Garland v. Orlans, PC

• Decision Date: 28 May 2021
• Docket Number: No. 20-1527,20-1527
• Citation: 999 F.3d 432
• Parties: Freddie GARLAND, Plaintiff-Appellant, v. ORLANS, PC ; Linda M. Orlans; Alison Orlans, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

999 F.3d 432

Freddie GARLAND, Plaintiff-Appellant,

v.ORLANS, PC ; Linda M. Orlans; Alison Orlans, Defendants-Appellees.

No. 20-1527

United States Court of Appeals, Sixth Circuit.

Argued: March 10, 2021

Decided and Filed: May 28, 2021

ARGUED: Andrew J. McGuinness, ANDREW J. MCGUINNESS, ESQ., Ann Arbor, Michigan, for Appellant. I.W. Winsten, HONIGMAN LLP, Detroit, Michigan, for Appellees. ON BRIEF: Andrew J. McGuinness, ANDREW J. MCGUINNESS, ESQ., Ann Arbor, Michigan, for Appellant. I.W. Winsten, Andrew W. Clark, HONIGMAN LLP, Detroit, Michigan, for Appellees.

Before: McKEAGUE, GRIFFIN, and NALBANDIAN, Circuit Judges.

NALBANDIAN, Circuit Judge.

Orlans, PC, a law firm acting on behalf of Wells Fargo Home Mortgage Inc., sent a letter on law-firm letterhead to Freddie and Linda Garland. The letter said Wells Fargo had referred the Garlands’ loan to Orlans for foreclosure. But the letter also said that "[w]hile the foreclosure process ha[d] begun," "foreclosure prevention alternatives" might still be available if the Garlands reached out to Wells Fargo. (R. 1, Letter, PageID 28.) It informed the Garlands that Wells Fargo might have already sent a letter about possible alternatives, and it explained how the Garlands could contact Wells Fargo "to attempt to be reviewed for possible alternatives to foreclosure." (Id .) The letter's signature was typed and said, "Orlans PC." (Id. )

Freddie Garland says that the letter confused him because he was unsure if it was from an attorney. And he says that the letter "raised [his] anxiety" by suggesting "that an attorney may have conducted an independent investigation and substantive legal review of the circumstances of his account, such that his prospects for avoiding foreclosure were diminished." (R. 1, Complaint, PageID 9.)

Garland alleges that Orlans sent a form of this letter to tens of thousands of homeowners and that it did so without having any attorney provide a meaningful review of the homeowners’ foreclosure files, so the communications deceptively implied they were from an attorney. Both the Fair Debt Collection Practices Act (FDCPA) and Michigan's Regulation of Collections Practices Act (RCPA) prohibit misleading debt-collection communications that falsely represent or imply they are from an attorney. Garland brought class-action claims under both acts against Orlans and its principals.¹

The district court dismissed Garland's FDCPA claim and declined to exercise supplemental jurisdiction over his RCPA claim. We AFFIRM , but on grounds that differ from those articulated by the district court. Simply put, Garland lacks standing to assert either of his claims, so we lack jurisdiction.

I.

To sue in federal court, a plaintiff must have standing under Article III of the Constitution, which "limits the judicial power to resolving actual ‘Cases’ and ‘Controversies.’ " Buchholz v. Meyer Njus Tanick, PA , 946 F.3d 855, 860 (6th Cir. 2020). The oft-repeated constitutional standing test 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, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). Garland runs into trouble under the first two factors.

A.

To have standing, a plaintiff must have suffered an injury in fact—"an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical." Lujan v. Defs. of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (citations and internal quotation marks omitted). Garland's complaint asserts that Orlans violated the RCPA and FDCPA by sending misleading letters that confused him and made him anxious. None of the "injuries" that we can tease out of Garland's complaint satisfy standing's concreteness requirement.

Garland's complaint alleges statutory violations that led to confusion and increased anxiety. The FDCPA and the RCPA both create causes of action against collectors who violate their provisions. One might think that a clear statutory directive to open the doors to court would be enough for standing. Not so. Because standing is a constitutional requirement, the fact that a statute purports to create a cause of action does not in isolation create standing. A plaintiff asserting a procedural claim (like an FDCPA violation) cannot bring a claim unless she has suffered a concrete injury of some kind.

In Spokeo , the Supreme Court addressed the concrete-injury requirement and said three important things for resolving the question of concreteness in Garland's case. First, the Court explained that although concrete injuries are " ‘real’ and not ‘abstract,’ " they are not necessarily tangible—intangible injuries can sometimes be concrete. Spokeo , 136 S. Ct. at 1548 (citations omitted).

Second, the Court crafted a framework for examining whether intangible injuries are concrete. Id. at 1549. When trying to determine whether an intangible injury qualifies, Spokeo says that we should look to history and congressional judgment. Id. If an "alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit," then it is likely sufficient. Id. Similarly, where Congress says a harm satisfies Article III, the harm likely does for two reasons: 1) "Congress is well positioned to identify intangible harms that meet minimum Article III requirements," and 2) Congress has the power to permissibly make some injuries "previously inadequate in law" constitutionally "cognizable." Id. (citation omitted). The Court, however, was quick to note that Congress's "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" suit. Id.

Third, Spokeo specifically explained how courts should deal with plaintiffs who allege a violation of a statute that purports to create a cause of action. Statutory violation plaintiffs can show concrete injury in one of two ways. Id. First, a plaintiff can show a concrete harm (if intangible, using the principles just explained) flowing from the violation. See id. Second, in some cases a plaintiff could show that the procedural violation alone was enough with no other showing of harm. Id. But the Court limited this second category to cases in which a plaintiff can show 1) that Congress created the statutory right to protect a concrete interest (if intangible, applying the principles just explained) and 2) the violation creates a "risk of real harm" to that concrete interest. Id.

Thus under Spokeo , Garland has standing if his complaint sufficiently alleges that 1) Orlans's suspected FDCPA and RCPA violations caused him concrete harm or 2) the violations in and of themselves create standing because 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. Ltd. P'ship , 897 F.3d 747, 756 (6th Cir. 2018). We need only address the first possibility because Garland's complaint did not allege that the violations are enough in isolation due to risk of harm. Compare Macy , 897 F.3d at 761 (explaining that "a risk-of-harm analysis" is unnecessary when "no risk of harm was alleged"), with Donovan v. FirstCredit, Inc. , 983 F.3d 246, 251 (6th Cir. 2020) (explaining that a risk-of-harm analysis was necessary "because Donovan's alleged injury is based on the risk" of harm (emphasis omitted)). And the risk-of-harm inquiry is the only way under Spokeo to show that a statutory violation by itself is a concrete injury. 136 S. Ct. at 1549.

So the question that we resolve is whether Garland has sufficiently alleged that the statutory violations caused him individualized concrete harm. And here his allegations come up short. Garland's alleged injuries are not concrete enough to support standing. Garland's complaint alleges two injuries—confusion and anxiety. Both are intangible, so we analyze them under Spokeo ’s intangible-harm framework.

We can dispense with confusion easily under Spokeo . Confusion does not have "a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit." Spokeo , 136 S. Ct. at 1549. And Garland has not shown us that anything in the RCPA and FDCPA suggests that the legislatures² intended to make confusion cognizable. We have no difficulty joining the Seventh Circuit in holding that "the state of confusion is not itself an injury." Brunett v. Convergent Outsourcing, Inc. , 982 F.3d 1067, 1068 (7th Cir. 2020).

The anxiety analysis is not as easy, but Garland's anxiety allegation also fails. This is not the first time this court has considered an attorney-letterhead allegation of anxiety. In Buchholz , this court held that a similar attorney-letterhead plaintiff lacked standing because 1) fear of future harm not certainly impending is not an injury in fact and 2) his injury was not traceable to the defendant's conduct. 946 F.3d at 865-67. In that case, the panel majority also questioned whether a bare allegation of anxiety could be a concrete injury-in-fact at all. Id. at 863-65. Though we did not answer that question in Buchholz , today we do.

The plaintiff in Buchholz , Gustav Buchholz, received two letters from a law firm (on firm letterhead and signed by an attorney) that said a bank had retained the firm to collect two debts. Id. at 859-60. The letters did not threaten legal action. Id. at 860. Buchholz sued, alleging that the firm processed too many collection letters to have meaningfully reviewed the claims against him and "the letters made him feel anxious and fear that [the firm] would sue him if he did not promptly pay." Id. at 859. He did not...