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O'Boyle v. GC Services Limited Partnership

United States District Court, E.D. Wisconsin

May 17, 2018



          LYNN ADELMAN, District Judge

         Barbara O'Boyle brings this putative class action against GC Services Limited Partnership alleging violations of the Fair Debt Collection Practices Act, which provides, in relevant part, that “[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. According to O'Boyle, GC, in an attempt to collect a credit card debt, sent her a letter indicating that it would assume the validity of the debt unless she disputed it in writing within 30 days. She argues that, although a debt collector can assume that a debt is valid if the debtor does not dispute it within 30 days after receiving written notice of the debt, the debtor need not dispute the debt in writing. See 15 U.S.C. § 1692g(a)(3). GC moves to dismiss for lack of subject-matter jurisdiction and failure to state a claim upon which relief can be granted. O'Boyle moves to compel discovery.


         GC moves to dismiss for lack of subject-matter jurisdiction arguing that O'Boyle lacks standing to sue because she has not alleged that she suffered a concrete injury. “Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). One limitation on federal jurisdiction, rooted in Article III of the U.S. Constitution, is that a plaintiff must have standing to sue in order to “maintain a lawsuit in federal court.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1546-47 (2016).

         The first element of standing, and the only element at issue here, is that the plaintiff must have “suffered an injury in fact.” Id. at 1547. “To establish injury in fact, a plaintiff must show that . . . she suffered ‘an invasion of a legally protected interest' that is, ” among other things, “concrete.” Id. at 1548 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). A “concrete” injury is one that “actually exist[s]”-i.e., an injury that is “‘real, ' and not ‘abstract'”-though an injury need not be “tangible” to be concrete. Id. at 1548-49 (quoting Webster's Third New International Dictionary 472 (1971)).

         GC argues that O'Boyle has alleged a “bare procedural violation, divorced from any concrete harm, ” which is insufficient to satisfy the injury-in-fact requirement of standing. See Id. at 1549 (citing Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009); Lujan, 504 U.S. at 572). A “procedural violation” occurs where a “person . . . has been accorded, ” but denied, “a procedural right, ” such as the right to “a hearing prior to denial of [a] license application.” See Lujan, 504 U.S. at 572 & n.7. Ordinarily, a plaintiff has standing to sue “to enforce a procedural requirement the disregard of which could impair a separate concrete interest of [hers].” Id. at 572. “But deprivation of a procedural right without some concrete interest that is affected by the deprivation-a procedural right in vacuo-is insufficient to create Article III standing.” Summers, 555 U.S. at 496.

         According to GC, O'Boyle's claims arise from its alleged violation of § 1692g(a), which requires a debt collector to provide a consumer with written notice of a debt in collection containing certain disclosures, including “a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.” § 1692g(a)(3). GC argues that, even if, as alleged, it failed to provide an accurate version of this disclosure, O'Boyle does not seek to enforce the procedural requirement at issue-that is, she does not demand that she receive an accurate disclosure-and she does not allege any resulting harm to her concrete interests, so she lacks standing.

         O'Boyle's claims as alleged undoubtedly arise from a procedural violation, but she alleges more than a bare procedural violation. Indeed, she alleges that, rather than simply failing to provide a disclosure required by the FDCPA, GC affirmatively, or at least impliedly, misrepresented her right to dispute a debt in collection other than in writing and thereby suggested an artificially high barrier to raising such a dispute. As she notes, the FDCPA expressly prohibits debt collectors from using “any false representation or deceptive means to collect or attempt to collect any debt.” § 1692e(10). She argues that she “need not allege any additional harm” beyond that which the FDCPA proscribes. See Spokeo, 136 S.Ct. at 1549.

         “In determining whether an intangible harm constitutes injury in fact, both history and the judgment of Congress play important roles.” Id. Misrepresentation (or “deceit”) “has traditionally been regarded as providing a basis for a lawsuit in English or American courts, ” id.; see, e.g., Restatement (First) of Torts §§ 525, 552 (1938), but common-law liability for misrepresentation required proof of harm caused by “justifiable reliance upon the misrepresentation, ” see Id. § 525. In enacting the FDCPA, Congress identified the use of misrepresentation as an “abusive debt collection practice” and categorically barred its use by debt collectors. See 15 U.S.C. §§ 1692, 1692e. In other words, Congress identified the use of misrepresentation for debt collection purposes as a concrete harm in itself and elevated it to “the status of [a] legally cognizable injur[y].” Spokeo, 136 S.Ct. at 1549 (quoting Lujan, 504 U.S. at 578).

         “Congress is well positioned to identify [and elevate] intangible harms that” are “concrete” and “de facto” but “that were previously inadequate in law, ” as it did in enacting the FDCPA. Id. (quoting Lujan, 504 U.S. at 578). As such, “its judgment is . . . instructive and important.” Id. I see no reasonable basis for deviating from its judgment here, and GC does not provide one. Thus, because O'Boyle alleges a concrete injury identified and rendered actionable by Congress in the FDCPA, she has standing to sue. I will, therefore, deny GC's motion to dismiss for lack of subject-matter jurisdiction.


         GC moves to dismiss for failure to state a claim upon which relief can be granted. GC argues that, even accepting the truth of O'Boyle's factual allegations, her complaint does not plausibly suggest that it violated the FDCPA by misrepresenting her right to dispute the validity of her debt. To the contrary, GC says, § 1692g(a)(3) impliedly requires that consumers dispute the validity of debts in writing, so its letter suggesting as much was accurate, not false, deceptive, or misleading.

         Unlike § 1692g(a)(3), which permits a debt collector to assume the validity of a debt unless the consumer “disputes” it, other provisions of § 1692g expressly require that a consumer dispute a debt in writing. For example, § 1692g(a)(5) provides that, “upon the consumer's written request . . ., the debt collector will provide the consumer with the name and address of the original creditor.” Similarly, § 1692g(b) states that “the debt collector shall cease collection of the debt” pending verification if “the consumer notifies the debt collector in writing . . . that the debt . . . is disputed.”

         Despite this difference in language, the Third Circuit, in Graziano v. Harrison, 950 F.2d 107 (3d Cir. 1991), held that, “given the entire structure of section 1692g, subsection (a)(3) must be read to require that a dispute, to be effective, must be in ...

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