Pennell v. Global Trust Mgmt., LLC, 20-1524

• Decision Date: 11 March 2021
• Docket Number: No. 20-1524,20-1524
• Citation: 990 F.3d 1041
• Parties: Sonja PENNELL, Plaintiff-Appellant, v. GLOBAL TRUST MANAGEMENT, LLC, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

990 F.3d 1041

Sonja PENNELL, Plaintiff-Appellant,

v.GLOBAL TRUST MANAGEMENT, LLC, Defendant-Appellee.

No. 20-1524

United States Court of Appeals, Seventh Circuit.

Argued December 9, 2020

Decided March 11, 2021

Rehearing and Rehearing En Banc Denied April 12, 2021

David J. Philipps, Attorney, Philipps & Philipps, Palos Hills, IL, for Plaintiff-Appellant.

Brendan H. Little, Attorney, Lippes Mathias Wexler Friedman LLP, Buffalo, NY, for Defendant-Appellee.

Before Wood, Brennan, and St. Eve, Circuit Judges.

Brennan, Circuit Judge.

Sonja Pennell defaulted on a loan from MobiLoans, LLC, a lender. Pennell sent MobiLoans a letter refusing to pay her debt and requesting that all future debt communications cease. Soon after, MobiLoans sold Pennell's debt to Global Trust Management, LLC, a debt collector. In purchasing the debt, Global Trust obtained no actual knowledge that Pennell refused to pay her debt and that she was represented by counsel.

In November 2017, Pennell received a dunning letter from Global Trust. Odd, she thought, because her counsel had already asked the lender to stop directly communicating with her about the debt. Through a letter from her counsel, Pennell notified Global Trust that she refused to pay the debt and requested all debt communications stop. Global Trust complied with her request and did not take any further actions.

Pennell sued. She alleged that Global Trust violated 15 U.S.C. § 1692c(a)(2) and (c) of the Fair Debt Collection Practices Act (the "FDCPA"), which regulates debt collectors’ communications with consumers. Section 1692c(a)(2) prohibits a debt collector from directly communicating with a consumer who is represented by an attorney with respect to the debt. And § 1692c(c) proscribes a debt collector from directly communicating with a consumer who notifies a debt collector in writing that she refuses to pay the debt or that she wishes the debt collector to stop communicating with her. In her complaint, Pennell claimed "stress and confusion" as her injuries. She asserted Global Trust's dunning letter made her think that "her demand had been futile" and that she did not have rights under the FDCPA "to refuse to pay [her] debt and to demand that collection communications cease." The dunning letter, Pennell added, led her "to question whether she was still represented by counsel as to this debt, which caused stress and confusion as to whether she was required to pay the debt at issue."

The district court granted summary judgment for Global Trust on the merits. It reasoned that Global Trust could not have violated § 1692c(a)(2) and (c) without having actual knowledge of Pennell's cease-communication request. Pennell then filed a motion to reconsider, which the district court denied.

Pennell appealed. Neither party has raised the issue of Article III standing in their briefs. After hearing oral argument, we directed the parties to file supplemental memoranda addressing subject-matter jurisdiction in light of our court's recent FDCPA standing decisions. See, e.g. , Smith v. GC Servs. Ltd. P'ship , 986 F.3d 708 (7th Cir. 2021) ; Nettles v. Midland Funding LLC , 983 F.3d 896 (7th Cir. 2020) ; Spuhler v. State Collection Serv., Inc. , 983 F.3d 282 (7th Cir. 2020) ; Bazile v. Fin. Sys. of Green Bay, Inc. , 983 F.3d 274 (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) ; Larkin v. Fin. Sys. of Green Bay, Inc. , 982 F.3d 1060 (7th Cir. 2020). Of these recent FDCPA cases, this is the first to implicate § 1692c.

To resolve this appeal, we must answer the jurisdictional question whether Pennell has Article III standing to sue.

Article III of the Constitution limits the "judicial Power of the United States" to "Cases" and "Controversies." From this text comes the standing doctrine, which "confines the federal courts to a properly judicial role" and "limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong." Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). The "irreducible constitutional minimum of standing" requires the plaintiff or party invoking federal jurisdiction to demonstrate that he has suffered an injury in fact that is fairly 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). The plaintiff "must establish standing at the time suit is filed and cannot manufacture standing afterwards." Pollack v. U.S. Dep't of Just. , 577 F.3d 736, 742 n.2 (7th Cir. 2009). The Article III standing inquiry "remains open to review at all stages of the litigation." Nat'l Org. for Women, Inc. v. Scheidler , 510 U.S. 249, 255, 114 S.Ct. 798, 127 L.Ed.2d 99 (1994).

This case turns on the "foremost" standing requirement—injury in fact. Steel Co. v. Citizens for Better Env't , 523 U.S. 83, 103, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). To establish injury in fact, a plaintiff must allege a "concrete and particularized" injury. Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc. , 528 U.S. 167, 180, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). An injury is particularized if it "affect[s] the plaintiff in a personal and individual way," Lujan , 504 U.S. at 560 n.1, 112 S.Ct. 2130, and it is concrete if it is "real, and not abstract." Spokeo , 136 S. Ct. at 1548 (internal quotation marks omitted). But a concrete injury need not be tangible; a risk of real harm can constitute concrete harm. See id. at 1549. For a statutory violation, a plaintiff does not automatically satisfy concreteness "whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right." Id. That is because "a bare procedural violation, divorced from any concrete harm" cannot satisfy the injury-in-fact requirement. Id.

In Casillas v. Madison Ave. Assocs., Inc. , 926 F.3d 329 (7th Cir. 2019), this court applied Spokeo ’s holding in the FDCPA context. There, the plaintiff contended that the defendant violated 15 U.S.C. § 1692g(a) by failing to provide consumers with adequate notice about preserving their statutory rights to dispute their debt. Id. at 333–34. The plaintiff, however, did not assert any actual harm or risk of harm. She "complained only that her notice was missing some information" that the statute requires, without claiming that the defendant's mistake put her "in harm's way." Id. at 334. We dismissed the action for lack of subject-matter jurisdiction, noting that to satisfy the injury-in-fact requirement, an FDCPA plaintiff must allege in the complaint that "the violation harmed or presented an appreciable risk of harm to the underlying concrete interest that Congress sought to protect." Id. at 333 (internal quotation marks omitted). We concluded, "no harm, no foul." Id. at 331.

Pennell alleged in her complaint that Global Trust's dunning letter caused stress and confusion. But we made clear in Brunett that "the state of confusion is not itself an injury." 982 F.3d at 1068. Nor does stress by itself with no physical manifestations and no qualified medical diagnosis amount to a concrete harm. Cf. United States v. All Funds on Deposit with R.J. O'Brien & Assocs. , 783 F.3d 607, 616 (7th Cir. 2015) (noting that "purely psychological harm" does not suffice to establish Article III standing). For the alleged injury to be concrete, a plaintiff must have acted "to her detriment, on that confusion." Brunett , 982 F.3d at 1068. Pennell failed to show that receiving Global Trust's dunning letter led her to change her course of action or put her in harm's way. Instead, she merely pointed to a statutory...