In two cases in which the plaintiffs alleged that the debt collector defendants violated the FDCPA by sharing information about their debts with third party vendors used to prepare collection letters, an Illinois federal district court rejected the plaintiffs’ attempts to have their cases remanded to state court based on a lack of Article III standing. The decisions are at variance with recent New York federal court decisions.
In making their FDCPA claims, the plaintiffs relied on the Eleventh Circuit’s ruling in Hunstein v. Preferred Collection and Management Services that a debt collector’s transmittal of debt information to its letter vendor could violate the FDCPA’s limits in Section 1692c(b) on third party communications. Originally filed in Illinois state court, the plaintiffs’ lawsuits were removed by the defendants to federal court. Both plaintiffs filed motions to remand their cases to state court based on their lack of Article III standing. In response, the debt collectors argued that the consumers had met the requirements for standing in federal court.
In Keller v. Northstar Location Services and Thomas v. Unifin, Inc., the debt collectors argued that the plaintiffs had alleged an intangible but concrete harm because their claims alleged that they suffered an invasion of privacy. In making this argument, the debt collectors also relied on Hunstein, in which the Eleventh Circuit concluded that the alleged violation of FDCPA Section 1692c(b) had a close relationship to the harm resulting from the common law tort of invasion of privacy, specifically the private disclosure of private facts. The Eleventh Circuit held that a violation of FDCPA Section 1692c(b) gives rise to a concrete injury-in-fact for Article III standing.
Based on Hunstein and Seventh Circuit precedent, the district court agreed with the debt collectors and concluded that the plaintiffs had Article III standing to bring their FDCPA claims. Accordingly, the district court denied both motions to remand.
In July 2021, a New York federal district court dismissed six class action Hunstein “copycat” cases for lack of Article III standing. In dismissing the cases, the district court concluded that the plaintiffs’ speculative claims of potential future harm through the release of information by the mailing vendors used by the debt collector defendants could not support Article III standing.