Donovan v. FirstCredit, Inc.

• Decision Date: 18 December 2020
• Docket Number: No. 20-3485,20-3485
• Citation: 983 F.3d 246
• Parties: Lynne DONOVAN, Plaintiff-Appellant, v. FIRSTCREDIT, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

983 F.3d 246

Lynne DONOVAN, Plaintiff-Appellant,

v.FIRSTCREDIT, INC., Defendant-Appellee.

No. 20-3485

United States Court of Appeals, Sixth Circuit.

Argued: December 4, 2020

Decided and Filed: December 18, 2020

Rehearing En Banc Denied February 18, 2021

ARGUED: Geoffrey C. Parker, HILTON PARKER, Pickerington, Ohio, for Appellant. David B. Shaver, SURDYK, DOWD & TURNER CO., L.P.A., Dayton, Ohio, for Appellee. ON BRIEF: Geoffrey C. Parker, HILTON PARKER, Pickerington, Ohio, for Appellant. David B. Shaver, Jeffrey C. Turner, SURDYK, DOWD & TURNER CO., L.P.A., Dayton, Ohio, for Appellee.

Before: MOORE, COOK, and STRANCH, Circuit Judges.

KAREN NELSON MOORE, Circuit Judge.

Plaintiff Lynne Donovan appeals from a judgment entered against her after the district court granted Defendant FirstCredit, Inc.’s ("FirstCredit") motion for judgment on the pleadings. The central issue is whether Donovan's allegations—concerning a letter that FirstCredit sent to Donovan regarding a purported medical debt—are sufficient to state a claim for relief under 15 U.S.C. § 1692f(8), a provision of the Fair Debt Collection Practices Act ("FDCPA")¹ that limits the language and symbols that debt collectors may employ on an envelope when communicating with a consumer by mail. The district court determined that FirstCredit's letter did not run afoul of § 1692f(8) and accordingly granted judgment on the pleadings in favor of FirstCredit. We disagree, and so we REVERSE the judgment of the district court and REMAND for further proceedings.

I. BACKGROUND

On or about April 11, 2019, Donovan received from FirstCredit a letter "demanding payment of a purported medical debt incurred with Mount Carmel Health System." R. 11 (First Am. Compl. at ¶ 8) (Page ID #50). The letter came in an envelope with two transparent glassine windows on its face, stacked one on top of the other, together taking up most of the left half of the envelope. Id. at ¶ 9 & Ex. A (Page ID #50, 60). Because the letter, when folded, is smaller than the envelope containing it, the text visible through the glassine windows depends in part on where the letter is sitting within the envelope. See id. at ¶ 10 (Page ID #50). No matter how the letter is situated, Donovan's name and address are always visible through the window located in the bottom left quadrant of the envelope. Id. at ¶ 11 (Page ID #51). Likewise, always visible through the window situated in the top left quadrant of the envelope is an empty checkbox followed by the phrase "Payment in full is enclosed." Id. at ¶ 11 (Page ID #51). Sometimes, a second empty checkbox followed by "I need to discuss this further. My phone number is _______," is visible directly below the first. Id. at ¶ 12 (Page ID #51).

Donovan filed her operative First Amended Complaint on October 1, 2019. In it, she alleges that the visibility of the checkboxes and the accompanying language through the glassine window in FirstCredit's envelope "created the risk that anyone who caught a glimpse of Plaintiff's mail would recognize that she was receiving mail from a debt collector, causing her embarrassment and emotional distress." Id. at ¶ 15 (Page ID #51). Donovan sought relief under the FDCPA, alleging that FirstCredit violated § 1692f(8), which prohibits a debt collector's use of "any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails ... except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business."² She also sought relief under Ohio's Consumer Sales Practices Act ("CSPA"), alleging that any violation of the FDCPA constitutes a violation of Ohio Revised Code § 1345.02(A), which prohibits "unfair or deceptive act[s] or practice[s] in connection with a consumer transaction." Donovan sought statutory damages, costs, and attorney's fees, and also sought to represent a class of similarly situated consumers.

After answering Donovan's operative complaint, FirstCredit moved for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). See generally R. 17 (Mot. J. Pleadings) (Page ID #85–98). FirstCredit argued that § 1692f(8) includes an implied "benign language" exception and that its April 11, 2019 letter to Donovan did not violate that provision because the markings visible through the glassine windows of its envelope were benign. Id. at 5–12 (Page ID #89–96). Donovan responded that § 1692f(8) should not be interpreted to include a "benign language" exception and that, even if it did, the language visible through the glassine windows of FirstCredit's envelope was not benign. See generally R. 18 (Mem. in Opp.) (Page ID #99–119). The district court, noting a circuit split on the issue, concluded that § 1692f(8) should be read to include a "benign language" exception, relying on Strand v. Diversified Collection Service, Inc. , 380 F.3d 316, 319 (8th Cir. 2004), and Goswami v. American Collections Enterprise, Inc. , 377 F.3d 488, 494 (5th Cir. 2004). R. 25 (Op. & Order at 4–7) (Page ID #167–70). Finding the language at issue to be benign, the district court granted FirstCredit's motion for judgment on the pleadings. Id.

Judgment was entered against Donovan on May 5, 2020, R. 26 (J.) (Page ID #163), and Donovan timely appealed, see R. 27 (Notice of Appeal) (Page ID #173).

II. STANDING

Before reaching the merits, we must first determine whether Donovan's allegations satisfy the elements of standing. See Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) ("Where, as here, a case is at the pleading stage, the plaintiff must ‘clearly ... allege facts demonstrating’ each element [of standing]." (quoting Warth v. Seldin , 422 U.S. 490, 518, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) )). FirstCredit raised this argument for the first time at oral argument on appeal, but we have an independent obligation to ensure that the parties have standing and so will address the issue here. See Summers v. Earth Island Inst. , 555 U.S. 488, 499, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009) ("[I]t is well established that the court has an independent obligation to assure that standing exists."). In short, we hold that Donovan has sufficiently alleged that she has standing to bring her claim under the FDCPA.

In limiting the "judicial power of the United States" to "Cases" and true "Controversies," Article III of the Constitution requires that litigants in federal court have a "personal stake in the outcome" of the case, i.e., standing to sue.

Baker v. Carr , 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962). Standing has three elements: "The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo , 136 S. Ct. at 1547. As for the first element, an "injury in fact" is one that is " ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’ " Id. at 1548 (quoting Lujan v. Defs. of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). By satisfying these requirements, the plaintiff assures us that we are acting within our constitutionally prescribed role in weighing in on the matter. See id. at 1547 ("The [standing] doctrine developed in our case law to ensure that federal courts do not exceed their authority as it has been traditionally understood.").

At oral argument, FirstCredit argued that Donovan stumbles at the first standing hurdle because she has not suffered an injury in fact. In her rebuttal, Donovan responded that this requirement is satisfied because someone could have seen FirstCredit's letter to her—which she alleges violated her consumer rights under the FDCPA—and identified it as a debt-collection letter.³ These arguments are directed towards the concreteness requirement, which limits standing to plaintiffs who have suffered a "real" rather than an "abstract" injury, i.e., an injury that "actually exist[s]." Id. at 1548 (quoting Webster's Third New International Dictionary 472 (1971); Random House Dictionary of the English Language 305 (1967)).

To satisfy standing's concreteness requirement, Donovan needs to allege something more than a "bare procedural violation," id. at 1549, of the FDCPA. This is because "the violation of a procedural right granted by statute is sufficient in and of itself to constitute concrete injury in fact" only where "Congress conferred the procedural right to protect a plaintiff's concrete interests and the procedural violation presents a material risk of real harm to that concrete interest." Macy v. GC Servs. LP , 897 F.3d 747, 756 (6th Cir. 2018) (citing Spokeo , 136 S. Ct. at 1549 ). Thus, because Donovan's alleged injury is based on the risk that someone would see the envelope that she received from FirstCredit and identify it as coming from a debt collector, we must determine whether that risk involves a concrete interest that Congress sought to protect through the FDCPA, and in particular § 1692f(8).

Here, Donovan alleges that the statutory violation by FirstCredit presented the risk of public disclosure of her status as a purported debtor.⁴ That risk "implicates a core concern animating the FDCPA—the invasion of privacy."

Douglass v. Convergent Outsourcing , 765 F.3d 299, 303 (3d Cir. 2014) ; see also Macy , 897 F.3d at 756 ("Congress enacted the FDCPA because of ‘abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors’ that ‘contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy .’ " (emphasis added) (quoting 15 U.S.C. § 1692(a) )). Section 1692f(8) ’s prohibition on the language and symbols that debt collectors may employ on envelopes when communicating with consumers protects that privacy interest by preventing at least...