Federal District Court: Violation Of The Fair Debt Collection Practices Act — Without More — Counts As A Concrete Injury

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On March 24, 2017, the United States District Court for the District of New Jersey concluded that an alleged violation of the Fair Debt Collection Practices Act (“FDCPA” or the “Act”) — without more — counted as a “concrete injury” for the purposes of Article III’s standing requirement.

The FDCPA — specifically, 15 U.S.C. § 1692f(8) — prohibits a debt collector from “[u]sing any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails[,] . . . except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.”

The defendant — Retrieval-Masters Creditors Bureau, Inc. — is a debt collector.  The plaintiff — Thomas E. St. Pierre — alleged that the defendant sent him two letters concerning unpaid E-ZPass debts and associated penalties.  According to the plaintiff, the defendant sent the letters in envelopes with transparent windows through which an observer could see the plaintiff’s name, address, and collection account number.

The plaintiff filed a lawsuit against the debt collector and contended that displaying the plaintiff’s information — his name, address, and collection account number — behind the envelopes’ transparent windows violated the FDCPA.  Specifically, the plaintiff argued that the debt collector violated 15 U.S.C. § 1692f(8) because the information visible behind the envelopes’ transparent windows was something other than what the statute allows to appear on an envelope: the debt collector’s address, and the debt collector’s business name if the name does not convey that it is in the debt collection business.  As remedies, the plaintiff sought statutory damages, costs of the litigation, and attorney’s fees.

The defendant filed a motion to dismiss the complaint.  The defendant, among other things, argued that the plaintiff had failed to allege a concrete harm that satisfied Article III’s standing requirement.  Specifically, the defendant contended that the plaintiff’s allegations were deficient because the plaintiff failed to allege that any actual harm or any risk of actual harm stemmed from the defendant’s conduct.  According to the plaintiff, the defendant’s conduct constituted a concrete harm because it caused an impermissible disclosure of private information about the plaintiff.

To resolve the dispute, the court identified two tests that it believed the Supreme Court of the United States established for determining whether an intangible harm is also a concrete harm. Under the first test, a court must determine whether the alleged harm has a close relationship to a harm that has traditionally been a legitimate basis for lawsuits in English courts or American courts.  Under the second test, a court must determine whether Congress has elevated the harm to the status of a legally cognizable harm.  After reviewing how other courts had dealt with similar alleged harms, the federal district court determined that the right to privacy, which was implicated when the defendant’s conduct disclosed private information about the plaintiff, was deeply rooted in the common law.  Additionally, the court concluded that Congress, by enacting the FDCPA, recognized a right to be free from having a debt collector disclose one’s private information on a debt collection envelope.  On those grounds, the court decided that the plaintiff’s alleged harm was concrete and satisfied Article III’s standing requirement.

Although the court determined that the plaintiff had suffered a concrete harm that satisfied Article III’s standing requirement, the court ultimately granted the debt collector’s motion to dismiss.  An essential requirement of an FDCPA claim is that the defendant’s conduct must involve an attempt to collect a “debt” as defined in the Act.  The court determined that the money the defendant attempted to collect did not count as a debt according to the Act’s definition and, on that basis, the court dismissed the complaint.

A copy of the court’s decision is available by clicking here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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