American Bar Association’s Business Law Today April Month-In-Brief: Business Regulation & Regulated Industries.

In Ward v. NPAS, Inc., 63 F.4th 576 (6th Cir. 2023), Plaintiff Ward did not pay as agreed for medical services, and the medical center sent his unpaid bills to a third-party collector, NPAS, Inc. (NPAS). In trying to collect the amount due, NPAS left Ward three voicemails. Ward sent a cease and desist letter after he received the second voicemail, but he sent it to the wrong company and therefore, NPAS did not receive it. The District Court determined that NPAS was not a debt collector under the Fair Debt Collection Practices Act (FDCPA) because the debt was not in default at the time NPAS attempted to collect. Ward appealed.

On appeal, the NPAS questioned whether Ward had suffered an injury in fact. Ward argued that he had been injured by the first two voicemails in three ways: (1) he was confused when NPAS identified itself in voicemails as NPAS instead of NPAS, Inc.; (2) he had expenses associated with hiring counsel; and (3) NPAS violated the FDCPA. The 6^th Circuit rejected these arguments and held that a bare procedural violation of the FDCPA is not enough to establish standing. Instead, Ward 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. The 6^th Circuit specifically reserved the question of whether the third voicemail allowed for an injury in fact as Ward’s complaint did not allege such a harm. The 6^th Circuit affirmed the District Court’s holding that NPAS was not a debt collector.

On remand to the District Court, Ward amended his complaint to include a claim for intrusion into seclusion as to the third voicemail. The District Court granted NPAS’s motion for summary judgment as to liability, again finding that NPAS was not a debt collector, but denied summary judgment as to standing. Ward appealed.

On appeal, the 6th Circuit analyzed whether the unwanted calls bear a close relationship to the kind of harm sought to be protected at common law for the intrusion into seclusion claim. The Court held that even if the number of calls received is small and may not be actionable at common law, Spokeo, Inc. v. Robins requires the Court to “look for a harm with a close relationship ‘in kind, not degree’ to common law harms.” The Court further held that “Congress may choose to ‘elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.’” Thus, one phone call was enough for Ward to establish standing and a concrete injury. Notably, the 6th Circuit analogized its decision to case law in sister circuits assessing injury in fact under the Telephone Consumer Protection Act (TCPA), holding that both the TCPA and FDCPA seek to prevent intrusions on a consumer’s privacy and courts have determined that one phone call under the TCPA is enough to establish standing.

Reprinted with permission from the American Bar Association’s Business Law Today April Month-In-Brief: Business Regulation & Regulated Industries.