Driesen v. Rsi Enters. Inc., CV-18-08140-PCT-DWL

Kimberly Driesen, Plaintiff, v. RSI Enterprises Incorporated, Defendant.

No. CV-18-08140-PCT-DWL

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

January 22, 2019

ORDER

On December 28, 2018, the Court ordered the parties to submit supplemental briefing regarding whether Plaintiff Kimberly Driesen ("Driesen") has standing to pursue the claim asserted in her complaint. (Doc. 30.) Having considered the parties' supplemental briefs (Docs. 31 & 32), the Court finds that Driesen has standing.

Also pending before the Court are (1) Defendant RSI Enterprises Incorporated's ("RSI") motion to dismiss under Rule 12(b)(6) (Doc. 16) and (2) Driesen's motion for leave to file a surreply (Doc. 22). These motions are fully briefed and neither party has requested oral argument. As explained below, the Court denies both motions.

BACKGROUND

A. Factual Allegations

The complaint was filed on June 27, 2018. (Doc. 1.) The following summary assumes the truth of all allegations contained therein.

RSI called Driesen on February 27, 2018 at approximately 10:12 a.m. (Id. ¶ 21.) At that time, RSI left Driesen the following voicemail: "We have an important message from RSI Enterprises. This call is from a debt collector. Call 602-627-2301. Thank you." (Id. ¶ 22.) Driesen listened to this message that day. (Id. ¶ 23.)

A different RSI employee called Driesen on the same day at approximately 11:18 a.m. (Id. ¶ 27.) At that time, RSI left Driesen the following voicemail: "We have an important message from RSI Enterprises. This is a call from a debt collector. Please call 602-627-2301. Thank you." (Id. ¶ 28.)

Several days later, Driesen received a letter from RSI, dated February 27, 2018, in which RSI disclosed that it was attempting to collect a debt and that any information obtained would be used for that purpose. (Id. ¶¶ 25-26.)

B. Legal Theory

Driesen brings one claim for violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Specifically, she alleges that RSI "violated 15 U.S.C. § 1692e(11) by failing to disclose in its initial communication with [her] that the communication was an attempt to collect a debt and any information obtained would be used for that purpose." (Doc. 1 ¶ 56.)

ANALYSIS

I. Standing

A. Legal Standard

In Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) ("Spokeo I"), the Supreme Court considered whether a plaintiff alleging a violation of a regulatory scheme—the Fair Credit Reporting Act of 1970 ("FCRA")—had standing to pursue his claim. The Court began by reiterating several long-established standing principles, including that the plaintiff "must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision," that the plaintiff, "as the party invoking federal jurisdiction, bears the burden of establishing these elements," and that the injury-in-fact element is satisfied only if the plaintiff "suffered 'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual or imminent, not conjectural or hypothetical.'" Id. at 1547-48 (citations omitted). TheCourt further stated that for an injury to be "particularized," "it 'must affect the plaintiff in a personal and individual way.'" Id. at 1548 (citation omitted). And for an injury to be "concrete," it "must be 'de facto'; that is, it must actually exist." Id. The Court cautioned, however, that "concrete" is not "necessarily synonymous with 'tangible.' Although tangible injuries are perhaps easier to recognize, . . . intangible injuries can nevertheless be concrete." Id. at 1549.

After articulating these standards, the Court applied them to the FCRA claim before it. The Court concluded, on the one hand, that standing doesn't automatically arise whenever a plaintiff alleges a violation of a statutory scheme. The Court explained that "Congress' role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right," that "Article III standing requires a concrete injury even in the context of a statutory violation," and that a plaintiff therefore cannot "allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III." Id. at 1549. On the other hand, the Court recognized that "the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact. In other words, a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified." Id. Thus, the Court remanded to the Ninth Circuit to assess whether the particular type of FCRA violation alleged by the plaintiff "entail[ed] a degree of risk sufficient to meet the concreteness requirement." Id. at 1550.

On remand, the Ninth Circuit concluded the plaintiff had standing. Robins v. Spokeo, Inc., 867 F.3d 1108 (9th Cir. 2017) ("Spokeo II"). In reaching this conclusion, the court adopted the following two-part test to determine whether a plaintiff alleging a statutory violation has sufficiently established a concrete injury: "(1) whether the statutory provisions at issue were established to protect [the plaintiff's] concrete interests (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged in this case actually harm, or present a material risk of harm to, suchinterests." Id. at 1113. With respect to the first element, the court emphasized that "congressional judgment still plays an important role in the concreteness inquiry" and that "Congress's judgment as to what amounts to a real, concrete injury is instructive." Id. at 1112. With respect to the second element, the court held that Spokeo I "requires some examination of the nature of the specific alleged [violation] to ensure that [it] raise[s] a real risk of harm to the concrete interests that [the statutory scheme] protects." Id. at 1116.

B. Analysis

On December 28, 2018, the Court issued an order requesting supplemental briefing because it wanted to be certain Driesen had standing to bring her specific claim and was not relying on the mistaken theory that a debt collector causes a constitutionally-cognizable injury whenever it violates the FDCPA. (Doc. 30.)

RSI argues in its supplemental brief that Driesen lacks standing because she did not allege any informational violation, risk of financial harm, detrimental reliance, or actual tangible harm. (Doc. 31.) Thus, although RSI acknowledges that "the majority of courts that have construed Spokeo in the context of the [FDCPA] have found standing," it argues the facts of this case require a different result. (Id.)

Driesen argues in her supplemental brief that she suffered an injury upon listening to RSI's initial voicemail because it "infringed upon her concrete interest in being reminded that any future communications with RSI will be adversarial in nature." (Doc. 32 at 4.) She contends this sort of injury satisfies Spokeo II. (Id.)

The Court agrees with Driesen. First, the statutory provision at issue here, 15 U.S.C. § 1692e(11), was established to protect concrete interests, as opposed to purely procedural rights. Under the FDCPA, consumers have an affirmative right to receive certain types of information—including a warning that "the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose," see 15 U.S.C. § 1692e(11)—when a debt collector makes its first communication. The Ninth Circuit has stated the "remedial purpose" of these disclosure requirements is to augment "consumers' ability to chart a course of action in response to a collection effort." Davis v. Hollins Law,832 F.3d 962, 963 (9th Cir. 2016). Thus, the disclosure requirement embodied in 15 U.S.C. § 1692e(11) can't be dismissed as a mere procedural right—it was established by Congress to protect consumers' concrete interests. See also Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1060 (9th Cir. 2011) (quoting 15 U.S.C. § 1692(e)) ("The FDCPA was enacted as a broad remedial statute designed to 'eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.'"); Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 938 (9th Cir. 2007) ("The purpose of the FDCPA is to protect vulnerable and unsophisticated debtors from abuse, harassment, and deceptive collection practices."); Watkins v. Inv. Retrievers, Inc., 2018 WL 558833, *3 (E.D. Cal. 2018) (quoting Spokeo I, 136 S. Ct. at 1554 (Thomas, J., concurring)) (holding that 15 U.S.C. § 1692e "do[es] not merely impose procedural requirements upon debt collectors, but instead 'create[s] a private duty owed personally to' a consumer by a debt collector to refrain from using false, deceptive, or misleading means or representations in attempting to collect a debt").

This conclusion is buttressed by the Ninth Circuit's post-Spokeo I case law construing other statutory schemes. In Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017), the plaintiff alleged a prospective employer violated the FCRA by failing to clearly and affirmatively inform him that his credit history and other information could be collected and used. Id. at 497-98. The Ninth Circuit concluded the statutory provision at issue "create[d] a right to information" such that a violation preventing a consumer from making a fully informed choice constituted "a concrete injury" that conferred "Article III standing to bring th[e] lawsuit." Id. at 499-500. So, too, here.

Under the second prong of the Spokeo II test, Driesen must show "the...