Perez v. McCreary, Veselka, Bragg & Allen, P.C.

• Decision Date: 15 August 2022
• Docket Number: 21-50958
• Citation: 45 F.4th 816
• Parties: Mariela PEREZ, on behalf of herself and all others similarly situated, Plaintiff—Appellee, v. MCCREARY, VESELKA, BRAGG & ALLEN, P.C.; MVBA, L.L.C., formerly known as McCreary, Veselka, Bragg & Allen, L.L.C., Defendants—Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

45 F.4th 816

Mariela PEREZ, on behalf of herself and all others similarly situated, Plaintiff—Appellee,

v.MCCREARY, VESELKA, BRAGG & ALLEN, P.C.; MVBA, L.L.C., formerly known as McCreary, Veselka, Bragg & Allen, L.L.C., Defendants—Appellants.

No. 21-50958

United States Court of Appeals, Fifth Circuit.

FILED August 15, 2022

Brent Allen Devere, Esq., Austin, TX, for Plaintiff-Appellee.

Eugene Xerxes Martin, Esq., Malone Frost Martin, P.L.L.C., Dallas, TX, for Defendants-Appellants.

Before Davis, Smith, and Engelhardt, Circuit Judges.

Jerry E. Smith, Circuit Judge:

McCreary, Veselka, Bragg & Allen ("MVBA") is a law firm that specializes in collecting debts owed to Texas local governments. In 2019, it sent a letter to Mariela Perez demanding that she pay several hundred dollars in delinquent utility debt that she owed to the City of College Station. But limitations on that debt had run, and the letter did not disclose that fact. So Perez sued MVBA under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692e. She also sought to certify a class of Texans with time-barred debt who had received the same form letter. The district court granted that request, and MVBA appealed under Federal Rule of Civil Procedure 23(f).

On appeal, MVBA does not contest Perez's standing. But we have an "independent obligation to assure that standing exists, regardless of whether it is challenged by any of the parties." Summers v. Earth Island Inst. , 555 U.S. 488, 499, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009). Perez has standing only if the letter inflicted an injury with a "close relationship to a harm traditionally recognized as providing a basis for a lawsuit in American courts." TransUnion LLC v. Ramirez , ––– U.S. ––––, 141 S. Ct. 2190, 2200, 210 L.Ed.2d 568 (2021) (quotation omitted). Because Perez hasn't shown that she has suffered such an injury, we vacate the class-certification order and remand with instruction to dismiss for want of jurisdiction.

I.

When Perez was living in College Station, she incurred $486.57 in utility bills that she did not pay. Later, the city hired MVBA to collect the debt. The firm tried to do so by sending Perez a form letter demanding payment. Notably, her debt had become delinquent four years and one day before MVBA sent its letter. Under Texas law, that meant it was unenforceable. See TEX. CIV. PRAC. & REM. CODE § 16.004(a). But the letter failed to mention that fact.

MVBA soon paid a price for its omission. Perez had previously filed FDCPA suits against three other defendants. And when she received the form letter, she sued MVBA, too.

Perez alleged that the firm had violated the FDCPA by making a misrepresentation in connection with an attempt to collect her debts. See 15 U.S.C. § 1692e. She also sought to represent a class of Texas consumers who had received the same form letter from MVBA in connection with their time-barred debts. And she requested that she be awarded statutory damages, a declaration that MVBA's debt-collection practices violate the FDCPA, costs, and attorneys' fees.

Importantly for present purposes, Perez's complaint highlighted three injuries that she suffered as a result of MVBA's letter. First, she maintained that the letter "created a significant risk of harm" in that she might have paid her time-barred debts. Second, she claimed that the letter misled and confused her about the enforceability of her debt. Finally, she said that the letter required her to consult an attorney to determine the enforceability of the debt.

After discovery, Perez moved to certify her class. Both parties also moved for summary judgment. As relevant here, MVBA contended that Perez did not have standing to bring suit because she had not suffered a concrete injury-in-fact under Spokeo, Inc. v. Robins , 578 U.S. 330, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016). While those motions were pending, the Supreme Court decided TransUnion. MVBA brought that decision to the attention of the district court in a motion for leave to file supplemental authority that reiterated its position that Perez had not suffered an injury in fact.

One day later, the district court ruled on the three motions. First, it rejected MVBA's claim that Perez lacked standing to bring suit. It held that the violation of Perez's statutory rights under the FDCPA constituted a concrete injury-in-fact because those rights were substantive, not procedural. In the alternative, it maintained that Perez's confusion qualified as a concrete injury-in-fact. And, in a footnote, it distinguished TransUnion based on its facts. Second, it held that MVBA's letter had violated the FDCPA but factual disputes concerning an affirmative defense precluded summary judgment. Finally, it certified the proposed class under Rule 23(b)(3).

MVBA sought permission to appeal the class-certification order under Rule 23(f). It received that permission from a motions panel of our court and now appeals.

II.

Federal courts are courts of limited subject matter jurisdiction. Our power to resolve disputes is limited to "Cases" and "Controversies," U.S. Const. art. III, § 2, to prevent us from encroaching on domains properly allocated to the other branches in our system of self-government, see TransUnion , 141 S. Ct. at 2203 ; Clapper v. Amnesty Int'l USA , 568 U.S. 398, 408, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013) ; Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). As relevant for our purposes, a lawsuit is not a "Case[ ]" or "Controvers[y]" unless the plaintiff can prove that he has standing to bring suit. Lujan , 504 U.S. at 560–61, 112 S.Ct. 2130.

That requires the plaintiff to "show (i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief." TransUnion , 141 S. Ct. at 2203. Moreover, "standing is not dispensed in gross; rather, plaintiffs must demonstrate standing for each claim that they press and for each form of relief that they seek (for example, injunctive relief and damages)." Id. at 2208.

This case involves the first element of standing: the requirement that the plaintiff show he has suffered a concrete injury-in-fact. Last Term, the Supreme Court clarified standing's concrete-injury requirement in Trans-Union . There, it reiterated that a purported injury is not concrete for purposes of Article III unless it has a " ‘close relationship’ to a harm traditionally recognized as providing a basis for a lawsuit in American courts." Trans-Union , 141 S. Ct. at 2200 (quoting Spokeo , 578 U.S. at 340–41, 136 S.Ct. 1540 ). That standard doesn't require an "exact duplicate." Id. at 2204. But "federal courts" may not "loosen Article III based on contemporary, evolving beliefs about what kinds of suits should be heard in federal courts." Ibid.

Some harms plainly have that "close relationship." Think of "traditional tangible harms, such as physical harms and monetary harms." Ibid. But intangible harms can also be concrete. Think of the kind of harms recognized in longstanding tort law or the Constitution itself. See ibid. When evaluating whether intangible harms are concrete, Congress's views are also entitled to "due respect." Ibid. "Congress may ‘elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.’ " Spokeo , 578 U.S. at 341, 136 S.Ct. 1540 (alteration adopted and quotation omitted).

But "Congress's creation of a statutory prohibition or obligation and a cause of action does not relieve courts of their responsibility to independently decide whether a plaintiff has suffered a concrete harm under Article III." TransUnion , 141 S. Ct. at 2205. Any other rule would allow Congress to grant private plaintiffs a personal stake in enforcing regulatory law and ultimately usurp the President's Article II authority to execute the laws. See id. at 2206–07 & nn.2–3. And that would aggrandize our power by letting us resolve disputes that are not "of a Judiciary Nature." 2 THE RECORDS OF THE FEDERAL CONVENTION OF 1787, at 430 (M. Farrand ed. 1911) (Statement of James Madison).

So TransUnion is clear: A plaintiff always needs a concrete injury to bring suit, and injuries are concrete only if they bear a "close relationship" to injuries that courts have traditionally recognized as concrete. But how close is close enough? The Supreme Court hasn't provided an exact formulation. But then-Judge Barrett got it right in Gadelhak v. AT&T Services Inc. , 950 F.3d 458, 462 (7th Cir. 2020) : "[W]e are meant to look for a ‘close relationship’ in kind, not degree." After all, Congress's ability to "elevate" harms "to the status of legally cognizable injuries," TransUnion , 141 S. Ct. at 2205 (quotation omitted), implies that the level of harm required at common law "does not stake out the limits of [its] power to identify harms deserving a remedy," Gadelhak , 950 F.3d at 463.

Picking up on that cue, our court has already recognized that we must "focus[ ] on types of harms protected at common law, not the precise point at which those harms become actionable." Cranor v. 5 Star Nutrition, L.L.C. , 998 F.3d 686, 693 (5th Cir. 2021) (quotation omitted). Beyond the Seventh Circuit, many of our sister circuits have done the same.¹ So a plaintiff doesn't need to demonstrate that the level of harm he has suffered would be actionable under a similar, common-law cause of action. But he does need to show that the type of harm he's suffered is similar in kind to a type of harm that the common law has recognized as actionable. If he can't do that, he hasn't suffered a concrete injury and doesn't have standing to bring suit.

III.

That brings us to this case. Before the district court, MVBA claimed that Perez hadn't suffered a concrete injury. It failed to do so on appeal. But we have an obligation to assure ourselves of jurisdiction—even in "limited" ...