The Seventh Circuit Court of Appeals has been quite clear in its recent holdings regarding Article III standing in FDCPA cases: to have standing a consumer must do more than allege an FDCPA violation.  However, on May 14, 2021, in the case of Markakos v. Mericredit, Inc., No. 20-2351, (7th Cir May 14, 2021), although the 7th Circuit reached a similar conclusion, two of the judges on the panel issued concurring opinions which agreed with the result, but questioned whether the 7th Circuit has gone too far.

The Case:

In Markakos, the consumer filed a lawsuit against a debt collector, alleging that the debt collector sent her letters with inconsistent amounts and which did not clearly identify the creditor. Notably, however, the consumer admitted she properly disputed the debt and did not overpay.  Instead, she alleged she was injured because she was confused and aggravated by the letters.

The opinion, written by Judge Kanne, begins by explicitly noting, “[i]n the last five months, we’ve held eight times that a breach of the Fair Debt Collection Practices Act (FDCPA) does not, by itself, cause an injury in fact.” Accordingly, the Court affirmed that the case should be dismissed for lack of standing and provided the following analysis:

“[the consumer]” has failed to show an injury in fact for a commonsense reason: she has not paid a dime, and she has properly disputed her debt. Thus, winning or losing this suit would not change [the consumer]’s prospects. If this case went forward and [the consumer] lost, she would continue disputing her debt based on the inadequacy of the services provided. And if she won, she would do just the same; not a penny would change hands, and not a word or deed would be rescinded.”

The Concurrences:

The other two judges on the panel, Judge Ripple and Judge Rovner, each submitted concurring opinions, which agreed that the ruling was correct, but questioned whether the 7th Circuit has gone too far in its application of Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016).   


While agreeing with the outcome, Judge Ripple noted that congress intended the public to be the primary enforcer of the FDCPA and questioned whether the ruling takes “too restrictive a view of congress’s authority to identify intangible injuries and to allocate enforcement burdens.”   According to Judge Ripple, by barring a complaint which alleges a “core substantive violation of the FDCPA... 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 went on to question whether any FDCPA plaintiff can be successful unless the debt collector’s deceit is successful.   

Judge Rovner also agreed with the outcome based on the current 7th Circuit precedent regarding standing. However, she agreed with Judge Ripple’s concurrence and cautioned against thwarting the judgment of congress by an interpretation of Article III standing, which is narrower than required.   According to Judge Rovner, the proper approach is to find the failure to comply with a substantive provision of the FDCPA is a concrete harm.  She concluded by saying, “[t]he cleaner approach, 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.”

insideARM Perspective:

Do the concurrences in Markakos mean the string of decisions on standing in the 7th Circuit have reached an end? Probably not. At least not right now anyway since despite raising concerns, each of the concurrences noted that the decision was correct under the current 7th Circuit case law.

While Judge Rovner’s concurrence was interesting since she verbalized the concept of a “substantive provision” of the FDCPA, where precisely would the line be drawn? Consumer attorneys have long argued that mere technical violations are substantive, and the FDCPA itself does not give us a bright line list of what is and is not substantive. As such, a potential substantive vs. not substantive analysis does little to clear up the muddy waters of the FDCPA. Conversely, the standard set forth in the main opinion issued by Judge Kanne provides a much clearer line of distinction: will redress of this issue change anything for this consumer? If the answer is no- then there has been no harm.

We’ll continue to watch this line of cases as it develops and bring you any updates as they develop.

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