In Frank v. Autovest, LLC, 2020 U.S. App. LEXIS 18082 (9th Cir. June 9, 2020), the Ninth Circuit addressed a thorny standing issue under the Fair Debt Collection Practices Act (“FDCPA”): does a consumer who alleges harm from a technical violation of the FDCPA have standing to continue her suit when her deposition testimony shows that she has no actual injury? The court’s answer was a definitive “no.”
A debt collector sued the appellant consumer to collect money on behalf of the appellee creditor. The complaint was verified by a person who held herself out to be an agent of the debt collector. However, she was actually an employee of the creditor, not an agent of the debt collector. Later, the debt collector filed a motion for a default judgment in the same proceeding, accompanied by an affidavit from another person holding himself out as the debt collector’s agent. Again, the person was actually an employee of the creditor. The debt collector ultimately dropped the suit. The consumer then filed a putative class action in federal court, accusing the creditor and its employees of making false, deceptive, or misleading representations under the FDCPA, 15 U.S.C. § 1692e, based on the employees’ misleading statements regarding their relationship to the debt collector. At deposition, the consumer denied that she took any action or refrained from doing anything based on those allegedly misleading statements. Based on that testimony, the district court granted summary judgment to the creditor, holding that any falsehoods were immaterial, as plaintiff had not been injured.
The Ninth Circuit affirmed the district court’s dismissal, holding that the consumer failed to show a concrete personal injury traceable to the misleading statements in the affidavits, and therefore lacked standing. The FDCPA creates a cause of action where a debt collector’s statement would confuse or mislead an unsophisticated consumer. But, as the Ninth Circuit held, standing cannot be confused with the merits of a claim. Showing that a statement would confuse or mislead an unsophisticated consumer is not enough for a plaintiff to maintain an FDCPA claim—the plaintiff must show that the misleading statement also caused a specific, personal injury.
Despite the plaintiff lacking standing, the Ninth Circuit still kept the door open for alternative theories of injury under the FDCPA, such as investigatory injuries involving resources spent uncovering or confirming the truth of a deceptive communication. Technical violations of the FDCPA are not enough to confer standing, but a creative plaintiff may be able to prove just enough to keep a claim alive—and a dogged defendant may be able to pin a plaintiff down during discovery and get a claim dismissed.