The Court of Appeals for the Seventh Circuit has affirmed the dismissal of a Fair Debt Collection Practices Act case because the plaintiff lacked standing to sue, but one of the three judges wrote a dissenting opinion arguing that receiving collection letters from the defendant after having the debt discharged in bankruptcy is enough for the plaintiff to have standing to sue.
A copy of the ruling in Pucillo v. National Credit Systems can be accessed by clicking here.
The plaintiff filed for bankruptcy protection and listed a past-due debt owed for his apartment rental on the petition, a debt that he had disputed. The defendant subsequently sent two collection letters to the plaintiff, demanding payment on the unpaid debt. The letters informed the plaintiff that in exchange for payment on the discharged debt, it would “update credit data it may have previously submitted regarding this debt.” A District Court judge ruled the plaintiff lacked standing to sue because all he claimed to have suffered was confusion, stress, and concern.
The Seventh Circuit has been way out in front of other courts in the past couple of years, setting a new standard for the type of injury a plaintiff needs to have suffered in order to be able to claim a collector violated the FDCPA.
Two of the three judges assigned to the appeal ruled that the plaintiff’s worry that his bankruptcy filing may have been futile because he received the collection letters only alleges the “risk of harm” and not a harm in and of itself. Under TransUnion v. Ramirez, the risk of harm is not enough for a plaintiff to have standing. Nor does the risk of injury reach the level of an invasion of the plaintiff’s privacy, the Appeals Court ruled. The plaintiff “argues he suffered several potential harms, and he invokes different decisions of our court in which standing has been found based on those harms,” the Appeals Court wrote. “But those two decisions are distinguishable, and there is a gap between Pucillo’s pleadings in the district court and the arguments he makes on appeal.”
But in a dissenting opinion, Judge John Lee argues that whether his two colleagues determined the plaintiff lacked standing because he only received two letters — and not five text messages like in Gadlehak v. AT&T Services — or because receiving letters is different than receiving text messages, they missed the boat. “…the abuse that forms the basis of Pucillo’s claim lies not in the two letters per se
