6th Cir. Holds Mere Confusion Does Not Impart Article III Standing, Reverses FDCPA Ruling in Favor of Defendant

The U.S.
Court of Appeals for the Sixth Circuit recently reversed a trial court order
granting summary judgment in favor of the defendant on a consumer’s claim that
the defendant violated the federal Fair Debt Collection Practices Act.

In so ruling, the Sixth Circuit
held that, even though the defendant’s failure to properly identify itself in
the phone calls confused the plaintiff and led to him sending a cease and
desist request to the wrong entity, confusion by itself does not establish “a
concrete injury for Article III purposes.” 

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Therefore, the Court held, the
consumer did not suffer “more than a bare procedural violation of the FDCPA” as
required to establish the standing necessary to pursue his claims. 

A copy of
the opinion in Ward v. Nat’l Patient Account
Servs. is available at:  Link to Opinion.

The
consumer incurred medical expenses after treatment with a medical provider. The
provider hired a company to collect the debt. The collection company allegedly
left several voice messages while attempting to collect the debt.

The consumer filed suit alleging
claims against the collection company (“defendant”) under the FDCPA arising out
of the alleged voice mails where the defendant did not accurately identify
itself.  The consumer claimed that the defendant’s failure to accurately
provide its correct legal name confused him.  As a result of this
confusion, the consumer allegedly sent a cease and desist letter to the wrong
entity.

Specifically, the consumer
claimed that the defendant violated section 1692d(6) of the FDCPA, which
provides that a “debt collector may not engage in any conduct the natural
consequence of which is to harass, oppress, or abuse any person in connection
with the collection of a debt[,]” including the “placement of telephone calls
without meaningful disclosure of the caller’s identity.” 

The consumer also claimed that
the defendant violated section 1692e(14), which provides that a “debt collector
may not use any false, deceptive, or misleading representation or means in
connection with the collection of any debt[,]” including “us[ing] any
business, company, or organization name other than the true name of the debt
collector’s business, company, or organization.”

The defendant moved for summary
judgment arguing that it did not meet the definition of a debt collector under
the FDCPA, and the trial court granted the motion. This appeal followed.

On appeal, the defendant argued
that the consumer lacked Article III standing. Although the defendant did not
raise this issue with the trial court, the Sixth Circuit observed that it has
an independent obligation to determine its jurisdiction to hear an appeal.

As you may recall, standing
requires that the “plaintiff must have (1) suffered an injury in fact, (2) that
is fairly traceable to the challenged conduct of the defendant, and (3) that is
likely to be redressed by a favorable judicial decision.” The plaintiff bears
the burden of setting forth facts that demonstrate standing. 

The issue in this appeal was
whether the plaintiff suffered an injury in fact. This requires that “the
injury must be (1) particularized and (2) concrete.”  The dispute here
concerned whether the consumer suffered a concrete injury. 

The consumer claimed that he
suffered a concrete injury for two reasons. First, he argued that the violation
of his procedural rights under the FDCPA established a concrete injury. Second,
he claimed that the confusion caused by the phone calls and expense of the
counsel that he retained demonstrated that he suffered a concrete injury. 

The Sixth Circuit observed that
in TransUnion LLC v. Ramirez, the
Supreme Court of the United States recently clarified what is required to show
that a violation of a procedural right established a concrete injury and, as a
result, the plaintiff “must show either that the procedural harm itself is a
concrete injury of the sort traditionally recognized or that the procedural
violations caused an independent concrete injury.”  After conducting that
inquiry here, the Sixth Circuit concluded that the consumer lacked Article III
standing to pursue his alleged claims.

As a result of the alleged FDCPA
violations the consumer argued that the FDCPA created an enforceable right to
know who is calling about a debt because the defendant’s failure to correctly
provide its full legal name concretely harmed him. The consumer further argued
that this harm is closely related to the invasion of privacy harm that most
states recognize. 

The Sixth Circuit rejected the
consumer’s argument because the defendant’s alleged failure to disclose its
full legal name does not resemble a traditional harm “regarded as providing a
basis for a lawsuit,” as required to establish a concrete injury. 

The Sixth Circuit acknowledged
that most states recognize actions to enforce the right of privacy, including
“the tort of intrusion upon one’s right to seclusion.” However, the Court noted
that not receiving full and complete information about the name of a defendant does
not closely resemble the tort of intrusion upon seclusion because this common
law tort typically requires proof that the defendant “intentionally intrude[d],
physically or otherwise, upon the solitude or seclusion of another or his
privacy affairs or concerns.”

The consumer’s alleged harm did
not impact his privacy.  Instead, it merely confused him. The defendant
did not share his private information with a third party or publicize his
private information. Thus, the Sixth Circuit found that the consumer’s claimed
harm did “not bear a close relationship to traditional harms” and the consumer
could not establish standing based solely upon the alleged statutory
violations.

The consumer advanced several
additional reasons for why he suffered a concrete injury that stemmed from the
alleged statutory violation. First, the consumer claimed that the defendant’s
failure to properly identify itself in the phone calls confused him and led to
him sending a cease and desist request to the wrong entity. The Sixth Circuit
rejected this argument, because confusion by itself does not establish “a
concrete injury for Article III purposes.”

The consumer next argued that he
retained counsel to stop the calls and that this action constitutes a concrete
harm flowing from the statutory violation. The Sixth Circuit disagreed that the
expense of hiring counsel established a concrete harm because applying this
“logic to any plaintiff who hires counsel to affirmatively pursue a claim would
nullify the limits created under Article III.”

Finally, the consumer argued that
an additional call that he received after he sent his cease and desist letter
to the wrong entity concretely harmed him. The Sixth Circuit declined to
consider this argument because the consumer did not clearly allege in his
complaint that he received another phone call after sending the cease and
desist letter or that this additional call harmed him.

Thus, the Sixth Circuit held that
consumer did not demonstrate that he suffered “more than a bare procedural
violation of the FDCPA” and that he lacked Article III standing to pursue his
claims. Therefore, the Sixth Circuit vacated the trial court’s order granting
summary judgment and remanded the case to be dismissed without prejudice for
lack of subject matter jurisdiction.