Seventh Circuit Holds That Even a Brief Interruption of Self-Employment Can Be An Injury For Article III Purposes, But It Must Be Proven Factually

In Brown v. CACH, Inc., No. 23-1308 (7th Cir. Feb. 29, 2024), the Seventh Circuit observes that a self-employed person may argue, as an Article III injury, that they were interrupted from remunerative work – even briefly – but that the injury must be proven, not assumed.

In response to a call at home about an alleged debt, plaintiffs filed an action under 15 U.S.C. §1692e, part of the Fair Debt Collection Practices Act (FDCPA). As an injury for purposes of Article III standing, a plaintiff asserted that the caller had “interrupted my self-employment” to “mull over my memories” and “scour my records” about the asserted debt.

“[W]hen the judge requested supplemental briefs with details, such as what [plaintiff]’s self-employment entailed and how any interruption led to a loss of income or other tangible detriment, she declined to provide additional information. The judge then dismissed the complaint for lack of standing to sue.”

The Seventh Circuit affirms. Notably, it accepts the plaintiff’s basic theory as at least a possible injury. “It is easy to see how debt-collection efforts could reduce a person’s self-employment income. Imagine a writer who tries to work from 8 am to noon every day, gets interrupted by a dunning phone call at 8:05, loses her train of thought (and thus a day’s work), and cannot finish the manuscript on the original schedule, which reduces or delays her royalties.”

Nevertheless, the panel holds that the injury was not established here as a matter of law. “Gabriel was asked for details and re-fused to provide any. We do not know on this record that Ga-briel ever has obtained income from her self-employment, let alone how CACH’s failure to say that the Bank had not war-ranted the accuracy of its calculation affected self-employment income.”

The panel finally disaffirms prior district-court level authority suggesting that an injury may be presumed. “To repeat: Interruption of self-employment could cause a loss, but whether it did cause a loss must be established by evidence. Plaintiffs, who declined an opportunity to produce such evidence, cannot carry on with this litigation.”