnion v. Ramirez, in which a class of individuals were accidentally added to a terrorist watch list, to the injuries allegedly suffered by the plaintiffs in the Hunstein cases, Judge Brown cited the Supreme Court’s analysis that courts have not recognized “intra-company disclosures as actionable publications for purposes of the tort of defamation. Nor have they necessarily recognized disclosures to printing vendors as actionable publications.”
The Supreme Court’s statement “appears dispositive of the mailing vendor theory,” Judge Brown wrote.
As well, invoking the risk of future harm is not enough to confer standing, Judge Brown confirmed. Judge Brown also took issue with the amount of the debts in the Hunstein lawsuits and whether “the possible non-payment of a relatively small invoice could constitute ‘a defamatory statement that would subject [plaintiffs] to hatred, contempt, or ridicule,’ particularly when such information is shared only with a mailing vendor.”
Judge Brown did give the plaintiffs 14 days to amend their complaints or to re-file the suits in state court, if appropriate. If the cases are not amended or re-filed within 14 days, they will be dismissed with prejudice.
