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Casillas v. Madison Avenue Associates, Inc.

United States Court of Appeals, Seventh Circuit

June 4, 2019

Paula Casillas, Plaintiff-Appellant,
Madison Avenue Associates, Inc., an Indiana corporation, Defendant-Appellee.

          Argued April 20, 2018

          Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. l:16-cv-01774 - William T. Lawrence, Judge.

          Before Sykes and Barrett, Circuit Judges, and Durkin, District Judge. [*]

          Barrett, Circuit Judge.

         The bottom line of our opinion can be succinctly stated: no harm, no foul. Madison Avenue Associates, Inc. made a mistake. The Fair Debt Collection Practices Act requires debt collectors to notify consumers about the process that the statute provides for verifying a debt. Madison sent Paula Casillas a debt-collection letter that described the process, but it neglected to specify that she had to communicate in writing to trigger the statutory protections. Casillas noticed the omission and filed a class action against Madison.

         The only harm that Casillas claimed to have suffered, however, was the receipt of an incomplete letter-and that is insufficient to establish federal jurisdiction. As the Supreme Court emphasized in Spokeo, Inc. v. Robins, Casillas cannot claim "a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III." 136 S.Ct. 1540, 1549 (2016). Article III grants federal courts the power to redress harms that defendants cause plaintiffs, not a freewheeling power to hold defendants accountable for legal infractions. Because Madison's violation of the statute did not harm Casillas, there is no injury for a federal court to redress.


         Paula Casillas allegedly owed a debt to Harvester Financial Credit Union. Presumably acting as an agent of the credit union, Madison Avenue Associates, Inc. sent Casillas a letter demanding payment. The Fair Debt Collection Practices Act requires a debt collector to give a written notice to a consumer within five days of its initial communication. 15 U.S.C. § 1692g(a). That notice must include, among other things, a description of two mechanisms that the debtor can use to verify her debt. First, a consumer can notify the debt collector "in writing" that she disputes all or part of the debt, which obligates the debt collector to obtain verification of the debt and mail a copy to the debtor. Id. § 1692g(a)(4). A failure to dispute the debt within 30 days means that the debt collector will assume that the debt is valid. Id. § 1692g(a)(3). Second, a consumer can make a "written request" that the debt collector provide her with the name and address of the original creditor, which the debt collector must do if a different creditor currently holds the debt. Id. § 1692g(a)(5). Madison's notice conveyed all of that information, except that it neglected to specify that Casillas's notification or request under those provisions must be in writing.

         Casillas filed a class action against Madison because of that omission. She did not allege that she tried-or even planned to try-to dispute the debt or verify that Harvester Financial Credit Union was actually her creditor. But the Act renders a debt collector liable for "fail[ing] to comply with any provision of [the Act]," id. § 1692k(a), and by neglecting to notify Casillas of the writing requirement, Madison failed to comply with a provision of the Act. That, Casillas alleged, "constitute[d] a material/concrete breach of her rights under the [Act]." She sought to recover a $1000 statutory penalty for herself and a $5000 statutory penalty for the unnamed class members, along with attorneys' fees and costs. Id. § 1692k(a)(2)(A)-(B). The parties eventually entered a joint motion for class certification and preliminary approval of a class settlement.[1]

         While that motion was pending, we decided Groshek v. Time Warner Cable, Inc., 865 F.3d 884 (7th Cir. 2017). There, following the Supreme Court's decision in Spokeo, we held that a plaintiff cannot satisfy the injury-in-fact element of standing simply by alleging that the defendant violated a disclosure provision of a consumer-protection statute. Id. at 887. The district court held that Groshek required it to dismiss Casillas's complaint. Casillas had not alleged that Madison's omission affected her in any way. And absent an allegation that Madison's violation had caused her harm or put her at an appreciable risk of harm, the district court said, Casillas lacked standing to sue.


         The elements of standing are well settled: the plaintiff must allege an injury in fact that is traceable to the defendant's conduct and redressable by a favorable judicial decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). These requirements are rooted in Article III, which limits a federal court's authority to the resolution of "Cases" or "Controversies." U.S. CONST, art. III, § 2. If the plaintiff does not claim to have suffered an injury that the defendant caused and the court can remedy, there is no case or controversy for the federal court to resolve.

         Casillas's appeal involves the injury-in-f act requirement, which the Supreme Court has described as the "[f]irst and foremost" element of standing. Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 103 (1998). An "injury in fact" is "an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical." Lujan, 504 U.S. at 560 (citations and quotation marks omitted). An alleged harm need not be tangible to be "concrete," but it must be "'real/ and not 'abstract.'" Spokeo, 136 S.Ct. at 1548. The question here is whether Casillas has alleged that she suffered-or faced a real risk of suffering-a concrete harm.[2]


         We begin by emphasizing a basic point: the fact that Congress has authorized a plaintiff to sue a debt collector who "fails to comply with any requirement [of the Fair Debt Collection Practices Act];' 15 U.S.C. § 1692k(a), does not mean that Casillas has standing. See Spokeo, 136 S.Ct. at 1549 ("Congress' role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right."). Congress has the power to define intangible harms as legal injuries for which a plaintiff can seek relief, see Lujan, 504 U.S. at 578, and it has sought to exercise that power by enabling debtors to hold debt collectors liable for statutory violations. But Congress must operate within the confines of Article III, which "requires a concrete injury even in the context of a statutory violation." Spokeo, 136 S.Ct. at 1549. Thus, Casillas cannot demonstrate standing simply by pointing to Madison's procedural violation. She must show that the violation harmed or "presented an 'appreciable risk of harm' to the underlying concrete interest that Congress sought to protect." Groshek, 865 F.3d at 887 (citation omitted).

         The Fair Debt Collection Practices Act seeks to protect debtors from "the use of abusive, deceptive, and unfair debt collection practices by many debt collectors." 15 U.S.C. § 1692(a). Section 1692g serves this end by giving debtors a way to dispute or verify their supposed debts. And by obligating creditors to tell debtors how to do that, subsections (a)(4) and (5) reduce the risk that debtors will inadvertently lose the protections given to those who observe the statutory requirements.

         Casillas did not allege that Madison's actions harmed or posed any real risk of harm to her interests under the Act. She did not allege that she tried to dispute or verify her debt orally and therefore lost or risked losing the statutory protections. Indeed, she did not allege that she ever even considered contacting Madison or that she had any doubt about whether she owed Harvester Financial Credit Union the stated amount of money. She complained only that her notice was missing some information that she did not suggest that she would ever have used. Any risk of harm was entirely counterfactual: she was not at any risk of losing her statutory rights because there was no prospect that she would have tried to exercise them. Because Madison's mistake didn't put Casillas in harm's way, it was nothing more than a "bare procedural violation." Spokeo, 136 S.Ct. at 1549. Casillas had no more use for the notice than she would have had for directions accompanying a product that she had no plans to assemble.

         Casillas insists that she suffered the same kind of harm that we held sufficient to confer standing in Robertson v. Allied Solutions, 902 F.3d 690 (7th Cir. 2018). There, a prospective employer violated the Fair Credit Reporting Act's requirement that it provide the plaintiff with a copy of her background check before it revoked her offer of employment. Id. at 693. We held that the plaintiff satisfied the injury-in-fact requirement even though she had not alleged that the report was inaccurate or that she could have persuaded the defendant to hire her if she had received it. Id. at 697. Casillas says that she suffered an injury in fact even though she did not allege that she would have disputed or verified the debt if the notice had been complete.

         But the plaintiff in Robertson alleged that the defendant had not only violated the statute but also harmed the concrete interest that the statute protected. The Fair Credit Reporting Act required the prospective employer to give the applicant a copy of the background report before it took an adverse action so that she would have an opportunity to review and respond to the information in the report. If there were inaccuracies, she could identify them; if the negative information was accurate, she could try to put the bad facts in a better light. Id. at 696-97. The plaintiff alleged that the employer took that opportunity from her: "[b]y withholding her background report ... [the employer] limited her ability to review the basis of the adverse employment decision and impeded her opportunity to respond." Id. at 695.

         In holding that this allegation satisfied the injury-in-fact requirement, we emphasized that "Article III's strictures are met not only when a plaintiff complains of being deprived of some benefit, but also when a plaintiff complains that she was deprived of a chance to obtain a benefit." Id. at 697. The plaintiff in Robertson made just that complaint. She did not have to allege that she could have retained the job offer if she had access to the background report. Her lost opportunity to try to change the defendant's opinion of her was a sufficiently concrete injury to confer standing.

         Casillas did not allege any comparable lost opportunity. Nor could she. Unlike the Fair Credit Reporting Act, the provisions of the Fair Debt Collection Practices Act that Madison violated do not protect a consumer's interest in having an opportunity to review and respond to substantive information. See id. ("An informational injury can be concrete when the plaintiff is entitled to receive and review substantive information." (emphasis added)). They instead protect a consumer's interest in knowing her statutory rights. And in Robertson, we expressly distinguished a defendant's obligation to provide substantive information from its obligation to give notice of statutory rights. There, the prospective employer had not only failed to provide the plaintiff with the background report; it had also failed to provide her with a written summary of her rights under the Fair Credit Reporting Act. See id. at 693. We didn't need to resolve whether the plaintiff would have had standing if the latter were her only complaint-so we didn't. But we observed that "[t]he problem with that argument is that it describes only a procedural injury. [The plaintiff] did not indicate how, if the procedures had properly been followed, she might have persuaded [the employer] to hire her. With or without written notice of her rights, [she] would not have become an [] employee." Id. at 694-95. So too here: receiving a complete notice would not have changed anything for Casillas.

         Casillas's case is not like Robertson. Instead, as the district court recognized, it is like those in which we have held that procedural injuries under consumer-protection statutes are insufficiently concrete to confer standing. In Groshek, for example, the plaintiff sued a prospective employer for violating the Fair Credit Reporting Act. 865 F.3d at 886. The defendant had complied with the Act by disclosing that it would obtain a credit report on the applicant. But it violated the Act's "stand-alone" requirement: the statute mandated that the disclosure appear on its own page, and the defendant had included other information along with it. Id. at 885-86. We said that the plaintiff had alleged nothing more than a bare procedural violation. Id. at 887. He hadn't claimed that the improper format had caused him to misunderstand the disclosure, he hadn't asserted that he would have withheld consent if the information had been presented correctly, and he hadn't said that he was unaware that the prospective employer would obtain a credit report on him. Id. Instead, he had "alleged a statutory violation completely removed from any concrete harm or appreciable risk of harm." Id. Under Spokeo, we explained, that was not enough to satisfy Article III. Id.; see also Meyers v. Nicolet Restaurant of De Pere, LLC,843 F.3d 724, 727 (7th Cir. 2016) (holding that the ...

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