Nearly two years after the Supreme Court’s 2021 decision in Transunion v. Ramirez, courts and litigants continue to grapple with standing issues in Fair Debt Collection Practices Act (FDCPA) cases brought by plaintiffs alleging intangible harms to reputation and privacy interests. Prominent among these post-Ramirez FDCPA cases was Hunstein v. Preferred Collection & Management Services. (11th Cir. 2022), where the plaintiffs alleged a debt collector violated the FDCPA’s prohibition on debt collector communications with third parties, 15 U.S.C. 1692c(b), by disclosing their debts to a third-party letter-vendor who formulated and mailed collection letters. Citing to Ramirez, the Hunstein court differentiated between the limited disclosure to a private party alleged by the plaintiffs and the broad public dissemination actionable at common law. Because the former caused no concrete harm to the plaintiffs’ privacy interests, the Hunstein court dismissed the case for lack of standing.
While Hunstein remains the law of the land in the Eleventh Circuit, other courts have reached the opposite result. A recent opinion out of the Western District of Washington in the case of Jennings v. IQ Data International Inc. illustrates courts’ growing divergence on this issue.
The facts in Jennings were indistinguishable from those in Hunstein. The plaintiff alleged the defendant debt collector used a third-party letter vendor to transmit a collection letter, thereby disclosing plaintiff’s debt obligation to a third party in violation of § 1692c(b). Relying on Ramirez and Hunstein, the defendant moved for judgment on the pleadings, arguing that, despite the alleged purported violation, the plaintiff failed to allege any concrete harm stemming from its limited disclosure and, therefore, lacked Article III standing. The court disagreed. Though the plaintiff alleged no tangible injury stemming from the disclosure — e.g., physical or monetary harm — the court held that the alleged intangible injury to plaintiff’s privacy interest was sufficient for Article III purposes.
The court’s analysis began with a summary of Ramirez, which held that intangible injuries caused by statutory violations may be concrete if they bear a “close relationship” to claims traditionally actionable at common law. Though Ramirez requires a “close relationship,” it did not hold that an asserted intangible injury must be an “exact duplicate” of its common law antecedent. Applying these principles to the plaintiff’s claim, the court found her asserted injury was similar to the common law action for “publicity given to private life,” which imposed liability for a person’s publication of another’s private affairs that would be “highly offensive to a reasonable person” and “not of legitimate concern to the public.” To be actionable at common law, however, an aggrieved plaintiff was required to show publicity — i.e., “disclosure to the public or several people.” While the court acknowledged that the plaintiff’s complaint had not alleged publicity, it nonetheless found “the harm that both the common law tort . . . and § 1692c(b), seek to remedy is the same: it protects people’s privacy.” According to the court, the publication at common law and the defendant’s disclosure to its letter vendor caused the same type of harm, with any difference being simply “a matter of degree.”
In holding that the plaintiff had standing, the court acknowledged the Eleventh Circuit’s opposite holding in Hunstein. The court’s opinion, however, devoted little discussion to the reasoning underpinning that decision — observing instead that “[t]his out of circuit decision is not binding.”
The Jennings court gave short shrift to Hunstein. Nonetheless, its holding exemplifies courts’ diverging application of Ramirez‘s “close relationship” test to FDCPA claims alleging intangible injuries. With respect to letter-vendor claims specifically, the lack of uniformity on the standing issue will, at least for the time being, continue to pose a particular challenge to collections companies operating across multiple jurisdictions.