Simpson v. Revco Sols.

1

LISA SIMPSON, Plaintiff, v. REVCO SOLUTIONS, INC., Defendant.

No. 22-cv-00483-JPG-1

United States District Court, S.D. Illinois

December 12, 2022

MEMORANDUM AND ORDER

J PHIL GILBERT DISTRICT JUDGE

I. Introduction

This matter comes before the Court on Defendant Revco Solutions, Inc. (“Revco” or “Defendant”) Motion to Dismiss this case pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). (Doc. 22). Specifically, Revco argues that Plaintiff Lisa Simpson (“Simpson” or “Plaintiff”), who brings this case under the Fair Debt Collection Practices Act (“FDCPA”), lacks Article III standing and fails to state a claim under the FDCPA. Simpson filed a response and opposition (Doc. 26). Additionally, citing exceptional circumstances, Revco filed a reply (Doc. 27).

II. Factual and Procedural Background

Revco is a debt collection company with its principal office in South Carolina. Revco regularly collects or attempts to collect debt after they are in default. (Doc. 21 at ¶¶ 6, 8). Simpson incurred debt after being in default. Id. at ¶¶ 5, 7.

On April 9, 2021, Simpson alleges her attorneys sent a letter to Revco notifying them of their representation of Simpson^[1]. Id. at ¶ 11. Revco allegedly sent Simpson another notice after attorney representation notification. Simpson contends that after being notified about her debt after her representation by an attorney, Revco violated FDCPA §§ 1692c(a)(2), 1692e and 1692f. Id. at ¶¶ 13, 20, 22, 24.

Plaintiff alleges as a proximate result of Revco's actions, Simpson suffered “actual financial harm and monetary losses,” and as a result of Revco's misleading statements, Simpson impacted her choice on how to proceed by forcing her to retain legal representation. Id. at ¶¶ 1415. Plaintiff alleges that as a result of Revco's actions, she bore harm that has a close relationship to “invasion of privacy, abuse of process, intentional infliction of emotional distress, and negligent misrepresentation.” Id. at ¶ 16. As a result, Plaintiff indicates she suffered “undue stress and anxiety.” Id. at ¶ 17. Additionally, Plaintiff states she detrimentally relied on Revco's misleading statements and suffered “confusion, wasted time, annoyance, emotion [sic] distress, monetary loss, and informational injuries that satisfies the concreteness requirement for injury in fact of Article III.” Id. at ¶ 18.

Simpson filed her complaint in this Court on March 9, 2022 (Doc. 1). On May 13, 2022, Revco filed a motion to dismiss on the basis of Rule 12(b)(6) and lack of jurisdiction. (Doc. 18). In response, Simpson filed an Amended Complaint (Doc. 21). Simpson's amended complaint has three counts: (1) violation of 15 USC § 1692c(a)(2) for communicating with a consumer after having notice of attorney representation; (2) violation of 15 USC § 1692e for engaging in false deceptive, or misleading methods to collect a debt; and (3) a violation of 15 USC § 1692f for engaging in unfair and/or unconscionable means to collect, or attempt to collect the debt. Revco filed a motion to dismiss on the same bases as previously, and both parties filed their briefs on the operative motion. (Docs. 22, 26, 27). The parties filed a motion to stay the case and the discovery deadlines while the Court rules on the pending motion. (Doc. 28). The Court granted that motion and stayed all deadlines. (Doc. 29). The Court now turns to the specifics of this case.

III. Analysis

Revco has moved to dismiss all Plaintiffs' claims pursuant to Rule 12(b)(1) for lack of subject-matter jurisdiction and Rule 12(b)(6) for failure to state a claim. To survive a Rule 12(b)(6) motion, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.' ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This pleading standard does not necessarily require a complaint to contain detailed factual allegations. Twombly, 550 U.S. at 555. Rather, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Iqbal, 556 U.S. at 678). The same plausibility standard applies under Rule 12(b)(1). Silha v. ACT, Inc., 807 F.3d 169, 174 (7th Cir. 2015) (Court must determine if complaint's allegations “plausibly suggest a claim of subject[-]matter jurisdiction” in reviewing Rule 12(b)(1) motion).

Congress passed the FDCPA to “eliminate abusive debt collection practices, to ensure that debt collectors who abstain from such practices are not competitively disadvantaged, and to promote consistent state action to protect consumers.” Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 577 (2010). “To show a violation of the FDCPA, the plaintiff must show (1) that the plaintiff is a ‘consumer' within the meaning of the statute; (2) that the defendant collecting the debt is a ‘debt collector' within the meaning of the statute; and (3) that the defendant has violated the FDCPA by act or omission.” Anderson v. Leading Edge Recovery Sols., LLC, 2012 WL 4506012, at *4 n.1 (S.D. Ill. Sept. 30, 2012).

a. Article III Standing

To establish standing to sue in federal court, “[t]he 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.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). This case concerns the injury-in-fact requirement, which is the “[f]irst and foremost” of standing's three elements. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 103, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). The injury-in-fact inquiry “asks whether the plaintiff has suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical.” Fox v. Dakkota Integrated Sys., LLC, 980 F.3d 1146, 1151-52 (7th Cir. 2020). A concrete injury “must actually exist” and must be “real and not abstract.” Spokeo, Inc., 578 U.S. at 340. The injury analysis often occurs at the pleading stage, where we are limited to the complaint's “general factual allegations of injury resulting from the defendant's conduct” to evaluate standing. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

In Spokeo, the Supreme Court held that “Article III standing requires a concrete injury even in the context of a statutory violation.” 578 U.S. at 341. The Seventh Circuit has repeatedly held that a breach of the FDCPA “does not, by itself, cause an injury in fact.” Markakos v. Medicredit, Inc., 997 F.3d 778, 779-80 (7th Cir. 2021). Even where the statutory violation is considered substantive and not merely procedural, a plaintiff must allege a concrete injury. Larkin v. Fin. Sys. of Green Bay, Inc., 982 F.3d 1060, 1066 (7th Cir. 2020) (holding plaintiff alleged no harm from the statutory violation and therefore lacked standing, despite alleging that statements in the collection letters were false, deceptive, or misleading). Though “traditional tangible harms, such as physical harms and monetary harms,” most readily qualify as concrete injuries, “[v]arious intangible harms can also be concrete.” TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2204, 210 L.Ed.2d 568 (2021). “Chief among [intangible concrete harms] are injuries with a close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts.” Ramirez, 141 S.Ct. at 2205. When determining if a statutorily identified, intangible harm has a close-but-not-exact match in American history or at common law, we look to the kind of injury the statute protects, not the degree of harm suffered. Ewing v. MED-1 Sols., LLC, 24 F.4th 1146, 1151 (7th Cir. 2022).

Such alleged violations of the FDCPA where defendants disagree plaintiffs have alleged concrete harms have been common and plentiful within the Seventh Circuit. Because Simpson alleges intangible harms, the Court will take each of them in turn. Specifically, Simpson alleges financial harm, monetary losses, impact regarding her choice to retain legal counsel, harm with a close relationship to invasion of privacy, abuse of process, intentional infliction of emotional distress, and negligent misrepresentation. Additionally, she alleges undue stress, anxiety, confusion, wasted time, annoyance, emotional distress, monetary loss, and informational injuries. (Amended Complaint, Doc. 21 at ¶¶ 14-18).

The Seventh Circuit has been clear regarding emotional harms. They do not constitute concrete injury.

As our bevy of recent decisions on FDCPA standing makes clear, anxiety and embarrassment are not injuries in fact. Indeed, we have expressly rejected “stress” as constituting concrete injury following an FDCPA violation. Likewise, it is not enough for a plaintiff to be “annoyed” or “intimidated” by a violation. Nor is it enough for a plaintiff to experience “infuriation or disgust” or “a sense of indignation.” Likewise, a plaintiff's “state of confusion” resulting from an FDCPA-deficient communication, without any ensuing detriment, is not a concrete injury for if it were, then everyone would have standing to litigate about everything. These are quintessential abstract harms that are beyond our power to remedy.

Wadsworth v. Kross, Lieberman & Stone, Inc., 12 F.4th 665, 668 (7th Cir. 2021) (internal citations omitted) (emphasis added). Therefore, in line with circuit precedent and a long line of recent decisions regarding FDCPA harms, the Court finds Simpson's harms for undue stress, anxiety, confusion, annoyance, and emotional...