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On February 14, 2022, the Eighth Circuit took up the issue of Article III standing to pursue a claim under the Fair Debt Collection Practices Act (FDCPA) in Ojogwu v. Rodenburg Law Firm.

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The FDCPA prohibits a debt collector from contacting a consumer directly when the debt collector knows that the consumer is represented by counsel. See 15 U.S.C. § 1691c(a)(2). Additionally, the FDCPA provides a private right of action for those who violate its provisions.

Like many jurisdictions, Minnesota law requires a garnishment summons to be served on the debtor at his or her last known mailing address. To comply with the statute, the Rodenburg Law Firm (Rodenburg) did just that. Problematically, the consumer in Ojogwu had informed Rodenburg in writing that the consumer was represented by counsel and was not to be contacted directly.

The consumer filed suit in the United States District Court for the District of Minnesota alleging that by serving him with the summons directly, Rodenburg violated the FDCPA. The District Court concluded that the FDCPA preempted the Minnesota law requiring the garnishment summons to be sent directly to the consumer, and that Rodenburg therefore violated the FDCPA – a conclusion that caused an intradistrict split among decisions out of the District of Minnesota.

The Eighth Circuit did not address preemption or otherwise resolve the intradistrict conflict and instead held that the consumer lacked Article III standing and that the District Court never should have decided the dispute in the first instance. The court explained that because the summons was mailed directly to the consumer, it affected him in an individual way, but that the issue was whether the consumer alleged a concrete harm. The court held that the consumer failed to allege a tangible harm because he did not claim to have suffered monetary harm and the summons imposed no tangible obligation on the consumer.

The court then cited the Supreme Court’s decisions in Spokeo v. Robins and TransUnion LLC v. Ramirez, which held that “Article III standing requires a concrete injury even in the context of a statutory violation.” The court ultimately concluded that the consumer’s allegations were insufficient to confer Article III standing. The court explained that the consumer’s receipt of the summons did not cause him to act on his own detriment or fail to protect his interests. Indeed, the consumer promptly turned the documents over to his attorney.

The court held that the alleged intangible harm, as set forth in the consumer’s complaint (in which he alleged that he suffered a fear of answering the phone, nervousness, restlessness and irritability), was also insufficient because the consumer’s direct receipt of the summons benefitted him. The court also noted that the harm had to be caused by the defendant and that the consumer “who had avoided paying his debt for more than ten years, made no showing that his alleged ‘negative emotions’ were caused by Rodenburg commencing a lawful garnishment proceeding.”

The Eighth Circuit vacated the District Court’s decision and remanded the case with instructions that it be dismissed.

The Eighth Circuit’s decision in Ojogwu (and recent cases from the D.C. and Seventh Circuits (discussed in a previous <a href="https://www.thompsonhine.com/publications/eleventh-circuit-deepens-split-on-standing-in-fdcpa-cases" target="_self" rel="noopener">Business Litigation Update</a>)) was fact specific but may still be helpful to debt collectors in the Eighth Circuit and other federal courts. These decisions can help debt collectors in defending lawsuits premised entirely on technical statutory violations that have no tie any actual harm. Ojogwu is especially helpful to debt collectors who often face “gotcha” claims for statutory violations that arise out of the debt collector’s good faith compliance with state law collections requirements. As we’ve said before, FDCPA defendants should be vigilant in challenging a plaintiff’s standing. The unfortunate reality, though, and as we are seeing in our day-to-day practice, is that the decisions are simply leading plaintiffs to file their FDCPA claims (and other claims premised on federal statutes) in state court.

Jessica E. Salisbury-Copper 937.443.6854 <a href="mailto:Jessica.Salisbury-Copper@ThompsonHine.com">Jessica.Salisbury-Copper@ThompsonHine.com</a>

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

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https://admin.thompsonhine.com/wp-content/uploads/2022/08/Business_Litigation_Update_-_Eighth_Circuit_Avoids_Intradistrict_Split_and_Evaluates_Standing_in_FDCPA_Case_-_Mar_2022.pdf

Eighth Circuit Avoids Intradistrict Split and Evaluates Standing in FDCPA Case

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