A District Court judge in Nevada has overruled the objections of a defendant in 20 separate Fair Debt Collection Practices Act cases and remanded each of them back to state court where they were originally filed because the plaintiffs do not have standing to have the cases heard in federal court. Each of the plaintiffs were represented by the same attorney and all made the same allegations — that the defendant violated the FDCPA by disclosing information about a debt to a third party — a third-party mailing vendor. That’s right, these are all Hunstein cases.
The background: Each of the cases were originally filed in Nevada state court and then subsequently removed to federal court by the defendant.
- The defendant, a large debt buyer, the sought to have each case dismissed, arguing the complaints failed to state a claim and that the plaintiffs lacked standing under Article III of the Constitution.
- The plaintiffs, in turn, filed motions to remand, asserting that they were seeking only statutory damages and that the federal court lacked jurisdiction.
- The defendant maintained that the plaintiffs’ allegations were too vague to establish a concrete injury. At the same time, it argued that general references in the complaints were sufficient to establish standing.
- The plaintiffs countered that these generalized statements were not meant to allege actual injury, but rather to highlight the statutory rights provided by the FDCPA, which Congress has authorized to be enforced in both state and federal courts.
- A Magistrate court judge recommended last month that each of the cases be dismissed and remanded back to federal court, to which the defendant objected.
The ruling: Judge Cristina D. Silva of the District Court for the District of Nevada agreed with the magistrate judge’s earlier recommendation that the federal court lacked subject matter jurisdiction and that remand, not dismissal, was the proper outcome. The ruling emphasized that the defendant bore the burden of proving removal was proper, and it failed to do so.
- Judge Silva wrote, “There is no dispute that to establish standing a plaintiff must have suffered an injury-in-fact — an invasion of a legally protected interest which is concrete and particularized, and actual or imminent, not conjectural or hypothetical.” The judge noted that none of the plaintiffs alleged they had personally suffered harms like bankruptcies or job losses, making their complaints insufficient for federal jurisdiction.
- However, that lack of standing under Article III did not preclude the claims from proceeding in Nevada state court. The ruling highlighted Nevada’s “long-standing history of recognizing statutory rights that are broader than those afforded to citizens by constitutional standing,” meaning plaintiffs could continue their FDCPA claims at the state level.
- Judge Silva also pointed out the structural quirk of the federalist system: “While it may strike some as nonsensical that a state court has jurisdiction to adjudicate a federal claim when a federal court does not, this is in fact a notable quirk of the United States federalist system.”
- Ultimately, she denied the defendant’s motions to dismiss, granted the plaintiffs’ motions to remand, and ordered each of the 20 cases back to Nevada’s Eighth Judicial District Court.
