New York District Court Dismisses Article III Standing in FDCPA Claim Due to Absence of Concrete and Particularized Injury

New York District Court Dismisses Article III Standing in FDCPA Claim Due to Absence of Concrete and Particularized Injury

Following the suit of TransUnion v Ramirez, No. 20-297 (June 25, 2021), the United States District Court for the Eastern District of New York, on July 28, 2021, held that the plaintiff lacked Article III standing to file a FDCPA suit as she couldn’t establish a concrete and particularized injury. Bush v. Optio Solutions LLC, CV 21-1880 (GRB)(ARL), 2021 U.S. Dist. LEXIS 140835. The Court ruled that an instance where a debt collector discloses that the customer owes another debt to a third party, does not establish a concrete and particularized injury for an Article III standing.

As per the facts of the case, the plaintiff filed a complaint which asserted two FDCPA violations, viz. a) failure of the debt collector to provide information required under 15 U.S.C. §1692g, and b) a deception arising from the fact that the letter falsely implied that the plaintiff had waived a right to challenge the debt. However, the complaint failed to allege any injury. The complaint was then amended and a third count was added. The plaintiff thereby alleged that the defendant used a mailing vendor in sending her a single collection notice and therefore, disclosed her private and sensitive information to a third-party vendor. Soon after, the plaintiff filed a bankruptcy petition and listed the debt in her bankruptcy schedules.

The Court issued a show cause order, whereby plaintiff was directed to identify any “concrete, particularized injury in fact from the statutory violations alleged herein.” The plaintiff in response said that the defendant invaded her right to privacy and seclusion by disclosing her private and sensitive information to the third party.

However, the Court found that the plaintiff failed to identify any injury which resulted from debtor’s actions. It held that in wake of the TransUnion ruling, the plaintiff’s “mailing vendor” theory does not identify any injury and fit the definition of a concrete injury for an Article III standing. It also found that since the plaintiff disclosed the debt owed to a third party in her bankruptcy petition, she could not allege an injury caused by communication of the same fact by the defendant.

Since the TransUnion ruling, a great deal of clarification has been brought to the Article III standing and the required concrete and particularized injury. This might also result in a trend wherein the FDCPA and related suits would be filed in a large number before the state court due to the harsh treatment being meted out to these claims by the federal courts.