Macy v. GC Servs. Ltd. P'ship

• Decision Date: 30 July 2018
• Docket Number: No. 17-5593,17-5593
• Citation: 897 F.3d 747
• Parties: Wilbur MACY; Pamela J. Stowe, Plaintiffs-Appellees, v. GC SERVICES LIMITED PARTNERSHIP, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

897 F.3d 747

Wilbur MACY; Pamela J. Stowe, Plaintiffs-Appellees,

v.GC SERVICES LIMITED PARTNERSHIP, Defendant-Appellant.

No. 17-5593

United States Court of Appeals, Sixth Circuit.

Argued: January 23, 2018

Decided and Filed: July 30, 2018

ARGUED: William S. Helfand, LEWIS BRISBOIS BISGAARD & SMITH, Houston, Texas, for Appellant. James L. Davidson, GREENWALD, DAVIDSON RADBIL PLLC, Boca Raton, Florida, for Appellees. ON BRIEF: William S. Helfand, LEWIS BRISBOIS BISGAARD & SMITH, Houston, Texas, for Appellant. James L. Davidson, GREENWALD, DAVIDSON RADBIL PLLC, Boca Raton, Florida, for Appellees.

Before: GIBBONS, WHITE, and STRANCH, Circuit Judges.

HELENE N. WHITE, Circuit Judge.

Plaintiffs Wilbur Macy and Pamela J. Stowe (Plaintiffs) brought this putative class action against GC Services Limited Partnership (GC), a debt collector, alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq . Plaintiffs alleged that GC, in attempting to collect debt owed by Plaintiffs to GC’s client, sent Plaintiffs letters that contained legally deficient warnings and advisories, in violation of Section 1692g of the FDCPA. GC moved to dismiss the action for lack of Article III standing, arguing that the alleged violations of the FDCPA do not constitute harm sufficiently concrete to satisfy the injury-in-fact requirement of standing. The district court denied GC’s motion and later certified the class. We granted GC’s petition for interlocutory review of the certification order and permitted GC to challenge Plaintiffs’ standing. We now AFFIRM the district court’s certification order and hold that Plaintiffs have Article III standing.

I. BACKGROUND

The facts are undisputed. Plaintiffs both received a letter from GC notifying them that their Synchrony Bank credit-card accounts had been referred to GC for collection. The letters contained the following statement about the procedure for obtaining verification of the debt and the name and address of the original creditor:

[I]f you do dispute all or any portion of this debt within 30 days of receiving this letter, we will obtain verification of the debt from our client and send it to you. Or, if within 30 days of receiving this letter you request the name and address of the original creditor, we will provide it to you in the event it differs from our client, Synchrony Bank.

(R. 1-1, PID 14; R. 1-2, PID 16.)

Plaintiffs assert that the letters were deficient because they failed to inform Plaintiffs that GC was obligated to provide the additional debt and creditor information only if Plaintiffs disputed their debts in writing . Plaintiffs filed a complaint on their own behalf and on behalf of a class of similarly situated individuals, alleging violations of two subsections of the FDCPA that impose notice requirements containing the in-writing provisions, 1692g(a)(4) and (5).

GC moved to dismiss the suit for lack of standing. In denying GC’s motion, the district court determined that GC’s letters created a "substantial" risk that consumers would waive important protections afforded to them by the FDCPA by following GC’s deficient instructions for obtaining verification of the debt or the identity of the original creditor.

GC reasserted its challenge to standing at the class-certification stage. The district court certified a class of Kentucky and Nevada consumers, rejecting GC’s argument that certain elements of Federal Rule of Civil Procedure 23 were not satisfied because Plaintiffs had not shown that each member of the class had standing. We granted GC’s petition for interlocutory review of the district court’s certification order.

On appeal, GC argues that: 1) Plaintiffs’ claims must be dismissed because Plaintiffs lack Article III standing, and 2) the district court abused its discretion by certifying the class "because the certified class is not limited to individuals who sustained a concrete injury." (Appellant’s Br. at x.)

II. STANDING

A. Standard of Review

We "review a district court’s decision regarding a plaintiff’s Article III standing de novo ." Murray v. U.S. Dep’t of Treasury , 681 F.3d 744, 748 (6th Cir. 2012) (citation omitted).

B. Applicable Law

"Article III of the Constitution limits the judicial power of the United States to the resolution of ‘Cases’ and ‘Controversies,’ and ‘Article III standing ... enforces the Constitution’s case-or-controversy requirement.’ " Hein v. Freedom From Religion Found., Inc. , 551 U.S. 587, 597–98, 127 S.Ct. 2553, 168 L.Ed.2d 424 (2007) (alteration in original) (quoting DaimlerChrysler Corp. v. Cuno , 547 U.S. 332, 342, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006) ). A plaintiff must possess " ‘such a personal stake in the outcome of the controversy’ as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court’s remedial powers on his behalf." Warth v. Seldin , 422 U.S. 490, 498–99, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (quoting Baker v. Carr , 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962) ).

"[T]he irreducible constitutional minimum of standing contains three elements." Lujan v. Defs. of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). "First, the 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." Id. (internal quotation marks and citations omitted). "Second, there must be a causal connection between the injury and the conduct complained of—the injury has to be ‘fairly ... trace[able] to the challenged action of the defendant, and not ... th[e] result [of] the independent action of some third party not before the court.’ " Id. at 560–61, 112 S.Ct. 2130 (alteration in original) (quoting Simon v. Eastern Ky. Welfare Rights Org. , 426 U.S. 26, 41–42, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976) ). "Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Id. at 561, 112 S.Ct. 2130 (internal quotation marks and citation omitted).

"Each element of standing ‘must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.’ " Fair Elections Ohio v. Husted , 770 F.3d 456, 459 (6th Cir. 2014) (quoting Lujan , 504 U.S. at 561, 112 S.Ct. 2130 ). "Where, as here, a case is at the pleading stage, the plaintiff must ‘clearly ... allege facts demonstrating’ each element." Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) (alteration in original) (footnote omitted) (quoting Warth , 422 U.S. at 518, 95 S.Ct. 2197 ). Further, in class actions, "named plaintiffs who represent a class ‘must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.’ " Simon , 426 U.S. at 40 n.20, 96 S.Ct. 1917 (quoting Warth , 422 U.S. at 502, 95 S.Ct. 2197 ); see also O’Shea v. Littleton , 414 U.S. 488, 494, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974).

Here, GC challenges Plaintiffs’ ability to demonstrate the first standing requirement—injury in fact.

C. Injury in Fact and Spokeo

The Supreme Court in Lujan stated that injury in fact "may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing." 504 U.S at 578, 112 S.Ct. 2130 (citation and internal quotation marks omitted). However, after Lujan , courts divided over whether a statutory violation, in and of itself, is sufficient to establish injury in fact; the Supreme Court addressed the issue in Spokeo . See 136 S.Ct. at 1549.¹ The Court held that a plaintiff does not "automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right" because "Article III standing requires a concrete injury even in the context of a statutory violation." Id. Thus, a plaintiff does not satisfy the standing requirement by alleging a "bare procedural violation" of a statute. Id. Rather, to establish injury in fact, a plaintiff must allege that the procedural statutory violation caused the plaintiff to suffer some harm that "actually exist[s]"; there must be an injury that is "real" and not "abstract" or merely "procedural." Id. at 1548–49 (internal quotation marks omitted).

However, the Court went on to explain that a "violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact," and "in such a case [a plaintiff] need not allege any additional harm beyond the one Congress has identified." Id. at 1549. The Court also explained that both tangible and intangible injuries, as well as a "risk of real harm" could "satisfy the requirement of concreteness." Id.²

Applying this framework to the claim before it, the Court stated:

On the one hand, Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk. On the other hand, Robins cannot satisfy the demands of Article III by alleging a bare procedural violation. A violation of one of the FCRA’s procedural requirements may result in no harm. For example, even if a consumer reporting agency fails to provide the required notice to a user of the agency’s consumer information, that information regardless may be entirely accurate. In addition, not all inaccuracies cause harm or present any material risk of harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.

Id. at 1550. Ultimately, the Court remanded the case without deciding whether Robins had adequately alleged injury in fact.

Unsurprisingly, the parties present diverging interpretations of Spo...