After the U.S. Supreme Court decided Spokeo in 2016, there was an unfulfilled moment of hope. Defendants in Fair Debt Collection Practices Act (FDCPA) cases would file motions to dismiss based on lack of standing only for the courts to repeatedly deny those motions. Spokeo required that plaintiffs prove their injury is concrete and particularized, but courts followed a pattern of finding that statutory damages — such as the ones permitted through the FDCPA — were concrete enough. It took a few years, but the winds are now blowing in the other direction and a new trend is emerging: a no harm, no foul approach to FDCPA standing.
This new trend began in the 11th Circuit with the Trichell case and it's not barreling down at full speed in several other circuit courts of appeal. The 11th Circuit’s “no harm, no foul” approach to standing has now seen its partners in the Seventh Circuit, which issued an avalanche of decisions in December finding that the respective FDCPA plaintiffs had no standing to bring their claim, as well as the Ninth Circuit.
Here’s a sampling of the Seventh Circuit cases:
Nettles: Complaint alleged defendant sent a letter that overstated the balance by $100. Seventh Circuit said the only injury claimed is the receipt of a non-compliant letter, which is not actual harm since the consumer admitted on appeal that the letter didn’t affect them at all.
Bazile: Complaint alleged the typical interest disclosure claim. The district court initially found that plaintiff had standing, but Seventh Circuit remanded with instruction to conduct an evidentiary hearing on the issue.
Burnett: Complaint alleged the typical 1099C allegations. The District Court granted the defendant’s motion for summary judgment on the case, but the 7th Circuit vacated the order and remanded the case to be dismissed because the consumer did not have standing. The consumer admitted in deposition that the letter merely confused them but was not tied to an injury, and confusing alone doesn’t suffice.
The others are Gunn, Spuhler, Larkin.
Similarly, the Ninth Circuit found in Adams that a consumer lacked standing because they did not claim anything more than a procedural harm from a letter that allegedly failed to clearly identify the current creditor.
We're keeping an eye on how things continue to progress. This seems to be an issue ripe for a circuit split considering all of the post-Spokeo/pre-Trichell court decisions we have from a few years ago. This means that we might see it at the steps of the U.S. Supreme Court sometime in the next year or two depending on how things shake out.