Hsu v. Enhanced Recovery Corporation, LLC et al

Filing 24

ORDER DENYING 6 Motion to Remand to State Court. Signed by Judge Robert Pitman. (dm)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
JENNIFER HSU,
Plaintiff,
v.
ENHANCED RECOVER CO., LLC, and
PHILADELPHIA INDEMNITY
INSURANCE COMPANY,
Defendants.

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1:17-CV-128-RP

ORDER
Before the Court is Plaintiff’s Motion to Remand. (Dkt. 6). Having considered the pleadings,
the parties’ briefing, and the relevant law, the Court issues the following order.
Plaintiff Jennifer Hsu filed this action against Defendants Enhanced Recovery Co., LLC,
(“ERC”) and Philadelphia Indemnity Insurance Company in Travis County court on January 16,
2016. Plaintiff alleged in her state court petition that she had incurred personal debt that she was
unable to repay. This debt was later assigned or transferred to ERC, a debt collector.
ERC allegedly sent a collection letter to Plaintiff on or around September 16, 2016. The
letter included the name of the original creditor, an account number, and a balance due. However,
according to Plaintiff, the letter did not provide ERC’s true legal name—Enhanced Recovery
Corporation, LLC—but instead featured only ERC’s initials. Plaintiff asserts that ERC is not
registered to use its initials in connection with its debt-collection activity in the State of Texas. On
these facts, Plaintiff brings claims under the federal Fair Debt Collection Practices Act, 15 U.S.C.
§§ 1692 et seq., and similar state laws. Relevant to the matter under consideration is Plaintiff’s federal
claim under 15 U.S.C. § 1692e(14), which provides that it is unlawful for a debt collector to use any
name other than its true legal name in connection with the collection of a debt. Defendants removed

the action to this Court on February 21, 2017, and Plaintiff filed the instant motion to remand the
next day.
The sole basis for Plaintiff’s motion to remand is her failure to allege any injury in fact in her
complaint. Plaintiff relies on Spokeo, Inc. v. Robins, 136 S. Ct. 1340 (2016), to argue that her lack of
injury undermines her Article III standing and, resultantly, the Court’s jurisdiction. Plaintiff is
correct that an injury in fact is part of the “irreducible constitutional minimum” of standing. Spokeo,
136 S. Ct. at 1548. Thus, if Plaintiff has suffered no injury in fact, the Court is presented with no
Article III case or controversy and lacks jurisdiction to adjudicate Plaintiff’s claims. See
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 (2006). To determine whether there is a sufficient
injury alleged, the Court looks at Plaintiff’s state court petition as it existed at the time of removal.
Louisiana v. Am. Nat’l Prop. & Cas. Co., 476 F.3d 633, 636 (5th Cir. 2014).
Opposing remand, Defendants first assert that jurisdiction is proper because the Court has
“original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United
States.” See 28 U.S.C. § 1331. This is an incomplete statement. The Court has jurisdiction over all
cases and controversies arising under the federal Constitution, laws, and treaties. U.S. Const. art. III, § 2.
There is no dispute that Plaintiff has raised a federal claim; the inquiry here is whether that claim
presents a justiciable case or controversy under Article III.
Defendants next argue that Plaintiff’s allegations suffice to establish an injury in fact under
Spokeo. The Court agrees. The Spokeo Court held that a plaintiff could not “allege a bare procedural
violation, divorced from any harm, and satisfy the injury-in-fact requirement of Article III.” Id. at
1549. The Court recognized, however, that there were circumstances in which a plaintiff need not
allege any additional harm beyond the violation of a statute, such as when the violation poses a risk
of real harm. Id. Since Spokeo, at least two district courts have sustained suits under § 1962e(14)
without allegations of harm beyond a violation of the statute. See Velez v. Healthcare Revenue Recovery

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Grp., LLC, 1:16CV377, 2017 WL 1476144, at *2–3 (M.D.N.C. Apr. 24, 2017); Tang v. Med. Recovery
Specialists, LLC, No. 11 C 2109, 2011 WL 6019221, at *2–3 (N.D. Ill. July 7, 2011).
This Court concurs with those others finding that a violation of § 1962e(14) presents a
sufficient injury in fact under Spokeo. Where debt collectors make certain representations to debtors,
§ 1962e(14) entitles the debtors to receive certain information, i.e., the true legal name of the
collecting entity. The Supreme Court has held in another context that the inability of an individual to
obtain information to which he is statutorily entitled constitutes a sufficiently concrete injury in fact.
F.E.C. v. Akins, 524 U.S. 11, 21 (1998). “There is no reason to doubt . . . that the information would
help” a debtor evaluate whether the debt collector runs a legitimate operation or a fraudulent one,
whether its claim to her debt is valid, and how she might respond. See id. In other words, the statute
is directed at a “real risk of harm,” even if the harm stemming from a violation may be difficult to
measure. See Spokeo, 136 S. Ct. at 1550. Accordingly, the Court finds that no additional harm beyond
a violation of § 1962e(14) must be alleged to satisfy the injury-in-fact requirement of Article III.
Plaintiff has alleged that Defendant has violated § 1962e(14), the Court therefore concludes
that a sufficient injury in fact appears in her petition. Because the Court is satisfied that no other
jurisdictional defect is present, Plaintiff’s Motion to Remand is DENIED. (Dkt. 6).
SIGNED on July 10, 2017.

ROBERT PITMAN
UNITED STATES DISTRICT JUDGE

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