Tourgeman v. Collins Fin. Servs., Inc.

• Decision Date: 25 June 2014
• Docket Number: No. 12–56783.,12–56783.
• Parties: David TOURGEMAN, Plaintiff–Appellant, v. COLLINS FINANCIAL SERVICES, INC., DBA Precision Recovery Analytics, Inc., a Texas corporation; Nelson & Kennard, a partnership; Paragon Way, Inc.; Collins Financial Services USA, Inc., Defendants–Appellees, and Dell Financial Services, LP, Defendant.
• Court: U.S. Court of Appeals — Ninth Circuit

755 F.3d 1109

David TOURGEMAN, Plaintiff–Appellant,

v.COLLINS FINANCIAL SERVICES, INC., DBA Precision Recovery Analytics, Inc., a Texas corporation; Nelson & Kennard, a partnership; Paragon Way, Inc.; Collins Financial Services USA, Inc., Defendants–Appellees,andDell Financial Services, LP, Defendant.

No. 12–56783.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted April 9, 2014.

Filed June 25, 2014.

Brett M. Weaver (argued), Johnson & Weaver, LLP, San Diego, California, and Daniel P. Murphy, Law Offices of Daniel Murphy, San Diego, California, for Plaintiff–Appellant.

Tomio B. Narita (argued) and Jeffrey A. Topor, Simmonds & Narita LLP, San Francisco, California, for Defendant–Appellee Nelson & Kennard.

No appearance for Defendants–Appellees Collins Financial Services, Inc., Collins Financial Services USA, Inc., or Paragon Way, Inc.

Before: JEROME FARRIS and ANDREW D. HURWITZ, CIRCUIT JUDGES, and PAUL L. FRIEDMAN, District Judge.^*

Opinion by Judge FRIEDMAN; Dissent by Judge FARRIS.

OPINION

FRIEDMAN, District Judge.

This is a class action brought under the Fair Debt Collection Practices Act (“FDCPA” or “the Act”), 15 U.S.C. § 1692 et seq. Plaintiff David Tourgeman contends that the defendants—Collins Financial Services, Inc.; Paragon Way, Inc.; Nelson & Kennard; and Collins Financial Services USA, Inc.—made false representations to him in connection with their efforts to collect a purported debt.¹ Specifically, Tourgeman argues that the defendants violated the Act by misidentifying his original creditor in a series of collection letters sent to him, as well as in a complaint filed against him in state court. He also maintains that one defendant, Nelson & Kennard, misleadingly represented that its collection letter was from an attorney when, on Tourgeman's account of the facts, no attorney had been “meaningfully involved” in evaluating his case. The district court granted summary judgment to the defendants. We have jurisdiction under 28 U.S.C. § 1291. We now reverse and hold that judgment should be entered for Tourgeman.

I. BACKGROUND

David Tourgeman bought a Dell computer. At the time of the purchase, Tourgemanresided in Mexico, and he ordered the computer to be shipped to his parents' home in California. He financed the purchase through Dell Financial Services, which arranged for a loan to be originated by CIT Online Bank. Dell Financial then serviced the loan. According to Tourgeman, he completed repayment within two years of buying the computer. But Dell Financial's records reflected otherwise. Tourgeman's allegedly outstanding debt therefore was charged off and then sold, along with more than 85,000 other Dell Financial debts, to Collins Financial Services.²

Collins transferred Tourgeman's file along with the other Dell Financial accounts to Collins's affiliated collection agency, Paragon Way, Inc., which mailed three letters to Tourgeman encouraging him to pay off the purported debt. Collins then referred the file to the law firm of Nelson & Kennard, which sent its own dunning letter to Tourgeman. All of these letters were mailed to addresses in California at which Paragon and Nelson & Kennard believed Tourgeman might reside. In fact, the addresses belonged to Tourgeman's parents, and Tourgeman himself remained resident in Mexico. After receiving no response to the letters, Nelson & Kennard filed a complaint on behalf of Collins in San Diego County Superior Court. Tourgeman retained counsel, and Nelson & Kennard eventually elected to dismiss the action. It was during this state court litigation that Tourgeman learned of the several letters that had been mailed to him at his parents' addresses. See Tourgeman v. Collins Fin. Servs., Inc., No. 08–cv–1392, 2011 WL 3176453, at *6 (S.D.Cal. July 26, 2011).

Tourgeman then went on the offensive. He filed this lawsuit in federal district court, alleging that Collins, Paragon Way, and Nelson & Kennard had violated the FDCPA, as well as California law, in their efforts to collect the purported debt from him.³ Tourgeman's complaint survived motions to dismiss filed by the several defendants, see id., and the district court later certified a class of consumer plaintiffs, see Tourgeman v. Collins Fin. Servs., Inc., No. 08–cv–1392, 2012 WL 1327824, at *4–10 (S.D.Cal. Apr. 17, 2012). But upon the defendants' motions for summary judgment and Tourgeman's cross-motion, the court granted judgment to the defendants. See Tourgeman v. Collins Fin. Servs., Inc., No. 08–cv–1392, 2012 WL 3731807 (S.D.Cal. Aug. 29, 2012).

On appeal, Tourgeman makes two claims under the FDCPA. His main claim arises from the fact that the defendants—both in their letters and in the state court complaint—falsely identified his original creditor as “American Investment Bank, N.A.,” when, in actuality, CIT Online Bank originated the loan. Tourgeman contends that this misidentification violated the Act's prohibition on the “use [of] any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Tourgeman's second claim relates to the letter sent to him by the law firm of Nelson & Kennard. He argues that the attorney who signed the letter had not been “meaningfully involved” in evaluating his case, and that the letter therefore runs afoul of 15 U.S.C. § 1692e(3), which proscribes “[t]he false representation or implication that any individual is an attorney or that any communication is from an attorney.” Tourgeman seeks only statutory damages, conceding that he suffered no pecuniary loss as a result of the defendants' conduct.

II. STANDING

Nelson & Kennard first argues that Tourgeman lacks both statutory and Article III standing to assert any claims based on the collection letters, which Tourgeman admittedly never received when they were sent. The law firm contends that the FDCPA does not provide a cause of action to a consumer in Tourgeman's position, notwithstanding the statute's broad language providing that “any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person.” 15 U.S.C. § 1692k(a). Nelson & Kennard further maintains that even if the FDCPA does purport to endow such consumers with a cause of action, Article III would forbid it, because consumers who never receive the offending communication have suffered no injury in fact. Tourgeman's position is that a violation of the FDCPA “in and of itself [ ] confers Article III standing.”

A. Article III Standing

“Article III of the Constitution limits federal-court jurisdiction to ‘Cases' and ‘Controversies.’ ” Massachusetts v. E.P.A., 549 U.S. 497, 516, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007). The requirement of standing flows from this limitation. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Standing doctrine assures that “the litigant is entitled to have the court decide the merits of the dispute or of particular issues,” Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975), by demanding that he or she “possess a ‘direct stake in the outcome’ of the case,” Hollingsworth v. Perry, ––– U.S. ––––, 133 S.Ct. 2652, 2662, 186 L.Ed.2d 768 (2013) (quoting Arizonans for Official English v. Arizona, 520 U.S. 43, 64, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997)).

To possess standing, a plaintiff must have suffered an “injury in fact,” meaning “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, 112 S.Ct. 2130 (internal citations and quotation marks omitted). In addition, “there must be a causal connection between the injury and the conduct complained of ... [and] it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Id. at 560–61, 112 S.Ct. 2130 (internal citations and quotation marks omitted).

“The ... injury required by Art. III may exist solely by virtue of ‘statutes creating legal rights, the invasion of which creates standing.’ ” Id. at 578, 112 S.Ct. 2130 (quoting Warth, 422 U.S. at 500, 95 S.Ct. 2197); see also Massachusetts, 549 U.S. at 516, 127 S.Ct. 1438 (“Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before.” (quoting Lujan, 504 U.S. at 580, 112 S.Ct. 2130 (Kennedy, J., concurring in part and concurring in the judgment))) (internal quotation marks omitted). In cases involving statutory rights, “the particular statute and the rights it conveys [ ] guide the standing determination.” Donoghue v. Bulldog Investors Gen. P'ship, 696 F.3d 170, 178 (2d Cir.2012); see also Hammer v. Sam's East, Inc., 754 F.3d 492, 498 & n. 3, 2014 WL 2524534, at *4 & n. 3 (8th Cir. June 5, 2014) (noting that “the actual-injury requirement may be satisfied solely by the invasion of a legal right that Congresscreated ”); Robey v. Shapiro, Marianos & Cejda, L.L.C., 434 F.3d 1208, 1212 (10th Cir.2006) (where a court is “dealing with legal rights created by Congress under the FDCPA ... the ‘injury in fact’ analysis for purposes of Article III is directly linked to the question of whether [the plaintiff] has suffered a cognizable statutory injury”). As the Supreme Court has explained, “[e]ssentially, the standing question in such cases is whether the constitutional or statutory provision on which the claim rests properly can be understood as granting persons in the plaintiff's position a right to judicial relief.” Warth, 422 U.S. at 500, 95 S.Ct. 2197. For this reason, “the violation of a statutory right is usually a sufficient injury in fact to confer standing.” Robins v. Spokeo, Inc., 742 F.3d 409, 412 (9th Cir.2014).

At the same time, “the requirement of injury in fact is a hard floor of Article III jurisdiction that cannot be removed by statute.” Summers v. Earth Island Inst., 555 U.S. 488,...