Coleman v. Charlottesville Bureau of Credits, Inc.

Filing 11

MEMORANDUM OPINION. Signed by District Judge Henry E. Hudson on 04/17/2017. (tjoh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

SUMIKO COLEMAN

Plaintiff,
Civil Action No. 3:17CV147-HEH

V.

CHARLOTTESVILLE BUREAU OF

CREDITS, INC.,
Defendants.

MEMORANDUM OPINION

(Dismissing Case for Lack of Subject-Matter Jurisdiction)
THIS MATTER is before the Court on its own initiative. Plaintiff Sumiko Coleman

("Plaintiff) brings this action against Charlottesville Bureau of Credits, Inc. ("Defendant"),

alleging violations of the FairDebtCollections Practices Act ("FDCPA"), 15 U.S.C. § 1692
et seq. {See generally CompL, ECF No. 1.)
As an affirmative defense. Defendant asserted that Plaintiff lacks standing to bring this

action because she has not suffered a particularized and concrete injury. (Answer 3, ECF No.

4.) Because this calls into question whether the Court has subject-matter jurisdiction over
this matter, the Court ordered the parties to submit memoranda addressing whether Plaintiff
has sufficiently pleaded an injury in fact to confer standing. (ECF No. 6.)

All parties have filed memoranda supporting their respective positions. (ECF Nos. 7,
8, 10.) The Court will dispense with oral argument because the facts and legal contentions

are adequately presented in the materials before it, and oral argument would not aid in the
decisional process. E.D. Va. Local Civ. R. 7(J).
For the reasons that follow, the Court finds that it lacks subject-matter jurisdiction and

therefore must dismiss this action.
I. BACKGROUND

Plaintiff begins her one-count Complaint by averring that "[o]n information and belief,
on a date better known to Defendant, Defendant began collection activities on an alleged

consumer debt from the Plaintiff." (Compl. f 7.) The Complaint notes that this alleged debt

was incurred as a financial obligation that was primarily for personal, family, or household

purposes and that Commonwealth Lab Consultants was the original creditor. (Jd. ^ 8.)
Though the timing is unclear from the face of the Complaint, at some point Defendant
reported the debt on Plaintiffs credit report. {Id. T| 10.)
Plaintiff sent a letter to Defendant on October 28, 2016, disputing the debt. (Id. H11.)

Several months later, on January 10, 2017, Plaintiffexamined her creditreport and found that
Defendant had re-reported the debt, but had not listed it as being "disputed by consumer."

{Id. f 12.) As a result. Plaintiffsummarily alleges thatshe "has been damaged" and that she
"is entitled to damages in accordance with the FDCPA." {Id.

13, 16.)

However, at no point in her Complaint does Plaintiffplead with any degree of

specificity how she has allegedly been damaged.'
II. LEGAL FRAMEWORK

A bedrock constitutional principle of our Federal Government is the division of

powers between its branches. As such, it is well settled that judicial power is limited to the
' In herresponse briefonstanding, Plaintiff attempts to bolster herComplaint by stating that"she has received
a lowercredit score impact due to the failure of the Defendant to properly update her report" and that
"[c]urrentissuers of creditto [Plaintiff] constantly peak at her creditto determine if they should continue to
extend credit lines that she currently has." (PL's Resp. to Defs Mem. on Standing 4, ECF No. 8.) She goes
on to note "that the lower credit score impacts [her] in multiple facts [^/c] includingdenial of credit and
increased cost of insurance policies and applicable interest rates on creditcards and loans she might own."
{Id.) From the face of her Complaint, however, Plaintiffhas simply failed to set out any facts that support her
allegation that she has suffered a concrete harm as a result of Defendant's conduct.

extent that federal courts may exercise jurisdiction only over "cases" and "controversies."

U.S. Const, art. Ill, §2; Lujan v. Defenders of Wildlife, 504 U.S. 555, 559 (1992). Thus,

subject-matter jurisdiction requires ajusticiable case or controversy within the meaning of
Article III of the United States Constitution. See Allen v. Wright, 468 U.S. 737, 750-51

(1984), abrogatedon othergrounds by Lexmark Int'I, Inc. v. Static Control Components,
Inc., 134 S. Ct. 1377 (2014). Standing constitutes one component of justiciability. Lujan,

504 U.S. at 560. Whether a plaintiffhas standing presents a "threshold question in every

federal case, determining the power of the court to entertain the suit." Warth v. Seldin, 422
U.S. 490, 498 (1975). "The objection that a federal court lacks subject-matter jurisdiction

may be raised by a party, or by a court on its own initiative, at any stage in the litigation."
Arbaugh v. Y&HCorp., 546 U.S. 500, 506 (2006) (internal citation omitted).

The Supreme Court has established that the "irreducible constitutional minimum" of
standing includes three elements: (1) an injury-in-fact; (2) a causal connection between the

injury and the alleged misconduct; and (3) a likelihood that the injury will be redressed by a
favorable decision. Lujan, 504 U.S. at 560-61 (citations and quotation marks omitted).
Because Plaintiff seeks to invoke this Court's jurisdiction, she bears the burden of

establishing all three elements. Id. at 561. "Where, as here, a case is at the pleading stage,
the plaintiffmust 'clearly . .. allege facts demonstrating' each element." Spokeo, Inc. v.
Robins, 136 S. Ct. 1540, 1547 (2016), as revised

24, 2016) (quoting Warth, 422 U.S. at

518).

In Spokeo, the Supreme Court reiterated the basic tenets of the standing doctrine. Id.
at 1547. It noted that to satisfy the injury-in-fact requirement, a plaintiff must show "'an

invasion of a legally protected interest' that is 'concrete and particularized' and 'actual and

imminent, not conjectural or hypothetical.'" Id. at 1548 (citing Lw/aw, 504 U.S. at 560).
To satisfy the particularization requirement, the plaintiff"must allege a distinct and
palpable injury to himself." Warth, 422 U.S. at 501 (citations omitted). The injury must

"affectthe plaintiffin a personal and individual way." Lujan, 504 U.S. at 560 n.l. Claims
asserting "'generalized grievance[s]' shared in substantially equal measure by all or a large
class of citizens ... normally do[] not warrant exercise ofjurisdiction." Warth, 422 U.S. at
499 (citations omitted).

Standing's concreteness requirement demands that an injury be real, not abstract.

Spokeo, 136 S. Ct. at 1548. However, it is possible for an intangible harm to be concrete.^
Id. at 1549. When determining whether such intangible harms are sufficiently concrete to

satisfy Article Ill's requirements, Congress' "judgment is ... instructive and important." Id.
In creating statutory rights of action, "Congress may 'elevat[e] to the status of legally

cognizable injuries concrete, defacto injuries that were previously inadequate in law.'" Id.
(quoting Iwyaw, 504 U.S at 578) (alteration in original). However, "Congress' role in

identifying and elevating intangible harms does not 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." Id. The Supreme Court has
made clear that "Article III standing requires a concrete injury even in the context ofa
statutory violation.'' Id. (emphasis added).

When a plaintiff alleges a statutory violation, she usually must plead an additional
^Examples of these intangible injuries include libel, slander, and violations of theconstitutional rights to free
speech and free exercise. See Spokeoy 136 S. Ct. at 1549(citing Pleasant Grove City v. Summum^ 555 U.S.
460 (2009); Church ofLukumi BabaluAye, Inc. v. City ofHialeah, 508 U.S. 520 (1993); Restatement (First) of
Torts §§ 569, 570).

injury in order to satisfy the concreteness requirement. Concreteness cancertainly be
satisfied by alleging a harm—either tangible or intangible—^which has already occurred or is

continuing to occur. But concreteness can also be satisfied where the plaintiff faces a "risk of
real harm" likely to occur in the future. Id.

The Supreme Court has noted that in some circumstances, however, merely pleading
"the violation of a procedural right granted by statute" may be sufficient to satisfy
concreteness. Id. This occurs in situations where the legislature has codified causes of action

with intangible harms where recovery was long permitted at common law. Id. (citing
Restatement(First) of Torts §§ 569 (libel), 570 (slanderper

) (1938); Fed. Election

Comm'n v. Akins, 524 U.S. 11, 20-25 (1998) (access to public information); Pub. Citizen v.

U.S. Dep't ofJustice, 491 U.S. 440, 449 (1989) (access to public information)). "[A] plaintiff
in such a case need not allege any additional harm beyond the one Congress has identified."
Id.

However, absent this narrow exception where Congress has codified a common law

intangible injury, standing only exists for a statutory violation where the plaintiffhas also

alleged an additional concrete harm.^ For example, the Supreme Court noted in Spokeo that a
consumerreporting agency may fail to provide the statutorily required notice to the user of
consumer information, even if that information is entirely accurate. Id. at 1550. Or, the

agency might provide some wholly inaccurate, yet benign, information, such as an incorrect
zip code. Id. While both of these situations constitute statutory violations, the "victim" has
no standing because the conduct does not "cause harm or present any material risk of harm."
^Though the Supreme Court in Spokeo highlighted this requirement specifically within the context of the
FCRA, its analysis was not limited to causes of action arising under that Act. The Court finds that the
Supreme Court's reasoning is readily applicable to cases alleging violations of the FDCPA as well.

Id.

It is with these principles in mind that the Court conducts its analysis.
III. DISCUSSION

The entirety of Plaintiff s Complaint amounts to an allegation that Defendant violated
various provisions of the FDCPA by failing to list her account as "disputed by consumer"

when it reported the debt on her credit report in January 2017. (See generally Compl.)
However, it appears to be undisputed that the Complaint is devoid of any reference to

Plaintiffsuffering any actual harm as a result of these violations. But see supra note 1

(detailing Plaintiffs attempt to amplify her Complaint in her response briefon standing).
Therefore, the Court concludes that Plaintiff has failed to allege any facts to support an

assertion that she suffered a "concrete and particularized" harm that is "actual and imminent,

not conjectural or hypothetical" to confer Article III standing. Lujan, 504 U.S. at 560.
Absent such an allegation, the next step in the Court's inquiry is to determine whether
Plaintiff has sufficiently pleadedthat she faces a "risk of real harm" that is likely to occur in
the future. Spokeo, 136 S. Ct. at 1549. Despite the fact that she made no allegation to this
effect in her Complaint, Plaintiff has attempted to bolster her position in this regard in her
response brief on standing.

Plaintiff contends that "the failure to communicate that a disputed debt is disputed ...

presents a risk of harm to the consumer sufficient to create Article III standing." (PL's Resp.
to Def's Mem. on Standing 11.) To support this proposition. Plaintiff cites two cases—
Wilhelm v. Credico Inc., 519 F.3d 416 (8th Cir. 2008), and Gomez v. Portfolio Recover
Assocs. LLC, No. 15C4499, 2016 WL 3387158 (N.D. 111. June 20, 2016)—which emphasize

the potential impact that omitting a proper notation can have on a debtor when a debt

collector reports a debt to a credit bureau with knowledge thatthe debt is disputed. While the
Court recognizes both the importance of this requirement under the FDCPA and the possible
effect that a violation could have on a consumer's credit score, such a violation does not

mean ipsofacto that the debtor is likely to suffer a future risk of harm.
The Court finds that the Fourth Circuit's recent decision in Beck v. McDonald, 848

F.3d 262 (4th Cir. 2017), adds instructive clarity to the "risk of future harm" analysis. The
teachings of Beck are subtle but substantive in assessing the harm necessary to support
subject-matter jurisdiction.

In Beck, the court consolidated two cases that involved data breaches at the Dorn

Veterans Affairs Medical Center ("Dom VAMC") in Columbia, South Carolina. Id. at 267-

68. The plaintiffs alleged that both data breaches constituted violations of the Privacy Act.
Id. at 266-68. However, they did not "allege that Dorn VAMC's violations of the Privacy
Act alone constitute[d] an Article III injury-in-fact." Id. at 271 n.4. Rather, the plaintiffs
asserted that they suffered concrete injury from the future risk of harm of identitytheft. Id. at
266-61,

The Fourth Circuit found that the plaintiffs speculative allegations were "insufficient
to establish a 'substantial risk' of harm" necessary to show concrete injury. Id. at 275.

Consequently, it held that plaintiffs' abstract claim of harm was inadequate to confer
standing. Id. at 276-67,

The Court concludes that Plaintiff has attempted to make similarly speculative claims

in her response brief on standing and has pleaded no facts in her Complaint to support any
reasonable inference that she faces an impending risk of actual harm. Thus, the Court finds
that Plaintiff cannot claim standing on this ground, either.

Therefore, the lone remaining avenue for Plaintiff to assert standing is if she can

demonstrate that the statutory provisions alleged to have been violated in her Complaint are

of the type where the legislature has codified causes of action with intangible harms where
recovery was long permitted at common law. See Spokeo, 136 S. Ct. at 1549.

"In determining whether an intangible harm constitutes injury in fact, both history and

thejudgment of Congress play important roles." Id. Therefore, "it is instructive to consider
whether an alleged intangible harm has a close relationship to a harm that has traditionally

been regarded as providing a basis for a lawsuit in English or American courts." Id.
When Congress enacted the FDCPA, it endeavored "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." 15 U.S.C. §

1692(e). In doing so, Congress specifically stated that "the failure to communicate that a
disputed debt is disputed" was conductthat violated the Act. 15 U.S.C. § 1692e(8).
However, as the Supreme Court held in Spokeo, "Congress' role in identifying and

elevating intangible harms does not mean that a plaintiffautomatically satisfies the injury-infact requirement whenever a statute grants a person a statutory right and purports to authorize
that person to sue to vindicate that right." Spokeo, 136 S. Ct. at 1549; see also Nicklaw v.
Citimortgage, Inc., 839 F.3d 998, 1003 (11th Cir. 2016) ("[T]he requirement of concreteness
under Article III is not satisfied every time a statute creates a legal obligation and grants a

private right of action for its violation. A plaintiff must suffer some harm or risk of harm

from the statutory violation to invoke the jurisdiction of a federal court." (internal citation
omitted)). Thus, the Supreme Court made clear that "Article III standing requires a concrete

injury even in the context ofa statutory violation^ Spokeo, 136 S. Ct. at 1549 (emphasis
added).

Nevertheless, Plaintiff contends that "a violation of the FDCPAper se constitutes a

concrete injury enough to invoke Article III standing." (PL's Resp. to Def.'s Mem. on

Standing 7 (citing Clark v. Trans Union, LLC, Civil Action No. 3:15cv391, 2017 WL
814252, at *2 (E.D. Va. Mar. 1, 2017) ("The violation of a procedural right granted by statute
can be sufficient in some circumstances to establish an injury in fact." (emphasis added,

internal quotation marks and citation omitted))).) In support of this broad assertion. Plaintiff
cites a recent decision out of the Alexandria Division of this District, Biber v. Pioneer Credit

Recovery, Inc., Case No. l:16-cv-804, 2017 WL 118037 (E.D. Va. Jan. 11, 2017).

The plaintiffs in Biber brought a putative class action against a defendant debt
collector, asserting that it had violated the FDCPA by sending letters to debtors that mislead
them into believing thattheirwages were about to be garnished if they did not paytheir
student loans. Id. at *1-2. When ruling on the defendant's motion to dismiss pursuant to

Federal Rule of Civil Procedure 12(b)(1), the Biber court found that, "[n]ot surprisingly, in

the wake of Spokeo, the overwhelming majority of courts have held that FDCPA claims
similar to Biber's are sufficient to satisfy Article Ill's requirement that a plaintiff establish an
injury in fact." Id. at *3 (emphasis added).

And so, far from issuing a sweeping holding that all "violation[s] of the FDCPAper se

constitute^ a concrete injury," (PL's Resp. to Def.'s Mem. on Standing 7), the Biber court in

actuality found only that outrageous behavior similar to that complained of in that case was of
the type that other courts have found sufficient to conferArticle III standing. Plaintiffhas not
alleged such egregious conduct in her Complaint. Therefore, upon review, the Court

concludes that a more comparable case to the one at hand is Higgens v. Trident Asset Mgmt.,
Civil Action No. 16-24035, 2017 WL 1230537 (S.D. Fla, Mar. 28, 2017).

In Higgens, the district court was confronted with a virtually identical FDCPA

complaint to the one Plaintiff has filed in this action."^ {Compare CompL, with Reply Br. Ex.
A, ECF No. 10-1 (a copy of the Higgens complaint).) Finding that the plaintiffhad failed to
establish that he had standing to bringhis claim, the courtreiterated that "[a] plaintiffseeking

to vindicate a public right embodied in a federal statute ... must demonstrate that the
violation of that public right has caused him a concrete, individual harm distinct from the

general population." Higgens, 2017 WL 1230537, at *2 (quoting

136 S. Ct. at 1553

(Thomas, J., concurring)) (ellipses in original). In other words, "'absent some showing that
the plaintiffhas suffered a concrete harm particular to him,' the plaintiffcannot enforce a
violation of the statute in his own name." Id. (quoting Spokeo, 136 S. Ct. at 1553 (Thomas,
J., concurring)).

Similar to Plaintiff in this case, Higgens only statedthat he "ha[d] been damaged" and

that he "[was] entitled to damages" in his complaint. (Reply Br. Ex. A, at

15, 18 .) After

considering the motion to dismiss, the Higgens court concluded that these allegations, alone,
were insufficient to demonstrate that he had standing to bring his suit, noting that "[f]rom the

face of the complaint, there is simply no indication that Higgens actually suffered any harm
as a result of [the defendant's] alleged statutory violation." Id.

The Court finds this reasoning convincing and readily applicable to the present

^The Court also observes that Plaintiffs counsel has filed three other nearly carbon copy Complaints in this
District. See Taylor v. MedicalData Sys., Inc., Civil Action No. 3:17-cv-263; Gathers v. CAB Collection
Agency, Civil Action No. 3:17-cv-261;
v. R&B Corp. ofVa., Civil Action No. 2:17-cv-107. Of those
three, one is awaiting determination on a motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(1) and the remaining two are awaiting return of service.
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Complaint, Moreover, the Court finds that the Fourth Circuit's reasoning in Beck is
controlling. In that case, the court recognized Spokeo's holding that "some violations of the

[FCRA], though 'intangible' harms, may still be sufficiently 'concrete' to establish an Article
III injury-in-fact." Beck, 848 F.3d at 271 n.4. But the court did not even suggest that the
theft of the plaintiffs' personal information resembled a common law invasion of privacy
sufficient to create a concrete injury merely by alleging a statutory violation. Seegenerally
id.

Similarly, in this case, the Court finds that alleging a statutory violation evolving fi-om
Defendant's failure to list an account as disputed, without more, is not the type of common

law invasion of a right that is sufficient to create the type of concrete injury envisioned by

Spokeo. Consequently, the Court concludes thatthe FDCPA violations which Plaintiff
alleges do not, by themselves, constitute an injury in fact. Those statutory rights are not the
type for which "the law has long permitted recovery." Spokeo, 136 S. Ct. at 1549.
In summary, the Court determines that Plaintiffs mere allegation of a bare statutory
violation in this case is insufficient to confer standing. This does not mean that Plaintiff

could never have standing to bring an action to recover for the FDCPA violations which she

alleges. But she must plead a concrete harm in order to satisfy the injury-in-fact requirement
of Article III.
IV. CONCLUSION

Based on the foregoing, this case will be dismissed without prejudice.

An appropriate Order will accompany this Memorandum Opinion.

II

The clerk is directed to send a copy of this Memorandum Opinion and the
accompanying Order to all counsel of record.

/s/

Henry E. Hudson
United States District Judge

Date:lVpr:| i1^7on
Richmond, VA

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