Hernandez v. Midland Credit Management, Inc.

Filing 59

ENTER MEMORANDUM and Order: Defendant's motion to dismiss 36 is denied. Signed by the Honorable Joan B. Gottschall on 7/13/2017:Mailed notice(mjc, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DANIEL HERNANDEZ, on behalf of himself
and all others similarly situated,

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Plaintiff,
v.
MIDLAND CREDIT MANAGEMENT, INC.,
Defendant.

Case No. 15-CV-11179
Judge Joan B. Gottschall

MEMORANDUM AND ORDER
Plaintiff Daniel Hernandez (“plaintiff”) brings this civil action against defendant
Midland Credit Management (“defendant”), alleging violations of the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. §§ 1692, et seq. Plaintiff alleges that a dunning letter sent
to him on October 5, 2015, was false and misleading in a number of respects. Defendant has
moved to dismiss on the basis of lack of subject matter jurisdiction, arguing that the Supreme
Court’s decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016), makes plain that
plaintiff has not suffered sufficient injury to establish standing in this case. See Fed. R. Civ. P.
12(b)(1). For the reasons set forth below, defendant’s motion is denied.
Rooted in Article III of the Constitution, the requirement that a litigant have standing
consists of three elements which the plaintiff must establish by facts demonstrating each
element: the plaintiff must have suffered an injury in fact, the injury must be fairly traceable to
the challenged conduct of the defendant, and the injury must be likely to be redressed by a
favorable judicial decision. Spokeo, 136 S. Ct. at 1547; Lardas v. Grcic, 847 F.3d 561, 566 (7th
Cir. 2017) (citing Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167,
180–81 (2000)). Spokeo, an alleged consumer reporting agency, generated a profile of plaintiff

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Thomas Robins allegedly containing inaccurate information. Spokeo, 136 S. Ct. at 1546. Robins
sued under the Fair Credit Reporting Act of 1970 (“FCRA”), 15 U.S.C. § 1681 et seq., which
requires, among other things, that consumer reporting agencies follow reasonable procedures to
assure the accuracy of consumer reports. The district court dismissed for lack of standing, but
the Ninth Circuit reversed, holding that Robins had adequately alleged injury-in-fact in that his
own statutory rights had been violated and he had a personal interest in the handling of his credit
information. Spokeo, 136 S. Ct. at 1546. The Supreme Court held that the Ninth Circuit’s
analysis was incomplete in that, while it adequately addressed the second prong of the injury-infact requirement, particularity, it overlooked the first prong, concreteness. See id. at 1547–48.
The Supreme Court vacated the decision and remanded for consideration of the concreteness
requirement. Id. at 1550.
Spokeo concerned the first of standing’s elements, the requirement of injury-in-fact. To
establish injury-in-fact, Spokeo holds, the plaintiff must show that he suffered an invasion of a
legally protected interest that is both concrete and particularized, and actual or imminent, not
conjectural or hypothetical. 136 S. Ct. at 1548. To be particularized, an injury must affect the
plaintiff in a personal and individual way. Id. To be concrete, an injury “must actually exist,”
and be real and not abstract. Id. This does not mean, however, that the injury must be tangible.
Intangible injuries can also satisfy the concreteness test. To determine if they do, both history
and the judgment of Congress should be considered. Historically, the court should consider
whether the alleged intangible harm has a close relationship to a harm that has traditionally been
regarded as the basis for a lawsuit. Id. And because Congress is well-positioned to identify
intangible harms that meet Article III requirements, its judgment should be considered.
Assuming compliance with standing principles, Congress may elevate to the status of legally

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cognizable injuries concrete injuries that were previously inadequately addressed in the law. Id.
at 1549.
In the case at bar, the injury alleged is both particularized and concrete. It is
particularized because the allegedly improper dunning letter was sent directly to plaintiff, in
violation of his personal rights. And it is concrete, for reasons explained best in the statute at
issue, 15 U.S.C § 1692(a), in which Congress articulates its findings that “[t]here is abundant
evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt
collectors.” Such practices “contribute to the number of personal bankruptcies, to marital
instability, to the loss of jobs, and to invasions of individual privacy.” Id.
As numerous cases make clear, an injury is adequately concrete as long as there is some
“appreciable risk of harm” to the plaintiff. Haddad v. Midland Funding, LLC, No. 16 C 3942,
2017 WL 1550187, at *2 (N.D. Ill. May 1, 2017) (citing Spokeo and collecting Seventh Circuit
cases holding that an injury was “too ethereal”); see also Eike v. Allergan, Inc., 850 F.3d 315,
317 (7th Cir. 2017) (finding no standing based on mere dissatisfaction with product and
observing, in apparent contrast, that the plaintiff did not make “any claim that the defendants
misrepresent the quality of their product”).1 In § 1692(b), Congress explicitly found that
“[e]xisting laws and procedures for redressing these injuries are inadequate to protect
consumers.” Under Spokeo, Congress’ finding alone cannot be decisive on the standing
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The Seventh Circuit applied Spokeo in Meyers v. Nicolet Rest. of De Pere, LLC, 843 F.3d 724 (7th Cir. 2016), cert.
denied, No. 16-1113, 2017 WL 1001378 (June 19, 2017), cited by defendant in its Motion to Cite Additional
Authority, ECF No. 51. Meyers is far more like Spokeo than is the case at bar. Meyers complained of a violation of
the Fair and Accurate Credit Transactions Act (FACTA) in that defendant had failed to truncate the expiration date
on plaintiff’s credit card receipt, as FACTA requires. The Seventh Circuit, applying Spokeo, concluded that Meyer
had suffered neither harm nor an appreciable risk of harm since he discovered the violation immediately before
anyone else could see the non-compliant receipt. If that were not enough, Congress had declared that proper
truncation of the card number, regardless of the inclusion of the expiration date, obviates any risk of identity theft.
In the case at bar, in contrast, defendant is alleged to have provided plaintiff with false information, putting him at
risk of falling victim to all the ills detailed in § 1692. The fact that plaintiff sought the assistance of counsel rather
than responding to defendant’s allegedly improper notice does not obviate the risk that this plaintiff or others could
easily respond to such an inadequate notice to their detriment. The risk of harm is real.

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question, but it “play[s] an important role,” along with the historical right to sue based on similar
confusing, misleading, and deceptive practices at which Congress took aim when it enacted the
FDCPA. Spokeo, 136 S. Ct. at 1549 (stating that Congress’ enactment of a statute does not
automatically satisfy the injury-in-fact requirement).
Since the parties completed briefing these issues, many FDCPA cases have been decided
by courts in this circuit. After canvassing Congress’ findings, historical practice, and the
Supreme Court’s standing decisions, these cases uniformly conclude that FDCPA claims satisfy
Spokeo’s standing requirements. See, e.g., Dunham v. Robert Crane & Assocs., LLC, No. 1:16cv-2100-SEB-MPB, 2017 WL 2664287, at *4 (S.D. Ind. June 20, 2017) (“[S]everal district
courts within the Seventh Circuit as well as other circuit courts have consistently held that
violations of the FDCPA constitute concrete injuries-in-fact sufficient to support Article III
standing”); Pogorzelski v. Patenaude & Felix APC, No. 16-C-1330, 2017 WL 2539782, at *3
(E.D. Wis. June 12, 2017) (“[N]umerous other courts, including courts in this circuit and from
around the country, have rejected Spokeo-based standing challenges in the context of FDCPA
violations”); Haddad, 2017 WL 1550187, at *3 (“The value of receiving truthful information
about one’s financial affairs—and the ill effects of receiving misleading information—may be
hard to quantify, especially where, as here, the plaintiff did not act upon the misinformation. But
being lied to in violation of an anti-trickery statute like the FDCPA is a concrete harm
nevertheless.”).
Having considered Congress’ findings in § 1692, the relationship of the trickery targeted
by the FDCPA to intangible harms which have historically conferred standing to sue, and the risk
of harm to consumers who receive inaccurate or inadequate collection letters from debt

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collectors, this court is persuaded by the reasoning of the cases discussed above. For these
reasons, defendant’s Motion to Dismiss, ECF No. 36, is denied.

Date: July 13, 2017

/s/
Joan B. Gottschall
United States District Judge

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