Bautz v. ARS National Services, Inc.

Filing 27

ORDER denying 22 Motion to Dismiss for Lack of Jurisdiction For the reasons set forth herein, defendant's motion to dismiss for lack of standing is DENIED. SO ORDERED. Ordered by Judge Joseph F. Bianco on 12/23/2016. (Hammond, Daniel)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 16-CV-768 (JFB) (SIL)

_____________________

VIRGINIA T. BAUTZ,
ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED,

Plaintiffs,
VERSUS

ARS NATIONAL SERVICES, INC.,
Defendant.
___________________
MEMORANDUM AND ORDER
December 23, 2016
___________________

136 S. Ct. 1540, 1549 (2016)), defendant’s
motion is denied.

JOSEPH F. BIANCO, District Judge:
Plaintiff Virginia T. Bautz (“plaintiff”
or “Bautz”) brings this putative class action
against ARS National Services, Inc.
(“defendant” or “ARS”) under the Fair Debt
Collection Practices Act (the “FDCPA”), 15
U.S.C. §§ 1692 et seq.

Plaintiff alleges that defendant violated
Section 1692e of the FDCPA by including a
“false,
deceptive,
or
misleading
representation” in a letter to her concerning
the collection of outstanding credit card
debt, and the Court previously determined
that plaintiff had plausibly stated a claim
that the representation at issue was
materially misleading to the least
sophisticated consumer. The Court now
holds, consistent with Supreme Court and
Second Circuit precedent, that adequately
alleging a “false, deceptive, or misleading
representation” under Section 1692e that is
materially misleading to the least
sophisticated consumer satisfies the concrete
injury component of Article III standing
because such conduct violates an
individual’s substantive statutory right to be
free of abusive debt practices. The Supreme

Defendant now moves to dismiss
plaintiff’s complaint, pursuant to Federal
Rule of Civil Procedure 12(b)(1), for lack of
standing. Because the Court concludes that
plaintiff has sufficiently alleged (1) a
substantive violation of the FDCPA that
demonstrates a concrete and particularized
injury-in-fact; or, alternatively, (2) a
procedural violation of the FDCPA that
poses a “risk of real harm” to plaintiff’s
statutory interests, Strubel v. Comenity
Bank, 842 F.3d 181, 189 (2d Cir. 2016)
(citing Spokeo Inc. v. Robins, --- U.S. ---,

1

“contribute to the number of personal
bankruptcies, to marital instability, to the
loss of jobs, and to invasions of individual
privacy.” 15 U.S.C. § 1692(a). The
statute’s purpose 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.” Id. § 1692(e). To
that end, the FDCPA prohibits, inter alia,
“[t]he false representation of (A) the
character, amount, or legal status of any
debt; or (B) any services rendered or
compensation which may be lawfully
received by any debt collector for the
collection of a debt,” and, more generally,
“[t]he use of any false representation or
deceptive means to collect or attempt to
collect any debt or to obtain information
concerning a consumer.” Id. §§ 1692e(2),
(10). Such “conduct is a violation” of the
FDCPA. Id. § 1692e.

Court’s decision in Spokeo, as well as the
Second Circuit’s decision in Strubel, do not
suggest otherwise; rather, both cases
addressed alleged procedural violations of
statutes, which do not automatically confer
standing absent a concrete harm that
satisfies the injury-in-fact requirement of
Article III. In contrast, here, the claim
involves an alleged materially false and
misleading statement that is a substantive
violation of Section 1692e, and confers
standing upon the plaintiff without running
afoul of the guidance in Spokeo and Strubel.
In any event, even assuming arguendo that
plaintiff’s alleged Section 1692e claim could
somehow be considered to be a procedural,
rather than substantive, violation of the
FDCPA, the Court holds that plaintiff still
has standing, under Spokeo and Strubel,
because, as to the particular alleged
violation
in
this
case,
she
has
“demonstrate[d] a sufficient ‘risk of real
harm’ to the underlying [statutory] interest
to establish concrete injury without ‘need to
allege any additional harm beyond the one
Congress has identified.’” Strubel, 842 F.3d
at 189 (brackets omitted) (quoting Spokeo,
136 S. Ct. at 1549). The Court emphasizes
that its analysis is limited to this claim under
Section 1692e of the FDCPA, and it offers
no view on whether other provisions of the
FDCPA confer substantive rights.

As a remedy for statutory infractions, the
FDCPA permits recovery in individual
actions for damages equal to the plaintiff’s
actual loss and/or statutory damages of no
more than $1,000, id. §§ 1692k(a)(1)-(2)(A);
and in class actions for “(i) such amount for
each named plaintiff as could be recovered”
in an individual action, “and (ii) such
amount as the court may allow for all other
class members, without regard to a
minimum individual recovery, not to exceed
the lesser of $500,000 or 1 per centum of the
net worth of the debt collector,” id. §
1692k(a)(2)(B). In addition, a successful
individual or class action may recover “the
costs of the action, together with a
reasonable attorney’s fees as determined by
the court.” Id. § 1692k(a)(3).

I. BACKGROUND
A. The FDCPA
Because the instant motion and the
Court’s analysis address plaintiff’s interests
under the FDCPA, a brief discussion of the
purpose and structure of the relevant
statutory scheme is required.
Congress enacted the FDCPA because of
“abundant evidence of the use of abusive,
deceptive, and unfair debt collection
practices by many debt collectors,” which
2

incomplete tax information because in actual
fact and according to IRS regulations,
Department Stores National Bank ‘will not’
report to the IRS forgiveness of debt of less
than $600.” (Id. ¶ 39.) Because the Letter
offered to settle plaintiff’s debt for only
$382.20, plaintiff alleges that the IRS
Language was “an attempt by ARS to make
consumers think that the IRS requires the
reporting of all forgiveness of debt.” (Id. ¶
42.) Plaintiff further claims that “[s]uch a
statement in a collection letter suggests to
the least sophisticated consumer that failure
to pay will get the consumer into trouble
with the IRS,” and that the “least
sophisticated consumer would likely be
deceived into [falsely] believing that there
would be a tax consequence if she accepted
Defendant’s offer . . . .” (Id. ¶¶ 44-45.)

B. Facts
The following facts are taken from the
complaint. The Court assumes them to be
true for the purpose of deciding this motion
and construes them in the light most
favorable to the plaintiff as the non-moving
party.
Prior to December 2015, plaintiff
incurred a credit card debt owed to
Department
Stores
National
Bank
(“DSNB”). (Compl., ECF No. 1, ¶ 13.) On
or about December 31, 2015, defendant, a
debt collector, mailed or caused to be mailed
to plaintiff a letter (the “Letter”) that
attempted to collect that debt. (Id. ¶¶ 10-12,
18; id., Ex. A.) The Letter stated that
plaintiff had an outstanding debt of $849.35
and “offer[ed] to settle [her] account for the
reduced amount of $467.15. That’s a
savings of $382.20.” (Id. ¶¶ 22-23; id., Ex.
A.) In addition, it said that “Department
Stores National Bank will report forgiveness
of debt as required by IRS [i.e., Internal
Revenue Service] regulations.” (Id. ¶ 24;
id., Ex. A.)

Accordingly, plaintiff asserts that
defendant violated the FDCPA, 15
U.S.C. §§ 1692e, 1692e(2), and 1692e(10);
and seeks statutory damages, attorney’s fees,
and costs on behalf of herself and a putative
class pursuant to 15 U.S.C. § 1692k. (Id. at
9.)

Plaintiff alleges that the language in the
Letter “is deceptive and misleading and
violated the FDCPA,” that defendant’s “debt
collection practice is largely automated and
utilizes standardized form letters,” and that
defendant mailed or caused to be mailed
similar correspondence “over the course of
the past year to hundreds of New York
consumers . . . .” (Id. ¶¶ 25, 27, 30.)
Specifically, plaintiff asserts that the
statement that “‘Department Stores National
Bank will report forgiveness of debt as
required by IRS regulations’ [the “IRS
Language”] could reasonably be understood
by the least sophisticated consumer to mean
that IRS regulations require that Department
Stores National bank report all forgiveness
of debt.” (Id. ¶ 38.) Plaintiff claims that the
IRS Language “giv[es] erroneous and

C. Procedural History
Plaintiff commenced this action on
February 15, 2016. (ECF No. 1.) On June
2, 2016, defendant filed its first motion to
dismiss the complaint for failure to state a
claim pursuant to Federal Rule of Civil
Procedure 12(b)(6). (ECF No. 13.) That
motion was fully briefed on July 14, 2016
(ECF No. 15), and the Court held oral
argument on August 24, 2016 (ECF No. 17.)
The Court denied the first motion to
dismiss in an oral ruling on August 31,
2016. (ECF No. 19.) It held that plaintiff
had sufficiently pled that the Letter
contained a “false, deceptive, or misleading
representation” under an “an objective test
based on the understanding of the least

3

sophisticated consumer.” (Tr. of Aug. 31,
2016 Oral Ruling, ECF No. 21, at 3:5-6, 1822 (citing Bentley v. Great Lakes Collection
Bureau, 6 F.3d 60, 62 (2d Cir. 1993), and Vu
v. Diversified Collection Servs., Inc., 293
F.R.D. 343, 359 (E.D.N.Y. 2013)).)
Specifically, the Court concluded that “the
combination of the term ‘will report’, as
well as the term ‘as required’” in the IRS
Language “reasonably communicates to the
least sophisticated consumer that any
forgiveness
of
debt
without
any
qualifications or conditions will be reported
to the IRS because it is required by the IRS
regulations.” (Id. at 4:25-5:5.) In addition,
the Court determined that plaintiff had
adequately alleged that the IRS Language
was “material,” and therefore actionable
under the FDCPA, because a “belief that tax
consequences [would] stem[] from debt
forgiveness could potentially impact
whether the Plaintiff decides to pay the
lesser amount offered, as opposed to the
entire debt owed or even some other
option.” (Id. at 6:21-7:1 (citing Valez v.
Enhanced Recovery Co., LLC, No. 16-CV164, 2016 WL 1730721, at *3 (E.D. Pa.
May 2, 2016).) The Court observed that the
“[t]he least sophisticated consumer afraid of
audit may be pressured by any statement
such as one made by the Defendant into
paying more of his debt to avoid the risk of
triggering an IRS audit.” (Id. at 7:16-19
(quoting Kaff v. Nationwide Credit, Inc., No.
13-CV-5413 (SLT) (VVP), 2015 WL
12660327, at *7 (E.D.N.Y. Mar. 31, 2015).)

the Second Circuit’s recent decision in
Strubel, 842 F.3d at 181. (ECF No. 25.)
The Court held argument on December 7,
2016 (ECF No. 26) and has carefully
considered the parties’ submissions.
II. STANDARD OF REVIEW
When a court reviews a motion to
dismiss for lack of subject matter
jurisdiction under Rule 12(b)(1), it “must
accept as true all material factual allegations
in the complaint, but [it is] not to draw
inferences from the complaint favorable to
plaintiffs.” J.S. ex rel. N.S. v. Attica Cent.
Schs., 386 F.3d 107, 110 (2d Cir. 2004).
The burden of proving subject matter
jurisdiction by a preponderance of the
evidence is on the plaintiff. Aurecchione v.
Schoolman Transp. Sys., Inc., 426 F.3d 635,
638 (2d Cir. 2005). “In resolving a motion
to dismiss for lack of subject matter
jurisdiction under Rule 12(b)(1), a district
court . . . may refer to evidence outside the
pleadings” to resolve the jurisdictional issue,
Makarova v. United States, 201 F.3d 110,
113 (2d Cir. 2000) (citing Kamen v.
American Tel. & Tel. Co., 791 F.2d 1006,
1011 (2d Cir. 1986)), but a court “may not
rely on conclusory or hearsay statements
contained in the affidavits,” Attica Cent.
Sch., 386 F.3d at 110.
Federal courts are courts of limited
jurisdiction and may not preside over cases
if subject matter jurisdiction is absent. See
Lyndonville Sav. Bank & Trust Co. v.
Lussier, 211 F.3d 697, 700-01 (2d Cir.
2000). Unlike personal jurisdiction, lack of
subject matter jurisdiction cannot be waived
and may be raised at any time by a party or
by the Court sua sponte. Id. “If subject
matter jurisdiction is lacking, the action
must be dismissed.” Id.; see also Fed. R.
Civ. P. 12(h)(3). Where, as here, the “case
is at the pleading stage, the plaintiff must
‘clearly . . . allege facts demonstrating’”

Defendant subsequently filed the instant
motion to dismiss for lack of subject matter
jurisdiction on September 30, 2016. (ECF
No. 22.) Plaintiff submitted her opposition
on October 31, 2016 (ECF No. 23), and
defendant filed its reply on November 14,
2016 (ECF No. 24). On December 5, 2016,
defendant submitted a supplemental
authority letter providing a copy of

4

F.3d 625, 632 (2d Cir. 2003) (quoting Lujan
v. Defenders of Wildlife, 504 U.S. 555, 560
(1992)). Further, the alleged injury must
“affect[] the plaintiff in a personal and
individual way to confirm that the plaintiff
has a personal stake in the controversy and
avoid having the federal courts serve as
merely publicly funded forums for the
ventilation of public grievances or the
refinement
of
jurisprudential
understanding.” Id. (citations omitted).

each of Article III’s constitutional standing
requirements. Spokeo, 136 S. Ct. at 1547.
III. DISCUSSION
Defendant argues that this Court lacks
subject matter jurisdiction because plaintiff
has failed to allege the injury-in-fact
necessary to establish Article III standing.
For the reasons set forth below, the Court
disagrees.

“Congress’s authority to create new
legal interests by statute, the invasion of
which can support standing, is beyond
question.” Strubel, 842 F.3d at 188 (citing
Warth v. Seldin, 422 U.S. 490, 500 (1975)
(recognizing that injury required by Art. III
may be based on “statutes creating legal
rights”), and Lujan, 504 U.S. at 578
(recognizing Congress’s authority to
“elevat[e] to the status of legally cognizable
injuries concrete, de facto injuries that were
previously inadequate in law”)). However,
even where Congress has codified a
statutory right, a plaintiff must still allege
that she has suffered a concrete and
particularized injury connected to that
interest. Id.; see also Spokeo, 136 S. Ct. at
1547-48. In other words, the creation of a
statutory interest does not vitiate Article
III’s standing requirements.

A. Applicable Law
“The jurisdiction of federal courts is
defined and limited by Article III of the
Constitution[, and] the judicial power of
federal courts is constitutionally restricted to
‘cases’ and ‘controversies.’”
Flast v.
Cohen, 392 U.S. 83, 94 (1968). “This
limitation is effectuated through the
requirement of standing.” Cooper v. U.S.
Postal Serv., 577 F.3d 479, 489 (2d Cir.
2009) (citing Valley Forge Christian Coll. v.
Ams. United for Separation of Church &
State, Inc., 454 U.S. 464, 471-72 (1982)).
“It is axiomatic that there are three Article
III standing requirements: (1) the plaintiff
must have suffered an injury-in-fact; (2)
there must be a causal connection between
the injury and the conduct at issue; and (3)
the injury must be likely to be redressed by a
favorable decision.’” Id. (brackets and
citation omitted); see also Lamar Adver. of
Penn, LLC v. Town of Orchard Park, N.Y.,
356 F.3d 365, 373 (2d Cir. 2004) (“To meet
Article III’s constitutional requirements for
standing, a plaintiff must allege an actual or
threatened injury to himself that is fairly
traceable to the allegedly unlawful conduct
of the defendant.” (citation omitted)).

In Spokeo, the Supreme Court addressed
whether the respondent had standing to
assert a claim under the Fair Credit
Reporting Act (the “FCRA”), 15 U.S.C. §§
1681 et seq. 136 S. Ct. at 1544. The
respondent alleged that the petitioner had
violated the FCRA by including false
information about him in a consumer report.
136 S. Ct. at 1546. The Court noted that,
although a concrete injury need not be
tangible to satisfy Article III,

Article III’s injury-in-fact component
requires that a plaintiff’s alleged injury
“must be ‘concrete and particularized’ as
well as ‘actual or imminent, not conjectural
or hypothetical.’” Baur v. Veneman, 352

Congress’ role in identifying and
elevating intangible harms does not

5

of false information by adopting procedures
designed to decrease that risk,” but that the
respondent could not “satisfy the demands
of Article III by alleging a bare procedural
violation.”
Id. at 1550.
The Court
remanded to the Ninth Circuit for a
determination as to “whether the particular
procedural violations alleged in this case
entail a degree of risk sufficient to meet the
concreteness requirement,” and it cautioned
that those violations may not constitute
injury-in-fact because, for example, the
misinformation at issue might turn out to be
accurate or too insignificant to “cause harm
or present any material risk of harm.” Id.
(“It is difficult to imagine how the
dissemination of an incorrect zip code,
without more, could work any concrete
harm.” (footnote omitted)).

mean that a plaintiff automatically
satisfies
the
injury-in-fact
requirement whenever a statute
grants a person a statutory right and
purports to authorize that person to
sue to vindicate that right. Article III
standing requires a concrete injury
even in the context of a statutory
violation.
Id. at 1549. Accordingly, “a bare procedural
violation, divorced from any concrete harm,
[would not] satisfy the injury-in-fact
requirement of Article III.” Id. (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.”), and Lujan,
504 U.S. at 572)).

The Second Circuit recently applied
Spokeo in Strubel to a suit brought under the
Truth In Lending Act (“TILA”), 15 U.S.C.
§§ 1601 et seq. There, the plaintiff sought
statutory damages for an allegedly deficient
credit card agreement, arguing that the
defendant had failed to disclose that

Nevertheless, the Supreme Court
recognized that “the violation of a
procedural right granted by statute can be
sufficient in some circumstances to
constitute injury in fact,” and “a plaintiff in
such a case need not allege any additional
harm beyond the one Congress has
identified.” Id. As examples, the Court
cited two of its precedents concerning
statutes that conferred informational rights
of access: (1) Federal Election Commission
v. Akins, 524 U.S. 11 (1998), which held
that voters had standing to seek disclosure of
information pursuant to the Federal Election
Campaign Act, id. at 20-25; and (2) Public
Citizen v. United States Department of
Justice, 491 U.S. 440 (1989), which held
that the failure to obtain information subject
to disclosure under the Federal Advisory
Committee Act “constitutes a sufficiently
distinct injury to provide standing to sue,”
id. at 449.

(1) cardholders wishing to stop
payment on an automatic payment
plan had to satisfy certain
obligations; (2) [the defendant] was
statutorily obliged not only to
acknowledge billing error claims
within 30 days of receipt but also to
advise of any corrections made
during that time; (3) certain
identified rights pertained only to
disputed credit card purchases for
which full payment had not yet been
made, and did not apply to cash
advances or checks that accessed
credit card accounts; and (4)
consumers dissatisfied with a credit
card purchase had to contact [the
defendant]
in
writing
or
electronically.

The
Supreme
Court
ultimately
concluded that the FCRA embodied
Congress’s intent to “curb the dissemination

6

demonstrate the concrete
necessary for standing.

Strubel, 842 F.3d at 186-86. The defendant
relied on Spokeo to argue that plaintiff
lacked standing to assert these claims
because they were procedural in nature.

injury

Id. at 190-91 (brackets, citations, and
footnote omitted). Moreover, the Second
Circuit held, with respect to those claims,
that the plaintiff sought

As a threshold matter, the Second
Circuit held that it did “not understand
Spokeo categorically to have precluded
violations
of
statutorily
mandated
procedures from qualifying as concrete
injuries supporting standing.” Id. at 189.
Instead, the Supreme Court made clear that
“some violations of statutorily mandated
procedures may entail the concrete injury
necessary for standing,” id., and “where
Congress conferred [a] procedural right to
protect a plaintiff’s concrete interests,” the
critical inquiry is whether “the procedural
violation presents a ‘risk of real harm’ to
that concrete interest,” id. at 190 (quoting
Spokeo, 136 S. Ct. at 1549).

to vindicate interests particular to
her—specifically,
access
to
disclosures
of
her
own
obligations . . . The failure to provide
such required disclosure of consumer
obligations thus affects Strubel “in a
personal and individual way,” and
her suit is not “a vehicle for the
vindication of the value interests of
concerned bystanders” or the public
at large.
Id. at 191 (citations omitted).
In contrast, the Court found that the
plaintiff did not have standing as to her
claims concerning notice of automatic
payment plans and reported billing error.
The Second Circuit determined that the
defendant “did not offer an automatic
payment plan at the time Strubel held the
credit card at issue,” and that the plaintiff
thus could not “establish that [the
defendant’s] failure to make this disclosure
created a ‘material risk of harm’—or,
indeed, any risk of harm at all—to Strubel’s
interest in avoiding the uninformed use of
credit.” Id. at 191-92 (quoting Spokeo, 136
S. Ct. at 1550). With respect to the billing
error claim, the Second Circuit found that
“the bare procedural violation alleged by
Strubel presents an insufficient risk of harm
to satisfy the concrete injury requirement of
standing” because the “plaintiff fail[ed] to
show either (1) that the creditor’s challenged
notice caused her to alter her credit behavior
from what it would have been upon proper
notice, or (2) that, upon reported billing
error, the creditor failed to honor its

Under that framework, the Second
Circuit concluded that the plaintiff had
standing to assert two of her four TILA
claims concerning “required notice that (1)
certain identified consumer rights pertain
only to disputed credit card purchases not
yet paid in full, and (2) a consumer
dissatisfied with a credit card purchase must
contact the creditor in writing or
electronically.” Id. The Court found that
[t]hese disclosure requirements do
not operate in a vacuum . . . Rather,
each serves to protect a consumer’s
concrete interest in “avoiding the
uninformed use of credit,” a core
object of the TILA. . . . For that
reason, a creditor’s alleged violation
of each notice requirement, by itself,
gives rise to a “risk of real harm” to
the consumer’s concrete interest in
the informed use of credit. Having
alleged such procedural violations,
Strubel was not required to allege
“any
additional
harm”
to

7

advance that argument, claiming that
plaintiff’s complaint asserts a “bare
procedural violation” of the FDCPA.
(Def.’s Br. at 5; Def.’s Letter of Dec. 5,
2016 (“Def.’s Suppl. Letter”), ECF No. 25,
at 1.)

statutory
response
obligations
to
consumers.” Id. at 194 (footnote omitted).
Moreover, the plaintiff “concede[d] that she
never had reason to report any billing error
in her credit card statements. Thus, she
[did] not—and [could not]—claim concrete
injury . . . .” Id. at 193.

For the reasons stated below, that
reliance is misplaced, and the Court
concludes that plaintiff has alleged (1) a
substantive violation of the FDCPA
resulting in a concrete and particularized
injury; or, alternatively, (2) a procedural
violation of the FDCPA that poses a
“material risk of harm” to plaintiff’s
statutory interests sufficient to satisfy
Article III’s injury-in-fact requirement.

Read together, Spokeo and Strubel reaffirm the long-standing principle that
Congress can recognize new interests—
either tangible or intangible—through
legislation and confer private rights of action
to protect those interests.
However,
identifying a statutory violation does not
automatically establish injury-in-fact for
purposes of Article III standing. Where a
plaintiff sues to enforce a statutory right, the
test for standing under Spokeo and Strubel is
two-fold. First, a court must determine
whether the purported infraction is
procedural in nature. Second, if so, a court
must determine whether that procedural
violation presents a “material risk of harm”
to the underlying interest(s) that Congress
sought to protect by enacting the apposite
statute. If a plaintiff satisfies this standard,
then she need not allege “any additional
harm”—pecuniary or otherwise—beyond
the procedural violation itself.

1. Substantive Violation
a. Concrete Injury
As a threshold matter, the test articulated
in Spokeo and Strubel and summarized
supra concerns procedural violations of
statutory schemes. In such cases, a court
must determine whether the purported
infraction presents a “risk of real harm” to
concrete statutory interests, Strubel, 842
F.3d at 189 (quoting Spokeo, 136 S. Ct. at
1549), or instead implicates “a procedural
right in vacuo,” id. (quoting Summers, 555
U.S. at 496).

B. Analysis
Defendant argues that plaintiff does not
have standing to assert her FDCPA claims
because she has “failed to allege a concrete
and particularized injury-in-fact” connected
to the IRS Language, which defendant
characterizes as a “voluntary disclosure”
that “merely inform[ed] Ms. Bautz that
DSNB will comply with federal law and the
Internal Revenue Service (IRS) regulations.”
(Def.’s Mem. of Law in Supp. of Mot. to
Dismiss for Lack of Subject Matter
Jurisdiction (“Def.’s Br.”), ECF No. 22-1, at
1.) Defendant invokes Spokeo, and Strubel
in its supplemental authority letter, to

However, as noted, Spokeo did not
disturb the Supreme Court’s prior precedent
recognizing that “Congress may ‘elevat[e] to
the status of legally cognizable injuries
concrete, de facto injuries that were
previously inadequate in law.’” 136 S. Ct.
at 1549 (quoting Lujan, 504 U.S. at 578);
see also id. at 1553 (Thomas, J., concurring)
(“Congress can create new private rights and
authorize private plaintiffs to sue based
simply on the violation of those private
rights. . . . A plaintiff seeking to vindicate a
statutorily created private right need not

8

WL 5339806, at *11-12 (N.D. Cal. Sept. 23,
2016); Prindle v. Carrington Mortg. Servs.,
LLC, No. 3:13-CV-1349-J-34PDB, 2016
WL 4369424, at *8 (M.D. Fla. Aug. 16,
2016). Put differently, there is a meaningful
distinction between the direct violation of a
specific statutory interest that Congress has
recognized—for example, the right to
truthful information in debt collection
communications—and
an
ancillary
procedural infraction that may or may not
materially harm that interest. The former, if
sufficiently alleged, establishes concrete
injury for purposes of Article III, whereas
the latter, under Spokeo and Strubel, requires
a “real risk of harm” to the underlying right
to ensure that the plaintiff does not seek
relief for a “bare procedural violation” that
is not constitutionally cognizable.

allege actual harm beyond the invasion of
that private right.” (citing Havens Realty
Corp. v. Coleman, 455 U.S. 363, 373-74
(1982) (recognizing standing for a violation
of the Fair Housing Act), and Tennessee
Elec. Power Co. v. TVA, 306 U.S. 118, 13738 (1939) (recognizing that standing can
exist where “the right invaded is a legal
right,—one of property, one arising out of
contract, one protected against tortious
invasion, or one founded on a statute which
confers a privilege”))). The Court cited
approvingly Justice Kennedy’s concurrence
in Lujan, which “explained that ‘Congress
has the power to define injuries and
articulate chains of causation that will give
rise to a case or controversy where none
existed before.’” Id. at 1549 (quoting Lujan,
504 U.S. at 580 (Kennedy, J., concurring)).
Moreover, the Court emphasized that, in
determining whether a violation of a
statutorily-protected interest constitutes a de
facto injury, “both history and the judgment
of Congress play important roles,” and
courts must therefore consider (1) whether
the statutory violation bears a “close
relationship to a harm that has traditionally
been regarded as providing a basis for a
lawsuit in English or American courts,” and
(2) Congress’s judgment in establishing the
statutory right.
Id.
Strubel similarly
observed that “Congress’s authority to
create new legal interests by statute, the
invasion of which can support standing, is
beyond question.” 842 F.3d at 188 (citing
Warth, 422 U.S. at 500).

Accordingly, the Supreme Court found
standing in a Fair Housing Act (“FHA”)
case where “‘testers’ . . . who, without an
intent to rent or purchase a home or
apartment, pose[d] as renters or purchasers
for the purpose of collecting evidence of
unlawful steering practices” that evidenced
racial discrimination. Havens, 455 U.S. at
373.
The Court emphasized that
“congressional
intention
cannot
be
overlooked in determining whether testers
have standing to sue” and found that Section
804(d) of the FHA “establishes an
enforceable right to truthful information
concerning the availability of housing.” Id.;
see also id. at 374 n.14 (“Congress’ decision
to confer a broad right of truthful
information concerning housing availability
was
undoubtedly
influenced
by
congressional awareness that the intentional
provision of misinformation offered a means
of maintaining segregated housing.”). Thus,
a “tester who has been the object of
a
misrepresentation
made
unlawful
under § 804(d) has suffered injury in
precisely the form the statute was intended
to guard against, and therefore has standing

Thus, in cases where a plaintiff sues to
enforce a substantive legal right conferred
by statute, she has standing to pursue that
claim without need to allege a “material risk
of harm” because the infringement of that
right constitutes, in and of itself, a concrete
injury.
See, e.g., Church v. Accretive
Health, Inc., 654 F. App’x 990, 995 & n.2
(11th Cir. 2016) (per curiam); Matera v.
Google Inc., No. 15-CV-04062-LHK, 2016
9

U.S.C. § 1692k). Thus, through Section
1692e of the FDCPA, Congress established
“an enforceable right to truthful information
concerning” debt collection practices,
Havens, 455 U.S. at 373, a decision that
“was
undoubtedly
influenced
by
congressional awareness that the intentional
provision of misinformation” related to such
practices, id. at 374 n.14, “contribute[s] to
the number of personal bankruptcies, to
marital instability, to the loss of jobs, and to
invasions of individual privacy,” 15 U.S.C.
§ 1692(a).

to maintain a claim for damages under the
[FHA’s] provisions.”
Id. at 373-74
(emphasis added).
Moreover, the fact that a “tester may
have approached the real estate agent fully
expecting that he would receive false
information, and without any intention of
buying or renting a home, [did] not negate
the simple fact of injury within the meaning
of § 804(d).” Id. at 374. In other words, the
Supreme Court did not require the testers to
allege reliance on the discriminatory
misinformation and consequential tangible
harm, such as pecuniary damages: The mere
act of providing misinformation was, in this
context, sufficient to establish injury-in-fact.
See also Ragin v. Harry Macklowe Real
Estate Co., 6 F.3d 898, 903-04 (2d Cir.
1993) (plaintiffs had standing under the
FHA
to
challenge
discriminatory
advertisements even though the defendants
alleged, and the Second Circuit accepted as
true arguendo, that plaintiffs were not in the
market for housing when they saw those
advertisements).

The Second Circuit has “‘consistently
interpreted the statute with [these]
congressional object[s] in mind,’” and
“because the FDCPA is ‘primarily a
consumer protection statute,’” courts
“must construe its terms ‘in liberal fashion
[to achieve] the underlying Congressional
purpose.’” Avila v. Riexinger & Assocs.,
LLC, 817 F.3d 72, 75 (2d Cir. 2016)
(citations omitted). Accordingly, prior to
Spokeo, the Second Circuit held that “actual
damages are not required for standing under
the FDCPA.”
Miller v. Wolpoff &
Abramson, L.L.P., 321 F.3d 292, 307 (2d
Cir. 2003) (finding that the fact “that
plaintiff did not ever pay any attorneys’ fees
. . . [did] not necessarily suggest that he was
not injured for purposes of his FDCPA
claim, if he [could] show that [defendant
debt collector] attempted to collect money in
violation of the FDCPA”). Other circuit
courts adopted the same position because the
FDCPA “is blind when it comes to
distinguishing between plaintiffs who have
suffered actual damages and those who have
not.” Keele v. Wexler, 149 F.3d 589, 593-94
(7th Cir. 1998) (“Indeed, the FDCPA is
designed to protect consumers from the
unscrupulous antics of debt collectors,
irrespective of whether a valid debt actually
exists.”); see also Baker v. G. C. Servs.
Corp., 677 F.2d 775, 777 (9th Cir. 1982).
Citing this precept, the district court in

As with the FHA, Congress enacted the
FDCPA to remedy a distinct problem:
“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.” 15 U.S.C. § 1692(e). To that end,
in Section 1692e Congress specifically
precluded the “use [of] any false, deceptive,
or misleading representation or means in
connection with the collection of any debt,”
id. § 1692e, and to “accomplish these goals,
the FDCPA creates a private right of action
for debtors who have been harmed by
abusive
debt
collection
practices,”
Benzemann v. Citibank N.A., 806
F.3d 98, 100 (2d Cir. 2015) (citing 15
10

to what she may have done in response to
the Letter or how she felt when she received
it.”).)
Under Miller, making a false
statement in connection with an attempt to
collect a debt is sufficient harm for standing
purposes. In other words, a plaintiff who
receives such a misrepresentation “has
suffered injury in precisely the form
[Section 1692e of the FDCPA] was intended
to guard against,” Havens, 455 U.S. at 37374, and adequately alleging a “false,
deceptive, or misleading representation” that
is materially misleading to the least
sophisticated consumer thus satisfies the
concrete injury component of Article III. 1

Kaff—a decision this Court cited in its oral
ruling denying defendant’s first motion to
dismiss—found standing to assert an
FDCPA Section 1692e claim arising from a
statement similar to the IRS Language
because the plaintiff had a “right under the
FDCPA to be free of abusive debt collection
practices and that right was infringed when
he received a collection letter which
potentially increased the amount of debt
collected by falsely misrepresenting the
law.” 2015 WL 12660327, at *2 n.1.
Here, the Court has already determined
that plaintiff sufficiently alleged a material
violation of the FDCPA based on the IRS
Language because a “belief that tax
consequences [would] stem[] from debt
forgiveness could potentially impact
whether the Plaintiff decides to pay the
lesser amount offered, as opposed to the
entire debt owed or even some other
option.” (Tr. of Aug. 31, 2016 Oral Ruling
at 6:21-7:1.) The Court also found that
“[t]he least sophisticated consumer afraid of
audit may be pressured by any statement
such as one made by the Defendant into
paying more of his debt to avoid the risk of
triggering an IRS audit.” (Id. at 7:16-19).
Thus, defendant is wrong to claim that
plaintiff has not alleged a concrete injury
because she failed to identify “any actual
damages” stemming from the IRS
Language, such as that “she paid the Debt
[that plaintiff owed] or that the Letter
influenced her decision to pay the Debt in
any way.” (Def.’s Br. at 8, 13; see also id.
at 14 (“Ms. Bautz has identified no
economic harm; no particularized damage to
her; no concrete injury in the Complaint.
She pleads that she did not respond to the
Letter, she did not call ARS and she did not
speak to anyone from ARS concerning
alternative arrangements to settle the Debt if
she cannot make the offered payments-as
proposed to her in the Letter. In fact, the
Complaint fails to provide any idea at all as

Further, neither Spokeo nor Strubel
abrogated this principle.
Contrary to
defendant’s view that Spokeo “definitively
holds that a bare statutory violation,
‘divorced from any concrete harm,’ is not
enough to create standing” (Def.’s Br. at
14), the Supreme Court clearly identified
“bare procedural violations, divorced from
any concrete harm” as a species of alleged
injury that would not satisfy Article III
standing, 136 S. Ct. at 1549 (emphasis
added). While the Court said that a plaintiff
does not “automatically satisf[y] the injuryin-fact requirement whenever a statute
grants a person a statutory right and purports
to authorize that person to sue to vindicate
that right,” and that “Article III standing
requires a concrete injury even in

1

To the extent that defendant argues that the IRS
Language allegation is “frivolous” or immaterial
(Def.’s Br. at 9), that argument is foreclosed by this
Court’s August 31, 2016 oral ruling denying
defendant’s 12(b)(6) motion to dismiss. See Johnson
v. Holder, 564 F.3d 95, 99 (2d Cir. 2009) (“The law
of the case doctrine commands that ‘when a court has
ruled on an issue, that decision should generally be
adhered to by that court in subsequent stages in the
same case’ unless ‘cogent and compelling reasons
militate otherwise.’” (citation omitted)).

11

the context of a statutory violation,” id., 2 the
Court recognized, as discussed above, that a
statutory infraction may result in de facto
injury-in-fact where historical practice and
congressional judgment support finding a
substantive right. This Court has already
outlined Congress’s rationale for enacting
the FDCPA and granting a right to be free
from
abusive
debt
practices,
and
“[f]raudulent
and
negligent
misrepresentation have been recognized as
legally cognizable harms under the common
law since at least the publication of the First
Restatement of the Law of Torts.” Prindle,
2016 WL 4369424, at *8 n.9; see also, e.g.,

Neal v. Clark, 95 U.S. 704, 709 (1877)
(discussing the meaning of common-law
fraud).
Moreover, the FDCPA provision at issue
here—15 U.S.C. § 1692e—differs from the
FCRA section discussed in Spokeo, which
“imposes
a
host
of
[procedural]
requirements concerning the creation and
use of consumer reports” that consumer
reporting agencies must follow, 136 S. Ct. at
1545, and the TILA provisions and
regulations at issue in Strubel, which impose
certain mandatory disclosure requirements
on creditors, 842 F.3d at 186-87. Instead of
requiring that debt collectors follow certain
technical specifications, Section 1692e of
the FDCPA, like Section 804(d) of the FHA,
created a “new private right[] and
authorize[d] private plaintiffs to sue based
simply on the violation of [that] private
right[],” Spokeo, 136 S. Ct. at 1553
(Thomas, J., concurring)—namely, the right
to be free from “any false, deceptive, or
misleading representation or means in
connection with the collection of any debt,”
15 U.S.C. § 1692e.

2

Spokeo’s citation to Summers and Lujan for these
propositions is instructive. In Summers, the plaintiffs
asserted they had “suffered procedural injury”
because they were “denied the ability to file
comments on some Forest Service actions and
w[ould] continue to be so denied.” 555 U.S. at 496.
However, the Supreme Court found that “a
procedural right in vacuo . . . is insufficient to create
Article III standing. Only a ‘person who has been
accorded a procedural right to protect his concrete
interests can assert that right without meeting all the
normal standards for redressability and immediacy.’”
Id. (citation omitted). Likewise, in Lujan, the
plaintiffs argued that they had a “procedural right”
under the Endangered Species Act to “file suit in
federal court to challenge [an agency’s] failure to”
consult with the Secretary of the Interior as to the
impact of an agency’s actions on endangered
wildlife. 504 U.S. at 572 (brackets omitted). The
Supreme Court held that the plaintiffs lacked
standing because this was “not a case where plaintiffs
are seeking to enforce a procedural requirement the
disregard of which could impair a separate concrete
interest of theirs,” but rather a suit “raising only a
generally available grievance about government—
claiming only harm to his and every citizen’s
interest in proper application of the Constitution and
laws . . . .” Id. at 572-73.

Accordingly, the majority of postSpokeo decisions that have analyzed
standing under the FDCPA have found that
alleging a “use [of] any false, deceptive, or
misleading representation or means in
connection with the collection of any debt,”
15 U.S.C. § 1692e, establishes a concrete
injury. In Church, 654 F. App’x at 990, the
Eleventh Circuit—which is the only federal
appellate court to have addressed this issue
as of this ruling—analogized the FDCPA to
the FHA claim raised in Havens. The court
found that “[j]ust as the tester-plaintiff had
alleged injury to her statutorily-created right
to truthful housing information [in Havens],
so too has [the plaintiff] alleged injury to her
statutorily-created right to information
pursuant to the FDCPA” by virtue of
pleading that she received a debt collection

As discussed supra and infra, unlike Summers and
Lujan, plaintiff has asserted a violation of a
substantive statutory right that resulted in harm to
her, and not the public generally. Accordingly, she
has pled a concrete and particular injury that supports
Article III standing.

12

consumers from certain harmful practices; it
logically follows that those practices would
themselves constitute a concrete injury.”)
(collecting cases); Irvine v. I.C. Sys., Inc.,
No. 14-CV-01329-PAB-KMT, 2016 WL
4196812, at *3 (D. Colo. July 29, 2016)
(“Plaintiff’s lawsuit does not seek to merely
vindicate an interest in defendant’s
procedural compliance with the FDCPA;
rather, plaintiff’s suit is based on her claim
that defendant violated her substantive rights
under the FDCPA by its conduct and
communications
regarding
plaintiff’s
debt.”). 3

letter that did not contain statutorilymandated disclosures.
Id. at 994.
Notwithstanding that the plaintiff “did not
allege that she suffered actual damages . . .
[but] simply allege[d] that upon receiving
the letter in question, she ‘was very angry’
and ‘cried a lot,’” the Eleventh Circuit held
that the plaintiff “sufficiently alleged that
she has sustained a concrete—i.e., ‘real’—
injury because she did not receive the
allegedly required disclosures.” Id. at 991,
995.
The court distinguished Spokeo,
finding it “inapplicable to the allegations at
hand, because [the plaintiff] has not alleged
a procedural violation. Rather, Congress
provided [the plaintiff] with a substantive
right to receive certain disclosures and [the
plaintiff] has alleged that [the defendant]
violated that substantive right.” Id. at 995
n.2.

In contrast, the district court cases that
defendant cites are not compelling. (Def.’s
Br. at 12-13.) In Chad & Courtney Provo v.
Rady Children’s Hospital - San Diego, No.
15CV00081-JM(BGS), 2016 WL 4625556
(S.D. Cal. Sept. 6, 2016), the court
dismissed an FDCPA claim alleging a
Section 1692e violation because “the only
harm Plaintiffs [pled was] . . . ‘undue stress,
anxiety, and frustration,’” id. at *2, and
“Plaintiffs failed to allege an injury that
‘actually exist[ed]’ and that affected them
‘in a personal and individual way,’” id.
(quoting Spokeo, 136 S. Ct. at 1548). The
court further found that although “Plaintiffs
state[d] in their opposition . . . that
unsophisticated debtors may face harm as a
result of receiving this sort of letter, they did
not plead in the FAC that they themselves
suffered this type of harm.” Id. For the
reasons
discussed
above,
Chad
misapprehends Spokeo’s ruling, which was
limited to procedural violations, and
incorrectly concludes that the plaintiffs were

Several district courts have taken the
same approach, finding that the “FDCPA
unambiguously grants recipients of debtcollection communications . . . a right to be
free from abusive collection practices,” and
that a plausible allegation that the defendant
violated that right through use of a false,
deceptive, or misleading debt collection
communication establishes concrete harm.
Prindle, 2016 WL 4369424, at *11; see also,
e.g., Kaymark v. Udren Law Offices, P.C.,
No. CV 13-419, 2016 WL 7187840, at *7
(W.D. Pa. Dec. 12, 2016) (“Under these
circumstances, [the defendant’s] alleged
violation of [the plaintiff’s] right to truthful
information and freedom from efforts to
collect unauthorized debt constitutes a
concrete injury and satisfies Article III’s
injury-in-fact
requirement.”
(footnote
omitted)); Long v. Fenton & McGarvey Law
Firm P.S.C., No. 115CV01924LJMDKL,
2016 WL 7179367, at *3 (S.D. Ind. Dec. 9,
2016); Linehan v. Allianceone Receivables
Mgmt., Inc., No. C15-1012-JCC, 2016 WL
4765839, at *7-8 (W.D. Wash. Sept. 13,
2016) (“The goal of the FDCPA is to protect

3

In addition, plaintiff’s opposition brief aggregates
the extensive and ever-growing array of district court
decisions adopting this position. (Pl.’s Resp. Br.
Opposing Def.’s Mot. for Dismissal, ECF No. 23, at
24-28.)

13

required to allege actual harm. 4 In addition,
to the extent that Chad found a lack of
particularity, it is distinguishable as
discussed infra. Further, in Jackson v.
Abendroth
&
Russell,
P.C.,
No.
416CV00113RGEHCA, 2016 WL 4942074
(S.D. Iowa Sept. 12, 2016), the court found
that “bare procedural violations of FDCPA
sections 1692g(a) and (b) do not amount to a
concrete injury,” but “recognize[d] that
violations of other FDCPA provisions may
be sufficient on their own to constitute an
Article III injury in fact.” Id. at *11 (citing,
e.g., Bernal v. NRA Grp., LLC, No. 16 C
1904, 2016 WL 4530321, at *4-5 (N.D. Ill.
Aug. 30, 2016) (finding alleged violations of
section 1692e and section 1692f constitute a
concrete injury sufficient for Article III
standing)). Accordingly, Jackson’s “holding
is confined to the context of this case and
the disclosure requirements in section 1692g
of the FDCPA; it does not express judgment
on whether a violation of any other FDCPA
provision constitutes an injury in fact
sufficient for Article III standing.” Id.
Similarly, this Court’s analysis is limited to
Section 1692e and offers no view on
whether other FDCPA provisions confer
substantive statutory rights.

Dolan analyzed standing under a provision
of the Real Estate Settlement Procedures Act
(“RESPA”), 12 U.S.C. § 2605, and found
that the injuries alleged in that case
constituted “bare procedural statutory
violations” that did not satisfy Article III.
Id. at *6. On that basis, it is inapposite
because, as discussed above, the Court
agrees with the weight of post-Spokeo
authority holding that Section 1692e of the
FDCPA, unlike other statutory schemes,
creates a substantive right to be free from
abusive debt communications. 5 See Long,
2016 WL 7179367, at *3 (“While courts
have found that violations of other statutes,
such as the Cable Communications Policy
Act (‘CCPA’) or FCRA, do not create
concrete injuries in fact, violations of the
FDCPA are distinguishable from these other
statutes and have been repeatedly found to
establish concrete injuries.”).
Although
Dolan disagreed with Church’s holding in a
footnote, finding “that the cases cited in
Spokeo as examples of intangible harm
sufficient to confer standing, i.e., Akins and
Public Citizen, involved interests of much
greater and broader significance to the
public than those at issue in Church and,
more relevantly, under Section 2605 of
RESPA,” id. at *6 n.7, this Court is not
bound by that dictum and respectfully
disagrees with Dolan’s characterization of

Finally, defendant relies on Dolan v.
Select Portfolio Servicing, No. 03-CV-3285
PKC AKT, 2016 WL 4099109 (E.D.N.Y.
Aug. 2, 2016), to argue that the IRS
Language constitutes a technical procedural
violation and that Church is inconsistent
with Spokeo. (Def.’s Br. at 8-9; Def.’s
Reply Br., ECF No. 24, at 7-9.) However,

5

For that reason, defendant’s string cite of decisions
finding a lack of standing based on procedural
violations of other statutes (Def.’s Br. at 10-11, 1516) is also largely inapposite. The one FDCPArelated decision in that chain, Tourgeman v. Collins
Financial. Services, Inc., No. 08-CV-1392 CAB
(NLS), 2016 WL 3919633 (S.D. Cal. June 16, 2016),
appeal docketed, No. 16-56190 (9th Cir. Aug. 19,
2016), found no standing for an alleged Section
1692e violation because the plaintiff never even
“received the offending communication” at issue. Id.
at *2. Tourgeman is thus factually dissimilar from
the instant case, where there is no dispute that
plaintiff received the Letter.

4

Insofar as Chad also determined that intangible
harms are insufficient to establish Article III injuryin-fact, such a finding is clearly contrary to Spokeo,
which re-affirmed its precedents Akins and Public
Citizens holding that intangible informational injuries
are constitutionally cognizable. Spokeo, 136 S. Ct. at
1549-50.

14

herself.
Complaint, ¶ 43. The
Complaint also alleges that the Letter
“suggests to the least sophisticated
consumer that failure to pay will get
the consumer into trouble with the
IRS.” Id. at ¶ 44. Therefore,
Plaintiff’s Complaint suffers from a
fundamental lack of particularized
injury to confer standing under
recent Second Circuit and Supreme
Court jurisprudence.

the important rights that Congress
sought to protect through the FDCPA. 6 On
the contrary, this Court finds that Section
1692e of the FDCPA creates a “new legal
interest[] by statute, the invasion of which
can support standing . . . .” Strubel, 842
F.3d at 188.
In sum, the Court finds that plaintiff has
pled a concrete interest for the purpose of
Article III standing based on her receipt of
the IRS Language in the Letter because a
material violation of FDCPA Section 1692e
infringes plaintiff’s substantive statutory
right to be free from abusive debt practices.

Def.’s Suppl. Letter at 2.
This argument is meritless. Like the
plaintiff in Strubel, who, with respect to the
claims for which the Second Circuit found
standing, “sue[d] to vindicate interests
particular to her—specifically, access to
disclosures of her own obligations,” 842
F.3d at 191, plaintiff filed this action based
on the Letter, which was addressed to her,
stated that she had an outstanding debt of
$849.35, and “offer[ed] to settle [her]
account for the reduced amount of
$467.15. That’s a savings of $382.20.”
(Compl. ¶¶ 22-23; id., Ex. A.) Thus, the
Letter affected plaintiff “in a personal and
individual way, and her suit is not a vehicle
for the vindication of the value interests of
concerned bystanders or the public at large.”
Strubel, 842 F.3d at 191 (citing Lujan, 504
U.S. at 560 n.1, and Valley Forge Christian
Coll., 454 U.S. at 473). Insofar as defendant
argues that plaintiff’s “injury is not
particularized because it is not distinct from
that sustained by other members of the
putative class,” that argument is also
foreclosed by Strubel, which held that “Fed.
R. Civ. P. 23(a)(3) conditions class actions
on the claims or defenses of representative
parties being ‘typical of the claims or
defenses of the class.’” Id. at 191 n.10.
Thus, defendant’s “urged interpretation of
particularized injury would render class
actions inherently incompatible with Article
III, a conclusion for which it cites no

b. Particularity
Spokeo also emphasized that Article III’s
injury-in-fact component requires that an
alleged harm be both concrete and
particular, and “[f]or an injury to be
particularized, it must affect the plaintiff in a
personal and individual way.” 136 S. Ct. at
1548. In other words, a plaintiff must
“sustain a grievance distinct from the body
politic, not a grievance unique from that of
any identifiable group of persons.” Strubel,
842 F.3d at 191 n.10 (citing Sierra Club v.
Morton, 405 U.S. 727, 734-40 (1972)).
Here, defendant contends that plaintiff
does not allege that the IRS Language
affected her personally at all.
Instead, and contrary to the recent
law of this Circuit, Ms. Bautz asserts
that a voluntary disclosure of
possible IRS regulation applicability
“tends to give erroneous and/or
incomplete
tax
advice
to
consumers”—not to Ms. Bautz
6

Accordingly, the Court also disagrees with
defendant’s claim that the IRS language did “not
result in an injury comparable to the injury in Havens
. . . .” (Def.’s Reply Br. at 8-9.)

15

injury without ‘need [to] allege any
additional harm beyond the one Congress
has identified.’” Strubel, 842 F.3d at 189
(quoting Spokeo, 136 S. Ct. at 1549).

support in law.” Id.; see also Jacobson v.
Healthcare Fin. Servs., Inc., 516 F.3d 85, 91
(2d Cir. 2008) (noting how the FDCPA
“enlists the efforts of sophisticated
consumers . . . as ‘private attorneys general’
to aid their less sophisticated counterparts,
who are unlikely themselves to bring suit
under the Act, but who are assumed by the
Act to benefit from the deterrent effect of
civil actions brought by others”). 7

As already discussed, the Court
previously concluded that the IRS Language
presents a material risk of injury to
plaintiff’s interests under the FDCPA—
freedom from deceptive debt collection
practices—because a “belief that tax
consequences [would] stem[] from debt
forgiveness could potentially impact
whether the Plaintiff decides to pay the
lesser amount offered, as opposed to the
entire debt owed or even some other
option,” and “[t]he least sophisticated
consumer afraid of audit may be pressured
by any statement such as one made by the
Defendant into paying more of his debt to
avoid the risk of triggering an IRS audit.”
(Tr. of Aug. 31, 2016 Oral Ruling at 6:217:1, 7:16-19.)
Thus, the plaintiff’s
complaint parallels the TILA claims for
which the Second Circuit found standing in
Strubel because the requirement that debt
collectors “may not use any false, deceptive,
or misleading representation or means in
connection with the collection of any debt,”
15 U.S.C. § 1692e, is “a core object of the
[FDCPA],” Strubel, 842 F.3d at 190, which
has the purpose of “eliminat[ing] abusive
debt collection practices by debt collectors,”
15 U.S.C. § 1692(e). Including a materially
false, deceptive, or misleading statement in a
debt collection communication would, by
definition, cause an individual “to lose the
very . . . rights that the law affords him.”
Strubel, 842 F.3d at 190. Accordingly,
“[h]aving
alleged
such
procedural
violations, [plaintiff] was not required to
allege ‘any additional harm’ to demonstrate
the concrete injury necessary for standing,”
id. at 191 (quoting Spokeo, 136 S. Ct. at
1549), and, as noted supra, defendant is
therefore incorrect to claim that plaintiff has
not alleged a concrete injury because she

Therefore, for the foregoing reasons, the
Court finds that plaintiff has met Article
III’s injury-in-fact requirement by alleging a
concrete and particular harm based on a
violation a substantive statutory right.
2. Procedural Violation
Assuming arguendo that the IRS
Language constitutes a procedural violation
of the FDCPA, the Court finds that plaintiff
has met the test set forth in Spokeo and
Strubel because she has “demonstrate[d] a
sufficient ‘risk of real harm’ to the
underlying interest to establish concrete
7

Defendant also argues that the alleged FDCPA
violation at issue was procedural because it included
the IRS Language in the Letter pursuant to bulletins
issued by the Consumer Financial Protection Bureau
(“CFPB”). Defendant claims that “CFPB Bulletins
2013-07 and 2013-08 state that debt collectors may
not misrepresent the consequences and circumstances
of forgiveness of debt, may not misrepresent the
consequences and circumstances of forgiveness of
debt and must take steps to ensure that any claims
that they make about the effect of paying debts are
not deceptive.” (Def.’s Br. at 18.) However, those
bulletins do not impose a mandatory requirement on
defendant to disclose the possible tax consequences
of repaying a debt, and defendant’s decision to
include the IRS Language in the Letter was thus
volitional and not pursuant to a procedural obligation.
Cf. Strubel, 842 F.3d at 186-87 (discussing codified
CFPB
regulations
delineating
procedural
requirements under TILA).
Indeed, defendant
characterized the IRS Language in its brief and at
oral argument as a “voluntary disclosure.” (Def.’s
Br. at 1.)

16

***
Plaintiff is represented by Gus Michael
Farinella and Ryan L. Gentile of the Law
Offices of Gus Michael Farinella P.C., 110
Jericho Turnpike, Suite 100, Floral Park,
New York 11001. Defendant is represented
by Peter G. Siachos and Yevgeny
Roymisher of Gordon & Rees LLP, 90
Broad Street, 23rd Floor, New York, New
York 10004.

failed to identify “any actual damages”
stemming from the IRS Language (Def.’s
Br. at 8, 13-14).
Further, plaintiff’s claim is distinct from
those in Strubel that lacked standing. Unlike
the automatic payment plan challenge—
where it was “undisputed that [the
defendant] did not offer an automatic
payment plan at the time Strubel held the
credit card at issue,” 842 F.3d at 191—there
is no such factual gap here because
defendant does not assert that plaintiff failed
to receive the Letter. Similarly, plaintiff has
showed that defendant “failed to honor its
statutory response obligations to consumers”
by alleging that ARS included a false,
deceptive, or misleading statement in the
Letter, and thus plaintiff’s claim is also
dissimilar from the billing error challenge in
Strubel. Id. at 194 (footnote omitted).
Accordingly, plaintiff has adequately
pled a violation of the FDCPA that poses a
“material risk of harm” to her statutory
interests and has, thus, satisfied the injuryin-fact requirement of Article III. 8
IV. CONCLUSION
For the foregoing reasons, defendant’s
motion to dismiss for lack of subject matter
jurisdiction (ECF No. 22) is denied.
SO ORDERED.

________________________
JOSEPH F. BIANCO
United States District Judge
Dated:

December 23, 2016
Central Islip, NY

8
As discussed supra, the Court also finds this injury
to be sufficiently particular.

17