Shields v. Prof'l Bureau of Collections of Md., Inc.

55 F.4th 823

Elizabeth SHIELDS, Plaintiff - Appellant,

v.PROFESSIONAL BUREAU OF COLLECTIONS OF MARYLAND, INC., Defendant - Appellee.

No. 22-3006

United States Court of Appeals, Tenth Circuit.

FILED December 16, 2022

Russell S. Thompson, IV, Thompson Consumer Law Group, PC, Scottsdale, Arizona, for Plaintiff-Appellant.

Joshua C. Dickinson (Kersten L. Holzhueter with him on the brief), Spencer Fane LLP, Kansas City, Missouri, for Defendant-Appellee.

Before TYMKOVICH, PHILLIPS, and McHUGH, Circuit Judges.

TYMKOVICH, Circuit Judge.

Professional Bureau of Collections of Maryland, Inc. sent three collection letters to Elizabeth Shields over outstanding student loan debt. It used an outside mailer to send the letters. The letters did not indicate the debt balance could increase due to interest and fees from the date of the letters. Shields sued, alleging the disclosure of her debt and the misleading letters violated the Fair Debt Collection Practices Act (FDCPA).

The district court dismissed because it found Shields lacked a concrete injury necessary for standing. We affirm. Shields did not allege that Professional Bureau's use of a mailer and the content of its letters sufficiently harmed her.

I. Background

Shields has significant outstanding student loan debt. In July 2019, Professional Bureau sent her a collection letter that listed the assigned balance as $184,580.73 and the debt balance as $217,657.60 without explaining the difference or that the debt could increase due to interest, fees, and other charges. In early August, Professional Bureau sent a second letter with the same debt balance. It later sent a third letter with a debt balance of $218,727.01 without explaining the increase. Professional Bureau used an outside mailer to compose and send the letters.

Shields sued under the FDCPA. She alleged Professional Bureau violated 15 U.S.C. § 1692c(b) by communicating her debt to the mailer and violated § 1692e(2)(A), (10) and § 1692g(a)(1) by misrepresenting her debt. Professional Bureau moved to dismiss, alleging Shields lacked standing because she lacked a concrete injury. Shields responded and included a declaration of additional facts to show her injuries. The district court treated Professional Bureau's motion as a facial challenge to subject matter jurisdiction, declined to consider the declaration, and dismissed Shields's complaint without prejudice because she lacked standing. It later rejected Shields's requests to reopen the case, reconsider dismissal, and allow an amended complaint.

II. Analysis

Shields asserts she has standing because she suffered both concrete tangible and intangible injuries. And she claims the district court erroneously rejected her efforts to reopen the case and allow her to file an amended complaint.

A. Standing

The FDCPA limits how debt collectors can pursue certain types of debt and creates a private right of action when they violate those limitations. See Tavernaro v. Pioneer Credit Recovery, Inc. , 43 F.4th 1062, 1067 (10th Cir. 2022). But to invoke that right, "a violation of a legal entitlement alone is insufficient." Laufer v. Looper , 22 F.4th 871, 878 (10th Cir. 2022). Article III of the Constitution requires a plaintiff have standing to sue, meaning she has incurred (or will incur) (1) "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." Spokeo, Inc. v. Robins , 578 U.S. 330, 338, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016). The injury must be concrete—real, not abstract—and can be either tangible (e.g. , physical) or intangible (e.g. , reputational). Id. at 340, 136 S.Ct. 1540. We determine "standing on a claim-by-claim basis." Santa Fe All. for Pub. Health and Safety v. City of Santa Fe , 993 F.3d 802, 813 (10th Cir. 2021), cert. denied , ––– U.S. ––––, 142 S. Ct. 1228, 212 L.Ed.2d 234 (2022). Although a district court has discretion in how it resolves standing challenges under Rule 12(b)(1), Sizova v. Nat'l Inst. of Standards & Tech. , 282 F.3d 1320, 1326 (10th Cir. 2002), we review its ultimate decision de novo, Baker v. USD 229 Blue Valley , 979 F.3d 866, 871 (10th Cir. 2020).

Tangible harms in the FDCPA context include familiar injuries like detrimental reliance on a collection letter that misrepresents debt. An intangible harm might occur if a collector used billboards to publicly shame a private citizen into paying his debt. When considering "whether an intangible harm constitutes injury in fact, both history and the judgment of Congress play important roles." Spokeo , 578 U.S. at 340, 136 S.Ct. 1540. "Congress may ‘elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.’ " Id. at 341, 136 S.Ct. 1540 (alteration in Spokeo ) (quoting Lujan v. Defs. of Wildlife , 504 U.S. 555, 578, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). But the central question is "whether the asserted harm has a ‘close relationship’ to a harm traditionally recognized as providing a basis for a lawsuit in American courts." TransUnion LLC v. Ramirez , ––– U.S. ––––, 141 S. Ct. 2190, 2200, 210 L.Ed.2d 568 (2021). The harms must be similar "in kind, not degree." Lupia v. Medicredit, Inc. , 8 F.4th 1184, 1192 (10th Cir. 2021) (internal quotation marks omitted). Because an "exact duplicate" is unnecessary, TransUnion , 141 S. Ct. at 2204, a plaintiff may have standing for a statutory claim even if she could not succeed on the traditional tort, Lupia , 8 F.4th at 1192.

Shields alleges Professional Bureau injured her in two ways: by disclosing her debt and sending misleading letters. We conclude neither caused a concrete injury.

1. Disclosure

The FDCPA generally prohibits debt collectors from communicating, "in connection with the collection of any debt, with any person" without the consumer's consent or court permission. § 1692c(b).¹ There are, however, a few exceptions, such as the consumer, the consumer's attorney, and the collector's attorney. Id. Outside mailers are not one of the enumerated exceptions.

Shields asserts Professional Bureau's disclosure violated the FDCPA and injured her. Here, like below, she primarily relies on a close relationship with the traditional tort of public disclosure of private facts. That tort occurs when a tortfeasor gives "publicity to a matter concerning the private life of another" and "the matter publicized is of a kind that (a) would be highly offensive to a reasonable person, and (b) is not of legitimate concern to the public." Restatement (Second) of Torts § 652D (Am. L. Inst. 1977). "Publicity" means the information is conveyed "to the public at large, or to so many persons that the matter must be regarded as substantially certain to become one of public knowledge." Id. cmt. a.

The Eleventh Circuit recently rejected a similar argument in Hunstein v. Preferred Collection and Management Services, Inc. (Hunstein III ), 48 F.4th 1236, 1240 (11th Cir. 2022) (en banc). There, the plaintiff sued after a debt collector used an outside mailer to send a collection letter. Id. A panel twice found he had standing. Hunstein I , 994 F.3d 1341, 1348–49 (11th Cir. 2021) (pre- TransUnion ); Hunstein II , 17 F.4th 1016, 1027 (11th Cir. 2021) (post- TransUnion ). But the en banc court concluded otherwise because the plaintiff failed to allege publicity and "without publicity, there is no invasion of privacy." Hunstein III , 48 F.4th at 1245. This means that without publicity, there is "no harm, at least not one that is at all similar to that suffered after a public disclosure."

Id. The Eleventh Circuit observed the difference between private and public disclosure "is qualitative, not quantitative." Id. at 1249.

Like Hunstein, Shields failed to allege anything close to the required publicity element. She only alleged Professional Bureau disclosed her debt to its outside mailer—certainly not the public at large nor someone likely to widely communicate her debt. Shields did not have to plead and prove the tort's elements to prevail. But to proceed, she had to at least allege a similar harm. For example, we recently found a plaintiff who received one improper call about her alleged debt could pursue an FDCPA claim because her harm was analogous to the tort of intrusion upon seclusion. Lupia , 8 F.4th at 1191–92. Although a single call may have been insufficient for traditional tort liability, it was still the same kind of harm, i.e. , an intrusion into her privacy. Id. at 1192.

But here, Shields's alleged harm was that one private entity (and, presumably, some of its employees) knew of her debt. That is not the same kind of harm as public disclosure of private facts, which is concerned with highly offensive information being widely known. See Restatement, supra , § 652D cmt. a ("[I]t is not an invasion of the right of privacy, within the rule stated in this Section, to communicate a fact concerning the plaintiff's private life to a single person or even to a small group of persons."). Like Hunstein, Shields alleged private—not public—disclosure.

Beyond public disclosure, Shields briefly tries to link the statutory violation to intrusion upon seclusion. But she never alleged Professional Bureau intruded her "private solitude." Cf. Lupia , 8 F.4th at 1191. She throws out other torts, like defamation, but fails to explain their relevance. See DePaula v. Easter Seals El Mirador , 859 F.3d 957, 967 (10th Cir. 2017) (declining to consider inadequately briefed arguments). In short, Shields did not suffer a concrete injury when Professional Bureau used the outside mailer.

2. Substance of the Letters

The FDCPA also regulates how collectors communicate with consumers. Collectors may not falsely represent "the character, amount, or legal status of any debt," § 1692e(2)(A), or use "any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer," § 1692e(10). And "[...