Evans v. Portfolio Recovery Associates, LLC, 050218 FED7, 17-1773

Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
Judge Panel:Before Wood, Chief Judge, and Flaum and Easterbrook, Circuit Judges.
Opinion Judge:FLAUM, CIRCUIT JUDGE.
Party Name:Katherine Evans, Plaintiff-Appellee, v. Portfolio Recovery Associates, LLC, Defendant-Appellant. And Lusvina Paz, Plaintiff-Appellee, v. Portfolio Recovery Associates, LLC, Defendant-Appellant. And Peter Bowse, Plaintiff-Appellee, v. Portfolio Recovery Associates, LLC, Defendant-Appellant. And Evelyn Gomez, Plaintiff-Appellee, v. Portfolio ...
Case Date:May 02, 2018
Docket Nº:17-1773, 17-1860, 17-1866, 17-2622, 17-2756, 18-1374
 
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Katherine Evans, Plaintiff-Appellee,

v.

Portfolio Recovery Associates, LLC, Defendant-Appellant.

And

Lusvina Paz, Plaintiff-Appellee,

v.

Portfolio Recovery Associates, LLC, Defendant-Appellant.

And

Peter Bowse, Plaintiff-Appellee,

v.

Portfolio Recovery Associates, LLC, Defendant-Appellant.

And

Evelyn Gomez, Plaintiff-Appellee,

v.

Portfolio Recovery Associates, LLC, Defendant-Appellant.

Nos. 17-1773, 17-1860, 17-1866, 17-2622, 17-2756, 18-1374

United States Court of Appeals, Seventh Circuit

May 2, 2018

          Argued April 18, 2018

          Appeals from the United States District Court for the Northern District of Illinois, Eastern Division No. 15-cv-4498 - Matthew F. Kennelly, Judge, No. 15-cv-5073 - Manish S. Shah, Judge, No. 15-cv-4037 - Jorge L. Alonso, Judge, and No. 15-cv-4499 - Samuel Der-Yeghiayan, Judge.

          Before Wood, Chief Judge, and Flaum and Easterbrook, Circuit Judges.

          FLAUM, CIRCUIT JUDGE.

         This appeal concerns four consolidated cases involving similar alleged violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692e(8). Plaintiffs defaulted on credit cards, and defendant Portfolio Recovery Associates ("PRA"), an Illinois debt collection agency, bought the accounts for collection. The Debtors Legal Clinic (the "Clinic") sent separate letters on behalf of each plaintiff to PRA, stating "the amount reported is not accurate." PRA later reported each debt to credit reporting agencies without noting that the debt was "disputed." Plaintiffs each filed a suit against PRA for violations of the FDCPA, alleging that PRA communicated their debts to credit reporting agencies without indicating they had disputed the debt. The district courts granted summary judgment in favor of plaintiffs. We affirm.

         I. Background

         A. Factual Background1

         Each plaintiff defaulted on their credit card account, and PRA purchased the debts from the original creditors. As required by 15 U.S.C. § 1692g, PRA sent plaintiffs validation letters detailing the debt.2 Each plaintiff then sought the advice of the Clinic, a non-profit legal aid organization. More than thirty days after PRA sent the validation letters, Andrew Finko, a volunteer attorney at the Clinic, faxed separate letters to PRA on behalf of each plaintiff (hereinafter, the "Letters"). The Letters stated: This letter is concerning the above referenced debt.

Debtors Legal Clinic is a non-profit legal services organization that advises senior citizens, veterans, and low-income individuals whose income is protected by law of their rights under various state and federal statutes. Our clinic represents the above referenced client for the purposes of enforcing their rights pursuant to all applicable debt collection laws.

This client regrets not being able to pay, however, at this time they are insolvent, as their monthly expenses exceed the amount of income they receive, and the amount reported is not accurate. If their circumstances should change, we will be in touch.

Our office represents this client with respect to any and all debts you seek to collect, now or in the future, until notified otherwise by our office. As legal representative for this client, all communication must be through our office, please do not contact them directly.3

If you wish to discuss this matter, please contact our office directly at [phone number] to speak with the attorney assigned to the matter, Andrew Finko.

         Subsequent to receiving the Letters, PRA reported the amount of the debt, the account number, and the original creditor to credit reporting agencies. However, PRA did not inform the credit reporting agencies that the debt was disputed.

         PRA admits it received and reviewed the Letters. It says it treated them as "attorney representation letters, " but did not believe the Letters communicated disputes. According to Nyetta Jackson, PRA's Vice President of Operations: There was nothing [in the Letters] that indicated that this was a clear dispute that needed to be processed. What was clear is that the attorney was letting us know that they now represent the customer. What was clear is that they said they didn't have the money to pay and they regretted that.

         To support this view, Jackson states that Finko did not fax the Letters to PRA's special disputes department; rather, he sent the Letters to PRA's general counsel. Additionally, Jackson notes that on prior occasions, Finko sent letters that expressly stated his client "disputes the debt."

         B. Procedural Background

         The plaintiffs alleged that PRA violated 15 U.S.C. § 1692e(8), which prohibits debt collectors from "[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed." Plaintiffs maintained that they "disputed" the debt when the Clinic sent the Letters to PRA, and PRA admits that it did not inform the credit reporting agencies that the debt was disputed. The parties filed cross-motions for summary judgment, and the district courts each granted summary judgment for plaintiffs. We consolidated PRA's appeals for argument and disposition.4

         II. Discussion

         "We review de novo a district court's decision on cross-motions for summary judgment, construing all facts and drawing all reasonable inferences in favor of the party against whom the motion under consideration was filed." Hess v. Bd. Of Trs. Of S. Ill. Univ., 839 F.3d 668, 673 (7th Cir. 2016). "Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law." Id. (citing Fed.R.Civ.P. 56(a)).

         PRA makes four arguments: (1) plaintiffs did not have Article III standing; (2) the Letters did not "dispute" the debt within the meaning of § 1692e(8); (3) even if PRA violated the statute, the violation was not material; and (4) PRA has a bona fide error defense under § 1692k(c). We address each in turn.

         A. Standing

         First, PRA argues that plaintiffs lacked Article III standing. To establish standing, a plaintiff must show: (1) an "injury in fact, " that is, "an invasion of a legally protected interest which is … concrete and particularized, and … actual or imminent"; (2) a causal connection between the injury and the challenged conduct, meaning that the injury is "fairly traceable" to the challenged conduct; and (3) a likelihood "that the injury will be redressed by a favorable decision."

Dunnet Bay Const. Co. v. Borggren, 799 F.3d 676, 688 (7th Cir. 2015) (alterations in original) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). Relying primarily on the Supreme Court's recent opinion in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), PRA argues plaintiffs do not have standing because they "did nothing to show that they had an injury in fact." We disagree.

         In Spokeo, the defendant generated a consumer report that inaccurately stated the plaintiff's address, marital status, age, occupation, finances, and education. Id. at 1546. The plaintiff filed a class action, alleging the defendant failed to comply with the Fair Credit Reporting Act ("FCRA"); however, he did not identify any monetary harm. Id. Although the Court took no position as to whether the plaintiff actually had standing, id. at 1550, it expounded on whether violation of a congressional statute necessarily satisfies the "injury in fact" element. On the one hand, the Court stressed that a plaintiff "cannot satisfy the demands of Article III by alleging a bare procedural violation" because "[a] violation of one of the FCRA's procedural requirements may result in no harm."5 Id. Indeed, the Court stated that "Article III standing requires a concrete injury even in the context of a statutory violation." Id. at 1549; see also Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009) ("[D]eprivation of a procedural right without some concrete interest...

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