A District Court judge in New York has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act class-action, ruling the plaintiff lacked standing to sue over a disclosure made in a collection letter.
The Background: In April of 2022, the plaintiff received a collection letter from the defendant. The letter included the following disclosure:
The law limits how long you can be sued on a debt. Because of the age of your debt, LVNV Funding LLC will not sue you for it. If you do not pay the debt, LVNV Funding LLC may report or continue to report it to the credit reporting agencies as unpaid.
We are required by regulation of the New York State Department of Financial Services to notify you of the following information. This information is NOT legal advice: Your creditor or debt collector believes that the legal time limit (statute of limitations) for suing you to collect this debt may have expired. It is a violation of the Fair Debt Collection Practices Act, 15 U.S.C. section 1692 et seq., to sue to collect on a debt for which the statute of limitations has expired. If a creditor sues you to collect on this debt, you may be able to prevent the creditor from obtaining a judgment against you. To do so, you must tell the court that the statute of limitations has expired. Even if the statute of limitations has expired, you may choose to make payments on the debt. We are also required to tell you that, for certain kinds of debts, if you make a payment on the debt, admit to owing a debt, or promise to pay a debt, the time period in which the debt is enforceable in court may start again. However, your creditor or debt collector believes that restarting the time period on the above referenced this [sic] debt is prohibited by law, and whether or not you acknowledge, promise to pay, or make a payment on this debt, your creditor or debt collector will NOT sue you to collect this debt. If you waive the statute of limitations on a debt, the time period in which the debt is enforceable in court may start again.”
The letter left the plaintiff feeling concerned and uncertain and rendered him unable to evaluate his options of how to handle this debt, and forced him to expend time and money to determine the proper course of action.
- Relying on the letter and not taking any action was detrimental to the plaintiff because the defendant was furnishing information about the debt to the credit bureaus and this dissemination to third parties cause reputational harm to the plaintiff as well as emotional harm in the form of stress and anxiety, which manifested itself in the form of lost sleep.
The Ruling: None of the allegations made by the plaintiff rise to the level of suffering a concrete, which is required in order to have standing to file a lawsuit in federal court, noted Judge Andrew L. Carter of the District Court for the Southern District of New York.
- Emotional harms, even those that lead to loss of sleep are insufficient to establish standing, Judge Carter ruled, as are reputational harms, especially because the plaintiff did not state anywhere that his credit report was shared with a third party.
- The plaintiff’s final claim — a sufficient risk of being hared by future conversion and defamation — which caused him to spend time and money to mitigate the risk are also not concrete harms, Judge Carter ruled.
