Holmes v. Contract Callers, Inc.
Filing
15
MEMORANDUM OPINION. Signed by District Judge Henry E. Hudson on 6/22/2017. (jsmi, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
OLIVER HOLMES,
Plaintiff,
Civil Action No. 3:17cvl48-HEH
V.
CONTRACT CALLERS, INC.,
Defendant.
MEMORANDUM OPINION
(Dismissing Case for Lack of Subject-Matter Jurisdiction)
THIS MATTER is before the Court on its own initiative. On February 20, 2017,
Plaintiff Oliver Holmes ("Plaintiff) filed his Complaint alleging that Defendant Contract
Callers, Inc. ("Defendant") violated 15 U.S.C. § 1692, etseq., commonly known as the
Fair Debt Collections Practices Act ("FDCPA"). (ECF No. 1.)
On March 17,2017, Defendant filed an Answer to the Complaint. (ECF No. 3.)
As an affirmative defense. Defendant asserted that Plaintiff lacks standing to bring this
action. (Id at 3.) Because this called into question subject-matter jurisdiction, the Court
ordered the parties to submit memoranda addressing Plaintiffs standing. (ECF No. 6.)
Pursuant to the Court's Order, Defendant filed a memorandum on May 15, 2017,
arguing that this Court lacks subject-matter jurisdiction because Plaintiff has suffered no
injury and thus has no standing. (ECF No. 13.) In Plaintiffs response, filed on May 28,
2017, he argues that there are "sufficient facts to prove particularized and concrete
injuries to satisfy Article III standing." (ECF No. 14, at 2.)
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
materially aid in the decisional process. E.D. Va. Local Civ. R. 7(J).
For the reasons stated herein, the Court finds that it lacks subject-matter
jurisdiction and therefore will dismiss Plaintiffs Complaint without prejudice.
I. BACKGROUND
Plaintiff begins his one-count Complaint by asserting 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. K7.) The Complaint notes that this
alleged debt was incurred as a financial obligation that was primarily for personal, family
or household purposes, and that "10 Dominion Resources, Inc." was the original creditor.
{Id. ^ 8.) Though it is unclear when, at some point Defendant reported the debt on
Plaintiffs credit report. (Id.
10.)
Plaintiff sent a letter to Defendant on September 15,2016, disputing the debt. {Id.
nil.) Approximately two and a half months later, on November 28,2016, Plaintiff
examined his credit report and found that Defendant had re-reported the debt, but had not
listed it as being "disputed by consumer." {Id. H 12.) As a result, Plaintiff summarily
alleges that he "has been damaged" and that he "is entitled to damages in accordance
with the FDCPA." {Id
13, 16.)
However, at no point in his Complaint does Plaintiff specify how he has allegedly
been damaged.^
11. LEGAL STANDARD
Structurally, our Constitution divides the Federal Government into three discrete
branches, each with specifically defined powers. As such, it is well settled that judicial
power is limited to the 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 a justiciable 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), abrogated on other grounds by LexmarkInt'l,
Inc. V. Static Control Components, Inc., 134 S. Ct. 1377 (2014). Standing constitutes one
component ofjusticiability. Lujan, 504 U.S. at 560. Whether a plaintiff has 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
^In his briefon standing. Plaintiffattempts to bolster his Complaint by stating that he "has
received a lower credit score impact due to the failure of the Defendant to properly update his
report," that the lower credit score "gives a false and negative picture of his credit to anyone that
would pull his credit during this time period," and that "[cjurrent issuers of credit to [Plaintiff],
constantly peak at his credit to determine if they should continue to extend the credit lines that he
currently has." (PL's Resp. Def.'s Mem. on Standing 3—4, ECF No. 14.) He goes on to note
"that the lower credit score impacts [Plaintiff] in multiple facets including denial of credit and
increased cost of insurance policies and applicable interest rates on credit cards and loans he
might own." {Id. at 4.) Because the Court's analysis is confined to the facts as pleaded in the
Complaint, it cannot consider these possible credit-related injuries that Plaintiff raises for the
first time in his brief.
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its own initiative, at any stage in the litigation." Arbaugh v. Y&H Corp., 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, he bears the
burden of establishing all three elements. Id. at 561. "Where, as here, a case is at the
pleading stage, the plaintiff must 'clearly ... allege facts demonstrating' each element."
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016), as revised (May 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 {ciimgLujan, 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 "affect the plaintiff in 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
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, he usually must plead an additional
injury in order to satisfy the concreteness requirement. Concreteness can certainly be
satisfied by alleging a harm—either tangible or intangible—^whichhas already occurred
Examples of these intangible injuries include libel, slander, and violations of the constitutional
rights to free speech and free exercise. See Spokeo, 136 S. Ct. at 1549 (citing Pleasant Grove
City V. Summum, 555 U.S. 460 (2009); Church ofLukumi Babalu Aye, Inc. v. City ofHialeah,
508 U.S. 520 (1993); Restatement (First) of Torts §§ 569, 570).
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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 (slanderse)
(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] plaintiffin 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 violationwhere the plaintiff has
also alleged an additional concrete harm. For example, the Supreme Court noted
in Spokeo that a consumer reporting 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." Id.
III. ANALYSIS
The entirety of Plaintiffs Complaint amounts to an allegation that Defendant
violated various provisions of the FDCPA by failing to list his account as "disputed by
consumer" when it reported the debt on his credit report in November 2016. (See
generally Compl.) However, conspicuously absent is any allegation that Plaintiff
suffered any actual harm from these violations. Consequently, he has failed to plead that
he suffered a sufficiently "concrete and particularized" harm that is "actual and
imminent, not conjectural or hypothetical" to confer Article III standing. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992).
Without such an allegation, the next step in the Court's inquiry is to determine
whether Plaintiff has sufficiently pleaded that he faces a "risk of real harm" that is likely
to occur in the future. Spokeo, 136 S.Ct. at 1549. Despite the fact that he made no
allegation to this effect in his Complaint, Plaintiff has attempted to bolster his position in
this regard.
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. Def.'s Mem. on Standing 11.) To support this proposition. Plaintiff cites one
published case and one unpublished case from the Northern District of Illinois—^both of
which are currently on appeal to the Seventh Circuit—and one unpublished case from the
District of Maryland. (Id. at 7-9 (citing Bowse v. Portfolio Recovery Assocs., LLC, 218
F.Supp.Sd 745 (N.D. 111. 2016); Evans v. Portfolio Recovery Assocs., No. 15C-4498,
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2016 WL 6833930 (N.D. 111. Nov. 20,2016); Allah-Mensah v. Law Office ofPatrick M.
Connelly, P.C, No, PX-16-1053, 2016 WL 6803775 (D. Md. Nov. 17, 2016)).) While
these cases are informative, they are not binding on this Court, especially in light of the
Fourth Circuit's recent decision in Beck v. McDonald, 848 F.3d 262 (4th Cir. 2017).
In Beck, the court consolidated two cases involving data breaches at the Dom
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 Dom 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 a concrete injury from the future risk of
identity theft. Id. at 266-67.
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.
In this case, the Court concludes that Plaintiff has attempted to make similarly
speculative claims and has pleaded no facts in his Complaint to support any reasonable
inference that he faces an impending risk of actual harm. Thus, the Court finds that
Plaintiff cannot claim standing on this ground, either.
Therefore, the final step in the Court's inquiry is to determine whether the
statutory provisions Plaintiff alleges to have been violated are the type where Congress
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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 the judgment 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. Plaintiff does not suggest "a common law analogue" for his alleged FDCPA
injury, and there seems to be "no traditional right of action in common law that is
comparable." Dreher v. Experian Info. Sol, Inc., 856 F.3d 337, 345 (4th Cir. 2017).
The Fourth Circuit's recent decision in Dreher does not alter this Court's analysis.
In Dreher, the plaintiff was associated with a delinquent credit card account listed on his
credit report under the name of "Advanta." Id. at 340. Unbeknownst to the plaintiff,
another entity. CardWorks, had acquired Advanta and decided to continue servicing
Advanta's accounts using Advanta's name. Id. at 341. As a result of CardWorks' failure
to use its own name when reporting the Advanta accounts, the plaintiff alleged that "he
suffered a cognizable 'informational injury' because he was denied 'specific information'
to which [he was] entitled under the FCRA." Id. at 345.
After determining that there was no common law analogue to Dreher's alleged
FCRA violation, the Fourth Circuit suggested that he may have nonetheless suffered a
concrete injury if "he [was] denied access to information required to be disclosed by
statute, and he 'suffer[ed], by being denied access to that information, the type of harm
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Congress sought toprevent by requiring disclosure.'" Id. (quoting Friends ofAnimals v.
Jewell, 828 F.3d 989, 992 (D.C. Cir. 2016)). The court concluded, however, that the
harm which Dreher allegedly suffered was not the type which Congress sought to prevent
in enacting the FCRA. Id. at 346.
Similarly in this case, Plaintiff claims that he "has been damaged" by Defendant's
actions. (Compl.
14,17.) But his Complaint fails to indicate that he suffered "the type
of harm Congress sought to prevent by" enacting the FDCPA. Dreher, 856 F.3d at 345.
In fact, the Complaint fails to identify what Plaintiffs harm is at all. Therefore, the Court
must conclude that Plaintiffs injury is not an intangible harm sufficient to confer
standing under either Spokeo or Dreher.
IV. CONLUSION
In conclusion. Plaintiffs mere allegation of a failure to disclose the disputed status
of his debt is insufficient to confer constitutional standing because he failed to plead a
risk of harm and did not "identify either a common law analogue or a harm Congress
sought to prevent." Dreher, 856F.3dat346, Plaintiff is thus "left with a statutory
violation divorced from any real world effect." Id. This does not mean that Plaintiff
could never have standing to bring an action to recover for the FDCPA violations that he
alleges. But he must plead a concrete harm in order to satisfy the injury-in-fact
requirement of Article III.
Therefore, the Court will dismiss Plaintiffs Complaint (ECF. No. 1) without
prejudice.
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An appropriate Order will accompany this Memorandum Opinion.
'VlM"
1/
Henry E. Hudson
Date: Ton&
United States District Judge
PUchmond, Virginia
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