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Illinois Federal Court Dismisses FDCPA Claim for Lack of Article III Standing

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Federal courts across the country continue to divest themselves of Fair Debt Collection Practices Act (FDCPA) cases following the Supreme Court’s salient Article III standing decision in TransUnion LLC v. Ramirez. The Southern District of Illinois is no exception, with a court in that district recently dismissing an FDCPA action for lack of standing alleging contact with a consumer after the debt collector received notice that the consumer was represented by an attorney.

In Simpson v. Revco Solutions, Inc., the plaintiff alleged that in April 2021, her attorneys mailed a letter to the defendant notifying the debt collector of their representation. Despite this notice, the defendant mailed a collection letter directly to the plaintiff in alleged violation of §§ 1692c(a)(2), 1692e, and 1692f of the FDCPA. As is relevant to the court’s decision on standing, the plaintiff alleged that the defendant’s conduct caused her monetary and emotional harm. Specifically, the plaintiff alleged she was forced to retain legal representation — presumably to seek redress for the defendant’s violation — and suffered undue stress, anxiety, confusion, wasted time, annoyance, and informational injuries.

The defendant moved to dismiss the amended complaint for lack of standing and for failure to state a claim. The defendant argued the plaintiff’s general allegations of harm were not sufficient to state a concrete injury. The plaintiff countered that her allegation of monetary harm is a recognized concrete injury, and her allegations of non-monetary harm are analogous to a harm that is traditionally recognized at common law; namely, violation of a plaintiff’s privacy rights.

The court first addressed, and rejected, the plaintiff’s claim of emotional harm as a basis for standing. The court recognized that even prior to the Supreme Court’s decision in Ramirez, the Seventh Circuit repeatedly held in the context of the FDCPA that allegations of embarrassment, confusion, stress, and/or anxiety are insufficient to constitute an injury in fact under Article III. The court then turned to the plaintiff’s allegations of monetary harm. While the Court recognized that monetary harms are more readily and easily recognizable as concrete injuries under Article III, such allegations must not be vague. Here, the plaintiff’s allegations of “actual financial harm and monetary losses” were indeed too vague to support a finding that the plaintiff had standing to pursue her claims. The court similarly rejected the plaintiff’s claim of monetary loss resulting from retainment of legal representation. “Litigation, and consulting a lawyer,” the court found, “is a cost in any litigation and . . . is not enough to show the existence of standing.”

Turning to the plaintiff’s final basis for standing — that the defendant’s failure to heed the plaintiff’s notice of attorney representation was analogous to common law invasion of privacy — the court found that while the common law claim of intrusion upon seclusion was the best comparator to the plaintiff’s claim, the plaintiff’s receipt of an unwanted debt collection communication could not be viewed as highly offensive to a reasonable person. Therefore, the plaintiff’s claim lacked a “close relationship” to a common law harm and could not support a finding of standing. Since it did not have jurisdiction to consider the plaintiff’s claims, the court dismissed the action.

The court’s decision in Simpson follows a long line of recent decisions regarding what type of harm is sufficient to confer Article III standing within the context of the FDCPA in the Seventh Circuit, and beyond. It is becoming increasingly apparent that vague allegations of harm, be those monetary or emotional, will not be found sufficient.

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