Larkin v. Fin. Sys. of Green Bay Inc.
| Decision Date | 08 November 2018 |
| Docket Number | Case No. 18-C-496 |
| Parties | JENNIFER R. LARKIN, individually and on behalf of all those similarly situated, Plaintiff, v. FINANCE SYSTEM OF GREEN BAY INC. and JOHN DOES 1-25, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
DECISION AND ORDER GRANTING MOTION TO DISMISS
Plaintiff Jennifer Larkin filed this lawsuit on behalf of herself and all those similarly situated against Finance System of Green Bay and several John Does (collectively FSGB), alleging violations of the Fair Debt Collections Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. More specifically, Larkin alleges that FSGB sent her a form letter about a debt she incurred for personal, family, or household purposes that contained statements that are false, deceptive, and misleading. The complaint alleges FSGB sent similar letters to other consumers.
FSGB originally moved for dismissal on the ground that Larkin's claim is barred by the FDCPA's one-year statute of limitations and, in the alternative, for failure to state a claim. At the Court's request, the parties have also addressed the question of whether Larkin has standing under Spokeo v. Robbins, 136 S. Ct. 1540 (2016). Having considered the arguments of counsel, I now conclude that Larkin does have standing and that her claim is not barred by the one-year statute of limitations. I also conclude, however, that based on the letter itself, her complaint fails to state a claim on which relief can be granted. FSGB's motion will therefore be granted.
LEGAL STANDARD
A motion to dismiss tests the sufficiency of the complaint to state a claim upon which relief can be granted. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990); see Fed. R. Civ. P. 12(b)(6). When reviewing a motion to dismiss under Rule 12(b)(6), the court must accept all well-pleaded factual allegations as true and draw all inferences in the light most favorable to the non-moving party. Gutierrez v. Peters, 111 F.3d 1364, 1368-69 (7th Cir. 1997); Mosley v. Klincar, 947 F.2d 1338, 1339 (7th Cir. 1991). Rule 8(a)(2) mandates that a complaint need only include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The plaintiff's short and plain statement must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While a plaintiff is not required to plead detailed factual allegations, it must plead "more than labels and conclusions." Id. A simple, "formulaic recitation of the elements of a cause of action will not do." Id. A claim is plausible on its face when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009).
ALLEGATIONS OF THE COMPLAINT
Plaintiff Jennifer Larkin is a Wisconsin resident, who originally incurred a debt to a healthcare provider. FSGB, a corporation that engages in the collection of debts owed to others, is incorporated under the laws of Wisconsin and maintains its principal place of business in Green Bay, Wisconsin. The Court has jurisdiction under 15 U.S.C. § 1692k(d) and 28 U.S.C. § 1331.
On March 28, 2017, FSGB mailed a form debt-collection letter to Larkin, attempting to collect a debt in the amount of $57.08 that was originally owed to Green Bay Radiology SC. The letter included the following language:
On March 28, 2018, Larkin filed this lawsuit on behalf of herself and all others to whom FSGB mailed such a letter, alleging that the letter violated 15 U.S.C. § 1692e because it was confusing, misleading, and deceptive to the unsophisticated consumer. ECF No. 1. Larkin alleges that the letter falsely implies that FSGB had confidence in Larkin, that Radiology SC placed faith in Larkin, and that Green Bay Radiology maintained a credit rating for Larkin, who, as of the date of the letter, had a "good credit rating." Id. ¶ 29. Larkin also alleges that the letter constitutes an "unconscionable means to collect or attempt to collect a debt in violation of 15 U.S.C. § 1692f." Id. ¶ 44. She seeks statutory damages of up to $1,000 for herself and members of the class together with attorney's fees and cost.
ANALYSIS
At the court's request, the parties submitted supplemental briefs on the issue of whether Larkin has standing to assert an FDCPA claim. Although I have addressed that issue before in the context of an FDCPA claim, see, e.g., Pogorzelski v. Patenaude & Felix APC, No. 16-C-1330, 2017 WL 2539782, at *4 (E.D. Wis. June 12, 2017), several recent cases within the circuit caused me to question whether my analysis was correct. See Groshek v. Time Warner Cable, Inc., 865 F.3d 884 (7th Cir. 2017); Zuniga v. Asset Recovery Solutions, No. 17-cv-05119, 2018 WL 1519162 (N.D.Ill. Mar. 28, 2018). The issue of standing is, of course, fundamental to whether the case can proceed. Whether a plaintiff has standing is an issue of subject matter jurisdiction, Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). Article III of the United States Constitution limits the jurisdiction of federal courts to actual "cases" and "controversies" brought by litigants who demonstrate standing. Groshek, 865 F.3d at 886. "The 'irreducible constitutional minimum of standing' consists of three elements: injury in fact, causation, and redressability." Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). The plaintiff bears the burden of pleading sufficient factual allegations that "plausibly suggest" each element. Id. (citing Silha v. ACT, Inc., 807 F.3d 169, 174 (7th Cir. 2015)).
The issue of standing in cases seeking only statutory damages for alleged violations of prophylactic acts such as the FDCPA seemingly took on new life with the Supreme Court's decision in Spokeo. In Spokeo, the Court vacated the Ninth Circuit's decision in favor of the plaintiff in a Fair Credit Reporting Act (FCRA) case because the lower court had failed to consider whether the plaintiff had alleged an injury-in-fact sufficient to confer standing. The FCRA is intended to ensure fair and accurate credit reporting in part by regulating the creation and use of consumer reports by consumer reporting agencies for certain purposes, including credit transactions, insurance, licensing, consumer-initiated business transactions, and employment. 136 S. Ct. at 1545 (citing 15 U.S.C. §§ 1681(a)(1); 1681a(d)(1)(A)-(C); 1681b). In Spokeo, the plaintiff alleged that the defendant, which operated an internet "people search engine" violated the FCRA by gathering and disseminating information about him in response to a search that was incorrect. More specifically, the profile generated by the defendant falsely stated that the plaintiff was married, had children, was in his 50's, had a job, was relatively affluent, and held a graduate degree. Id. at 1546. But there was noallegation that the plaintiff had suffered any harm as a result of the inaccuracies in the profile. The district court dismissed the plaintiff's complaint on the ground that he had not properly pled an injury-in-fact as required by Article III. The Ninth Circuit reversed, holding that the plaintiff's allegation that the defendant had violated his statutory rights was sufficient to satisfy the injury-in-fact requirement of Article III. Id.
In vacating the Ninth Circuit's decision, the Court emphasized the requirement that there be an injury-in-fact, "the '[f]irst and foremost' of standing's three elements." Id. at 1547 (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 103 (1998)). It is not enough to allege a bare violation of law, the Court explained. "Injury in fact is a constitutional requirement, and it is settled that Congress cannot erase Article III's standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing." Id. at 1547-48 (internal quotation marks and alterations omitted). "To establish injury in fact," the Court stated, "a plaintiff must show that he or she suffered 'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual or imminent, not conjectural or hypothetical.'" Id. (quoting Lujan, 504 U.S. at 560). For an injury to be particularized, the Court explained, "it must affect the plaintiff in a personal and individual way." Id. at 1548 (internal quotation marks omitted). To be concrete, "the injury must be 'de facto'; that is, it must actually exist." Id. (internal quotation marks omitted). The adjective "concrete," as understood by the Court, means "real, and not abstract." Id. (internal quotation marks omitted). But "concrete," the Court noted, is not the same as "tangible." Id. at 1549. In determining whether an intangible harm constitutes an injury-in-fact, a court must look both at history and the judgment of Congress. Id. This is because "'Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where noneexisted before.'" Id. (citing Lujan, 504 U.S. at 580). For this reason, "'the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact,' such as where the statutory violation creates 'risk of real harm.'" Evans v. Portfolio Recovery Assocs., LLC, 889 F.3d 337, 344 (7th Cir. 2018) (quoting Spokeo, 136 S. Ct. at 1549). "In other words, a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified." Id.
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