Duane Morris Class Action Review - 2023 - Report - Page 264
In contrast to the Seventh Circuit, in Hunstein, et al. v. Preferred Collection &
Management Services, 48 F.4th 1236 (11th Cir. 2022), a divided en banc Eleventh
Circuit held that a statutory violation of the FDCPA is insufficient to establish an injury
giving rise to Article III standing. The plaintiff had alleged a debt collection agency
violated the FDCPA when it disclosed information about his debt to a mail vendor that
sent out debt-collection notices. Id. at 1240. In analyzing Article III standing, the
Eleventh Circuit opined the common law comparison approach (endorsed by the U.S.
Supreme Court in TransUnion LLC v. Ramirez, et al., 141 S. Ct. 2190 (2021)) was
appropriate, but it ultimately concluded there was no “close relationship” between the
alleged statutory violation and the common law tort. Id. at 1243-45. The Eleventh Circuit
determined that even though the alleged statutory harm need not be an “exact
duplicate” of a traditionally recognized harm, there is no “close relationship” when an
element “essential to liability” for the common law analogue is missing. Id. at 1242. The
Eleventh Circuit reasoned that a “public disclosure” was essential to the tort of “public
disclosure of private facts,” yet the plaintiff did not allege the information had been
disclosed to anyone other than a single third-party mail vendor. Id. at 1248. Without the
critical element of public disclosure, the Eleventh Circuit held that the plaintiff’s claimed
statutory violation was not analogous to a common law tort and did not confer standing.
It reasoned that finding otherwise would be tantamount to “hammering square causes of
action into round torts.” Id. at 1249.
In Adam, et al. v. Barone, 41 F.4th 230, 236 (3d Cir. 2022), the Third Circuit analyzed
the bare minimum necessary to establish a sufficient injury for Article III purposes. In
Adams, it held that the offer of a pre-litigation refund did not extinguish the plaintiff’s
standing to sue. In Adam, the plaintiff alleged that she was fraudulently charged $100
for beauty products that the defendants marketed as free samples. Id. at 232. Before
the lawsuit was filed, the defendants offered the plaintiff a full refund in the ordinary
course of business, which she refused. Id. The district court held the refund offer
mooted the plaintiff’s claim and it dismissed the case. Id. at 236. On the plaintiffs’
appeal, the Third Circuit reversed. It held that a pre-litigation “refund offer . . . made in
the ordinary course of business” was not a categorical bar to the plaintiff’s standing to
sue. Id. at 234. The Third Circuit opined that the $100 charge qualified as an “injury in
fact” because the plaintiff “neither received a refund nor accepted any alternative to a
refund,” and by applying traditional contract principles, the rejection of the refund offer
left the matter “as if no offer had ever been made.” Id. at 234-35.
The Fifth Circuit in Perez, et al. v. McCreary, Veselka, Bragg & Allen PC, 45 F.4th 816
(5th Cir. 2022), also addressed the parameters of a sufficient Article III injury in the
context of a class certification order. It held that a single unwanted message did not
constitute an injury-in-fact under the FDCPA. The plaintiff sued a law firm alleging that it
violated the FDCPA by trying to collect a debt for which the statute of limitations had
run. Id. The district court granted the plaintiffs’ motion for class certification, and
defendant appealed the certification ruling under Rule 23(f). Id. On appeal, the Fifth
Circuit, sua sponte, considered the plaintiff’s standing and concluded that the plaintiff
failed to allege or establish an injury-in-fact sufficient to confer standing. Id. The Fifth
Circuit ruled that Congress did not intend to elevate the receipt of a single, unwanted
message to the status of a legally cognizable injury under the FDCPA. Id. at 826. The
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Duane Morris Class Action Review – 2023
