SWIKE v. MED-1 SOLUTIONS, LLC

Filing 23

ORDER - This matter is before the Court on Defendant Med-1 Solutions, LLC's ("Med-1") Motion to Dismiss for Lack of Standing. [Filing No. 14 .] Plaintiff Erin Swike alleges that Med-1 continued to attempt to collect Ms. Swike's u npaid debt despite her written refusal to pay, in violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692c. [Filing No. 1 .] Med-1 now moves to dismiss Ms. Swike's complaint, arguing that Ms. Swike lacks a concrete injury as required to invoke this Court's jurisdiction under Article III of the Constitution. For the reasons stated in this Order, the Court DENIES Med-1's Motion. [Filing No. 14 .] (SEE ORDER). Signed by Judge Jane Magnus-Stinson on 9/15/2017. (APD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
ERIN SWIKE,
Plaintiff,
vs.
MED-1 SOLUTIONS, LLC,
Defendant.

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No. 1:17-cv-01503-JMS-MPB

ORDER
This matter is before the Court on Defendant Med-1 Solutions, LLC’s (“Med-1”) Motion
to Dismiss for Lack of Standing. [Filing No. 14.] Plaintiff Erin Swike alleges that Med-1
continued to attempt to collect Ms. Swike’s unpaid debt despite her written refusal to pay, in
violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692c. [Filing No.
1.] Med-1 now moves to dismiss Ms. Swike’s complaint, arguing that Ms. Swike lacks a concrete
injury as required to invoke this Court’s jurisdiction under Article III of the Constitution. For the
following reasons, the Court DENIES Med-1’s Motion. [Filing No. 14.]
I.
LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(1) “allows a party to move to dismiss a claim for
lack of subject matter jurisdiction.” Hallinan v. Fraternal Order of Police of Chicago Lodge No.
7, 570 F.3d 811, 820 (7th Cir. 2009). Jurisdiction is the “power to decide,” and federal courts may
only decide claims that fall within both a statutory grant of authority and the Constitution’s limits
on the judiciary. In re Chicago, R.I. & P.R. Co., 794 F.2d 1182, 1188 (7th Cir. 1986). When
deciding a motion to dismiss under Rule 12(b)(1), the Court accepts the allegations in the plaintiff’s
complaint as true and draws all reasonable inference in the plaintiff’s favor. Long v. Shorebank

Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999). The burden is on the plaintiff to demonstrate that
subject matter jurisdiction exists for his or her claims. See Lee v. City of Chicago, 330 F.3d 456,
468 (7th Cir. 2003).
II.
BACKGROUND
The following facts are drawn from Ms. Swike’s Complaint, [Filing No. 1], and are
accepted as true for the purposes of resolving Med-1’s Motion.
In 2014, Ms. Swike incurred several debts for medical services. [Filing No. 1 at 2.] Ms.
Swike was unable to timely pay the debts, so the medical provider sent them to Med-1 for
collection. [Filing No. 1 at 2.] On April 16, 2015, Med-1 sent a collection letter to Ms. Swike
demanding that she pay one of her outstanding debts. [Filing No. 1 at 2; Filing No. 1-3.] In
response to Med-1’s collection letter, Ms. Swike sent a letter stating that she was “refusing to pay
for the alleged debt that you are trying to collect.” [Filing No. 1-4 at 1.] Ms. Swike’s letter was
delivered to Med-1 on April 23, 2015. [Filing No. 1-4 at 2.]
Despite Ms. Swike’s written refusal to pay, Med-1 resumed its attempts to collect the debt
in 2017. [Filing No. 1 at 2-3.] Med-1 contacted Ms. Swike by telephone on March 7 and May 2,
2017, and sent a collection letter to Ms. Swike on May 4. [Filing No. 1 at 2-3; Filing No. 1-5.]
On May 8, 2017, Ms. Swike filed her Complaint in this Court, [Filing No. 1], alleging that
Med-1’s conduct violates 15 U.S.C. § 1692c(c) which provides that “[i]f a consumer notifies a
debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the
debt collector to cease further communication with the consumer, the debt collector shall not
communicate further with the consumer with respect to such debt,” except in specific
circumstances not relevant here. Ms. Swike seeks “actual and statutory damages, costs, and
reasonable attorneys’ fees” for Med-1’s alleged violations of the FDCPA. [Filing No. 1 at 4.]

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III.
DISCUSSION
Med-1 argues that Ms. Swike’s Complaint must be dismissed because Ms. Swike lacks
standing to bring her claim. Specifically, Med-1 argues that Ms. Swike has failed to allege, and is
unable to allege, a concrete injury-in-fact as required to establish Article III standing. In support,
Med-1 primarily relies upon Spokeo v. Robins, 136 S. Ct. 1540 (2016), and three recent Seventh
Circuit cases where plaintiffs alleging various consumer protection claims were found to lack a
concrete injury.
In response, Ms. Swike argues that receiving Med-1’s prohibited calls and letters
constitutes a concrete injury and distinguishes the cases upon which Med-1 relies. Ms. Swike
argues that the vast weight of the persuasive authority supports her position that violations of the
FDCPA, such as those alleged in this matter, satisfy the concrete injury requirement.
Under Article III of the U.S. Constitution, “whether the plaintiff has made out a ‘case or
controversy’ between [herself] and the defendant” is a “threshold question in every federal case.”
Warth v. Seldin, 422 U.S. 490, 498 (1975); see U.S. Const. Art. III § 2, cl. 1. Standing is the aspect
of the case or controversy requirement that looks to whether a plaintiff has a “vested interest in the
case.” Cabral v. City of Evansville, 759 F.3d 639, 641 (7th Cir. 2014). The standing inquiry
requires a plaintiff to establish three elements: (1) an “injury in fact” suffered by the plaintiff, (2)
a causal connection between the injury and improper conduct, and (3) that the injury would likely
be redressed by a favorable result. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
An injury in fact, in turn, is “an invasion of a legally protected interest which is (a) concrete and
particularized and (b) actual or imminent.” Id. at 560 (internal quotation omitted). “Concrete”
and “particularized” are distinct, “independent requirement[s]” of an injury in fact. Spokeo, 136
S. Ct. at 1548.

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In this case, Med-1 argues that Ms. Swike cannot establish the “injury in fact” element of
the standing analysis because her alleged injury is not concrete. In Spokeo, the Supreme Court
explained that a concrete injury is an injury that “actually exist[s],” meaning that it is “real, and
not abstract.” Id. (internal quotation omitted). While “concrete” does not necessarily mean
“tangible,” a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm,
and satisfy the injury-in-fact requirement of Article III.” Id. at 1549. At the same time, however,
“Congress may create a statutory right or entitlement the alleged deprivation of which can confer
standing to sue even where the plaintiff would have suffered no judicially cognizable injury in the
absence of statute.” Warth v. Seldin, 422 U.S. 490, 514 (1975). As the Spokeo Court concluded,
“the violation of a procedural right granted by statute can be sufficient in some circumstances to
constitute injury in fact. In other words, a plaintiff in such a case need not allege any additional
harm beyond the one Congress has identified.” 136 S. Ct. at 1549.
Spokeo involved a lawsuit against an operator of a website (called Spokeo) that procures
personal information in response to online search requests. Id. at 1545-46. The plaintiff alleged
that the results Spokeo produced upon searching for the plaintiff’s name returned inaccurate
information in violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq.,
which requires (among other things) consumer reporting agencies to follow procedures to ensure
the accuracy of consumer reports and to provide consumers with a notice of the reporting agencies’
statutory responsibilities.

Id. at 1545 (citing 15 U.S.C. § 1681e(b), (d)).

The inaccurate

information concerned the plaintiff’s marital status, familial status, age, employment, and
education. Id. at 1546. In explaining when a violation of a procedural right may constitute a
concrete harm, the Supreme Court provided several examples. Id. at 1549-50. On the one hand,
the failure to provide a congressionally-mandated disclosure effects a concrete harm upon a party

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seeking the undisclosed information. Id. (collecting cases). On the other hand, the failure to
provide the mandated FCRA notice would not constitute a concrete harm if the reported
information were all correct. Id. at 1550. Nor would providing an incorrect zip code, “without
more, . . . work any concrete harm.” Id. Contrary to Med-1’s representations, however, the
Supreme Court did not find the plaintiff’s standing “questionable.” [Filing No. 15 at 4.] Rather,
the Court held only that the Ninth Circuit’s standing analysis omitted the critical “concreteness”
element of an injury in fact, and took “no position as to whether the Ninth Circuit’s ultimate
conclusion—that [the plaintiff] adequately alleged an injury in fact—was correct.” Spokeo, 136
S. Ct. at 1550. On remand, the Ninth Circuit had “little difficulty concluding” that the alleged
false consumer reports constituted a concrete harm. Robins v. Spokeo Inc., 867 F.3d 1108 (9th
Cir. 2017). While Spokeo articulates the elements and provides some guidance for assessing Med1’s arguments, given the limited scope of the Supreme Court’s holding and the result in the court
of appeals on remand, Med-1’s assertion that this case is factually analogous to Spokeo is tenuous.
As both parties recognize, the Seventh Circuit has not decided an FDCPA standing case
since Spokeo. Med-1 thus turns to three Seventh Circuit cases applying Spokeo in other contexts
and deciding that the respective plaintiffs lacked a concrete injury: Eike v. Allergan, Inc., 850 F.3d
315 (7th Cir. 2017); Gubala v. Time Warner Cable, Inc., 846 F.3d 909 (7th Cir. 2017); and Meyers
v. Nicolet Restaurant of De Pere, LLC, 843 F.3d 724 (7th Cir. 2016). As the district courts across
the circuit have uniformly held, none of these cases is applicable to Ms. Swike’s FDCPA claim.
See, e.g., Hernandez v. Midland Credit Mgmt., 2017 WL 2985764 (N.D. Ill. 2017) (addressing
inapplicability of Eike and Meyers); Dunham v. Robert Crane & Assocs., LLC, 2017 WL 2664287
(S.D. Ind. 2017) (addressing inapplicability of Gubala and Meyers); see also, e.g., Long v. Fenton
& McGarvey Law Firm P.S.C.. 223 F. Supp. 3d 773 (S.D. Ind. 2016) (noting dispositive

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differences between violations of the FDCPA and violations of other consumer protection statutes,
such as the Cable Communications Policy Act).
Eike involved a state-law consumer fraud case alleging that the defendant made eye drops
that were unnecessarily large, causing the plaintiffs to spend more money than they would have to
if the drops were smaller. 850 F.3d at 316. The Seventh Circuit held that the plaintiffs lacked
standing because “[t]he fact that a seller does not sell the product that you want, or at the price
you’d like to pay, is not an actionable injury; it is just a regret or disappointment—which is all we
have here, the class having failed to allege ‘an invasion of a legally protected interest.’” Id. at 318
(quoting Spokeo, 136 S. Ct. at 1548).
Gubala involved a plaintiff’s allegations that a cable company failed to destroy his personal
information after he terminated his service, in violation of the Cable Communications Policy Act,
47 U.S.C. § 551(e). 846 F.3d at 910. But the plaintiff failed to allege that the defendant’s failure
to destroy the information harmed him in any way. Id. For example, the plaintiff did not allege
that the defendant “has ever given away or leaked or lost any of his personal information or intends
to give it away or is at risk of having the information stolen from it.” Id.
Finally, the plaintiff in Meyers alleged that the defendant restaurant failed to truncate the
expiration date of his credit card information on his receipt, in violation of the Fair and Accurate
Credit Transactions Act, 15 U.S.C. § 1681c(g)(1). 843 F.3d at 725. But the plaintiff “discovered
the violation immediately and nobody else ever saw the non-compliant receipt. In these
circumstances, it is hard to imagine how the expiration date’s presence could have increased the
risk” that the plaintiff would suffer any actual harm, such as identity theft. Id. at 727.
The Court agrees with the prevailing view expressed in cases such as Hernandez, Dunham,
Long, and many others that Med-1’s alleged FDCPA violations are distinct from those at issue in

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Eike, Gubala, and Meyers and are sufficient to establish a concrete injury in this case. Eike is
wholly inapposite, inasmuch as the plaintiffs failed to allege any injury at all, “procedural” or
otherwise, from the manufacturer’s decision to produce eye drops a certain way. Gubala and
Meyers are at least relevant, as the plaintiffs in those cases alleged that the defendants failed to
comply with requirements imposed by federal statutes. In those cases, however, the plaintiffs
neither received something from which they were protected (such as prohibited contacts from a
creditor), nor failed to receive something to which they were entitled (such as a required disclosure
from a creditor). The rationale of Bugala and Meyers does not extend nearly as far as Med-1
suggests and certainly does not extend to the FDCPA claim at issue here.
By contrast, Ms. Swike alleges in this case that Med-1 sent her multiple communications
from which she was expressly supposed to be protected. Just as a plaintiff has standing to sue
where a defendant fails to provide a required disclosure under the FDCPA, e.g., Long, 223 F. Supp.
3d at 777, so too does Ms. Swike have standing to sue Med-1 for sending her something from
which she was supposed to be protected. This is because the receiving of a prohibited debt
communication constitutes a real injury in and of itself, see, e.g., Smith v. GC Servs. Ltd. P’ship,
2017 WL 2629476, at *2 (S.D. Ind. 2017) (concluding in FDCPA case that receiving statutorily
deficient communication constituted a concrete harm), in addition to the wasted time and
annoyance of dealing with debt communications which the Court may reasonably infer followed,
see e.g., [Filing No. 1 at 2-3 (alleging that Med-1 left voicemail messages on Ms. Swike’s phone
to which she was required to respond)]; Caprel v. Specialized Loan Servicing, Inc., 2017 WL
1739919, at *3 (N.D. Ind. 2017) (holding that FDCPA claim for dunning letter sent directly to
represented debtor stated concrete injury because the letter “can cause that debtor confusion, and
require him to spend time and effort deciphering the letter, deciding how to respond, and contacting

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his attorney”); Aranda v. Caribbean Cruise Line, Inc., 202 F. Supp. 3d 850, 857 (N.D. Ill. 2016)
(observing, in Telephone Consumer Protection Act context, that Congress intended to deter “the
receipt of unsolicited telemarketing calls that by their nature invade the privacy and disturb the
solitude of their recipients” and rejecting defendant’s Spokeo arguments); see also, e.g., Reed v.
IC Sys., Inc., 2017 WL 89047, at *3 (W.D. Pa. 2017) (quoting Spokeo, 136 S. Ct. at 1549)
(“Plaintiff, as the object of repeated phone calls from Defendant which caused her wasted time
and annoyance, ‘has suffered injury in precisely the form the [FDCPA] was intended to guard
against.’”). The Court therefore joins the district courts of the Seventh Circuit in holding that
“violations of the FDCPA,” such as those alleged by Ms. Swike in this case, “constitute concrete
injuries in fact, sufficient to find Article III standing.” Long, 223 F. Supp. 3d at 776-77 (collecting
cases).
Med-1 makes two final arguments. First, Med-1 argues that the nonbinding cases upon
which it relies are “especially persuasive” because the Seventh Circuit generally applies an
“unsophisticated consumer” standard in FDCPA cases while other circuits apply a “least
sophisticated consumer” standard. [Filing No. 15 at 7.] This argument is unsupported and
unavailing. Med-1 provides no explanation for how the substantive standard in FDCPA cases
could be relevant in determining whether a complaint alleges a concrete injury.
Finally, in a section entitled “Persuasive Authority,” Med-1 lists, in a string citation, a
variety of cases from outside the Circuit. Most of these citations lack a database identifier or
reporter citation, making the Court’s review of these cases needlessly cumbersome. Cf. S.D. Ind.
L.R. 7-1(f) (“[A] party must attach to the party’s motion or brief a copy of any cited authority if it
is not available on Westlaw or Lexis.”). Furthermore, Med-1 fails to explain why the Court should
find these cases persuasive. As evinced by the Court’s detailed discussion above, the Court has

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considered and rejected Med-1’s arguments on their merits. Med-1’s “Persuasive Authority”
section does nothing to alter the Court’s conclusion that Ms. Swike’s allegations that she received
statutorily prohibited communications suffice to establish a concrete injury.
IV.
CONCLUSION
For the foregoing reasons, the Court DENIES Motion to Dismiss for Lack of Standing.
[Filing No. 14.]

Date: 9/15/2017

Distribution via ECF only to all counsel of record.

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