For the second time, a District Court judge in Illinois has dismissed a Fair Debt Collection Practices Act class-action lawsuit because the plaintiff lacked standing to sue, this time ruling that the plaintiff could not have paid the settlement amount offered by the debt collector or successfully changed the order of other payments.
The background: The plaintiff defaulted on a credit card debt that was placed with the defendant. The defendant filed a lawsuit against the plaintiff on behalf of the bank and obtained a judgment for $3,607.02. After unsuccessful attempts to collect the debt, the defendant sent the plaintiff a collection letter in January 2020. The letter offered a 40% settlement on the balance due of $4,212.90 if the plaintiff made a single payment of $1,685.16.
- Instead, the plaintiff filed a class-action lawsuit alleging that the defendant violated the FDCPA by sending this letter seeking to collect on an account that had already been reduced to judgment.
- The case has had a complex procedural history, including an initial dismissal, an appeal, and a remand from the Seventh Circuit Court of Appeals. The key issue ultimately came down to whether the plaintiff could have paid the settlement amount or successfully changed the order of other payments.
The ruling: In his ruling, Judge Robert W. Gettleman of the District Court for the Northern District of Illinois focused on the plaintiff’s own admission during a deposition. The plaintiff stated that the $1,685.16 settlement offer “was lot of money for me to pay one-off time. I didn’t have money at that time.” He further admitted that he could have only paid $100 or $150 at most.
- Based on this admission, the judge concluded that the plaintiff lacked an injury sufficient to confer Article III standing. The court reasoned that since the plaintiff could not have paid the settlement offer within a reasonable time, nothing the defendant allegedly did or failed to do could have injured the plaintiff.
- Judge Gettleman rejected the plaintiff’s argument that he might have been able to negotiate an alternative settlement if not for the allegedly misleading information in the letter. The court noted that the plaintiff had forwarded the letter to his attorney, who explained its contents, giving the plaintiff ample opportunity over three months to attempt negotiations if he wished.
- In dismissing the case, Judge Gettleman emphasized that his decision was consistent with the Seventh Circuit’s instructions to resolve whether the plaintiff could have paid the settlement amount or changed the order of other payments. The discovery process revealed that the plaintiff could not have done either, and neither party disputed this fact.
