Patterson v. Howe

96 F.4th 992

Mark A. PATTERSON, Plaintiff-Appellee, v. Howard HOWE, Defendant-Appellant.

No. 22-2602

No. 22-3083

United States Court of Appeals, Seventh Circuit

Argued September 12, 2023

Decided March 21, 2024

Appeals from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:16-cv-03364-DML-SEB — Debra McVicker Lynch, Magistrate Judge.

Robert E. Duff, Attorney, Indiana Consumer Law Group/law Office of Robert, Fishers, IN, for Plaintiff-Appellee.

Christopher C. Murray, Attorney, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Indianapolis, IN, for Defendant-Appellant.

Before Easterbrook, Hamilton, and Pryor, Circuit Judges.

HAMILTON, Circuit Judge.

Attorney Howard Howe filed suit for a client in an Indiana state court against Mark Patterson to collect an unpaid educational debt. Along with the complaint and summons, Howe served Patterson with four requests for admission, as allowed by Indiana law. Howe did not warn Patterson that the requests would be deemed admitted if Patterson did not respond within thirty days. Patterson answered the complaint but did not respond to the requests for admission. As we explain below, however, Patterson did not alter his behavior in response to the requests for admission, and during the state-court proceedings, Howe never tried to take advantage of Patterson's failure to respond.

Instead, while that action was pending, Patterson filed this separate federal lawsuit alleging that Howe's practice of serving requests for admission, at least without warning him of the consequences of failing to respond, violated the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. The district court granted summary judgment to plaintiff Patterson. The parties later stipulated to an award of statutory damages of $1,000 to Patterson, and the court awarded him more than $58,000 in attorney fees and costs. Defendant Howe has appealed both the merits judgment and the award of fees and costs. We vacate both judgments and order dismissal of the case. Under circuit law, Patterson lacks standing to bring his claim because he was not concretely harmed by Howe's alleged statutory violation.

I. Factual and Procedural Background

The parties do not dispute the facts of this case except in a few instances noted below. In 2012, plaintiff Mark Patterson began studying at the Indiana Institute of Technology, also known as Indiana Tech. Patterson thought financial aid would cover the cost of his classes. But he submitted his financial aid paperwork for the first semester too late and lost his financial aid for that semester. Patterson contends that the school's financial aid office was responsible for his tardiness because it gave him the wrong deadline. Howe, who had filed the collection suit on behalf of Indiana Tech, disagreed with that assessment. Regardless of fault, though, the parties agree that Patterson accumulated about $7,500 in student loan debt from his first semester. Indiana Tech then put a hold on his transcript, causing him to interrupt his education.

For several years, Patterson tried to resolve his debt. He emailed the school's financial aid office and tried to settle the matter, but the parties could not reach a resolution. Eventually, in May 2016, Indiana Tech retained attorney Howe to sue Patterson on the debt. When Howe filed suit, he served four documents: a summons, a complaint, a copy of the Payment Options Form that Patterson had signed when he began taking classes, and a one-page document that listed four requests for admission. Two requests were particularly significant. They asked Patterson to admit that the complaint's allegations were true and that Patterson had no valid counterclaim.

Patterson answered the complaint but did not respond to the requests for admission. Under Indiana Trial Rule 36, which parallels Federal Rule of Civil Procedure 36, requests for admission are deemed admitted if the recipient does not respond within thirty days. Patterson claims that when the thirty-day window expired, he did not know the requests for admission would be deemed admitted. He learned of this consequence later.

Though he had no attorney in the state-court action against him, Patterson hired an attorney to file this putative class-action lawsuit against attorney Howe for serving the requests for admission without warning that they would be admitted absent a response within thirty days. Patterson alleged that this practice violated 15 U.S.C. § 1692e and § 1692f of the Fair Debt Collection Practices Act, which prohibit false, deceptive, misleading, unfair, and unconscionable means in collecting consumer debts owed to someone other than the collector.

The state and federal cases proceeded separately for a few months. Patterson and Indiana Tech then settled the state case. Patterson agreed to pay $150 per month until he paid off his outstanding student debt of $7,500. He also agreed to pay $181 in court costs. In exchange, Indiana Tech agreed to release Patterson's transcript, allowing him to continue his education elsewhere. For reasons not included in our record, the settlement did not address Patterson's related claim in this federal case against attorney Howe.

Patterson continued to press this FDCPA action in federal court. In 2017, the parties filed cross-motions for summary judgment. Patterson argued that the requests for admission violated the Act as a matter of law because they were a deceptive and misleading debt collection practice. Howe argued, among other points, that Patterson lacked standing to pursue his claim. The district court held in favor of Patterson, finding that he had suffered an injury in fact when he was misled by the requests for admission. Patterson v. Howe, 307 F. Supp. 3d 927, 939 (S.D. Ind. 2018). The district court also held that Howe violated the Act because the requests for admission "would confuse an unsophisticated debtor . . . about the required timing and manner of a response to the plaintiff's claims." Id. at 936. The district court later certified a class of "All persons in the State of Indiana who received . . . from Defendant requests for admission served along with the complaint or notice of claim that were not accompanied by the notification that the requests are deemed admitted unless the defendant serves a written answer or objection to the requests upon the plaintiff within thirty days."

In August 2020, Howe asked the district court to reconsider its decision regarding Patterson's standing. Howe argued that our decision in Casillas v. Madison Avenue Associates, Inc., 926 F.3d 329 (7th Cir. 2019), reshaped this circuit's standing doctrine and undercut the district court's decision that Patterson had standing here. The district court granted Howe's motion for reconsideration insofar as it allowed him to conduct additional discovery pertaining to Patterson's standing. Patterson v. Howe, No. 1:16-cv-3364, 2021 WL 1124610, at *1, *6 (S.D. Ind. Mar. 23, 2021).

The district court ultimately still found that Patterson had standing to pursue his individual claim under the Act. Patterson v. Howe, No. 1:16-cv-3364, 2022 WL 20814938, at *6 (S.D. Ind. July 25, 2022). The district court found that Patterson would have denied the requests for admission within thirty days if he had known they would be deemed admitted otherwise, and that his subjective perception that he had lost negotiating leverage was a concrete injury sufficient to support his standing. Applying the Supreme Court's intervening decision in TransUnion LLC v. Ramirez, 594 U.S. 413, 141 S.Ct. 2190, 210 L.Ed.2d 568 (2021), however, the district court decertified the class. The parties then stipulated to a statutory damages award of $1,000. The district court later awarded Patterson $58,475.32 in attorney fees and costs under 15 U.S.C. § 1692k(a)(3).

II. Analysis

Howe argues that the district court erred in its standing determination, merits analysis, and award of costs and fees. In our review here, we view the evidence in the light reasonably most favorable to Patterson, but we review de novo legal issues concerning Patterson's standing. Spuhler v. State Collection Service, Inc., 983 F.3d 282, 285 (7th Cir. 2020). The undisputed facts show here that Patterson did not have standing to bring his FDCPA claim. We therefore do not reach the remaining issues raised by Howe.

To establish standing, a plaintiff must show that he has suffered or is at imminent risk of suffering an injury caused by the defendant and that the injury could likely be redressed by favorable judicial relief. TransUnion, 594 U.S. at 423, 141 S.Ct. 2190. Not all injuries satisfy this requirement. Only injuries that are concrete, particularized, and actual or imminent qualify as injuries in fact. Id. at 423-24, 141 S.Ct. 2190.

A concrete injury is one that is "real, and not abstract." Id. at 424, 141 S.Ct. 2190. Tangible harms such as monetary loss and physical damage ordinarily suffice. An intangible harm can also be concrete if it bears "a close relationship to a harm traditionally recognized as providing a basis for a lawsuit in American courts." Id. (internal quotations omitted). For example, reputational and privacy harms are sufficiently concrete because they have established common-law analogues. Id. at 425, 141 S.Ct. 2190. The relationship between a harm made actionable under a statute and a common-law counterpart need not be exact: the resemblance must exist only "in kind, not degree." Nabozny v. Optio Solutions LLC, 84 F.4th 731, 736 (7th Cir. 2023), quoting Gadelhak v. AT&T Services, Inc., 950 F.3d 458, 462 (7th Cir. 2020), citing Spokeo, Inc. v. Robins, 578 U.S. 330, 341, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016).

Intangible harms arising from statutory violations can satisfy the injury-in-fact requirement so long as they are sufficiently concrete. Congress may create civil liability for conduct that is not actionable under the common law, and consumer-protection statut...