No Harm, No Foul: Seventh Circuit Again Demands Concrete Harm In FDCPA Cases

Author:Mr Andrew Soven, Leonard A. Bernstein and Cory W. Eichhorn
Profession:Holland & Knight

Andrew J. Soven is a Partner in Holland & Knight's Philadelphia office.

Leonard A. Bernstein is a Partner in Holland & Knight's Philadelphia office.

Cory W. Eichhorn is a Partner in Holland & Knight's Miami office.

Whether there is a connection to the near end of another exciting National Basketball Association season is unknown, but in a recent ruling issued by the U.S. Court of Appeals for the Seventh Circuit, the court began its opinion by invoking a phrase credited to legendary Los Angeles Lakers broadcaster Chick Hearn in finding that without harm having been suffered by the plaintiff, there would be no foul called.

Seventh Circuit Decision

In Casillas v. Madison Avenue Associates, No. 17-3162 (7th Cir. June 4, 2019), the Seventh Circuit upheld entry of judgment in favor of the defendant debt collector on the grounds that the plaintiff lacked standing to pursue a claim. The alleged Fair Debt Collection Practices Act (FDCPA) violation was the failure of the collection notice to inform the consumer, as the FDCPA requires, that she or he needs to give the debt collector written notice contesting the purported debt. Succinctly put, the Court held that because "[t]he only harm that Casillas claimed to have suffered ... was the receipt of an incomplete letter" that she lacked standing under Article III, as interpreted by the U.S. Supreme Court in Spokeo, to establish federal jurisdiction over her claim.

Under the FDPCA, a consumer may notify the debt collector that the consumer disputes the debt by submitting a dispute "in writing." In Casillas, the debt collection notice the plaintiff received contained all of the information required by the FDCPA except that it did not state that any disputes must be made in writing. Although the parties had agreed to settle the matter on a classwide basis, while the settlement approval motion was pending, the Seventh Circuit issued Groshek v. Time Warner Cable, 865 F.3d 884 (7th Cir. 2017), where the Court held that a plaintiff in a Fair Credit Reporting Act (FCRA) suit lacked standing on Spokeo grounds. As a result of Groshek, the district dismissed Casillas' claim, leading to her appeal.

The Seventh Circuit held that merely "pointing to Madison's procedural violation" was not enough under Spokeo and, at minimum, there needed to be a plausible showing that she either suffered harm or there was an "appreciable risk of harm" to the underlying concrete interest that...

To continue reading