Hunstein v. Preferred Collection & Mgmt. Servs., Inc.

17 F.4th 1016

Richard HUNSTEIN, Plaintiff-Appellant,

v.PREFERRED COLLECTION AND MANAGEMENT SERVICES, INC., Defendant-Appellee.

No. 19-14434

United States Court of Appeals, Eleventh Circuit.

October 28, 2021

Thomas Martin Bonan, Seraph Legal, PA, Tampa, FL, for Plaintiff-Appellant.

Richard Jay Perr, Kaufman Dolowich Voluck, Philadelphia, PA, Robert Alexander Vigh, Solomon Vigh & Springer, PA, Tampa, FL, for Defendant-Appellee.

Shay Dvoretzky, Parker Andrew Rider-Longmaid, Skadden Arps Slate Meagher & Flom, LLP, Washington, DC, for Amicus Curiae ACA International.

Kirsten H. Smith, Sessions Israel & Shartle, LLC, Metairie, LA, for Amici Curiae Alltran Financial, LP, Nationwide Credit, Inc, Radius Global Solutions, LLC, and Transworld Systems Inc.

Mitchell L. Williamson, Barron & Newburger, PC, Somerset, NJ, for Amicus Curiae American Association of Healthcare Administrative Management.

R. Aaron Chastain, Stephen Colmery Parsley, Bradley Arant Boult Cummings, LLP, Birmingham, AL, for Amici Curiae American Bankers Association, American Financial Association, Chamber of Commerce of the United States of America, Consumer Bankers Association, and Credit Union National Association.

Lauren Marshall Burnette, Messer Strickler, Ltd., Jacksonville, FL, for Amici Curiae Arizona Creditors Bar Association, Attorneys Association of Alabama, Inc, California Creditors Bar Association, Colorado Creditors Bar Association, Inc., and Creditors Rights Attorney Association Nevada.

Jessica Klander, Bassford Remele, Minneapolis, MN, for Amicus Curiae Consumer Relations Consortium.

Bryan Christopher Shartle, Kirsten H. Smith, Sessions Israel & Shartle, LLC, Metairie, LA, for Amicus Curiae Credence Resource Management, LLC.

Scott Stephen Gallagher, Smith Gambrell & Russell, LLP, Jacksonville, FL, for Amicus Curiae Enhanced Recovery Company, LLC.

Ronald S. Canter, The Law Offices of Ronald S. Canter, LLC, Rockville, MD, for Amicus Curiae Florida Creditors Bar Association.

Jadd Fitzgerald Masso, Clark Hill Strasburger, Dallas, TX, Leslie Carol Bender, Senior Counsel, Clark Hill, PLC, Washington, DC, for Amicus Curiae LiveVox, Inc.

William J. Denius, Killgore Pearlman Semanie Denius & Squires, PA, Orlando, FL, for Amicus Curiae Missouri Creditors, Inc.

Manuel Newburger, Attorney, Barron & Newburger PC, Austin, TX, for Amici Curiae National Association of Professional Process Servers and The National Creditors Bar Association.

Brit J. Suttell, Barron & Newburger, PC, Media, PA, for Amicus Curiae New York State Creditors Bar Association.

John Henry Bedard, Jr., Michael Kevin Chapman, Bedard Law Group, PC, Duluth, GA, for Amicus Curiae Print and Mail Vendor Coalition.

Donald S. Maurice, Jr., Maurice Wutscher, LLP, Flemington, NJ, Jason Brent Tompkins, Jonathan P. Hoffmann, Balch & Bingham, LLP, Birmingham, AL, Martin Brent Yarborough, Maurice Wutscher, LLP, Birmingham, AL, for Amicus Curiae Receivables Management Association International, Inc.

Stefanie H. Jackman, Ballard Spahr, LLP, Atlanta, GA, for Amicus Curiae RevSpring, Inc.

Keith Jerrod Barnett, Troutman Pepper Hamilton Sanders, LLP, Atlanta, GA, Ethan G. Ostroff, Troutman Pepper Hamilton Sanders, LLP, Virginia Beach, VA, Misha Tseytlin, Troutman Pepper Hamilton Sanders, LLP, Chicago, IL, for Amicus Curiae Third Party Payment Processors Association.

Before Jordan, Newsom, and Tjoflat, Circuit Judges.

NEWSOM, Circuit Judge:

Upon consideration of the petition for rehearing, the amicus curiae briefs submitted in support of that petition, and the Supreme Court's intervening decision in TransUnion LLC v. Ramirez , ––– U.S. ––––, 141 S. Ct. 2190, 210 L.Ed.2d 568 (2021), which bears on one of the issues presented in the case, the Court sua sponte VACATES its prior opinion, published at 994 F.3d 1341 (11th Cir. 2021), and substitutes the following in its place.

* * *

This appeal presents an interesting question of first impression under the Fair Debt Collection Practices Act—and, like so many other cases arising under federal statutes these days, requires us first to consider whether our plaintiff has Article III standing.

Here's the short story, as described in the complaint, whose allegations we must accept as true for present purposes: A debt collector electronically transmitted "sensitive medical information" concerning a consumer's debt—including not only his name and outstanding balance, but also the fact that his debt resulted from his minor son's medical treatment, as well as his son's name—to a third-party vendor. The vendor then used the data to create, print, and mail a "dunning" letter to the consumer. The consumer filed suit alleging that, in sending his personal information to the vendor—and in particular, the complaint says, to the vendor's "employees"—the debt collector had violated 15 U.S.C. § 1692c(b), which, with certain exceptions, prohibits debt collectors from communicating consumers’ personal information to third parties "in connection with the collection of any debt." The district court rejected the consumer's reading of § 1692c(b) and dismissed his suit. On appeal, we must consider, as a threshold matter, whether the consumer has adequately alleged that the debt collector's violation of § 1692c(b) caused him to suffer a concrete injury in fact under Article III, and, on the merits, whether the debt collector's communication with its dunning vendor was "in connection with the collection of any debt."

We hold (1) that the violation of § 1692c(b) alleged in this case gives rise to a concrete injury in fact under Article III, and (2) that the debt collector's transmittal of the consumer's personal information to its dunning vendor constituted a communication "in connection with the collection of any debt" within the meaning of § 1692c(b). Accordingly, we reverse the judgment of the district court and remand for further proceedings.

I

Congress enacted the FDCPA "to eliminate abusive debt collection practices by debt collectors" and "to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). To that end, § 1692c(b) of the FDCPA, titled "Communication with third parties," provides that—

Except as provided in section 1692b of this title, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

15 U.S.C. § 1692c(b). The provision that § 1692c(b) cross-references—§ 1692b—governs the manner in which a debt collector may communicate "with any person other than the consumer for the purpose of acquiring location information." 15 U.S.C. § 1692b. The FDCPA thus broadly prohibits a debt collector from communicating with anyone other than the consumer "in connection with the collection of any debt," subject to several carefully crafted exceptions—some enumerated in § 1692c(b), and others in § 1692b.

The facts, according to the complaint, are these: Richard Hunstein incurred a debt to Johns Hopkins All Children's Hospital arising out of his minor son's medical treatment. The hospital assigned the debt to Preferred Collections & Management Services, Inc. for collection. Preferred in turn hired CompuMail Information Services, Inc., a California-based commercial mail vendor, to handle the collection. Preferred electronically transmitted to CompuMail "sensitive medical information" about Hunstein—including, for instance, not only (1) his status as a debtor and (2) the exact balance of his debt and the entity to which it was owed, but also (3) that the debt concerned his son's medical treatment and (4) his son's name. CompuMail used that information to generate and send a dunning letter to Hunstein.

Hunstein filed a complaint, asserting violations of both the FDCPA, see 15 U.S.C. §§ 1692c(b), 1692f, and the Florida Consumer Collection Practices Act, see Fla. Stat. § 559.72(5). As relevant here, Hunstein alleged that Preferred violated the FDCPA "when it disclosed information about his purported ... debt to the employees of an unauthorized third-party mail house." The district court dismissed Hunstein's action for failure to state a claim, concluding that he hadn't sufficiently alleged that Preferred's transmittal to CompuMail violated § 1692c(b) because it didn't qualify as a communication "in connection with the collection of a[ny] debt."¹

Hunstein appealed, and we requested supplemental briefing on the question whether he had Article III standing to sue, which we now consider along with the merits.²

II

First things first. Because standing implicates our subject matter jurisdiction, we must address it at the outset, before turning to the merits. Steel Co. v. Citizens for a Better Env't , 523 U.S. 83, 101–02, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). Article III of the Constitution grants federal courts "judicial Power" to resolve "Cases" and "Controversies." U.S. Const. art. III, §§ 1 –2. This case-or-controversy requirement, which has been construed to embody the doctrine of standing, "confines the federal courts to a properly judicial role." Spokeo, Inc. v. Robins , 578 U.S. 330, 338, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016). The "irreducible constitutional minimum" of Article III standing entails three elements: injury in fact, causation, and redressability. Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

Hunstein's appeal involves the first element, injury in fact, which consists of "an invasion of a legally protected interest" that is both "concrete and particularized" and "actual or imminent, not conjectural or hypothetical." Id. at 560, 112 S.Ct. 2130 (quotation marks omitted). In Trichell v. Midland Credit Management,...