Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau


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Spokeo’s Impact (So Far) on FDCPA Claims

Last week, Dykema’s Consumer Financial Services Law Blog discussed in detail the Supreme Court’s decision in Spokeo v. Robins, 136 S. Ct. 1540 (2016). In anticipation of that decision, district courts across the country issued stays pending guidance from the Supreme Court on one key issue: “Whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute.”

As we explained last week, the Court held that a plaintiff must allege an injury-in-fact that is both concrete and particularized. In doing so, however, the Court failed to answer whether the injury alleged—a Fair Credit Reporting Act violation that occurred when Spokeo’s search engine disseminated an inaccurate zip code—was sufficient to qualify as a particularized and concrete injury. The Court’s opinion, which has been described as “underwhelming,” did not provide the guidance that district courts had hoped for when they stayed their cases.

Particularly, district courts addressing Spokeo’s impact on claims under the Fair Debt Collection Practices Act (“FDCPA”) have been split so far as to whether a plaintiff’s allegation of a FDCPA violation, in the absence of any actual harm, adequately alleges a concrete injury. Some courts, led by the Eleventh Circuit’s unpublished opinion in Church v. Accretive Health, Inc., No. 15-15708, 2016 U.S. App. LEXIS 12414 (11th Cir. July 6, 2016), have answered in the affirmative, holding that a violation of the FDCPA, by itself, is a violation of a right that Congress sought to elevate to a concrete injury.

Several district courts, however, have noted their disagreement with Church’s analysis and have declined to follow it. See, e.g., Nokchan v. Lyft, Inc., No. 15-cv-03008, 2016 U.S. Dist. LEXIS 138582 (N.D. Cal. Oct. 5, 2016) (“not follow[ing] Church” and declining to adopt its “broad reading” of Spokeo); Macy v. GC Servs. L.P., No. 3:15-cv-819, 2016 U.S. Dist. LEXIS 134421, at *8 n.3 (W.D. Ky. Sept. 29, 2016) (noting that it “does not share the Church panel’s expansive reading of Spokeo”); Dolan v. Select Portfolio Servicing, No. 03-CV-3285, 2016 U.S. Dist. LEXIS 101201, at *20 n.7 (E.D.N.Y. Aug. 2, 2016) (“respectfully disagree[ing] with Church” and “reject[ing] the view that Spokeo established the proposition that every statutory violation of an ‘informational’ right ‘automatically’ gives rise to standing”). These courts have cited Spokeo’s statement that, just because Congress “identif[ies] and elevat[es] intangible harms does not mean that a plaintiff automatically satisfied the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. Article III standing requires a concrete injury even in the context of a statutory violation.” 136 S. Ct. at 1549. Thus, according to these courts, the bare allegation of a FDCPA violation, in and of itself, would fail to adequately plead a concrete injury. Others have held similarly. See Perry v. Columbia Recovery Grp., No. C16-0191JLR, 2016 U.S. Dist. LEXIS 145093, at *26 (W.D. Wash. Oct. 19, 2016) (finding that 15 U.S.C. § 1692g’s “requirements are procedural rights designed to decrease the risk of injury identified by Congress in the FDCPA—abusive debt collection practices. Although violating these procedural rights may result in the harm identified by Congress, it does not result in such an injury on its own”); Provo v. Rady Children’s Hosp., No. 15cv00081, 2016 U.S. Dist. LEXIS 120174, at *4 (S.D. Cal. Sept. 6, 2016) (finding allegation of a 15 U.S.C. § 1692e violation to be a “bare procedural” allegation that failed “to adequately plead injury in fact resulting from [the] alleged statutory violation”).

As the cases continue to pour in, it will be important for debt collectors and other FDCPA defendants to keep an eye out for any new developments in their jurisdiction.