We’ve seen this ruling in other jurisdictions, so it’s not necessarily a surprise, but I don’t think we’ve seen a ruling on this type of case in North Carolina yet. A District Court judge there has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act lawsuit on the grounds that the plaintiff lacked standing because he had the claim assigned to him by the individual who actually owed the debt in question.
The background: The plaintiff, who had been assigned a debt collection claim, engaged in communication with the defendant, regarding a debt he disputed. The plaintiff had sent a debt validation request, but the defendant allegedly continued to report the debt on the plaintiff’s credit report without responding. Despite the plaintiff’s follow-ups, the defendant did not resolve the issue, prompting the plaintiff to pursue legal action.
- The plaintiff claimed the defendant attempted to collect an unverified debt, reported the debt inaccurately, and made misleading statements about its status.
The ruling: Judge Louise W. Flanagan of the District Court for the Eastern District of North Carolina granted the defendant’s motion to dismiss, ruling the plaintiff lacked standing to pursue his claims. The key issue was that the claims under the FDCPA are not assignable, and thus, the plaintiff could not assert standing based on a claim that had been transferred to him by another party, Judge Flanagan ruled. The court referenced North Carolina state law, which prohibits the assignment of personal tort claims, including the type of claims the plaintiff was attempting to assert.
- While the plaintiff cited a Supreme Court ruling on the assignability of statutory claims, Judge Flanagan distinguished this case, noting significant differences, such as one case involving contract claims, not tort claims like the FDCPA.
- Judge Flanagan concluded that because the plaintiff’s assignment was void under North Carolina law, he lacked the necessary standing to pursue the FDCPA claims.
