Burton v. Portfolio Recovery Associates, LLC et al
ORDER signed by Judge William C Griesbach on 9/3/2021 granting 20 Motion for Partial Summary Judgment. The case is dismissed for lack of subject matter jurisdiction. The Clerk is directed to enter judgment dismissing the case without prejudice. (cc: all counsel)(Griesbach, William)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
JOHN H. BURTON,
Case No. 20-C-222
PORTFOLIO RECOVERY ASSOCIATES, LLC, and
RAUSCH, STURM, ISRAEL, ENERSON & HORNIK, LLP,
DECISION AND ORDER GRANTING DEFENDANTS’ MOTION FOR PARTIAL
Plaintiff John Burton brought this action claiming that Defendant Portfolio Recovery
Associates (PRA), through its attorneys, Defendant Rausch, Sturm, Israel, Enerson & Hornik
(Rausch Sturm), sued him in state court based on false representations in violation of the Fair Debt
Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., and the Wisconsin Consumer Act
(WCA), Wis. Stats. ch. 427. Burton specifically alleges that the managing attorney’s extreme
caseload precluded meaningful attorney involvement in the debt collection process and in the
authorization and issuance of the complaint against him. Burton also alleges that the attorneys
misrepresented the legal status of the debt and improperly sued him based on defective notices.
Before the Court is Defendants’ motion for partial summary judgment. For the following reasons,
the motion will be granted.
In October 2013, Burton, a resident of Green Bay, Wisconsin, applied and was approved
for a Walmart credit account through Synchrony Bank. Defs.’ Proposed Material Facts (DPMF),
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¶¶ 1, 3, Dkt. No. 20-16. Burton made purchases on the account through May 2017, and his last
payment to the account was in June 2017. Id., ¶¶ 24, 26. By that time, his outstanding balance
was $2,007.89. Mot. for S.J., Ex. 8, Dkt. No. 20-8 at 1. On September 6, 2017, Synchrony mailed
Burton a Notice of Right to Cure Default which stated:
RE: Walmart Credit Card
Account Number Ending In: 3544
Dear John H Burton,
September 21, 2017 is the LAST DAY FOR PAYMENT.
$150 is the AMOUNT NOW DUE.
You are late in making your payment(s). If you pay the AMOUNT NOW DUE
(above) by the LAST DAY FOR PAYMENT (above), you may continue with the
contract as though you were not late. Payment should be sent to us at the address
set forth below. If you do not pay by this date, we may exercise our rights under the
P.O. BOX 530927
ATLANTA, GA 30353-0927
Dkt. No. 20-9. Burton made no payment. With late fees and interest continuing to accumulate,
the balance reached $2,495.34 by February 2018, when the balance was “charged off” and the
account closed. Id., Ex. 5, Dkt. No. 20-6 at 25; DPMF ¶ 32.
In April 2018, Synchrony sold the account to PRA, a Nevada-based debt collection agency
that purchases defaulted consumer debts from creditors. DPMF, ¶¶ 32–33. On March 12, 2019,
Rausch Sturm, a law firm retained by PRA to assist in collecting such debts, sent Burton a letter
notifying him that it was trying to collect the debt on behalf of PRA, who had taken over the
Case 1:20-cv-00222-WCG Filed 09/07/21 Page 2 of 7 Document 35
delinquent account from the original creditor, Synchrony Bank. Dkt. No. 20-13. The letter was
accompanied by a Notice of Right to Cure Default which stated, in pertinent part:
Our records indicate that you are in default on the consumer credit
transaction briefly described as follows: Account number *************3544 of
PORTFOLIO RECOVERY ASSOCIATES, LLC, PO BOX 12914, NORFOLK VA
53541, 800/772-1413, in the current amount of $2,495.34. You are in default for
failure to make the minimum monthly payment on this account, with no payment
since June 27, 2017. You may cure the default on or before April 16, 2019, by
paying the sum of $499.00 to RAUSCH STURM . . . . Payments can be mailed,
made by telephone or at our website. You can also review information regarding
your account at our website. . . .
This communication is from a debt collector. This is an attempt to collect a debt
and any information obtained will be used for that purpose.
Id. Burton did not respond to either letter and Rausch Sturm filed a state collection action against
him on May 28, 2019, which remains pending. DPMF, ¶¶ 40–41.
Apparently of the view that the best defense is a strong offense, Burton commenced this
action against PRA and Rausch Sturm on February 12, 2020. He alleges that Rausch Sturm’s
lawsuit was signed by Attorney Anne Flinchum, Rausch Sturm’s “state managing attorney.”
Compl., ¶¶ 13–14. Burton asserts that, at the time this case was filed, online court records show
that Flinchum was counsel of record for at least 5,000 cases. Id., ¶¶ 14–16. In the 14 months prior
to the filing, Flinchum is listed as attorney of record for nearly 2,000 cases in the five most
populous counties in the state, and she was listed as attorney of record for 66 cases filed on the
same date she sued Burton, May 28, 2019. Id., ¶¶ 18–19, 23. Her court hearing calendar regularly
exceeds 100 hearings per week. Id., ¶ 27. Based on this and similar evidence, Burton asserts,
upon information and belief, that the case load and client demands for Flinchum were so high at
the time she filed the complaint that she could not and did not meaningfully review and attend to
his case before she filed it. Id., ¶¶ 37–39.
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Burton asserts three claims in his complaint. First, Burton alleges that Rausch Sturm
falsely represented that an attorney was meaningfully involved in the debt collection process when
it filed suit against him, in violation of the FDCPA, 15 U.S.C. § 1692e. Second, based on the same
false representation, Burton alleges that both defendants also violated the WCA. Finally, Burton
alleges that Rausch Sturm misrepresented the legal status of the debt and improperly sued him
without first providing a proper notice of right to cure. Burton alleges he suffered actual damages
by being sued, including suffering distress from the suit and its attendant delays and being required
to retain a lawyer to assist him.
Notwithstanding the questionable basis in law of each of Burton’s claims, Defendants have
moved for summary judgment only on the third cause of action—the allegedly improper suit based
on an inadequate right to cure notice—and have stipulated that they will defer litigation of the
“meaningful involvement issues” until this Court resolves the issues related to the right to cure.
But because the Court finds that Burton has no standing, the entire action will be dismissed.
At the outset, it is axiomatic that a federal plaintiff must demonstrate standing at each stage
of litigation. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). To establish standing,
plaintiffs must demonstrate that they have met the “irreducible constitutional minimum,”
consisting of three key elements: “The plaintiff must have (1) suffered an injury in fact, (2) that is
fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by
a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). To
demonstrate standing at the summary judgment stage of litigation, plaintiffs must “set forth by
affidavit or other evidence specific facts demonstrating” that they have satisfied the three elements
listed above. Spuhler v. State Collection Serv., Inc., 983 F.3d 282, 284 (7th Cir. 2020) (citing
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Lujan, 555 U.S. at 561) (internal quotation marks omitted). Here, the Court concludes that Burton
has failed to adequately demonstrate standing at this stage in the litigation.
Burton devotes just a little over two pages of his response brief to the topic of standing,
Dkt. No. 25 at 2–5, ultimately asserting that:
By filing the lawsuit, demanding a judgment, and attempting to recover money at a
hearing, the defendants subjected [Plaintiff] to a lawsuit that he should not have
faced, imposing on him the stress of having to find a lawyer and face a potential
money judgment, with its attendant collection efforts. [Plaintiff] does not, therefore,
present a potential harm; he has been actually harmed by the lawsuit that should
not have been filed, and has standing to sue in federal court.
Id. at 5. In support of this statement, Burton submitted an affidavit in which he states that being
sued on this debt has made him “anxious and frightened” about his finances and reputation, as well
as “distressed” by the fact that the suit was brought and remains public record on Wisconsin’s
Circuit Court Access Program. Dkt. No. 27 at 2.
Burton’s conclusory assertions are not enough to establish a “concrete and particularized”
injury for the purposes of Article III standing. This is so for two reasons. First, it appears the crux
of Burton’s alleged injury is emotional. Burton’s primary assertion is that he has felt anxious,
frightened, and stressed as a result of being sued in state court. But the Seventh Circuit has always
required something more than bare, conclusory statements when it comes to emotional injuries.
Indeed, “when the injured party’s own testimony is the only proof of emotional damages, he must
explain the circumstances of his injury in reasonable detail; he cannot rely on mere conclusory
statements.” Denius v. Dunlap, 330 F.3d 919, 929 (7th Cir. 2003). In addition, the Seventh Circuit
has also noted that these types of bare allegations by a plaintiff are not sufficient to establish injury
“unless the facts underlying the case are so inherently degrading that it would be reasonable to
infer that a person would suffer emotional distress from the defendant’s action.” Id.
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In this case, Burton’s only proof of emotional injury is his own affidavit and the brief
statement in his response brief that he has felt stressed as a result of the state court suit. Burton
goes into no further detail about his injuries, and supplies no evidence to support his statements.
Leaving aside the fact that the Wisconsin Circuit Court Access website seems to show that PRA’s
suit is one of five collection actions filed against Burton since 2011, the facts underlying this case
are not so “inherently degrading” that it would be reasonable to infer emotional distress. Burton
was sued in state court on an account that he admits he established, that he admits was chargedoff, and on a debt that he admits he never disputed. Dkt. No. 28, ¶¶ 1–4, 32, 43. That Defendants
acted on this undisputed debt and filed suit certainly is not “inherently degrading,” especially
considering Burton’s admission to the legitimacy of the debt. In any event, the Seventh Circuit
has squarely held that “stress by itself with no physical manifestations and no qualified medical
diagnosis” does not amount to a concrete harm. Pennell v. Global Tr. Mgmt., LLC, 990 F.3d 1041,
1045 (7th Cir. 2021) (citing United States v. All Funds on Deposit with R.J. O’Brien & Assocs.,
783 F.3d 607, 616 (7th Cir. 2015)). Here, Burton’s allegations amount to nothing more than
conclusory assertions of stress, anxiety, and fright, with no accompanying physical manifestations
or qualified medical diagnosis, and thus, Burton does not have standing under Article III.
Second, even putting aside Burton’s claims of emotional injury, it’s difficult to see what
other injury Burton may have as a result of the suit filed against him in state court. Although the
underlying suit in this case is still pending, Dkt. No. 25 at 2, that suit, no matter what the outcome,
will not result in the kind of harm needed to confer Article III standing. For example, if Burton
were to prevail in the state suit, he certainly would not have been harmed by the allegedly deficient
letter; indeed, he would benefit, as the letter would serve to shield him from paying an otherwise
valid debt. Should Burton lose, on the other hand, he would have no standing to complain because
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a finding that the letter complied with the WCA would mean that the underlying state suit was
properly brought and thus Burton would have experienced no harm.
It thus follows that whether it is Burton’s emotional injury claims, or some sort of claim
relating to the defense in the state suit, Burton has failed to provide “specific facts” demonstrating
that he has satisfied the elements of standing. Spuhler, 983 F.3d at 284. Specifically, Burton has
failed to show that he has suffered a “concrete” injury, within the meaning of Article III.
Because Burton lacks standing to bring this suit within the meaning of Article III of the
United States Constitution, the case is dismissed for lack of subject matter jurisdiction. The Clerk
is directed to enter judgment dismissing the case without prejudice.
SO ORDERED at Green Bay, Wisconsin this 3rd day of September, 2021.
s/ William C. Griesbach
William C. Griesbach
United States District Judge
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