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Flimsy FDCPA Lawsuits Dealt Major Blow

Consumer attorneys, debt relief companies, and/or sophisticated debtors are notorious for scrutinizing all collections activities on the part of any entity involved in debt collection. If a bare procedural FDCPA violation occurs, the same people who are trying to prevent their clients from paying their debts and/or are trying to avoid paying their debt(s) will not hesitate to file class action lawsuits in federal court against unsuspecting debt collection entities, whether it be financial institutions, collection agencies, and/or collection law firms.

A recent United States Supreme Court case has begun to curtail this practice.

In Spokeo, Inc. v. Robins, the plaintiff, Thomas Robins (“Robins”), alleged that Spokeo, Inc. (“Spokeo”), a web-based service that provides information about a person’s background, violated the Fair Credit Reporting Act (FCRA) when it reported inaccurate information about him. 136 S. Ct. 1540, 1544 (2016). The federal district court dismissed Robins’ lawsuit as a result of lack of standing, and an appeal followed to an intermediary federal appeals court, the Ninth Circuit Court of Appeals, which reinstated the lawsuit. Id. Spokeo appealed the matter to the United States Supreme Court.

Case law dictates that in order to have standing to file a lawsuit under Article III of the United States Constitution, “[a] plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id. at 1547 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).

The Supreme Court looked at the first prong of the three (3) part test, whether Robins had suffered an injury in fact, to determine if Robins had legal standing to file his class action lawsuit. The Court concluded that “a plaintiff must show he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Id. at 1548 (quoting Lujan, 504 U.S. at 560)). The Court then concluded that Robins could not show that his injury was particularized as, “[f]or an injury to be ‘particularized,’ it ‘must affect the plaintiff in a personal and individual way.”’ Id. (internal citations omitted).

Recently, a federal judge in Iowa, in Jackson v. Abendroth & Russell, P.C., 2016 U.S. Dist. LEXIS 125986 (S.D. Iowa Sept. 12, 2016), dismissed a FDCPA class action lawsuit based on the reasoning outlined in Spokeo. The Plaintiff, Patrick L. Jackson, filed a class action lawsuit against a collection agency, Abendroth & Russell, P.C., after he was sent a letter that did not contain two separate informational disclosures mandated by the FDCPA. Id. at 2-3.

The court in concluding that, “[a] violation of the FDCPA alone, however, does not automatically amount to an injury in fact[,]” dismissed Jackson’s lawsuit as a result of him “not argu[ing] he suffered the concrete harm the disclosure requirements … of the FDCPA are designed to prevent.” Id. at 16-17. However, the court warned that while it “finds bare procedural violations of [the] FDCPA … do not amount to a concrete injury, it recognizes that violations of other provisions may be sufficient on their own to constitute an Article III injury in fact.” Id. at 36. Essentially, the court was stating that debt collectors should not use the decision as grounds to openly violate the FDCPA.

The United States Supreme Court decision in Spokeo, Inc. v. Robins should curtail the number of lawsuits filed over bare procedural violations of the FDCPA. This belief is confirmed by the Iowa federal judge’s ruling in Jackson v. Abendroth & Russell, P.C. While Spokeo, Inc. v. Robins does not give debt collectors the ability to openly violate the FDCPA, it gives any entity involved in debt collection the peace of mind that debtors will not have legal standing to file a lawsuit if a bare procedural FDCPA violation occurs.

Of course, it is strongly encouraged that any entity involved in debt collection should make it a priority to be in full compliance with the FDCPA.

Founded in 1997, Gill Law Firm represents small, medium and large corporations in commercial debt recovery, small business and nonprofit startups throughout the state of Florida. To find out how the firm may help your company collect its unpaid deficiency judgments, please contact A. Wayne Gill, Esq. via email at or by phone at (561) 454-0301.

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