A couple of weeks ago, Judge Newsom of the Eleventh Circuit made a splash with a long, scholarly concurring opinion suggesting a complete refurbishing of standing doctrine. (See May 6, 2021 entry.) Last Friday, in Markakos v. Medicredit, Inc., No. 20-2350 (7th Cir. May 14, 2021), two more judges of the Seventh Circuit express their unrest with the court’s recent authority under Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).
At the end of 2020, the Seventh Circuit issued five opinions drastically curtailing standing under the Fair Debt Collection Practices Act (FDCPA). (See Dec. 16, 2020 entry.) Judge Kanne, writing the court’s opinion in the present case, notes these and other circuit decisions establish “that a breach of the [FDCPA] does not, by itself, cause an injury in fact. We now repeat that refrain once more.”
“Markakos sued Medicredit for allegedly violating the FDCPA by sending letters to her that stated inconsistent debt amounts and that unclearly identified her creditor as ‘Northwest Community 2NDS’—which is not the name of any legal entity in Illinois. Medicredit moved to dismiss the complaint for lack of standing and for failure to state a claim. The district court granted the motion and dismissed the case without prejudice.”
The panel holds that the error caused plaintiff no injury-in-fact. “Markakos has not alleged any way in which the alleged misinformation in Medicredit’s letters injured her. In fact, she’s shown the opposite by admitting that she did not pay anything extra and that she properly ‘disputed the debt as not warranted by the services provided.’” Plaintiff’s “only other alleged injury is that she was confused and aggravated by Medicredit’s letter,” also not deemed a cognizable injury for standing.
Judge Kanne recognizes, though, that “individual members of this court, now including my concurring colleagues, have expressed that they do not agree with the law of this circuit” (citing separate opinions by Chief Judge Wood and Judge Hamilton). His opinion for the court affirms the correctness of the recent FDCPA authority”. “Our circuit precedent thus faithfully holds that a statutory violation alone does not cause an injury in fact; instead, the violation must have ‘harmed or presented an ‘appreciable risk of harm’ to the underlying concrete interest that Congress sought to protect.’”
Judge Ripple, concurring, observes that he had not been on any of the prior FDCPA panels. “The outcome in today’s case puts a fine point on the problem identified by Judge Hamilton in Thornley. Congress has prohibited explicitly debt collectors from sending collection notices that state an inaccurate amount owed and has given individuals who receive such letters the right to sue the sender. Relying on that provision in her complaint, Ms. Markakos alleged that Medicredit had sent her such a letter and, in that letter, had instructed her to pay the stated amount. There can be no question that her complaint therefore states a core substantive violation of the FDCPA. Yet, our new case law closes the door on Ms. Markakos’s claim. In doing so, the court clearly effects a direct and complete frustration of Congress’s attempt to regulate commerce in the manner that it has chosen.”
Judge Ripple notes that the Seventh Circuit had taken a different path from its sister circuits. “Despite measured applications of Spokeo in other circuits, our case law recently began to develop a new enthusiasm not for the holding of Spokeo, but for the potential of its holding to transform, significantly, Congress’s substantive regulation of the economy . . . . The result of our flurry of recent decisions is that, at least in this circuit, a debt collector may send a letter demanding payment on an overstated debt, and the recipient lacks standing to enforce the FDCPA unless the debt collector’s deceit is successful in one way or another.”
Judge Rovner joins “Judge Ripple in his concurrence that the approaches taken in some other circuits are consistent with Article III case-or-controversy jurisprudence, while being more properly deferential to the Congressional judgment inherent in the determination of harms and remedies in the FDCPA, and that those approaches constitute the optimal path . . . . . [A]s Judge Ripple’s concurrence points out, other circuits have held that an allegation of a statutory violation can itself establish standing, where the violation implicates the concrete interest of the statute.”
Judge Rovner finds that “The cleaner approach” to analyzing risk of harm, “and one that would fully satisfy the purpose of the standing requirement, would be to recognize that an allegation of the statutory violation alone can adequately allege a risk of harm where the violation by its nature presents a risk of harm to its victims of the type traditionally recognized at common law, and no facts indicate that the plaintiff is not among the individuals so affected.”
Judge Rovner concludes that the “dissonance among the circuits as to how to approach standing post-Spokeo, and even how to apply the analysis as to whether a statutory provision has a ‘close relationship’ with a harm actionable at common law, is a clarion call to the Court for guidance. Hopefully, the Supreme Court will weigh in on this matter in the near future and provide that clarity.”
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