Sixth and Ninth Circuits Issue Decisions Applying Spokeo to FDCPA and FCRA Claims

Ballard Spahr LLP

Ballard Spahr LLP

Earlier this month, in Buchholz v. Meyer Njus Tanick, P.A., the U.S. Court of Appeals for the Sixth Circuit affirmed a district court’s decision that a plaintiff who alleged that the defendant had violated the Fair Debt Collection Practices Act (“FDCPA”), failed to allege a concrete injury in fact sufficient to confer Article III standing. The plaintiff alleged the defendant law firm violated the FDCPA by sending him two letters regarding overdue payments he owed on two accounts.  The plaintiff alleged that the law firm processed such a high volume of debt collection correspondence that its attorneys could not engage in a meaningful review of underlying accounts even though the letters created the impression that an attorney had reviewed the file.

The plaintiff further alleged that he suffered anxiety from reading the letters and from fearing litigation.  The Sixth Circuit rejected plaintiff’s argument that he had standing to sue. The plaintiff did not dispute the accuracy of the information in the letters or that he owed the debts.  The Court found that because the plaintiff had not alleged that the letters threatened litigation or that he had refused to pay the past due amounts owed, the alleged harm was speculative and the letters did not cause any actionable harm that would constitute a procedural violation under the U.S. Supreme Court’s decision in Spokeo and his “self-inflicted injury” did not create standing.  Accordingly, the Sixth Circuit found that the district court had properly dismissed the complaint for lack of Article III standing.

On the flip side, in Bultemeyer v. CenturyLink, Inc., the U.S. Court of Appeals for the Ninth Circuit reversed a district court’s finding that the plaintiff lacked Article III standing to bring a lawsuit alleging that the defendant violated the Fair Credit Reporting Act by obtaining her credit report without a permissible purpose and without the required authorization.  The district court found that the plaintiff failed to demonstrate a concrete injury in fact sufficient to satisfy Article III standing under Spokeo and dismissed her claim. The District Court determined that the defendant “did nothing with the information that would harm” the plaintiff and found that the plaintiff alleged only “a bare procedural violation without identifying any concrete harm.”

In a brief Memorandum decision, the Ninth Circuit held that “[s]ection 1681b(f)(1) [of the FCRA] ‘protects the consumer’s substantive privacy interest’ by prohibiting third parties from ‘obtaining a credit report for a purpose not otherwise authorized.’”  The Ninth Circuit stated further that because “‘every violation of § 1681b(f)(1) offends the interest that the statute protects,’ a plaintiff ‘has standing to vindicate her right to privacy under the FCRA when a third-party obtains her credit report without a purpose authorized by the statute, regardless of whether the credit report is published or otherwise used by that third-party.’”  The Ninth Circuit held that the plaintiff’s allegation that defendant obtained her credit report without the required authorization was sufficient to establish Article III standing and reversed and remanded the district court’s dismissal of the plaintiff’s FCRA claim.

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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