In Flecha v. Medicredit, Inc., the Fifth Circuit decertified a Fair Debt Collection Practices Act letter class and noted that the putative class “present[ed] substantial questions of Article III standing.” In doing so, the Fifth Circuit became part of a growing trend of circuit courts that are raising significant questions as to whether a class can be certified when many members lack constitutional standing.
In Flecha, plaintiff Nina Flecha failed to pay for medical care that she received. To assist the medical care provider with debt collection, defendant Medicredit sent Flecha several collection letters. The collection letter at issue stated that, “[a]t this time, a determination must be made with our client as to the disposition of your account.” Flecha sued Medicredit, alleging a class claim that Medicredit violated the FDCPA by sending her a letter with a false threat of legal action when the medical care provider never intended to sue her.
Flecha sought class certification, arguing that everyone who received the same collection letter similarly was falsely threatened with legal action. The district court granted class certification to all Texans who had received the same letter. On appeal, the Fifth Circuit decertified the class, finding that Flecha had not met the requirements for class certification.
To begin, the Fifth Circuit reasoned that Flecha failed to show that the claims of the class could be answered with common answers. To prove her claim, Flecha needed to show that Medicredit’s letter threatened legal action, and, with respect to each class member, that the medical care provider did not intend to pursue legal action against that individual. The Fifth Circuit noted that Flecha did not provide any proof of the medical care provider’s intent to pursue legal action, much less class-wide proof. Accordingly, she failed to demonstrate commonality. The Fifth Circuit noted that, under the same reasoning, Flecha’s class likewise failed to meet either the typicality or predominance requirements. Therefore, the Fifth Circuit reversed the district court’s class certification order.
Due to decertification of the class, the Fifth Circuit noted that there was no need to separately decide whether the class lacked standing. However, the Fifth Circuit acknowledged that it had not yet decided whether standing must be proven for putative class members and, instead, it indicated that other circuits have done so. The Fifth Circuit cited to Denney v. Deutsche Bank AG, for the proposition that “no class may be certified that contains members lacking Article III standing.” In Flecha’s case, the class standing issue was significant because “there are undoubtedly many unnamed class members here who lack the requisite injury to establish Article III standing.” The Fifth Circuit reasoned as follows:
After all, the putative class sweeps in “all persons in Texas…who received a form collection letter” from Medicredit. As a result, the putative class inevitably includes people who received the letter, but ignored it as junk mail or otherwise gave it no meaningful attention—and therefore lack a cognizable injury under Article III.
(Emphasis added.) As such, while the Fifth Circuit did not dismiss the class claims for lack of standing (because it already had decertified the class and, thus, there were no class claims to dismiss), it strongly indicated that letters that were received but ignored are not sufficient to prove an injury under Article III standing.
This case is significant in two regards. First, it is significant that the Fifth Circuit has now joined other circuits in questioning whether a class can be certified when the named plaintiff has standing, but many class members do not. Second, the Fifth Circuit recognized that a failure to read a letter precludes the recipient from having standing to bring an FDCPA claim based on that same letter.