Thome et al v. Sayer Law Group PC
ORDER denying Defendant's 44 Motion to Dismiss Plaintiff's Amended Complaint. Signed by Judge CJ Williams on 10/7/2021. (jjh)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
MARY THOME on behalf of herself and
all others similarly situated,
THE SAYER LAW GROUP, P.C.,
TABLE OF CONTENTS
INTRODUCTION ......................................................................... 3
RELEVANT BACKGROUND ........................................................... 3
APPLICABLE LAW ....................................................................... 5
12(b)(1) Motions .................................................................... 5
FDCPA’s Congressional Purpose ................................................ 9
Concrete Injury .....................................................................12
Intangible Harm ............................................................13
The Supreme Court’s TransUnion Opinion ...................14
Defining a Close Relationship after TransUnion .............16
Tangible Harm .............................................................28
Causal Connection .................................................................30
This matter is before the Court on defendant’s renewed motion to dismiss
plaintiff’s Amended Complaint under Federal Rule of Civil Procedure 12(b)(1). (Doc.
44); see also (Doc. 11). Plaintiff timely filed a resistance. (Docs. 58, 61). Defendant
timely filed a reply. (Doc. 64). For the following reasons, the Court denies defendant’s
The following facts are taken from plaintiff’s Amended Complaint and are
undisputed. (Doc. 11). This class action arises from defendant’s alleged violations of
the Fair Debt Collection Practices Act (“FDCPA”), Title 15, United States Code, Section
1692. (Id., at 1). Plaintiff Mary Thome (“Thome”) is an Iowa resident and “consumer”
within the meaning of Section 1692a(3). (Id., at 2).1 Defendant is an Iowa corporation
and an alleged debt collector as defined in Section 1692a(6). (Id.).
Plaintiff brings one count against defendant for various violations of the FDCPA.
(Id., at 10–12). Plaintiff seeks, on behalf of herself and all others similarly situated, a
“declaratory judgment, injunctive relief, as well as statutory damages against” defendant
for its practice of sending debt collection letters to various consumers which allegedly
violate Sections 1692e, 1692e(2), 1692e(2)(a), 1692e(5), 1692e(10), 1692f, 1692f(1),
1692g, 1692g(a)(3), and 1692g(b). (Id., at 1, 11). Plaintiff asserts this Court has subject
matter jurisdiction over this action under Title 28, United States Code, Section 1331,
because plaintiff’s claim arises under federal law. (Id., at 1).
Title 15, United States Code, Section 1692g, the primary provision at issue here,
concerns the specific content that a debt collector must include in a debt collection notice
sent to a consumer. In relevant part, Section 1692g(a)(3) states that a debt collector must
The parties stipulated to dismissal without prejudice of Kimberly Usher, also an originally
named plaintiff. (Doc. 40).
send the consumer a written notice containing “a statement that unless the consumer,
within thirty days after receipt of the notice, disputes the validity of the debt, or any
portion thereof, the debt will be assumed to be valid by the debt collector.” 15 U.S.C.
§ 1692g(a)(3) (emphasis added). Further, Section 1692g(b) states that “[a]ny collection
activities and communication during the 30-day period may not overshadow or be
inconsistent with the disclosure of the consumer’s right to dispute the debt or request the
name and address of the original creditor.”
On March 25, 2015, Thome took out a home loan (“Thome Note”) for $49,000
secured by a mortgage (“Thome Mortgage”) which was subsequently serviced by Wells
Fargo Home Mortgage (“Wells Fargo”). (Doc. 11, at 3). Thome later defaulted on the
Thome Note by failing to make monthly payments as required under the terms of the
Thome Note and Thome Mortgage. (Id.). As a result, Wells Fargo retained defendant’s
services. (Id.). On January 27, 2020, defendant sent Thome a letter titled Demand for
Payment which demanded that either Thome pay an accelerated balance of $46,055.75
within fourteen days or Wells Fargo would initiate foreclosure proceedings.2 (Docs. 11,
at 4; 11-2, at 1). An attachment to the letter titled Dispute & Validation Notice (the
“Notice”) warned Thome that if she did not signify to defendant that she disputed the
debt within thirty days, then the debt would “be assumed to be valid.” (Docs. 11, at 4;
11-2, at 1). It did not specify who would assume the debt’s validity. (Id.). See also 15
U.S.C. § 1692g(a)(3) (stating that the debt would be assumed to be valid “by the debt
collector”). On February 11, 2020, defendant filed a foreclosure action against Thome.
(Doc. 11, at 4). Thome alleges that the Notice left her “confused about her rights” and
made her believe she could not contest the debt after fourteen days and the filing of the
See (Doc. 13-1, at 5–6) (citing IOWA CODE § 654.4B(1) (“Prior to commencing a foreclosure
on the accelerated balance of a mortgage loan and after termination of any applicable cure period,
. . . a creditor shall give the borrower a fourteen-day demand for payment of the accelerated
balance to qualify for an award of attorney fees . . . on the accelerated balance.”)).
foreclosure action. (Id., at 5). Thome further alleges that as a result of defendant’s
Notice, she believed that she lost her right to delay foreclosure, feared losing her home,
and struggled with mental health and wellness issues. (Id.).
Plaintiff alleges, on behalf of herself and others who are similarly situated, that
the letter and Notice sent by defendant are improper for two reasons. (Id., at 8). First,
plaintiff argues that defendant’s demand that the consumer pay the debt within fourteen
days “overshadows and contradicts” the consumer’s right to contest the debt within thirty
days. (Id.). Second, plaintiff argues defendant’s failure to specify that only the debt
collector, as opposed to a court or some other entity, is permitted to assume the debt is
valid, if not timely disputed, misleads consumers about their rights. (Id.).
On December 3, 2020, plaintiff filed her Complaint in this Court. (Doc. 1). On
February 11, 2021, plaintiff filed her Amended Complaint. (Doc. 11). On February 17,
2021, defendant filed its motion to dismiss under Federal Rule of Civil Procedure
12(b)(1), which the Court denied, allowing defendant to reassert its factual attack on the
Amended Complaint under 12(b)(1) after further discovery. (Doc. 31). Following
discovery, defendant filed this renewed motion to dismiss under 12(b)(1). (Doc. 44).
Federal courts may only hear cases which fall within their limited subject matter
jurisdiction. N. Cent. F.S., Inc. v. Brown, 951 F. Supp. 1383, 1391–92 (N.D. Iowa
1996). Title 28, United States Code, Section 1331, grants federal courts subject matter
jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the
Under Federal Rule of Civil Procedure 12(b)(1), a defendant may move to dismiss
a complaint based on a “lack of subject-matter jurisdiction.” The plaintiff bears the
burden of proving subject matter jurisdiction by a preponderance of the evidence. V S
Ltd. P’ship v. Dept. of Hous. & Urb. Dev., 235 F.3d 1109, 1112 (8th Cir. 2000) (citation
omitted); Thompson v. Deloitte & Touche LLP, 503 F. Supp. 2d 1118, 1121 (S.D. Iowa
2007) (citing Blakemore v. Mo. Pac. R. Co., 789 F.2d 616, 618 (8th Cir. 1986)). A
defendant can either attack the complaint’s asserted jurisdictional basis on its face or the
factual basis underlying the court’s jurisdiction. Branson Label, Inc. v. City of Branson,
793 F.3d 910, 914 (8th Cir. 2015). In a facial challenge, “the court restricts itself to the
face of the pleadings, and the non-moving party receives the same protections as it would
defending against a motion brought under Rule 12(b)(6).” Osborn v. United States, 918
F.2d 724, 729 n.6 (8th Cir. 1990) (citations omitted). In such cases, the court must
“accept as true all factual allegations in the complaint,” Jackson v. Abendroth & Russell,
P.C., 207 F. Supp. 3d 945, 950 (S.D. Iowa 2016), and should not dismiss the complaint
“unless it appears beyond doubt that the plaintiff can prove no set of facts in support of
[their] claim which would entitle [them] to relief,” Osborn, 918 F.2d at 729 n.6 (citation
and internal quotation marks omitted). “In a factual attack, the court considers matters
outside the pleadings, and the non-moving party does not have the benefit of 12(b)(6)
safeguards.” Id. (citations omitted). In such cases, “the trial court is free to weigh the
evidence and satisfy itself as to the existence of its power to hear the case” and “no
presumptive truthfulness attaches to the plaintiff’s allegations.” Id. at 730 (quoting
Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977)).
The Court has no subject matter jurisdiction if plaintiff lacks standing to pursue a
claim. “Article III of the Constitution limits the judicial power of the United States to
the resolution of Cases and Controversies, and Article III standing enforces the
Constitution’s case-or-controversy requirement.”
Hein v. Freedom from Religion
Found., Inc., 551 U.S. 587, 597–98 (2007) (alteration, citation, and internal quotation
marks omitted). A plaintiff must have “such a personal stake in the outcome of the
controversy as to warrant [their] invocation of federal-court jurisdiction and to justify
exercise of the court’s remedial powers on [their] behalf.” Warth v. Seldin, 422 U.S.
490, 498–99 (1975) (citation and internal quotation marks omitted). In other words, the
standing requirement ensures that courts hear only “those disputes which are
appropriately resolved through the judicial process.” Lujan v. Defenders of Wildlife, 504
U.S. 555, 560 (1992). If a plaintiff lacks standing to pursue a claim, then the court has
no subject matter jurisdiction. Faibisch v. Univ. of Minn., 304 F.3d 797, 801 (8th Cir.
2002). Thus, “a standing argument implicates Rule 12(b)(1).” Id.
The Supreme Court of the United States has established three elements of standing:
(1) “the plaintiff must have suffered an ‘injury in fact’” which is concrete, particularized,
and actual or imminent; (2) “there must be a causal connection between the injury and
the conduct complained of[;]” and (3) “it must be likely, as opposed to merely
speculative, that the injury will be redressed by a favorable decision.”3 Lujan, 504 U.S.
at 560–61 (citations and internal quotations omitted). In determining whether a plaintiff
has standing, courts should focus on whether the plaintiff “possesses a legally cognizable
interest, or [a] personal stake in the outcome of the action.” Genesis Healthcare Corp.
v. Symczyk, 569 U.S. 66, 71 (2013) (citation and internal quotation marks omitted).
Courts “must accept as true all material allegations of the complaint, and must construe
the complaint in favor of the complaining party.” Warth, 422 U.S. at 501. “The Court
does not assess the overall merits of a plaintiff’s claim in the standing inquiry.” Jackson,
207 F. Supp. 3d at 950 (citation omitted).
An injury is “concrete” when it “actually exist[s].” Spokeo, Inc. v. Robins, 136
S. Ct. 1540, 1548 (2016). 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
Parties do not dispute redressibility. Thus, the Court will not analyze this prong of the standing
1549 (citing Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009) (“[D]eprivation of
a procedural right without some concrete interest that is affected by the deprivation . . .
is insufficient to create Article III standing.”)). Concrete injury can exist in the form of
“real harm or material risk of harm.” See Braitberg v. Charter Communications, Inc.
836 F.3d 925, 930 (8th Cir. 2016) (applying Spokeo, 136 S. Ct., at 1549–50).
Concrete injury, however, whether a real harm or material risk of harm, can be
intangible. Id. “In determining whether an intangible harm constitutes injury in fact,
both history and the judgment of Congress play important roles.” Spokeo, 136 S. Ct.,
at 1549. “[H]istory and tradition offer a meaningful guide to the types of cases that
Article III empowers federal courts to consider.” TransUnion LLC v. Ramirez, 141
S. Ct. 2190, 2204 (2021) (quoting Sprint Communications Co. v. APCC Services, Inc.,
554 U.S. 269, 274 (2008)). “And the judgment of Congress is important and instructive,
as Congress may elevate to the status of legally cognizable injuries concrete, de facto
injuries that were previously inadequate in law.” Jackson, 207 F. Supp. 3d at 950
(quoting Spokeo, 136 S. Ct. at 1549) (alteration and internal quotation marks omitted).
Still, there is no “open-ended invitation for federal courts to loosen Article III
based on contemporary, evolving beliefs about what kinds of suits should be heard in
federal courts.” TransUnion, 141 S. Ct. at 2204. Courts may not extend Article III
power to recognize injuries elevated by Congress that are “not remotely harmful.” Id.
at 2205 (quoting Hagy v. Demers & Adams, 882 F.3d 616, 622 (6th Cir. 2018)).
Likewise, bare “legal infractions” are insufficient. Id. (quoting Casillas v. Madison
Avenue Assocs., Inc., 926 F.3d 329, 332 (7th Cir. 2019)).
Instead, each injury must bear “a ‘close relationship’ to a harm ‘traditionally
recognized as providing a basis for a lawsuit in American courts.” Id. at 2204 (quoting
Spokeo, 136 S. Ct. at 1541). “That inquiry asks whether plaintiffs have identified a close
historical or common-law analogue for their asserted injury,” though “an exact duplicate”
is not required. Id. In sum, “the violation of a procedural right granted by statute can”
constitute an injury in fact when it poses a harm or risk of real harm identified by
Congress and traditionally accepted as the kind of injury required for Article III standing.
Spokeo, 136 S. Ct. at 1549.
In addition to being concrete, an injury must be particularized. Id., at 1545. “For
an injury to be particularized, it must affect the plaintiff in a personal and individual
way.” Id. (citing Lujan, 504 U.S. at 560) (internal quotation marks omitted). In other
words, the injury must be “personal” and “distinct” as to the plaintiff, “not
undifferentiated.” Id. (compiling cases, citations omitted).4
Moreover, “there must be a causal connection between the injury and the conduct
complained of.” Lujan, 504 U.S. at 560. In other words, the injury must be fairly
traceable to the conduct at issue, not merely the result of some independent action. Id.
When a statutory violation gives rise to an action, the injury must be fairly traceable to
the violation of federal law. Advantage Media, L.L.C. v. City of Eden Prairie, 456 F.3d
793, 801 (8th Cir. 2006).
FDCPA’s Congressional Purpose
Title 15, United States Code, Section 1692 lays out the congressional findings and
purpose of the FDCPA. Section 1692(a) states that “abusive, deceptive, and unfair debt
collection practices by many debt collectors” have “contribute[d] to the number of
personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of
individual privacy.” In Section 1692(b), Congress acknowledged that “[e]xisting laws
and procedures for redressing these injuries are inadequate to protect consumers.” Thus,
Section 1692(e) states that the purpose of the FDCPA is “to eliminate abusive debt
collection practices by debt collectors, to insure that those debt collectors who refrain
Parties do not dispute that plaintiff’s alleged injury is particularized. Thus, the Court will not
analyze this element of the injury requirement.
from using abusive debt collection practices are not competitively disadvantaged, and to
promote consistent State action to protect consumers against debt collection abuses.” To
that end, the FDCPA offers consumers various protections, such as the ability to dispute
or verify a debt within thirty days of receiving a notice from a debt collector. Id. at
§ 1692g(b). Further, “[a]ny collection activities and communication during the 30-day
period may not overshadow or be inconsistent with the disclosure of the consumer’s right
to dispute or” verify the debt. Id. Overshadowing “occurs when a debt-collection letter
conveys information in a confusing or contradictory fashion so as to cloud the required
message with uncertainty.” Owens v. Hellmuth & Johnson, PLLC, 550 F. Supp. 2d
1060, 1064 (D. Minn. 2008) (internal quotation marks and citation omitted).
Congress set forth provisions about disputing and verifying debts to “eliminate the
recurring problem of debt collectors dunning the wrong person or attempting to collect
debts which the consumer has already paid.” S. Rep. No. 95-382, at 4 (1977) as
reprinted in 1977 U.S.C.C.A.N. 1695, 1699. Congress, however, also recognized that
“[c]ollection abuse takes many forms, including . . . misrepresentation of a consumer’s
legal rights.” Id., at 2. Indeed, Congress explicitly sought to protect consumers from
all forms of abusive collection practices, even consumers in default. Id. at 3. (“[T]he
vast majority of consumers who obtain credit fully intend to repay their debts. When
default occurs, it is nearly always due to an unforeseen event such as unemployment,
overextension, serious illness, or marital difficulties or divorce.”).
Defendant launches a factual attack on plaintiff’s Amended Complaint. First,
defendant argues plaintiff fails to allege a causal connection between defendant’s alleged
FDCPA violation and plaintiff’s emotional harm because defendant’s statements failed to
change plaintiff’s situation when she was already in danger of losing her home due to
missed mortgage payments. (Docs. 45, at 11–14, 64 at 2–4). Second, defendant asserts
plaintiff did not suffer a sufficiently concrete injury such that this Court has standing to
hear this dispute, because plaintiff cannot fulfill the elements of an analogous traditional
injury under American law, as required by Spokeo and TransUnion. (Docs. 45, at 14–
20, 64 at 4–8).
Plaintiff argues defendant’s alleged FDCPA violation caused her emotional harm
because plaintiff suffered confusion and emotional distress in response to defendant’s
letter stating she had only fourteen days, not thirty, to dispute her debt and avoid losing
her home. (Doc. 61, 19–22). Plaintiff argues her injury was sufficiently concrete
because precedent under the Eighth Circuit Court of Appeals and this Court’s order
denying defendant’s first Motion to Dismiss, (Doc. 31), recognize emotional distress and
confusion as harms amounting to concrete injury. (Id., at 14–18). Plaintiff argues such
a finding is in keeping with Spokeo and TransUnion, particularly because the Supreme
Court implied that confusion and distress are forms of reliance. (Doc. 61, at 17).
Plaintiff argues that even though a circuit split exists as to what constitutes a real risk of
harm, her injury meets the requirements of all three circuit positions. (Id., at 22–24).
Finally, plaintiff argues her injury is also sufficiently concrete because it is inherently
substantive, not procedural, according to Title 15, United States Code, Sections 1692e
and 1692f. (Id., at 24–27).
In light of the parties’ arguments, the Court must consider whether plaintiff (1) has
alleged a concrete injury, and (2) that injury is causally connected to the conduct
complained of. In its factual analysis under this 12(b)(1) motion, the Court will consider
matters outside the pleadings and weigh evidence as necessary to determine its power to
hear the case. See Osborn, 918 F.2d at 729 n.6. The Court will not presume plaintiff’s
allegations are true. Id. In determining whether standing exists, the Court will not assess
the merits of plaintiff’s case. Id. The Court may, however, weigh the evidence when
necessary to determine its power to hear the case. Id. Because an injury must first exist
to assess its causal connection to conduct, the Court will begin by addressing the question
of concrete injury.
Defendant asserts plaintiff did not suffer a concrete injury sufficient for Article III
jurisdiction. (Doc. 45, at 11–16). Defendant argues no common-law analogue exists for
plaintiff’s claim such that her injury fits a traditional type of redressable injury in
American law. (Docs. 45, at 14; 64, at 4–8). Defendant asserts such an analogue is
required for Article III standing in light of the Supreme Court precedent in Spokeo and
TransUnion, and misrepresentation of information is the most analogous traditional
claim. (Doc. 45, at 5, 14). Defendant argues, however, that plaintiff fails to demonstrate
an analogous injury because she did not rely on defendant’s alleged misrepresentation
when she learned she could reinstate her loan and took action to do so within fourteen
days of receiving the letter and Notice. (Id., at 5–6, 15–16). Moreover, defendant
asserts plaintiff knew her obligation was valid and therefore could not rely to her
detriment on defendant’s letter. (Doc. 64, at 6). As such, defendant argues plaintiff
merely received defendant’s letter and did not suffer a concrete injury sufficient for
Article III standing. (Id.).
Defendant also argues plaintiff cannot recover for her
emotional distress because defendant’s conduct was not extreme and outrageous. (Id., at
Plaintiff argues the Eighth Circuit’s post-Spokeo case law and the Supreme Court’s
TransUnion opinion shows her confusion and emotional distress are concrete injuries.
(Doc. 61, at 8–9, 12–15). Plaintiff asserts she would have disputed the amount she owed
on her mortgage, even though she admitted to having a legitimate loan with Wells Fargo.
(Id., at 11). Plaintiff argues defendant’s letter and Notice, however, caused the real risk
plaintiff would be misled as to her right to dispute and did result in her confusion, leading
to her forfeiture of rights, and her emotional distress. (Id., at 14–16). Moreover,
plaintiff was confused about to whom her debt would be valid because defendant’s Notice
omitted the words “by the debt collector” when addressing the presumptive validity of
the debt. (Id., at 15). Plaintiff argues this Court has already held that emotional distress
and confusion are concrete harms for purposes of Article III standing. (Id. at 16–17
(citing Doc. 31, at 18 (addressing defendant’s facial attack))). Plaintiff argues that even
though a circuit split exists as to what constitutes a real risk of harm for Section 1692g
violations, her injury meets the requirements of all three circuit positions: receipt,
confusion, and intent to dispute or confirm validity of the debt. (Id., at 22–24). Finally,
plaintiff argues her injuries are concrete because violations of Sections 1692e and 1692f
are inherently substantive, not procedural. (Id., at 24–27).
In its Order on defendant’s first Motion to Dismiss, the Court stressed that
plaintiff’s success in demonstrating standing turns on whether plaintiff ever intended to
dispute or verify her debts. (See Doc. 31, at 12, 16). Since then, the parties have
engaged in written discovery and defendant has deposed plaintiff. (Doc. 45-1). In her
deposition, plaintiff expressly stated she would have disputed her debt had she known she
had thirty days at her disposal to act instead of fourteen days. (Id., at 10 ¶34:24–35:7;
14¶54:10–55:6; see also id. at 17 ¶62:11–63:5).5 As this Court has already found, “the
Likewise, defendant points to specific answers in plaintiff’s deposition as evidence that plaintiff
would not have taken any different action had she known she had thirty days to dispute. (Doc.
64, at 9). As a whole, however, plaintiff’s testimony says otherwise. Moreover, just because
plaintiff intended to reinstate her loan when faced with what she reasonably believed was a
fourteen-day deadline does not mean she would not have disputed it. As she testified in the
deposition, plaintiff did not necessarily admit the account balance in the Foreclosure Petition was
correct. (See Doc. 45-1, at 14 ¶ 50:14–15). But she also did not understand she could still
contest it. (Id., at ¶ 50:16–20). And she did not know she had time to obtain representation.
(Id., at ¶ 50:21–25, 51:1–6). Believing she had little time to act, plaintiff’s goal was to do
whatever it took to keep her home. (Id., at ¶ 51:12–25). Though plaintiff’s answers are not
always clear, the Court attributes this to her relative inexperience with financial terminology.
real risk that plaintiffs may fail to exercise their FDCPA rights,” here, the right to dispute
debt, “and the distress resulting from being misled are concrete injuries.” (Doc. 31, at
Here, plaintiff alleges she failed to dispute her debt because defendant’s
misrepresentations in its letter and Notice confused her, leading her to believe she had
only fourteen days to dispute and to misunderstand the consequences of her failure to do
so, and caused related emotional distress.
Thus, the Court must now determine whether its understanding of the concreteness
of these alleged injuries is in keeping with the Supreme Court’s recent decision in
TransUnion v. Ramirez. See generally 141 S. Ct. 2190. The Court will now discuss
TransUnion and its principles before applying them to the circumstances here.
The Supreme Court’s TransUnion Opinion
TransUnion will guide the Court’s determination of whether plaintiff’s harms are
concrete injuries for purposes of Article III standing. In the intervening months between
defendant’s first Motion to Dismiss and this Renewed Motion, the Supreme Court
revisited the standing doctrine’s concrete harm requirement in TransUnion. TransUnion
essentially clarifies Spokeo’s law on intangible harms and concrete injuries.
TransUnion, 141 S. Ct. at 2204–207. Although TransUnion relies heavily on Spokeo,
TransUnion also emphasizes that new harms created by congressional statutes must bear
“a close relationship” to analogues in traditional Article III injuries, and courts should be
discerning in their determinations of whether analogous harm exists. Id., at 2204–205.
Thus, though TransUnion reinforces Spokeo, this Court must be careful to apply its
guidance and caution, particularly in the absence of an Eighth Circuit ruling interpreting
The plaintiffs in Bassett v. Credit Bureau Services appealed to the Eighth Circuit Court of
Appeals after a post-TransUnion district court ruling on post-trial motions. 2021 WL 3579073
(D. Neb. Aug. 13, 2021) appeal filed, (8th Cir. Aug. 20, 2021). The Eighth Circuit, however,
The simplified facts of TransUnion are as follows. A plaintiff brought a putative
class action under the Fair Credit Reporting Act against TransUnion for erroneously
including their credit files on a government watch-list of “specially designated nationals”
prohibited from engaging in business in the United States due to their suspected
connections with terrorism, drug trafficking, or other serious criminal behavior. 141
S. Ct. at 2201. Named plaintiff Sergio Ramirez sued, alleging in part that TransUnion
failed to disclose information about the list and failed to provide him with a summary of
rights in its consumer disclosure. Id. at 2202. Before trial, “the parties stipulated that
the class contained 8,185 members, including Ramirez,” and “also stipulated that only
1,853 members of the class (including Ramirez) had their credit reports disseminated by
TransUnion to potential creditors.” Id. At trial, plaintiff did not offer any evidence that
the class members were injured, though he demonstrated evidence of his own injury. Id.
A jury found in favor of the plaintiffs and the Ninth Circuit affirmed most of the district
court rulings, including that all class members had Article III standing to recover damages
for their claims. Id.
On appeal, the Supreme Court reversed the judgment and clarified the principles
behind Article III’s concrete injury requirement.
See id. at 2203–214.
TransUnion Court described, congressional intent in creating an injury is “instructive,”
but not sufficient, in determining whether one exists for Article III purposes. Id. at
2204–205. “[U]nder Article III, an injury in law is not an injury in fact.” Id. at 2205.
Instead, the existence of “a close historical or common-law analogue for [a plaintiff’s]
asserted injury” determines whether a harm based in a statutory violation is a concrete
injury. Id. at 2204. Further, “downstream consequences” of intangible informational
has yet to hear the case. Moreover, the circumstances in Bassett, although FDCPA dependent,
are substantially different from those here. See generally 2021 WL 3579073, at *2 (“defendants
sent [a] form letter to over 9,500 Nebraska residents with allegedly overdue medical debts,” at
least some of which fail to identify the patient’s name or dates of service).
injuries, such as those found in public disclosure cases, may show a harm or real risk of
harm. See id. at 2214 (citing Fed. Election Comm’n v. Akins, 524 U.S. 11 (1998), Pub.
Citizen v. U.S. Dep’t of Justice, 491 U.S. 440 (1989)). In sum, TransUnion provides
guidance and clarification for courts and parties analyzing intangible harms elevated by
Congress. But questions remain about how to implement TransUnion’s guidance. The
Court examines these questions below.
Defining a Close Relationship after TransUnion
When cautioning that a relationship between an intangible harm created by
Congress and a historical or common-law analogue must be “close,” see id. at 2198, the
TransUnion Court does not define just how “close” the relationship must be. Thus, the
opinion necessarily leaves open the question of how closely a statutory violation must be
related to its historical or common-law analogue such that the violation can meet
standing’s concrete injury requirement.
For instance, the TransUnion Court found
certain plaintiffs did not suffer a concrete injury because they were missing the
“necessary” publication element to establish a close relationship to a defamation tort
analogue. Id. at 2209. But TransUnion does not state how many elements an intangible
harm must share with a historical or common-law cause of action to be sufficiently
analogous, or how to tell if an element is “necessary.” Id.
This Court need not determine how many elements an FDCPA injury and a
historical or common-law analogue harm must share.
One thing is certain: “the
[TransUnion] Court did not require the harm alleged to be an ‘exact duplicate,’ so the
elements need not be an exact duplicate either.” Ramones v. Experian Information
Solutions, LLC, 2021 WL 4050874, at 3 (S.D. Fla. 2021) (quoting TransUnion, 141 S.
Ct. at 2209).
When addressing the question of “how close is close,” both pre- and postTransUnion, Circuit Courts of Appeals have largely focused on “kind, not degree” of
harm, or a functionally equivalent analysis, when determining whether the traditional
harm’s essence aligns with the statutory violation alleged, such that a close relationship
exists. See Lupia v. Medicredit, Inc., 8. F.4th 1184, 1192 (10th Cir. 2021) (focusing on
“kind, not degree”); Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 462 (7th Cir. 2020)7
(Barrett, J.) (same); Melito v. Experian Marketing Solutions, Inc., 923 F.3d 85, 92–95
(2nd Cir. 2019) (focusing on whether harms identified by Congress shared the “same
character” as harms in traditional claims); Salcedo v. Hanna, 936 F.3d 1162, 1171–73
(11th Cir. 2019) (assessing both kind and degree yet focusing on “qualitative nature of
injury” overall); Van Patten v. Vertical Fitness Group, LLC, 847 F.3d 1037, 1043 (9th
Cir. 2017) (determining closeness based congressional intent and purpose); Susinno v.
WorkOutWorld Inc., 862 F.3d 346, 350 (3rd Cir. 2017) (focusing on whether newly
established causes of action protect “essentially the same interests” as traditional causes
of action). In sum, as a whole, courts generally look to the nature, not extent, of harm.
The Eighth Circuit addressed the analogue question in Braitberg v. Charter
Communications, Inc. and Demarais v. Gurstel Chargo, P.A., without directly
addressing whether the analogy between an intangible harm and a related traditional harm
should be measured “in kind” or in “degree.” See generally 836 F.3d 925, 925–31 (8th
Cir. 2016); 869 F.3d 685 (8th Cir. 2017). In Braitberg, the plaintiff alleged he was
injured because the defendant retained his information for an inappropriate amount of
time. Id. at 930. He analogized this harm to the common-law tort of invasion of privacy.
Id. The Braitberg Court, however, found that the analogy failed because the defendant
did not disclose the information or use it in any way. Id. at 930–31. Moreover, the
The TransUnion Court relied on the Gadelhak opinion when analogizing to injuries based in
intrusion upon seclusion. 141 S. Ct. at 2204 (citing Gadelhak, 950 F.3d 458, 462 (7th Cir.
2020) (Barrett, J.), cert denied, ––– U.S. ––––, ––– S.Ct. ––––, 209 L.Ed.2d 568 (2021)).
plaintiff failed to show he faced a real risk of harm from defendant’s retention. Id. As
such, the plaintiff could not show a need to protect his reputation. See id.; see also
TransUnion, 141 S. Ct. at 2211–12. Thus, the Eighth Circuit found the plaintiff’s harm
was not the kind of harm addressed by the “common law tradition of lawsuits for invasion
of privacy” alleged and was therefore not concrete. Id.
In Demarais, however, the Eighth Circuit found a sufficiently analogous harm.
869 F.3d at 692. There, the plaintiff alleged he was harmed because the defendant
attempted to collect a debt from him that did not exist. Id. at 690. The Demarais Court
identified the plaintiff’s distress as one of many personal harms that Congress intended
the FDCPA to protect against. See id. at 699 (also listing confusion). The Demarais
Court observed the plaintiff’s circumstances were “not a situation where ‘[i]t is difficult
to imagine how’ the violation of a statutory right alone could cause concrete harm.” Id.
at 692 (quoting Spokeo, 136 S. Ct. at 1550). Accordingly, the Eighth Circuit held the
risk of the plaintiff’s distress was sufficiently analogous to “the risk of mental distress”
traditionally recognized as providing the basis for “common-law unjustifiable-litigation
torts.” Id. Accordingly, the Demarais Court found the plaintiff’s emotional distress was
a concrete injury. Id.
The Court reads Braitberg and Demarais as providing the same general guidance
as Spokeo and TransUnion. One could read the Eighth Circuit holdings in these opinions
as requiring every element of an analogous tort to demonstrate a comparable analogue.
Still, these cases were decided before TransUnion, in which the Supreme Court clarified
a plaintiff needed to demonstrate a “close relationship” to a traditional harm, but not “an
exact duplicate.” TransUnion, 141 S. Ct. at 2204. Thus, even if Braitberg required
every element be satisfied, TransUnion effectively overruled that requirement.
Moreover, requiring every element would also be inconsistent with existing law. If
Congress, with its ability to identify and elevate intangible harm, could not do so unless
the harm could already be brought under current law, then its power would be illusory.
Thus, this Court views Eighth Circuit precedent as providing the same general guidance
found in Spokeo, on which both Braitberg and Demarais rely, and TransUnion. Namely,
the harm suffered must be the kind of harm suffered and redressed by the traditional
In light of TransUnion and the weight of recent Circuit Court opinions, the Court
finds that assessing an FDCPA claim’s close relationship to a traditional analogue is
assessed “in kind, not degree,” but does not require that plaintiff’s injury duplicates the
elements of an analogous traditional harm. Thus, the Court will assess plaintiff’s claims
As mentioned above, this Court has already found that “the real risk that plaintiffs
may fail to exercise their FDCPA rights and the emotional distress resulting from being
misled are concrete injuries regardless of whether plaintiffs ultimately obtained counsel
and avoided foreclosure.”8 (Doc. 31, at 14). The question, then, is whether this
understanding survives defendant’s factual attack, particularly in light of the Supreme
Court’s decision in TransUnion. For the following reasons, the Court finds that plaintiff
demonstrates by a preponderance of the evidence that she suffered a concrete injury.
Here, plaintiff’s relevant exercise of her FDCPA rights is her ability to dispute or validate her
debt. Some discrepancy exists between the parties regarding the terms “obligation,” “loan,”
and “foreclosure.” (See Docs. 45, at 15–16; 61, at 12–14). The Court finds these arguments
are semantic. In light of plaintiff’s deposition testimony, the Court finds the parties’
disagreement in terms is more indicative of the inequity between plaintiff’s limited insight as a
layperson with a mortgage and defendant’s professional knowledge as a debt collector.
Moreover, these arguments are largely irrelevant to the greater issue of whether plaintiff’s
FDCPA rights were infringed upon by defendant’s misrepresentation. Similarly, the parties’
argument about whether plaintiff “disputed” or “questioned” her debt loses sight of the
overarching issue of whether plaintiff’s confusion and emotional distress are concrete injuries
caused by defendant. (See id.).
As discussed above, TransUnion requires the Court to assess whether the alleged
injury has a “close relationship” to a harm “traditionally” recognized as providing a cause
of action in American courts: a harm that is a “close historical or common-law analogue
for [plaintiff’s] asserted injury.” 141 S. Ct. at 2204. This is a multi-part question. The
Court must assess (1) what harms the FDCPA protects against, (2) what “traditionally”
recognized harms are conceivably similar to plaintiff’s alleged harm, and (3) whether the
asserted harm here “closely related” to those identified harms.
The Court turns to the first part, the harms protected by this FDCPA. Congress
discussed freedom from misrepresentation as an interest protected by the FDCPA,
identifying “misrepresentation of a consumer’s legal rights” as a reason for enacting the
bill. See S. Rep. No. 95-382, at 2 (1977) as reprinted in 1977 U.S.C.C.A.N. 1695,
The Court now turns to the second part, identifying traditionally recognized harms
that seem similar to plaintiff’s harm. Plaintiff presents no common-law analogue, relying
instead on this Court’s prior order stating that her asserted injuries are sufficiently
Defendant, however, posits the closest analogue is either fraudulent
misrepresentation or negligent misrepresentation. (Doc. 45, at 5–6). The Restatement
Second of Torts codifies several misrepresentation torts including fraudulent
misrepresentation and negligent misrepresentation. §§ 525, 552. These torts give a
plaintiff a right to sue when the plaintiff suffers harm from justifiably relying on a
defendant’s misrepresentation. Id.
Because both the FDCPA and these common-law torts protect against
misrepresentation, the Court may now turn to the second question: whether plaintiff’s
asserted injury is “closely related” to these traditional common-law misrepresentation
torts. To recover for misrepresentation at common law, a plaintiff must “in fact rel[y]
upon the misrepresentation in acting or in refraining from action” and that reliance must
be “a substantial factor in bringing about the loss.” REST 2D TORTS § 537 cmt. a. See
also § 537 cmt. b. (stating reliance must be justifiable).
In the case of negligent
misrepresentation, defendants must make the representation “in the course of [their]
business, profession or employment, or in any other transaction in which he has a
pecuniary interest.” REST 2D TORTS § 552. At common law, a plaintiff must show her
detrimental reliance upon the information resulted in pecuniary loss to recover in both
fraudulent misrepresentation and negligent misrepresentation.9
§§ 525, 552(1).
See REST 2D TORTS
As such, common-law misrepresentation requires pecuniary—
financial—harm. REST 2D TORTS § 552 cmt. c., 525 cmt. h. It is debatable, however,
whether financial harm is merely an element of misrepresentation or the essence of it,
such that analogous injuries must also be financial to be “closely related.” As discussed
above, the asserted harm need not share every element of the historical or common-law
cause of action to be “closely related.” Meeting all elements is not necessary so long as
a plaintiff shows evidence that her harm is closely related to the kind of harm suffered in
a historical or common-law cause of action.
Analyzing the third part, the Court finds that detrimental reliance is the harm
addressed by misrepresentation torts. Financial harm, in contrast, is an element and
therefore not required to demonstrate an analogous relationship per TransUnion. As
discussed above, in assessing whether the same kind of harm exists, the Court considers
whether the harm affects a similar personal interest or results in a mere legal infraction.
TransUnion, 141 S. Ct. at 2205. The Court must also consider the congressional purpose
behind enacting the relevant statutes. Id. at 2204. “[T]he essence of an action for
misrepresentation, whether negligent or intentional, is the communication of
Pecuniary loss is an inherently tangible injury. TransUnion, 141 S. Ct. at 2204 (“The most
obvious [concrete injuries] are traditional tangible harms, such as physical harms or monetary
harms.”). See also Loss-Pecuniary loss. BLACK’S LAW DICTIONARY (11th ed. 2019) (defining
“pecuniary loss” as “[a] loss of money or of something having monetary value”).
misinformation on which the recipient relies.” Block v. Neal, 460 U.S. 289, 296 (1983).
In defendant’s words, “misrepresentation torts redress a person’s interest in being able
to make ‘decisions in certain settings free of misinformation generated by others,’ and
therefore require reliance (not mere receipt of misinformation).” (Doc. 45, at 5 (quoting
John C.P. Goldberg et. al., The Place of Reliance in Fraud, 48 ARIZ. L. REV. 1001,
1002 (2006)) (emphasis added)).
Congress likewise discussed freedom from misrepresentation as an interest
protected by the FDCPA, identifying “misrepresentation of a consumer’s legal rights” as
a reason for enacting the bill. See S. Rep. No. 95-382, at 2 (1977) as reprinted in 1977
U.S.C.C.A.N. 1695, 1696. This protection from misrepresentation is not merely a
commitment to the truth. It is a way to remedy specific pecuniary and emotional harms
from misrepresentation. Section 1692(a) states that “abusive, deceptive, and unfair debt
collection practices by many debt collectors” have “contribute[d] to the number of
personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of
individual privacy.” In Section 1692(b), Congress acknowledged that “[e]xisting laws
and procedures for redressing these injuries are inadequate to protect consumers.” Thus,
Section 1692(e) states that the purpose of the FDCPA is “to eliminate abusive debt
collection practices by debt collectors, to insure that those debt collectors who refrain
from using abusive debt collection practices are not competitively disadvantaged, and to
promote consistent State action to protect consumers against debt collection abuses.”
Congress, however, also recognized that “[c]ollection abuse takes many forms, including
. . . misrepresentation of a consumer’s legal rights.” Congress’s aim appears to be to
protect consumers from both pecuniary harms—for example, the personal bankruptcies,
and loss of jobs—and emotional harms—for example, marital instability. Congress also
appears to be addressing an inequity between the parties; namely, debt collectors are
professionals, while consumers ordinarily have no experience with the rules of debt. This
inequity enables abuse, and Congress’s 1692(e) provision focuses on remedying this
inequity-enabled abuse. For the reasons discussed above, Congress’s rationale can stem
from economic harm or emotional harm, but it always stems from harms rooted in the
inequity of knowledge and access to information that exists between debt collector and
The misrepresentation torts also show the same focus on the inequity between
dealer and consumer, even though the loss is limited to pecuniary loss. In the tort of
fraudulent misrepresentation, the loss is economic, but the illustrations show that the
losses contemplated stem from an inequity of knowledge and access to information
between a dealer or corporation and a consumer. REST 2D TORTS § 525, cmts. (a)–(h).
In the tort of negligent misrepresentation, even though the loss is solely pecuniary, REST
2D TORTS § 552, cmt. c, the fact that the defendant must make the statement “in the
course of his business, profession or employment, or in any other transaction in which
[the defendant] has a pecuniary interest” and guides the plaintiff in plaintiff’s “business
transactions,” shows that that tort, too, stems from an inequity of knowledge and access
to information between dealer and consumer. REST 2D Torts, § 552.
Therefore, the Court finds plaintiff’s alleged harm here is sufficiently analogous
to the harm suffered in misrepresentation torts. Plaintiff alleges she was confused about
her right to dispute her debt because defendant overshadowed that she had thirty days—
not fourteen—to dispute her debt. (Doc. 11, at 4–5). Plaintiff alleges she was also
confused about who could assume her debt was valid if she did not dispute it because
defendant did not clarify who could make this assumption. (Id., at 4). Plaintiff alleges
this confusion led to her inadvertent forfeiture of her right to dispute and related emotional
distress. (Id., at 5). In short, plaintiff alleges defendant, a debt collector, overshadowed
the amount of time she had to dispute her debt and failed to clarify to whom she was
obligated. (Id., at 8). In her deposition testimony, she states that she would have disputed
her debt and obtained representation had she known she had thirty days at her disposal
instead of fourteen. (Doc. 45-1, at 10 ¶33:23–¶35:21).10 Due to defendant’s alleged
misrepresentation, plaintiff believed she had lost her right for the remaining sixteen days.
Thus, plaintiff vowed “to save [her] house, no matter how [she] had to do it.” (Id., at
Defendant’s actions likely match what Congress has previously labeled collection
abuse resulting in “misrepresentation of a consumer’s legal rights.” See S. Rep. No. 95382, at 2 (1977) as reprinted in 1977 U.S.C.C.A.N. 1695, 1696. Like proper defendants
in misrepresentation torts, defendant invited plaintiff’s reliance by sending her a letter
and Notice requesting money within a certain number of days. (Doc. 45-1, at 8 ¶27:23–
28:13, 10 ¶33:23–¶34:3). By overshadowing plaintiff’s later deadline, defendant’s letter
misrepresented plaintiff’s rights. (Id., at 10 ¶33:23–¶34:3). Defendant’s emphasis on
the fourteen-day deadline confused plaintiff, who also saw the thirty-day deadline but did
not know which took precedent. (Id.). Because she was confused about which deadline
applied to her right to dispute, given that defendant highlighted its right to collect in
fourteen days, plaintiff believed she needed to dispute her accelerated balance in fourteen
days, not thirty. (Id.; see also id., at 61). Defendant’s letter and Notice also stated that
plaintiff’s debt would “be assumed to be valid” if plaintiff did not dispute it. (Docs. 11,
at 4; 11-2, at 1). Because it did not specify who would assume the debt’s validity,
plaintiff was confused whether entities other than defendant would assume her debt was
valid if she did not dispute it. (Id.).
Plaintiff detrimentally relied on defendant’s
misrepresentation when she became confused about her rights, choosing not to obtain
representation and dispute her debt because she believed she did not have enough time.
At this point in her deposition, plaintiff says she was “confused between the fifteen[-day
deadline] and the thirty[-day deadline.]” (Doc. 45-1, at 10 ¶33:25–34:1) (emphasis added).
Given that plaintiff consistently references a fourteen-day deadline throughout the rest of the
deposition, it is evident that plaintiff misspoke when she mentioned a “fifteen” day deadline.
(Doc. 45-1, at 10 ¶33:23–¶35:21). Plaintiff also suffered related emotional distress,
believing that she would lose her home unless she came up with the money in fourteen
days instead of the full thirty days available to her. (Id., at 9 ¶30:14–31:12, 13 ¶45:24–
46:11). She was severely distraught for “two [or] three days, and “a mess” for “three
(Id., at 9 ¶31:12, 32:16–19, 10 ¶33:6–7).
Plaintiff needed to obtain
professional help and prescription medication to address her distress, which included
PTSD, sleep deprivation, and anxiety. (Id., at 9 ¶19–20; Doc. 11, at 5).
Because the FDCPA cause of action is “closely related” to the misappropriation
torts, the Court finds that plaintiff successfully pled a “concrete” injury with her
confusion and distress stemming from defendant’s alleged misrepresentation.
Even though the Court found that a statute protecting both pecuniary harm and
confusion and distress is “closely related” to torts that only protect pecuniary harm, the
Court’s finding is consistent with TransUnion. TransUnion discusses confusion and
distress when analyzing both actual harm and real risk of harm. 141 S. Ct. at 2213.
When discussing whether the plaintiffs were actually harmed by the defendant’s statutory
formatting violations, the TransUnion Court listed confusion and distress as harm
potentially analogous to “harm traditionally recognized as providing a basis for a lawsuit
in American courts.” Id.
TransUnion’s reliance on Trichell v. Midland Credit Management, Inc. suggest
that consequential harms—termed “downstream consequences”—are key evidence in
establishing whether a newly-created harm is sufficiently analogous to traditional harms.
See TransUnion, 141 S. Ct. at 2214 (citing Trichell, 964 F.3d 990, 1004 (11th Cir.
2020)). In Trichell, the plaintiffs attempted to analogize their harms to misrepresentation
torts but failed to “prov[e] they relied on the representations, much less that the reliance
caused them any damages.” 964 F.3d at 998. In assessing the plaintiffs’ argument, the
Eleventh Circuit Court of Appeals differentiated the plaintiffs’ alleged informational
injuries from those in the Supreme Court’s public disclosure precedent by focusing in
part on the “identified consequential harms from the failure to disclose the contested
information” in those cases. Id. at 1004 (discussing Akins, 524 U.S. 11 (1998) and Pub.
Citizen, 491 U.S. 440 (1989)). The Trichell Court termed these identified consequential
harms “downstream consequences.” See id. Unlike the plaintiffs in Akins and Public
Citizen, the Trichell Court found its plaintiffs’ “allegedly misleading communications . . .
failed to mislead.” Id. Without “comparable downstream consequences,” plaintiffs
could show no “concrete impact.” Id. Thus, in citing Trichell, the TransUnion Court
underscores the importance of consequences when analogizing to a harm rooted in
reliance. In TransUnion, for instance, where the relevant analogue was defamation,
confusion and emotional distress could naturally follow from the core injury of
publication of false information. See 141 S. Ct. at 2214.
TransUnion also suggests that alleged injuries without downstream consequences
are not concrete. Id. at 2213–14. The TransUnion Court found certain plaintiffs failed
to show a concrete injury when those plaintiffs alleged defamation yet failed to prove
publication. Id. at 2211. These plaintiffs’ names were listed as “specially designated
nationals,” but they could not prove this designation was shared with anyone. Id. In
fact, these plaintiffs did not present evidence that they even knew their names were on
the list. Id. at 2212. As such, their associations with terrorism, drug trafficking, and
other serious criminal behavior existed in a vacuum. Thus, because there could be no
damage to their reputations without anyone knowing about the “specially designated
national” label, the TransUnion Court found these plaintiffs did not suffer the kind of
harm vindicated in a tort of defamation. Id. at 2211–12.
Here, unlike the plaintiffs in Trichell or the improper plaintiffs in TransUnion,
plaintiff has shown her reliance on defendant’s misrepresentation. Following the facts
alleged, defendant’s overshadowing created the risk that plaintiff would be confused
about her rights. Plaintiff was indeed confused, which directly resulted in her emotional
distress and the inadvertent loss of her right to dispute the debt for an additional sixteen
days. (Doc. 45-1, at 9 ¶30:14–31:12, 10 ¶33:23–¶35:21, 13 ¶45:24–46:11). Had
plaintiff been free of defendant’s misrepresentation about the fourteen-day limitation, she
would have obtained an attorney and asserted that right. (Id., at 10 ¶33:23–¶35:21).
Thus, in addition to satisfying the TransUnion requirements, the Court finds plaintiff’s
injury also satisfies the various risk of harm tests across the circuit split discussed in the
Court’s earlier opinion. (See Doc. 31, at 12–17). Plaintiff’s injury satisfies all three
elements of the most demanding test, namely, (1) receipt of a deficient notice,
(2) confusion about disputing debt, and (3) an intent to verify or dispute the validity of
the debt. See Johnson v. Wetsch Abbott Osborn Van Vliet PLC, 3:19-cv-00006, 2019 WL
7666751, at *4 (S.D. Iowa Mar. 21, 2019); Jackson v. Abendroth & Russell, P.C., 207
F. Supp. 3d 945, 954 (S.D. Iowa 2016).
The Court now turns to defendant’s remaining arguments. Defendant argues that
even if plaintiff successfully analogizes to a traditional harm, she must show defendant’s
excessive and outrageous conduct caused her emotional harm. Asserting that plaintiff
cannot, defendant argues that plaintiff’s claims must fail. Defendant distinguishes the
circumstances here from those in Demarais, where the Eighth Circuit found distress was
a concrete injury based on the analogous torts of “malicious prosecution, wrongful use
of civil proceedings, and abuse of process.” (Doc. 45, at 18 (quoting 869 F.3d at 691)).
Defendant notes the defendant in Demarais threatened the plaintiff, who had already paid
off his debt, with trial if did not pay the defendant. (Doc. 45, at 18). Defendant argues
the Demarais defendant’s behavior was extreme and outrageous, while its alleged
overshadowing was not. (Id., at 19–20). Thus, defendant asserts plaintiff’s emotional
injury cannot be sufficiently concrete. (Id.).
Defendant’s argument is not persuasive. First, the Demarais Court did not discuss
whether the defendant’s behavior was extreme and outrageous. It did mention that certain
emotional distress may be a “proximate and natural result” of certain tortious behavior,
like malicious prosecution. Demarais, 869 F.3d at 691 (quoting Carter v. Oster, 112
S.W. 995, 999 (Mo. App. 1908)).
Here, given the context of home foreclosure,
plaintiff’s distress may be such a proximate and natural result of defendant’s
misrepresentation, sufficient to satisfy Demarais. Second, as this Court has detailed
elsewhere, Eighth Circuit courts have found that confusion and emotional distress are
(See Doc. 31, at 18).
Third and finally, TransUnion mentions
intentional infliction of emotional distress as an example of a traditional harm, and does
not foreclose all other emotional harm for Article III purposes. 141 S. Ct. at 2211, n.7.
To the contrary, TransUnion briefly discusses confusion and distress as possible injuries
without mentioning that they would not be concrete without defendant’s act being extreme
and outrageous. See 141 S. Ct. at 2213. Thus, TransUnion does not overrule the Eighth
Circuit holdings. This Court already found plaintiff’s confusion and emotional distress
are sufficiently concrete and finds no reason to change its position here.
For these reasons, the Court finds plaintiff has shown her harm stemming from
her detrimental reliance on defendant’s misrepresentation is sufficiently analogous to the
detrimental reliance harm in a traditional misrepresentation tort.11 Thus, her harm meets
the concrete injury requirement for Article III standing.
Even though plaintiff does not argue she suffered a tangible injury, the evidence
presented suggests a financial injury may exist here. If this is so, plaintiff’s monetary
Accordingly, the Court does not reach plaintiff’s argument that it should classify her statutory
injuries as substantive and not procedural, thereby bypassing the analogue requirement. (Doc.
61, at 24–27).
harm would “readily qualify as [a] concrete injur[y] under Article III.”12 TransUnion,
141 S. Ct. at 220.
If plaintiff ended up paying more money because she did not think she could
dispute her obligation, then she suffered a concrete, tangible harm sufficient to survive
defendant’s motion to dismiss. In her deposition, plaintiff asserts she paid more money
to get her loan current—that is, to pay the accelerated balance—because she kept trying
to pay the amount outstanding and then encountering more fees. (See Doc. 45-1, at 11,
¶39:9–13, 12 ¶43:21–24, 14 ¶51:16–25) (describing how plaintiff had to pay extra fees
to get her loan “current” after receiving foreclosure petition and believing she needed to
pay the money to “save [her] house” within fourteen days)). It is unclear from plaintiff’s
deposition how or when these extra fees accumulated, but at least some seem to have
accrued between her receipt of defendant’s letter and Notice and when she paid the money
outstanding on her mortgage. (See id.) If this is so, plaintiff may have been making
additional payments when she could have been disputing the amount she owed. In sum,
plaintiff’s possible pecuniary loss would constitute a tangible harm and concrete injury
needing no common-law analogue.
Though plaintiff does not argue she suffered a tangible injury, the Court
nevertheless finds the evidence shows that more likely than not plaintiff suffered a
financial injury because of defendant’s misrepresentation. As discussed above, when a
party brings a motion to dismiss based on a factual attack, as defendant does here, the
Court may weigh the evidence presented in determining whether it has jurisdiction. If
A financial injury would also be sufficiently analogous to the injuries suffered in fraudulent
misrepresentation and negligent misrepresentation. But a plaintiff would not need to show a
closely analogous relationship for a tangible harm. See TransUnion, 141 S. Ct. at 2204
(automatically treating “physical or monetary injury” as a “concrete injury” while stating that
intangible harms that have “a close relationship to harms traditionally recognized as providing a
basis for lawsuits” are “concrete”).
the evidence makes the Court “fairly certain” it can hear the case, then it clears the
preponderance of the evidence burden that plaintiff shoulders.
deposition makes the Court fairly certain that plaintiff suffered a financial injury due to
defendant’s misrepresentation and plaintiff may therefore assert a tangible injury as her
For these reasons, the Court finds plaintiff demonstrates by a preponderance of
the evidence that she suffered a concrete injury.
Defendant argues that its alleged overshadowing regarding plaintiff’s deadline to
dispute and failure to clarify who could assume plaintiff’s debt was valid could not have
caused plaintiff’s emotional distress, because “it changed nothing about what she intended
to do or not do,” and thus the alleged injury would have occurred regardless of whether
the defendant actually violated the FDCPA. (Doc. 45, at 11 (quoting St. Louis Heart
Ctr., Inc. v. Nomax, Inc., 899 F.3d 500, 504 (8th Cir. 2018)). Citing opinions from the
Sixth and Seventh Circuits, defendant argues that plaintiff’s emotional injuries were
caused by the fact of her default, not by defendant’s letter, (Doc. 45, at 12), and thus
stemmed from plaintiff’s own failure to pay. (Doc. 45, at 12–13). Moreover, defendant
argues there is no evidence that plaintiff “acted or refrained from acting based on any
alleged misinformation contained” in the letter because she sought legal counsel and
learned she could reinstate her loan within the fourteen days, and ultimately did. (Id., at
12). Thus, defendant argues, not knowing she actually had thirty days could not have
caused an injury. (Id., at 12–13).
Plaintiff argues there is a plain causal connection between defendant’s deficient
letter and Notice, plaintiff’s being misled about her rights, and plaintiff’s resulting
confusion and emotional distress.
(Doc. 61, 19–20).
Plaintiff argues defendant
overshadowed other information shared by highlighting the fourteen-day deadline, which
caused her to believe she had less than two weeks to resolve her mortgage issue. (Id.).
Although plaintiff was already experiencing some distress at the prospect of losing her
home, she argues “it was exacerbated by the misleading timeframe” conveyed in
defendant’s letter and Notice. (Id., at 20). Plaintiff asserts she intended to dispute her
debt but believed she had only fourteen days to do so because of defendant’s alleged
misrepresentation. (Id., at 20–22).
Defendant’s arguments miss the mark. First, defendant’s comparison to St. Louis
Heart Center v. Nomax is unavailing. Though Nomax deals with causal connection, its
facts and the harm suffered are substantially different from those here. In Nomax, the
plaintiff alleged a faxed advertisement that failed to include a proper opt-out notice caused
loss in toner and paper, wasted time, and invasions of privacy. 899 F.3d 500, 501–502.
The Nomax Court found that the defendant’s violations were only “technical” and the
plaintiff “had the means and opportunity to opt out” of receiving advertisements. Id. at
504–505. “All twelve faxes” sent from defendant to plaintiff “contained a box that the
recipient could check if he did not wish to receive future faxes, and a domestic fax number
to which the form could be returned” to process the opt-out request. Id. at 504. There
was no evidence that the plaintiff in Nomax did not believe it could opt out or that its
request would be honored. See id. at 504–505. Whereas in Nomax the plaintiff had a
clear opportunity to opt-out each time the defendant sent a fax, here, reading defendant’s
letter and Notice, plaintiff was faced with conflicting information and a pressing deadline.
Although plaintiff appears to have had the means and opportunity to dispute her
accelerated balance, defendant’s misrepresentation led her to believe that she could not.
By overshadowing information or failing to provide it, defendant prevented plaintiff from
understanding and exercising her rights.
Defendant’s related argument that plaintiff’s anxiety in reaction to the foreclosure
stemming from her admittedly valid default is likewise inapposite. (Doc. 45, at 11–13).
Although plaintiff was distressed due to the letter’s news of the foreclosure, defendant’s
misrepresentation exacerbated that distress. Thus, defendant was a cause of her distress
and her recovery cannot be precluded just because defendant is not the only cause.
Apportioning responsibility is a question appropriate for a factfinder.
Defendant’s reliance on Garland v. Orlans, (see Doc. 45, at 12–13), is similarly
misplaced. As a preliminary matter, this Court is not bound by Sixth Circuit precedent
and considers Garland only as an illustrative example. In Garland, the plaintiff defaulted
on his mortgage and the defendant foreclosed upon it and sent plaintiff many delinquency
letters, causing plaintiff to be confused and anxious. 999 F.3d 432, 435–38 (6th Cir.
2021). The Sixth Circuit quickly dismissed confusion, finding it insufficiently analogous
to a traditional harm and noting the plaintiff did not argue that the FDCPA intended to
make it cognizable. Id. at 43–48. Ultimately, plaintiff’s alleged anxiety also failed. The
Sixth Circuit found plaintiff’s anxiety was rooted in the foreclosure, created by plaintiff’s
default, and because plaintiff defaulted, he could not claim defendant caused his anxiety.
See id. at 438–440. Instead, such anxiety was traceable to the plaintiff alone. See id. at
440–41. Here, the parties do not dispute that plaintiff defaulted.
But her alleged
injuries—confusion resulting in an inadvertent loss of a right and emotional distress—
stemmed from defendant’s communications, not plaintiff’s default. Though plaintiff
caused her default, plaintiff’s default did not cause her to believe she had only fourteen
days, instead of thirty, to dispute it. As above, even if plaintiff caused some of her
distress, she did not cause all of it. Moreover, she did not cause her own confusion or
loss of right. The Court finds, therefore, that plaintiff meets her burden in presenting
evidence that the deficiencies in defendant’s letter and Notice caused plaintiff’s confusion
about her right to dispute, her inadvertent loss of that right, and her related emotional
Thus, the Court finds that plaintiff demonstrates by a preponderance of the
evidence that her injuries were caused by defendant’s actions.
For these reasons, the Court finds the evidence weighs in favor of the Court’s
power to hear this case. Thus, the Court finds that defendant’s factual attack on plaintiff’s
Amended Complaint fails. The Court denies defendant’s motion to dismiss plaintiff’s
Amended Complaint under Federal Rule of Civil Procedure 12(b)(1). (Doc. 44).13
IT IS SO ORDERED this 7th day of October, 2021.
United States District Judge
Northern District of Iowa
The Court also denies defendant’s related motion to dismiss the putative class claims in light
of its findings above. (See Doc. 45, at 20).
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?