The technicalities of the legal system can be fascinating and unanticipated. To wit, the Court of Appeals for the Third Circuit has vacated a District Court’s dismissal of a Fair Debt Collection Practices Act class-action lawsuit against a collector because the plaintiff lacked standing to sue, and remanded the case back to the lower court to determine whether the plaintiff should be allowed to amend her complaint or whether the case should be dismissed for lack of jurisdiction instead.
The Background: The plaintiff received a collection letter from the defendant that included the following disclosure:
- The law limits how long you can be sued on a debt. Because of the age of your debt, the creditor cannot sue you for it. In many circumstances, you can renew the debt and start the time period for the filing of a lawsuit against you if you take specific actions such as making certain payments on the debt or making a written promise to pay. You should determine the effect of any actions you take with respect to this debt.
The plaintiff filed suit, alleging the disclosure violated Sections 1692e, 1692e(2)(A), 1692e(5), and 1692e(10) of the FDCPA. The plaintiff claimed the disclosure was illegal because she could, in fact, be sued for her debt — the statute of limitations is an affirmative defense — and that the disclosure was misleading because in New Jersey, partial payment alone is not enough to restart the statute of limitations. But Judge Evelyn Padin of the District Court for the District of New Jersey did not have to look far to find other cases that have ruled on the exact same language used by the defendant and granted the defendant’s motion to dismiss.
The Ruling: While this appeal was pending, the Third Circuit issued it’s ruling in Huber v. Simon’s Agency , ruling that a plaintiff needs to allege more than just being confused by a collection letter in order to have standing to sue.
- The plaintiff in this case did not plead any facts to show that she either relied upon the language in the letter or that she suffered any consequence that flowed from that reliance, the Appeals Court ruled. All that the plaintiff claimed is that she received an allegedly misleading letter, nothing more.
- “Morales’s complaint is replete with ‘ifs’ and ‘coulds’ and ‘woulds,’ ” the Appeals Court wrote. “It is bereft of any factual allegations other than that she incurred a debt and received a misleading debt collection letter. Mere confusion and the speculative risk of a lawsuit are not enough to confer standing to an FDCPA plaintiff.”
