Barclift v. Keystone Credit Servs., LLC

585 F.Supp.3d 748

Paulette BARCLIFT, on behalf of Herself and others similarly situated, Plaintiff,

v.KEYSTONE CREDIT SERVICES, LLC, Defendant.

No. 5:21-cv-04335

United States District Court, E.D. Pennsylvania.

Filed February 14, 2022

Jesse S. Johnson, Greenwald Davidson Radbil PLLC, Boca Raton, FL, Eric J. Landes, Landes Law, LLC, Sanatoga, PA, for Plaintiff.

Cheneise V. Wright, Lewis Brisbois Bisgaard & Smith LLP, Wilmington, DE, LeRoy J. Janiczek, Lewis Brisbois Bisgaard & Smith, Wayne, PA, for Defendant.

OPINION

Motion to Dismiss, ECF No. 9 – Dismissed

Joseph F. Leeson, Jr., United States District Judge

I. INTRODUCTION

This case was brought under the Fair Debt Collection Practices Act (the FDCPA). However a threshold issue that must be addressed in the case is whether the plaintiff has standing to pursue this lawsuit. Does a simple procedural violation of the FDCPA automatically establish a concrete injury, thereby providing the basis for plaintiff to sue? This court concludes that based on the particular facts of this case, it does not.

The FDCPA regulates how debt collectors like Keystone Credit Services, LLC, may collect consumer debts. Its purpose is to stop abusive debt collection practices. One provision of the act prohibits debt collectors from communicating "with any person other than the consumer" in "connection with the collection of a debt." 15 U.S.C. § 1692c(b).

Keystone acquired a personal debt of Paulette Barclift's from her original creditor. It then hired a mailing vendor to print and send Barclift a letter notifying her of the transfer and that Keystone intended to collect.

Barclift brought this class action lawsuit against Keystone, alleging that it had violated the FDCPA by using a mailing vendor. According to Barclift, sharing her personal information with a mailing vendor in order to send her a collection letter violates section 1692c(b) because she did not give her permission to Keystone to do so. Keystone then filed a motion to dismiss Barclift's claim for failing to state a claim upon which relief can be granted.

Before this Court can address the merits of any case, it must have subject-matter jurisdiction over the plaintiff's claims. Subject-matter jurisdiction only exists if the plaintiff has standing. Ultimately, the Court determines that Barclift has not alleged sufficient facts to establish standing because she did not suffer a concrete harm. Thus, the Court dismisses Barclift's complaint without prejudice and dismisses Keystone's motion as moot.

II. BACKGROUND

Barclift received a letter from Keystone. See Let., ECF No. 1-1 Ex. A. The letter informed her that Keystone had acquired a personal debt of hers from a prior creditor. See id. In the heading of the letter were various pieces of information that were personal to Barclift: her name; her address; the name of her original creditor; the date her debt became delinquent; and the balance of the debt. See id.

Keystone explained that it would "assume the debt is valid" unless Barclift notified it otherwise within 30 days. See id. At the bottom of the short letter was the following bolded statement: "Please be advised that this communication is from a debt collection company. This is an attempt to collect a debt; any information obtained will be used for that purpose." Id.

The letter was signed, "Very truly-yours, Keystone Credit Services, LLC." Id. Keystone, however, did not actually lick the stamp or drop the envelope in the mail. See Compl. 5–6, ECF No. 1. It hired a mailing vendor, RevSpring, to print and mail the letter. See id.

RevSpring provides personalized print, online, phone, email, and text communications for other companies. See id. 7. In order to use RevSpring's services, Keystone shared Barclift's personal information with the mailing vendor: her name; her address; the name of her original creditor; the date her debt became delinquent; and the balance of the debt. See id. 5. Barclift never gave Keystone permission to share her information with the mailing vendor. See id. 7.

Nearly one year after receiving the letter, Barclift sued Keystone. See id. She filed her Complaint as a class action suit, seeking to include as plaintiffs all persons with a Pennsylvania address who received collection letters from Keystone via a mailing vendor. See id. 7.

Barclift alleges in her Complaint that Keystone violated the FDCPA by sharing her information with the mailing vendor in connection with the collection of a debt. See id. 9. According to Barclift, sharing her information with a mailing vendor without her permission violated her "right not to have her private information shared with third parties." Id. 10. She claims that she has been "embarrassed and distressed by the disclosure of her sensitive financial details and personal medical services."¹ Id. For relief, she seeks statutory damages, actual damages, costs, attorneys’ fees, and injunctive relief. See id.

Keystone then filed a motion to dismiss the Complaint for failing to state a claim upon which relief can be granted. See Mot., ECF No. 9.

III. LEGAL STANDARD

Before a court can address the merits of a dispute, it must first determine whether it has subject-matter jurisdiction over the case. See Hollingsworth v. Perry , 570 U.S. 693, 704–05, 133 S.Ct. 2652, 186 L.Ed.2d 768 (2013) ("In light of this overriding and time-honored concern about keeping the Judiciary's power within its proper constitutional sphere, we must put aside the natural urge to proceed directly to the merits of an important dispute and to ‘settle’ it for the sake of convenience and efficiency." (Cleaned up)). Article III of the Constitution states that federal courts have subject-matter jurisdiction only over actual "cases" or "controversies." § 2. This limitation on the judiciary furthers the goal of separation of powers by ensuring that courts do not "usurp the powers of the political branches." Clapper v. Amnesty Int'l USA , 568 U.S. 398, 408, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013).

In order for a case or controversy to exist, several requirements must be met. Chief among those requirements is that the plaintiff suffered an injury-in-fact. In other words, the plaintiff must "prove that he has suffered a concrete and particularized injury." Hollingsworth , 570 U.S. at 704–05, 133 S.Ct. 2652 (citing Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). An injury-in-fact, among other requirements, is known as standing.²

If a plaintiff lacks standing, then there is no case or controversy, and a court does not have subject-matter jurisdiction over the plaintiff's claims. "If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12 (h)(3). Indeed, courts have an independent obligation to assess whether standing exists and "can dismiss a suit sua sponte for lack of subject jurisdiction at any stage in the proceeding." Zambelli Fireworks Mfg. Co., Inc. v. Wood , 592 F.3d 412, 420 (3d Cir. 2010).

When determining whether a plaintiff has alleged facts sufficient to establish standing, courts accept the plaintiff's well pled allegations as true and construe the pleadings in their favor. See Thorne v. Pep Boys Manny Moe & Jack Inc. , 980 F.3d 879, 885 (3d Cir. 2020).

IV. ANALYSIS

Barclift raises a single claim in her Complaint—that Keystone violated the FDCPA. See Compl. 9. Specifically, Barclift takes issue with the fact that Keystone shared her personal information with a mailing vendor without her permission. Barclift alleges that by sharing her information with a mailing vendor, Keystone violated section 1692c(b) of the FDCPA, which prohibits debt collectors from communicating "with any person other than the consumer" regarding the collection of a debt.

In response to the Complaint, Keystone filed a motion to dismiss for failure to state a claim upon which relief can be granted. See Mot. In its Motion, Keystone puts forth several arguments. However, before the Court can reach the merits of this case, it must determine whether Barclift alleged sufficient facts to establish standing because the Court does not have subject-matter jurisdiction if she did not.

In its analysis, the Court first discusses (a) a recent Supreme Court opinion addressing standing that sheds light on this case. It then briefly reviews (b) the FDCPA. Finally, (c) the Court applies the discussions in (a) and (b) to this case. Ultimately, the Court determines that it must dismiss the Complaint because Barclift has not alleged facts sufficient to establish that she has standing. Specifically, Barclift's Complaint does not satisfy the injury-in-fact requirement because the alleged harm is not concrete.

a. Supreme Court guidance on establishing an injury-in-fact for a violation of a federal statute.

In TransUnion v. Ramirez , ––– U.S. ––––, 141 S. Ct. 2190, 210 L.Ed.2d 568 (2021), the Supreme Court addressed whether a procedural violation of the Fair Credit Reporting Act (the FCRA), a consumer protection statute similar to the FDCPA, created a concrete injury. The FCRA regulates consumer reporting agencies that compile and disseminate consumer information. See 15 U.S.C. § 1681 et seq. In TransUnion , more than 8,000 plaintiffs brought a class action suit against a credit reporting agency, alleging that it had violated the FCRA. See 141 S. Ct. 2190.

The reporting agency compiled a database of potential terrorists, drug traffickers, and other serious criminals by comparing first and last names to those maintained by the U.S. Treasury Department's Office of Foreign Assets Control (the OFAC list). See id. at 2201. The reporting agency would then alert its customers of any consumers who were in its database and potentially on the OFAC list. See id.

The plaintiffs in TransUnion were marked as potential criminals in the reporting agency's database because their names matched names on the OFAC list. See id. at 2200–02. The problem was that the...