Kale v. Procollect, Inc.
| Decision Date | 02 July 2021 |
| Docket Number | No. 2:20-cv-2776-SHM-tmp,2:20-cv-2776-SHM-tmp |
| Citation | 547 F.Supp.3d 793 |
| Parties | Swapna KALE, Individually and on behalf of all others similarly situated, Plaintiffs, v. PROCOLLECT, INC., and John Does 1-25, Defendants. |
| Court | U.S. District Court — Western District of Tennessee |
ORDER GRANTING PROCOLLECT'S MOTION TO DISMISS
Plaintiff Swapna Kale ("Kale") brings this action under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692, et seq., on behalf of herself and all others similarly situated. She seeks relief from Defendants ProCollect, Inc. ("ProCollect") and John Does 1-25. (D.E. No. 1.) Before the Court is ProCollect's November 19, 2020 Motion to Dismiss (the "Motion"). (D.E. No. 9.) Kale responded on December 17, 2020. (D.E. No. 11.) ProCollect replied on December 31, 2020. (D.E. No. 12.) The Motion is GRANTED.
Kale incurred a debt to Centennial Gardens Apartments. (D.E. No. 1 ¶ 21.) Centennial Gardens Apartments contracted with ProCollect to collect the debt. (Id. ¶ 24.)
On or around April 21, 2020, ProCollect sent Kale a collection letter (the "Letter"). (Id. ¶ 26.) The Letter stated the amount Kale owed as $233.39. (Id. ¶ 27.) The amount owed was followed by an asterisk that corresponded to the following paragraph at the bottom of the letter:
Your agreement with the original creditor, or other applicable state law, may allow ProCollect to charge collection agency fees. If you have not already been put on notice of any applicable fee, this is your notice that a failure to pay the Amount Due within the applicable deadline set out in the agreement with the original creditor or state law, may result in ProCollect assessing collection agency fees allowed by such agreement or state law.
(Id. ¶ 28.) No information about how much the fees might be was included in the letter. (Id. ¶¶ 29-31.)
On October 26, 2020, Kale filed the Complaint. (D.E. No. 1.) She alleges three violations of 15 U.S.C. § 1692e. (Id. ¶¶ 37-41.) She alleges ProCollect failed "to truthfully represent the amount of the debt in the lawsuit pursuant to § 1692 [e](2)(A)." (Id. ¶ 40(a).) She alleges ProCollect failed to "provide the notices required in an initial collection letter in violation of § 1692e(10). (Id. ¶ 40(b).) She alleges ProCollect threatened to "take action (increasing the debt amount) that cannot legally be taken or that is not intended to be taken in violation of § 1692e(5)." (Id. ¶ 40(c).)
Kale alleges two violations of 15 U.S.C. § 1692f. She alleges ProCollect failed to state the amount of the debt and that ProCollect threatened "that the amount of the debt may increase even though it would not actually increase." (Id. ¶ 45.) Kale also alleges ProCollect violated 15 U.S.C. § 1692g by "[f]ailing to provide the actual amount of the debt." (Id. ¶ 50.)
Kale seeks actual and statutory damages, costs, and attorneys’ fees. (Id. ¶¶ 41, 46, 51.)
On November 19, 2020, ProCollect filed the Motion. (D.E. No. 9.) ProCollect argues that Kale lacks standing because she has failed to allege facts demonstrating that she suffered a concrete injury that was more than a bare procedural violation. (See id. at 54.) ProCollect argues that, even if Kale has standing, she has failed to allege facts sufficient to demonstrate that ProCollect violated the FDCPA. (Id. )
On December 17, 2020, Kale responded. (D.E. No. 11.) She argues that procedural violations of the FDCPA are injuries sufficient to support standing. (Id. at 90.) She lists several other injuries she suffered. (Id. ) She argues that the Complaint contains facts sufficient to state a claim that ProCollect violated the FDCPA. (Id. at 101-02.) Kale requests leave to amend the Complaint, should the Court grant the Motion. (Id. at 91.)
Kale's claims arise under the FDCPA. (See D.E. No. 1.) Therefore, the Court has federal question jurisdiction under 28 U.S.C. § 1331.
Although Kale asserts that the Court has supplemental jurisdiction over state law claims pursuant to 28 U.S.C. § 1367(a), her Complaint alleges no state law claims. (See D.E. No. 1.)
ProCollect challenges Kale's standing pursuant to Federal Rule of Civil Procedure 12(b)(1). (D.E. No. 9 at 54.) Standing is jurisdictional. Before considering the merits, the Court must ensure its subject-matter jurisdiction. Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 90 L.Ed. 939 (1946) ; see Coal Operators and Assocs., Inc. v. Babbitt, 291 F.3d 912, 915 (6th Cir. 2002). Challenges to standing can be facial or factual. DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004), overruled on other grounds, Knick v. Township of Scott, ––– U.S. ––––, 139 S. Ct. 2162, 204 L.Ed.2d 558 (2019) (). ProCollect raises both facial and factual challenges to Kale's standing. Because ProCollect's facial arguments resolve the standing issue, the Court need not reach ProCollect's factual arguments.
Article III of the Constitution limits the jurisdiction of federal courts to "Cases" and "Controversies." U.S. Const. art. 3, § 2. "[T]he core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). 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 establish standing a "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, 578 U.S. 330, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) (citing Lujan, 504 U.S. at 560, 112 S.Ct. 2130 ). An injury in fact must be both "concrete" and "particularized." Id. at 1548. "A ‘concrete’ injury must be ‘de facto’; that is, it must actually exist." Id. (citing Black's Law Dictionary 479 (9th ed. 2009)). "For an injury to be ‘particularized,’ it ‘must affect the plaintiff in a personal and individual way.’ " Id. (quoting Lujan, 504 U.S. at 560, 112 S.Ct. 2130 ).
Until recently, Kale could have established the disputed element of standing, an injury in fact, in a suit for damages in one of two ways. Buchholz v. Meyer Njus Tanick, PA, 946 F.3d 855, 863 (6th Cir. 2020). She could have alleged that ProCollect "violated the statute in [ways] that caused [her] concrete harm" or that ProCollect's "violation[s] of the statute did not cause tangible harm but created a risk of harm that Congress intended to prevent." Id.; Garland v. Orlans, PC, 999 F.3d 432, 436-437 (6th Cir. 2021) (quoting Macy v. GC Servs. Ltd. P'ship, 897 F.3d 747, 756 (6th Cir. 2018) ) ("Thus under Spokeo, Garland has standing if his complaint sufficiently alleges that 1) Orlans's suspected FDCPA ... 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.’ ").
The dispute about standing in this case boils down to whether the alleged procedural violations of the FDCPA, taken alone, are injuries in fact. (D.E. No. 9 at 57-59; D.E. No. 11 at 94-96; D.E. No. 12 at 111-114.) Kale pleads statutory violations. She pleads no tangible injury.1 The Sixth Circuit has previously said that the "risk-of-harm inquiry is the only way under Spokeo to show that a statutory violation by itself is a concrete injury." Garland, 999 F.3d at 436-437.
The Supreme Court recently clarified the risk-of-harm language in Spokeo, on which the Sixth Circuit has relied. The Supreme Court held that risk-of-harm analysis applies only in suits seeking injunctive relief and cannot be used to establish standing in a suit for damages. TransUnion LLC v. Ramirez, ––– U.S. ––––, 141 S. Ct. 2190, 2210-2211, 210 L.Ed.2d 568 (2021). In TransUnion, plaintiffs sought to bring a class action. Id. at *3. THey alleged violations of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et seq., ("FCRA"). Id. Some class members had incorrect information reported to third parties. Id. Others had incorrect information in their credit reports, but the incorrect information was never reported to a third-party. Id. The Supreme Court held that class members whose information was never reported lacked standing. Id.
"Because the plaintiffs [could] not demonstrate that the misleading information in the internal credit files itself constitute[d] a concrete harm, the plaintiffs advance[d] a separate argument based on an asserted risk of future harm." Id. at 2210 (emphasis in original). "[P]laintiffs rel[ied] on language from Spokeo where the Court said that ‘the risk of real harm’ ... can sometimes ‘satisfy the requirement of concreteness.’ " Id.
The Supreme Court recognized that the risk-of-harm language in Spokeo was based on Clapper v. Amnesty Int'l USA, 568 U.S. 398, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013), a suit for injunctive relief. Id. "[A] person exposed to a risk of future harm may pursue forward-looking, injunctive relief to prevent the harm from occurring." Id. That does not mean that a person seeking retrospective damages has standing based on a risk of harm. Id. Without alleging that defendant's statutory violations caused plaintiffs to suffer some other injury, such as an emotional injury, plaintiffs’ "argument for standing for their damages claims based on an asserted risk of future harm is unavailing." Id.
Kale relies on risk-of-harm analysis to...
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