Lyshe v. Levy

• Decision Date: 20 April 2017
• Docket Number: No. 16-4026,16-4026
• Parties: Brendan LYSHE, Plaintiff–Appellant, v. Yale R. LEVY; Levy & Associates, LLC; Kirschenbaum, Phillips & Levy, PC ; Krishna Velayudhan, Defendants–Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

854 F.3d 855

Brendan LYSHE, Plaintiff–Appellant,

v.Yale R. LEVY; Levy & Associates, LLC; Kirschenbaum, Phillips & Levy, PC ; Krishna Velayudhan, Defendants–Appellees.

No. 16-4026

United States Court of Appeals, Sixth Circuit.

Decided and Filed: April 20, 2017

ON BRIEF: Steven C. Shane, Bellevue, Kentucky, Stephen R. Felson, Cincinnati, Ohio, for Appellant. Boyd W. Gentry, LAW OFFICE OF BOYD W. GENTRY, LLC, Beavercreek, Ohio, for Appellees.

Before: GUY, SILER, and DONALD, Circuit Judges.

OPINION

BERNICE BOUIE DONALD, Circuit Judge.

Yale R. Levy, Levy & Associates, LLC, Kirschenbaum, Phillips & Levy, PC, and Krishna Velayudhan (collectively, "Appellees") brought a collection action against Brendan Lyshe. Alleging that Appellees' discovery requests violated state procedural rules, Lyshe brought a claim for relief under the Fair Debt Collection Practices Act ("FDCPA"). For the following reasons, we conclude that Lyshe did not suffer any concrete harm from Appellees' alleged state procedural violations. Accordingly, we AFFIRM the district court's judgment dismissing his claim for lack of jurisdiction.

I.

In 2016, Appellees brought a collection action against Lyshe. Soon after bringing the action, Appellees served Lyshe with discovery requests. They did not send a separate electronic copy, but instructed Lyshe to contact them if he would like an electronic copy. As part of the discovery, the requests for admission required that Lyshe verify that his responses were "true and correct to the best of [his] knowledge, information and belief," and included a blank notary block. Ex. C, ECF No. 1-3, Page ID 12. It further provided that any matter would be deemed admitted unless Lyshe made a sworn statement in compliance with the Ohio Rules of Civil Procedure.

Lyshe then brought suit, alleging that Appellees violated the FDCPA by failing to provide electronic discovery without prompting and requiring that the responses to the requests for admission be sworn and notarized. Appellees moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Relying on Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016), the district court concluded that it lacked subject matter jurisdiction under Rule 12(b)(1), and dismissed the case on that ground. Specifically, it held that Lyshe did not plead any injury in connection with the alleged violations of the state procedural rules. According to the district court, Appellees did not violate the Ohio Rules of Civil Procedure by offering to send electronic copies of the discovery only upon Lyshe's request. Regarding the alleged errors in the requests for admissions, the district court reasoned that Lyshe failed to allege that he was misled, that he felt compelled to make a sworn verification or engage a notary, or that he even responded to the challenged requests, so his allegations were insufficient to confer jurisdiction upon the federal courts. Lyshe appeals, arguing that this court has subject matter jurisdiction and that his complaint states a claim upon which relief may be granted.

II.

Article III of the Constitution limits the jurisdiction of federals courts to hear only actual cases and controversies. U.S. Const. art. 3, § 2. The doctrine of standing aids us in defining these limits. The plaintiff bears the burden of establishing standing. Summers v. Earth Island Inst. , 555 U.S. 488, 493, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009). To satisfy the "irreducible constitutional minimum of standing," the plaintiff must establish that: (1) he has suffered an injury in fact that is (a) concrete and particularized and (b) actual or imminent rather than conjectural or hypothetical; (2) that there is a causal connection between the injury and the defendant's alleged wrongdoing; and (3) that the injury can likely be redressed. Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). At dispute here is only whether Lyshe suffered an injury in fact. The existence of an abstract injury is insufficient for a plaintiff to carry his burden on this element. City of Los Angeles v. Lyons , 461 U.S. 95, 101, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983). Rather, a plaintiff must establish that he has a "personal stake in the outcome of the controversy." Susan B. Anthony List v. Driehaus , ––– U.S. ––––, 134 S.Ct. 2334, 2341, 189 L.Ed.2d 246 (2014) (quoting Warth v. Seldin , 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ).

Whether a party has standing is an issue of the court's subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). Allstate Ins. Co. v. Global Med. Billing, Inc. , 520 Fed.Appx. 409, 410–11 (6th Cir. 2013) (citing Murray v. U.S. Dep't of Treasury , 681 F.3d 744, 748 (6th Cir. 2012) ). We review such matters de novo . McGlone v. Bell , 681 F.3d 718, 728 (6th Cir. 2012).

III.

Lyshe maintains that Appellees violated the Ohio Rules of Civil Procedure by (1) failing to provide electronic discovery without a request from Lyshe; and (2) stating that the requests for admissions must be sworn and notarized or else be deemed admitted, and that these errors violate the FDCPA.¹ Lyshe contends that prior to Spokeo , circuit case law established that a debt collector's failure to follow state law procedural rules violated the FDCPA. He reasons that although Spokeo seemed to reexamine Article III standing in the context of intangible damages, it did not change the rule of law for standing and did not eliminate standing for cases like the one here involving intangible injuries. According to Lyshe, Congress created a cognizable intangible injury under the FDCPA by banning deceptive conduct made in connection with collection of a debt.

The Supreme Court in Spokeo dealt with a plaintiff's standing to sue under the Fair Credit Reporting Act ("FCRA"). 136 S.Ct. at 1544. To further its aim of ensuring accurate credit reporting, the FCRA imposes liability on an individual who willfully fails to comply with any of its requirements, including the requirement to follow reasonable procedures to attain the maximum accuracy of consumer reports. Id. at 1545. The plaintiff brought suit under the FCRA against a consumer reporting agency for reporting inaccurate information about him in violation of the statutory requirements. Id. at 1546. In resolving this issue, the Court took the opportunity to clarify the injury-in-fact requirement for standing; specifically, the necessity that the injury be concrete. It noted that even intangible injuries can be concrete. Id. at 1549. Further, it observed that Congress may "elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law." Id. (alteration in original) (quoting Lujan , 504 U.S. at 578, 112 S.Ct. 2130 ).

Yet, this does not eliminate the requirement that a plaintiff actually suffer harm that is concrete. Even though Congress may "identify intangible harms that meet minimum Article III requirements," id. at 1549, Spokeo emphasized that Congress could not "erase Article III's standing requirements by statutorily granting the right to sue," id. at 1547–48 (quoting Raines v. Byrd , 521 U.S. 811, 820 n.3, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) ). Importantly, "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." Id. at 1549. To that end, though declining to take a position on whether the circuit court erred in finding the plaintiff had standing, the Court held that "bare procedural violation[s]," like the violation alleged by the plaintiff, could not satisfy the injury-in-fact requirement if it is "divorced from any concrete harm." Id.

Therefore, under Spokeo , Lyshe would have us hold that the FDCPA created a concrete harm—receiving false information in connection with debt collection activities—that he suffered when Appellees made misstatements in their discovery requests about state procedural rules. This view of the law is untenable.

Initially, though Spokeo allows for a bare procedural violation to create a concrete harm, the procedural violation alleged here—a violation of a state law procedure not required under FDCPA—is not the type contemplated by Spokeo , which dealt with the failure to comply with a statutory procedure that was designed to protect against the harm the statute was enacted to prevent. The goal of the FDCPA is to eliminate abusive debt collection practices. See Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA , 559 U.S. 573, 577, 130 S.Ct. 1605, 176 L.Ed.2d 519 (2010). Yet, the sort of harm alleged by Lyshe, namely, that he would have been required to visit a notary and contact Appellees to obtain electronic copies of the discovery, was not the type of harm the FDCPA was designed to prevent. Moreover, Lyshe does not even allege that he suffered this harm, and concedes that he is at no risk to suffer this harm. The harm alleged is insufficient to confer standing before the federal courts. An examination of our own precedents and those of our sister circuits supports our conclusion.

This circuit has had the occasion to interpret Spokeo and has concluded that a statutory violation in and of itself is insufficient to establish standing. For instance, the plaintiffs in Soehnlen v. Fleet Owners Insurance Fund , filed suit alleging that the defendants violated the Affordable Care Act by failing to comply with its mandate that health plans eliminate certain caps on benefits, which constituted a violation of their rights under the Employee Retirement Security Act ("ERISA"). 844 F.3d 576, 579–80 (6th Cir. 2016). We rejected the plaintiff's argument that a mere allegation that the defendants violated ERISA was sufficient to establish standing, instead holding that, armed with only these alleged violations ...