On October 12, the U.S. Court of Appeals for the Third Circuit issued a decision rejecting a district court’s finding that the so-called informational injury doctrine established Article III standing for the named plaintiff and putative class in a class action brought under the Fair Debt Collection Practices Act (FDCPA).
While the Third Circuit ultimately affirmed the district court’s granting of summary judgment in favor of the plaintiff, finding that she had established Article III standing under a different theory, the appellate court vacated the district court’s certification of the class and remanded for further consideration on whether questions about the class members’ individual standing would predominate over the issues common to the class.
The underlying case concerns medical billing letters sent to the plaintiff that included charges for individual visits, but also provided a lump sum of the total amount owed for numerous visits. The district court ruled on summary judgment that the letters violated § 1692e of the FDCPA because they were misleading and deceptive. Specifically, the district court held that under the least sophisticated consumer standard, it was unclear whether the lump sum total included the separate single-visit charges listed in the letter. The Third Circuit agreed that the letters violated the FDCPA.
However, the Third Circuit found that the district court incorrectly concluded the plaintiff had Article III standing based on the informational injury doctrine, which stands for the proposition that the omission of statutorily required information can result in a cognizable injury.
In the underlying case, the district court found that misleading letters constituted an injury-in-fact under the informational injury doctrine because the confusion caused by the letters led the plaintiff to suffer financial consequences. Specifically, the plaintiff retained a financial advisor to help her understand the letters and had not paid the bill because of the confusion over the amount owed. The district court concluded that the unnamed class members would also have Article III standing on the theory that they too would inevitably suffer the same injury resulting from the confusing letters.
The Third Circuit determined that the district court expanded the doctrine too far, holding that while the letters in question were misleading, they did not omit any statutorily required information. In other words, the plaintiff failed to establish the threshold element of the informational injury doctrine — that she was denied information that was statutorily required.
Despite this ruling, the Third Circuit still concluded that the plaintiff had established Article III standing. Specifically, the appellate court held that the plaintiff’s injury bore a sufficiently close relationship to the common-law tort of fraudulent misrepresentation. Specifically, because the misleading letters had caused the plaintiff to seek out and pay for professional advice on what the letters meant and caused her to forego paying the bill, she had suffered a concrete injury-in-fact sufficient to establish Article III standing.
Since the Third Circuit found the district court had improperly applied the informational injury doctrine to conclude there was Article III standing, it vacated the district court’s certification of the class. The Third Court held that while individual standing of every unnamed class member is not necessary to certify a class, each class member would ultimately have to demonstrate Article III standing in order to recover. Thus, questions relevant to certification — namely, predominance of common issues — had to be considered. Because questions of predominance had not been addressed as a result of the district court conclusion that there was Article III standing under the informational injury doctrine, the Third Circuit remanded the case.
