A recent decision from the District of New Jersey recently added to a growing court split about what was required for a plaintiff to establish Article III standing in the context of Fair Debt Collection Practices Act (“FDCPA”) litigation.  Given the plaintiff-bar friendly ruling, more litigation (including more putative class action litigation) can be expected to be filed in this forum going forward.

In Rhee, the plaintiff sought to bring a putative class action for alleged violations of the FDCPA.  No. 19-cv-12253, 2020 U.S. Dist. LEXIS 127807 (D.N.J. July 21, 2020).  The plaintiff alleged that a debt collection letter from defendant failed to meet certain statutory requirements.  This included FDCPA claims premised on the allegations that: (1) the defendant’s account resolution offer overshadowed certain notice provisions and also (2) the letter contained two different return addresses and failed to specify which one plaintiff should use for submitting written disputes.  Id. at *3.  Relying on the Supreme Court’s ruling in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the defendant moved to dismiss plaintiff’s complaint for lack of standing.  After ordering supplemental standing on the question of plaintiff’s standing (or lack thereof), the United States District Court for the District of New Jersey denied defendant’s motion, adding to a growing court split on this issue.

It is firmly established at this point that to establish Article III standing (a prerequisite to litigating in federal court), a plaintiff is required to demonstrate “an injury-in-fact.”  Additionally, the Supreme Court has held that an injury in fact requires a plaintiff to show that he suffered an invasion of a legally protected interest that is concrete and particularized.  Notably, while “[a] concrete injury is one that actually exists, meaning that it is real and not abstract,” in Spokeo the Supreme Court recognize that an injury in fact does not have to be tangible, as a “risk of real harm” can suffice.  Id. at *4 (citation omitted).  To put it otherwise: the Supreme Court held that in some instances alleged procedural or statutory violations can meet the requirements of Article III standing.

Noting the remedial intent of the FDCPA—which included eliminating abusive debt collection practices and misleading collection statements—the court in Rhee held that “the receipt of a misleading debt collection letter may constitute a concrete injury because it is the precise injury that Congress hoped to stop with the FDCPA.”  Id. at *8.  While the defendant argued that plaintiff lacked standing because the harms alleged in the complaint are “hypothetical,” the court disagreed.  Id. at *9.  Commenting that the “applicable standard turns on the least sophisticated debtor rather than a particular plaintiff,” the court found that it was not necessary for plaintiff to allege any additional injury, such as the fact he was actually confused by the collection letter, to establish standing.