Trichell v. Midland Credit Mgmt., Inc., No. 18-14144

964 F.3d 990

John TRICHELL, individually and on behalf of all others similarly situated, Plaintiff - Appellant,

v.MIDLAND CREDIT MANAGEMENT, INC., a Kansas corporation, Midland Funding, LLC, a Delaware limited company, Defendants - Appellees.

Keith Cooper, individually on behalf of himself and all others similarly situated, Plaintiff - Appellant,

v.Midland Credit Management, Inc., Defendant - Appellee.

No. 18-14144

No. 19-10120

United States Court of Appeals, Eleventh Circuit.

July 6, 2020

David J. Philipps, Philipps & Philipps, Ltd, Palos Hills, IL, Tristan Wade Gillespie, Alpharetta, GA, for Plaintiff - Appellant

Jason Brent Tompkins, Chase T. Espy, Balch & Bingham, LLP, Birmingham, AL, for Defendants - Appellees Midland Credit Management, Inc., Midland Funding, LLC

Jason Brent Tompkins, Chase T. Espy, Balch & Bingham, LLP, Birmingham, AL, Austin Alexander, Thompson Hine, LLP, Atlanta, GA, Alan F. Pryor, Alston & Bird, LLP, Atlanta, GA, for Defendant - Appellee Midland Credit Management, Inc.

Before WILLIAM PRYOR, Chief Judge, MARTIN and KATSAS,^* Circuit Judges.

KATSAS, Circuit Judge:

Plaintiffs John Trichell and Keith Cooper received debt-collection letters that they say were misleading , but neither of them claims to have been misled . We consider whether Trichell and Cooper have Article III standing to pursue claims under the Fair Debt Collection Practices Act (FDCPA).

I

The FDCPA seeks to "eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692(e). Section 807 of the FDCPA provides that "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." Id. § 1692e. Section 808 provides that "[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt." Id. § 1692f. Section 813 provides that "any debt collector who fails to comply with any provision of [the FDCPA] with respect to any person is liable to such person" for "any actual damage sustained by such person as a result of such failure," id. § 1692k(a)(1), and "such additional damages as the court may allow," subject to statutory caps, id. § 1692k(a)(2)(A).

These cases arise from alleged FDCPA violations by defendants Midland Funding, LLC, which buys defaulted consumer debt, and its sister company Midland Credit Management, Inc., which attempts to collect the debt.

In 2017, Midland Credit sent three collection letters to Alabama resident John Trichell, who had defaulted on credit-card debt sometime before 2011. Each letter said that Trichell, who owed almost $43,000, had been "pre-approved for a discount program designed to save you money." Trichell App. 1-2 at 1, 2, 3 (formatting in original). The letters offered three repayment plans, all seemingly generous. Trichell could pay off his debt completely for about $13,000. He could pay off his debt in twelve monthly installments of about $1,800. Or he could create his own repayment plan with monthly payments as low as $50. The letters congratulated Trichell and encouraged him to "[a]ct now to maximize your savings and put this debt behind you." Id.

In fact, the offers were not so generous. Under Alabama law, the governing statute of limitations provides a defense if a suit to recover on a debt was filed more than six years after the last payment. See Ala. Code § 6-2-34(5) ; Ex parte HealthSouth Corp. , 974 So. 2d 288, 296 (Ala. 2007). Because Trichell had made no payments for over six years, any claim to recover the debt would be time-barred. At the bottom of each letter, a disclaimer acknowledged as much: "The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment of it to a credit bureau." Trichell App. 1-2 at 1, 2, 3.

Trichell sued Midland Funding and Midland Credit under the FDCPA. He alleged that the collection letters were misleading and unfair in falsely suggesting that he could be sued or that the debt could be reported to credit-rating agencies. Trichell sought to represent a class of similarly situated debtors and to recover statutory damages.

The district court dismissed the complaint for failure to state a claim. The court did not address whether Trichell had Article III standing to maintain his lawsuit. On the merits, the court concluded that the collection letters were neither misleading nor unfair.

The case of Keith Cooper, a Georgia resident, is similar. In 2017, Midland Credit sent a collection letter to Cooper, who had defaulted on credit-card debt in 2010. The letter offered Cooper seemingly attractive options for paying off his balance at steep discounts. But because the debt had been delinquent since 2010, claims on it would be time-barred. Ga. Code § 9-3-24. The letter contained a disclaimer, identical to those in the letters to Trichell, stating that Midland Credit would neither sue Cooper on the debt nor report it to credit bureaus.

Cooper sued Midland Credit under the FDCPA. He alleged that the letter was misleading because it failed to warn that making a partial payment on the debt could constitute a new promise to pay giving rise to a new limitations period. Cooper sought class certification and damages.

The district court dismissed the complaint for failure to state a claim. The court did not consider whether Cooper had Article III standing. On the merits, the court reasoned that because the disclaimer promised no lawsuit, the collection letter was not misleading.

In briefing the appeals, no party raised the question of Article III standing. In both cases, however, we ordered the parties to address that issue at argument.

II

Before reaching the merits, we must consider our own jurisdiction and that of the district court. See , e.g. , Lake Country Estates, Inc. v. Tahoe Reg'l Planning Agency , 440 U.S. 391, 398, 99 S.Ct. 1171, 59 L.Ed.2d 401 (1979). In particular, we must ourselves decide whether the plaintiffs in these cases have Article III standing, see United States v. Hays , 515 U.S. 737, 742, 115 S.Ct. 2431, 132 L.Ed.2d 635 (1995), and we must do so before reaching the merits, see 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).

A

When the delegates to the Constitutional Convention gathered in the summer of 1787, the extent of federal-court jurisdiction formed a focal point of their discussions. See W. Casto, The Supreme Court in the Early Republic: The Chief Justiceships of John Jay and Oliver Ellsworth 5–16 (1995). In a debate over what became Article III, section 2, James Madison urged that the jurisdiction of the Supreme Court be limited to cases of a "Judiciary Nature," for the "right of expounding the Constitution in cases not of this nature ought not to be given to that Department." 2 Records of the Federal Convention of 1787 , at 430 (M. Farrand ed., 1911). The delegates agreed without objection. Id.

Consistent with Madison's admonition, Article III grants federal courts the "judicial Power" to resolve only "Cases" or "Controversies." U.S. Const. art. III §§ 1 –2. As a result, federal courts may exercise their power only for "the determination of real, earnest, and vital controversy between individuals." Chi. & Grand Trunk Ry. Co. v. Wellman , 143 U.S. 339, 345, 12 S.Ct. 400, 36 L.Ed. 176 (1892). "No principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies." Raines v. Byrd , 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) (quotation marks omitted). This case-or-controversy requirement, embodied in the doctrine of standing, "confines the federal courts to a properly judicial role." Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016).

Under settled precedent, the "irreducible constitutional minimum" of standing consists of three elements: the plaintiff must have suffered an injury in fact, the defendant must have caused that injury, and a favorable decision must be likely to redress it. Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The party invoking the jurisdiction of a federal court bears the burden of establishing these elements to the extent required at each stage of the litigation. Id. at 561, 112 S.Ct. 2130. Thus, at the motion-to-dismiss stage, Trichell and Cooper bore the burden of alleging facts that plausibly establish their standing. See Ashcroft v. Iqbal , 556 U.S. 662, 677–84, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Salcedo v. Hanna , 936 F.3d 1162, 1168 (11th Cir. 2019).

The "foremost" standing requirement is injury in fact. Steel Co. , 523 U.S. at 103, 118 S.Ct. 1003. An injury in fact consists of "an invasion of a legally protected interest" that is both "concrete and particularized" and "actual or imminent, not conjectural or hypothetical." Defs. of Wildlife , 504 U.S. at 560, 112 S.Ct. 2130 (quotation marks omitted). A "concrete" injury must be "de facto "—that is, it must be "real, and not abstract." Spokeo , 136 S. Ct. at 1548 (quotation marks omitted). A "particularized" injury "must affect the plaintiff in a personal and individual way." Id. (quotation marks omitted). Each subsidiary element of injury—a legally protected interest, concreteness, particularization, and imminence—must be satisfied. See id. at 1545 ; Defs. of Wildlife , 504 U.S. at 560, 112 S.Ct. 2130. These cases turn most centrally on the requirement of concreteness.

As a general matter, tangible injuries qualify as concrete. See Spokeo , 136 S. Ct. at 1549. But the complaints here do not allege that the collection letters caused Trichell or Cooper any tangible injury. For example, neither plaintiff alleges that he made any payments in response to the defendants’ letters—or even that he wasted time or money in determining whether to do so....