Markakos v. Medicredit, Inc., 20-2351

• Decision Date: 14 May 2021
• Docket Number: No. 20-2351,20-2351
• Citation: 997 F.3d 778
• Parties: Rose MARKAKOS, Plaintiff-Appellant, v. MEDICREDIT, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

997 F.3d 778

Rose MARKAKOS, Plaintiff-Appellant,

v.MEDICREDIT, INC., Defendant-Appellee.

No. 20-2351

United States Court of Appeals, Seventh Circuit.

Argued January 14, 2021

Decided May 14, 2021

Daniel A. Edelman, Attorney, Edelman Combs Latturner & Goodwin, LLC, Chicago, IL, for Plaintiff-Appellant.

Eric A. Berg, Attorney, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Chicago, IL, Scott J. Dickenson, Attorney, Ryan C. Hardy, Attorney, Spencer Fane LLP, St. Louis, MO, for Defendant-Appellee.

Before Ripple, Kanne, and Rovner, Circuit Judges.

Kanne, Circuit Judge.

In the last five months, we've held eight times that a breach of the Fair Debt Collection Practices Act ("FDCPA") does not, by itself, cause an injury in fact. We now repeat that refrain once more.

In 2019, Defendant Medicredit, Inc., sent Plaintiff Rose Markakos a letter seeking to collect $1,830.56 on behalf of a creditor identified as "Northwest Community 2NDS" for medical services performed in 2017. A few weeks later, Markakos's lawyer sent Medicredit a letter disputing the debt (because the medical services were allegedly inadequate). Medicredit then sent a response to Markakos's counsel that listed a different amount owed of only $407.00.

Markakos sued Medicredit for allegedly violating the FDCPA by sending letters to her that stated inconsistent debt amounts and that unclearly identified her creditor as "Northwest Community 2NDS"—which is not the name of any legal entity in Illinois. Medicredit moved to dismiss the complaint for lack of standing and for failure to state a claim. The district court granted the motion and dismissed the case without prejudice.

That decision was right. Markakos lacks standing to sue Medicredit under the FDCPA because she did not allege that the deficient information harmed her in any way. Instead, she admits that she properly disputed her debt and never over-paid. We thus affirm the decision of the district court.

I. ANALYSIS

Article III limits federal courts to resolving "Cases" and "Controversies." U.S. Const. art. III, § 2. To ensure that what is before them is in fact a case or controversy, federal courts require that plaintiffs have "standing" to sue. That means a plaintiff must have suffered an injury in fact that is traceable to the defendant's conduct and redressable by a favorable judicial decision. Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

This case turns on the injury-in-fact requirement. An injury in fact is "an invasion of a legally protected interest which is (a) concrete and particularized and (b) ‘actual or imminent, not "conjectural" or "hypothetical." ’ " Id. at 560, 112 S.Ct. 2130 (citations omitted) (quoting Whitmore v. Arkansas , 495 U.S. 149, 155, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990) ) (citing Allen v. Wright , 468 U.S. 737, 756, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984) ; Warth v. Seldin , 422 U.S. 490, 508, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ; Sierra Club v. Morton , 405 U.S. 727, 740, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972) ).

Markakos argues that her injury in fact is informational in nature—the FDCPA entitled her to certain information about her debt amount and the name of her creditor, and she didn't get it. 15 U.S.C. § 1692g(a)(1)–(2) ("[A] debt collector shall ... send the consumer a written notice containing—(1) the amount of the debt; (2) the name of the creditor to whom the debt is owed ....").

We have recently decided a slew of cases that foreclose this argument. Casillas v. Madison Ave. Assocs., Inc. , 926 F.3d 329 (7th Cir. 2019) ; Larkin v. Fin. Sys. of Green Bay, Inc. , 982 F.3d 1060 (7th Cir. 2020) ; Bazile v. Fin. Sys. of Green Bay, Inc. , 983 F.3d 274 (7th Cir. 2020) ; Spuhler v. State Collection Serv., Inc. , 983 F.3d 282 (7th Cir. 2020) ; Gunn v. Thrasher, Buschmann & Voelkel, P.C. , 982 F.3d 1069 (7th Cir. 2020) ; Brunett v. Convergent Outsourcing, Inc. , 982 F.3d 1067 (7th Cir. 2020) ; Nettles v. Midland Funding LLC , 983 F.3d 896 (7th Cir. 2020) ; Smith v. GC Servs. Ltd. P'ship , 986 F.3d 708, 711 (7th Cir. 2021) ; Pennell v. Glob. Tr. Mgmt., LLC , 990 F.3d 1041 (7th Cir. 2021).

The thrust of these cases is simple—the violation of an FDCPA provision, whether "procedural" or "substantive," does not necessarily cause an injury in fact. Larkin , 982 F.3d at 1066. Rather, to fulfil the injury in fact requirement, the violation must have "harmed or presented an ‘appreciable risk of harm’ to the underlying concrete interest that Congress sought to protect." Casillas , 926 F.3d at 333 (quoting Groshek v. Time Warner Cable, Inc ., 865 F.3d 884, 887 (7th Cir. 2017) ); see also Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1550, 194 L.Ed.2d 635 (2016), as revised (May 24, 2016) ("[N]ot all inaccuracies [in a credit report governed by the Fair Credit Reporting Act] cause harm or present any material risk of harm.").

For example, an FDCPA violation might cause harm if it leads a plaintiff to pay extra money, affects a plaintiff's credit, or otherwise alters a plaintiff's response to a debt. Larkin , 982 F.3d at 1066. In Lavallee v. Med-1 Solutions , for instance, the debt collector failed to tell the plaintiff how to dispute her debt (as the FDCPA requires), and as a result, the plaintiff did not dispute the debt as she might have if she had received the information. 932 F.3d 1049, 1053 (7th Cir. 2019). She thus suffered a concrete injury. Id.

Unlike the plaintiff in Lavellee , Markakos has not alleged any way in which the alleged misinformation in Medicredit's letters injured her. In fact, she's shown the opposite by admitting that she did not pay anything extra and that she properly "disputed the debt as not warranted by the services provided."

Markakos's only other alleged injury is that she was confused and aggravated by Medicredit's letter. But we've held that such grievances are not injuries in fact in this context. Gunn , 982 F.3d at 1071 ("Many people are annoyed to learn that governmental action may put endangered species at risk ... . Yet ... to litigate over such acts in federal court, the plaintiff must show a concrete and particularized loss, not infuriation or disgust."); Brunett , 982 F.3d at 1068 ("[T]he state of confusion is not itself an injury." (citing Trichell v. Midland Credit Mgmt., Inc. , 964 F.3d 990 (11th Cir. 2020) )). This case is also not like Gadelhak v. AT&T Services, Inc. , in which we held that spam text messages, phone calls, and faxes can cause cognizable injury, 950 F.3d 458 (7th Cir. 2020). According to our decision in Gunn , collection letters that are allegedly unlawful merely because they contain misinformation are not such actionable invasions of privacy. 982 F.3d at 1071

* * *

The resolution of the issue of standing in this matter is quite straightforward given the precedent of this court reiterated in a number of recent cases. However, individual members of this court, now including my concurring colleagues, have expressed that they do not agree with the law of this circuit. Casillas , 926 F.3d at 339 (Wood, C.J., dissenting from the denial of en banc consideration); Thornley v. Clearview AI, Inc. , 984 F.3d 1241, 1250 (7th Cir. 2021) (Hamilton, J., concurring). It seems appropriate to briefly address the fundamental question of why our circuit law is correct according to controlling Supreme Court precedent.

The debate over what qualifies as an "injury in fact" in the realm of consumer protection laws like the FDCPA stems from competing interpretations of the Supreme Court's decision in Spokeo , 136 S. Ct. at 1540. There, the Court considered whether a plaintiff had standing to sue a company that violated the Fair Credit Reporting Act ("FCRA") by generating a consumer report with inaccurate information about the plaintiff's credit history. Id. at 1546. The Court somewhat contradictorily decreed on the one hand that "Article III standing requires a concrete injury even in the context of a statutory violation" but on the other hand that "the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact." Id. at 1549.

Judge Hamilton has aptly labeled Spokeo ’s instruction "Delphic" and has noted the oceans of ink spilled interpreting it. Thornley , 984 F.3d at 1250 (Hamilton, J., concurring). Still, the court in Spokeo made very clear, even amidst its difficult-to-understand instruction, that because "not all inaccuracies [in a credit report] cause harm or present any material risk of harm," the plaintiff could not satisfy the demands of Article III merely by alleging a violation of the FCRA. 136 S. Ct. at 1550. For example, the Court explained that "[i]t is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm." Id.

Our circuit precedent thus faithfully holds that a statutory violation alone does not cause an injury in fact; instead, the violation must have "harmed or presented an ‘appreciable risk of harm’ to the underlying concrete interest that Congress sought to protect." Casillas , 926 F.3d at 333 (quoting Groshek , 865 F.3d at 887 ). And as explained, this understanding of Spokeo defeats Markakos's purported standing.

Further, there is yet more recent Supreme Court precedent that clarifies any lingering issues. In Thole v. U.S. Bank N.A. , the plaintiffs received all of their monthly pension benefits from a defined-benefit retirement plan but nevertheless sued the plan's managers for violating the Employee Retirement Income Security Act of 1974 ("ERISA") by poorly investing the plan's assets. ––– U.S. ––––, 140 S. Ct. 1615, 1618, 207 L.Ed.2d 85 (2020). The Court expressed concern that "[c]ourts sometimes make standing law more complicated than it needs to be." Id. at 1622. It then explained that "[t]here is no ERISA exception to Article III. And under ordinary Article III standing analysis, the plaintiffs lack[ed] Article III standing for a simple, commonsense reason: They ha[d...