On August 11, 2017, a federal judge in California dismissed a lawsuit brought under the Fair Debt Collection Practices Act (FDCPA) by determining that the plaintiff in the case lacked standing under Article III to bring the claim.
The case is Blue v. Diversified Adjustment Service (Case No. 5:17-cv-366, U.S.D.C., Central District of California. A copy of the court’s Order can be found here.
In November 2016, defendant Diversified Adjustment Services (DAS), a collection agency, sent plaintiff Shon Blue a collection letter containing a number of payment options. The options included payment by mail, online, phone call, or even in-person. DAS requires consumers to pay a convenience fee for online payments. This option required Blue to affirmatively opt-in to pay online.
When Blue logged onto the DAS website to pay his debt, he did not agree to pay the convenience fee. In fact, he paid neither the convenience fee nor the outstanding debt.
Instead, four months later he filed this lawsuit against DAS, alleging violations of both the FDCPA and the California equivalent, the Rosenthal Fair Debt Collection Practices Act (RFDCPA). Blue claimed that because DAS directed consumers to its website for payment and then charged a convenience fee that was not part of the original debt, DAS violated both acts.
In response to the lawsuit, DAS filed a motion for summary judgment on two grounds: first that Blue’s claims are barred because Blue does not have Article III standing (for lacking a concrete injury) and second, that Blue cannot make a showing sufficient to establish the existence of a violation under the FDCPA or the RFDCPA.
Editor’s Note: A motion for summary judgment is based upon a claim by one party (or, in some cases, both parties) that contends that all necessary factual issues are settled or so one-sided they need not be tried. The summary judgment is appropriate when the court determines there no factual issues remaining to be tried, and therefore a cause of action or all causes of action in a complaint can be decided upon certain facts without trial.
The Court’s Decision
The court dimissed the case for lack of subject-matter jurisdiction under Spokeo v. Robins, 136 S.Ct. 1540 (2016).
The Order was written by the Honorable Stephen V. Wilson, U.S. District Court Judge. Judge Wilson wrote (citations eliminated):
“Here, Blue has filed claims against DAS alleging statutory violations of the FDCPA and the RFDCPA. Blue’s complaint does not clarify what actual or particularized injury Blue suffered as a result of DAS’s allegedly abusive debt collection practices. To the contrary, Blue admits that he did not even pay DAS’s online collection fee, the exact charge he claims constitutes the entirety of DAS’s allegedly abusive debt collection practice.
Even giving Shon Blue’s complaint full weight, Blue alleges no concrete harm from DAS’s collection activity, so his claim would merely be statutory. Under Spokeo, Blue has no standing to assert his claims because he cannot show “an invasion of a legally protected interest” that is concrete instead of “conjectural or hypothetical.”
For the foregoing reasons, Blue lacks standing under Article III for his FDCPA and RFDCPA claims. Accordingly, this Court DISMISSES Plaintiff’s claims.”
This is one of the very few FDCPA cases where a defendant has been successful in getting a case dismissed under Spokeo. insideARM has covered several cases that have attempted the Spokeo argument. A simple search on insideARM.com for the word SPOKEO will show our prior coverage.
On June 19, 2017 insideARM published an article by attorney Franciz X. Riley of the Saul Ewing LLP law firm that discussed standing under Spokeo in several areas. In his discussion of FDCPA cases, Riley wrote:
“Courts consistently find standing exists in FDCPA cases when applying the Spokeo standard of review. Several patterns have emerged since Spokeo: (1) courts are more likely to find a “concrete injury” when “the amount or validity of the debt has been misstated”; (2) standing likely exists when a communication contains any false or misleading information (for example, when it purports to be from an attorney or asserts entitlement to a credit card “convenience” fee or collection fee); and (3) standing will be found when the defendant fails to disclose that the defendant is a debt collector or fails to disclose other required information. On the other hand, a plaintiff who does not actually owe and does not intend to pay debt does not have standing, even he received misleading information from a debt collector.”
The result in the case is fact specific. The decision should not be taken too literally. It does not mean that even this court believes all FDCPA claims do not meet an Article III standing test.