RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 18a0032p.06 

### UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

J AMES R. H AGY , III, Plaintiff-Appellee ,

P ATRICIA R. H AGY , Plaintiff ,

v

.

D EMERS & A DAMS ; D AVID J. D EMERS , Defendants-Appellants ,

G REEN T REE S ERVICING , LLC; K EVIN W INEHOLD ; P RO A SSURANCE C ASUALTY C OMPANY , Defendants

. ┐ │ │ │ │ │ │ │ │ │ │ │ │ │ │ │ ┘ No. 17-3696

Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 2:11-cv-00530—Terence P. Kemp, Magistrate Judge. Argued: January 31, 2018 Decided and Filed: February 16, 2018 Before: SUHRHEINRICH, SUTTON, and BUSH, Circuit Judges.

_________________ COUNSEL

ARGUED: Adam J. Bennett, COOKE DEMERS LLC , New Albany, Ohio, for Appellant. Edward A. Icove, ICOVE LEGAL GROUP, LTD., Cleveland, Ohio, for Appellee. ON BRIEF: Adam J. Bennett, David J. Demers, COOKE DE MERS LLC, New Albany, Ohio, for Appellant. Edward A. Icove, ICOVE LEGAL GROUP, LTD., Cleveland, Ohio, Kristen Finzel Lewis, SOUTHEASTERN OHIO LEGAL SERVICE, Ne w Philadelphia, Ohio, for Appellee. 

### >No. 17-3696 Hagy v. Demers & Adams Page 2

_________________ OPINION

_________________ SUTTON, Circuit Judge. David Demers, an atto rney, sent a letter on behalf of his client to the attorney for James and Patricia Hagy. Th e letter indicated that th e Hagys would not have to pay the balance on their loan and that the le nder would not pursue any other remedies against the Hagys. That seemed like good news for the Hagys. Little did Demers know that this epistle would lead to six years (and counting) of litigation against him and his firm for violating the Fair
Debt Collection Practices Act. Because the complaint failed to identify a cognizable injury traceable to Demers (and his firm) and becau se Congress cannot override this baseline requirement of Article III of the U.S. Constitution by labeling the violation of any requirement of a statute a cognizable injury, we must dismiss the appeal and, with it, the underlying case.

I.
In 2002, James and Patricia Hagy took out a lo an to purchase a mobile home and some property on which to park it. In 2010, they defaulted on thei r loan payments. Green Tree Servicing, a mortgage servicing company, initiated foreclosure proceedings against the Hagys.
Patricia Hagy called the law firm that repr esented Green Tree, the star-crossed Demers & Adams, with hopes of settling th e claim. It worked. On June 8, 2010, David Demers sent the Hagys a letter containing a Warranty Deed in Lieu of Foreclosure. “In return for [the Hagys] executing the Deed,” the letter said, “Green Tree has advised me that it will waive any deficiency balance.” R. 18-3 at 1. The Hagys execute d the Deed on June 24, 2010. And on June 30, 2010, Demers sent another letter, this time to the Ha gys’ attorney, James Sandy. That letter confirmed receipt of the executed Deed and reaffirmed th at “Green Tree will not attempt to collect any deficiency balance which may be due and owing afte r the sale of the collateral.” R. 18-5 at 1. Three weeks later, Green Tree dismissed the foreclosure complaint against the Hagys.
What seemed to end the dispute did not.No. 17-3696 Hagy v. Demers & Adams Page 3

Green Tree began calling the Hagys to collect th e debt that they no longer owed. James Hagy protested that he “didn’t ha ve to pay anything else” in light of the Deed. R. 67 at 26.
Green Tree realized it had made a mistake a nd agreed that the Hagys owed nothing more.
In 2011, the Hagys sued Green Tree and one of its employees (Kevin Winehold), and Demers and his law firm (Demers & Adams), in fede ral court. They claime d that the phone calls
and letters violated the Fair Debt Collectio n Practices Act and the Ohio Consumer Sales
Practices Act.

Green Tree and Winehold, the phone callers, moved to stay the proceedings and compel arbitration. The district court gr anted the motion, and this set of contestants eventually resolved their dispute through arbitration.

Demers and his law firm, the letter writers, moved to dismiss the claims against them. The court dismissed the Hagys’ federal claim base d on the June 8 letter because it was timebarred. But it refused to dismiss the Hagys’ Ohio claims based on the June 8 letter as well as
their federal and Ohio claims ba sed on the June 30 letter.
After discovery, Demers and the Hagys each moved for summary judgment. In 2013, the district court ruled for the Hagys , reasoning that Demers’ June 30 letter to Sandy “fail[ed] to
disclose” that it was a “communicati on . . . from a debt collector” in violation of the federal law. 15 U.S.C. § 1692e(11). Believing that the Ohio la w incorporates the federal requirements, the
court ruled that Demers also violated the Ohio statute by failing to make the § 1692e(11) disclosure in the June 8 and June 30 letters and by failing to provide the notice required by § 1692g(a) “[w]ithin five days [o f] the initial communication with [the] consumer.” R. 95. All told, the court awarded the Hagys $1,800 in st atutory damages, $312 in costs, and $74,196 in attorney’s fees against Demers and his law firm.
Over the next three years, the Hagys (successfully) filed two supplemental complaints and Demers (unsuccessfully) tried to appeal th e district court’s non-final summary judgment decision. Meanwhile, Demers asked the district c ourt to reconsider its decision in light of Anderson v. Barclay’s Capital Real Estate, Inc. , 989 N.E.2d 997 (Ohio 2013), and Spokeo, Inc.
v. Robins , 136 S. Ct. 1540 (2016). The district court refused. On ly in 2017, after James HagyNo. 17-3696 Hagy v. Demers & Adams Page 4

settled the arbitration with Gr een Tree and agreed to dismiss the supplemental complaints, did
the district court issu e a final order.
Demers the man and Demers the law firm appealed.

II.
They argue that (1) the dist rict court lacked jurisdicti on over the disput e because the Hagys did not have standing to assert their federa l and state claims; (2) the June 30 letter to the Hagys’ attorney did not violate the federal la w because it was not a “communication with the consumer,” 15 U.S.C. § 1692e(11); (3) they did not violate the Ohio law because it does not incorporate the requirements of the federal law and (under Ohio law) this case did not involve a “consumer transaction” or a “supplier,” Ohio Rev. Code §§ 1345.01, 1345.02; and (4) the district
court abused its discretio n by awarding disproportionate attorney’s fees.
There is plenty to debate about the merits of this case. The federal circuits disagree about whether provisions like § 1692e(11) cover communi cations with a consumer’s attorney. Some say they do not. Guerrero v. RJM Acquisitions LLC , 499 F.3d 926, 934–39 (9th Cir. 2007) (per curiam); Kropelnicki v. Siegel , 290 F.3d 118, 127–28 (2d Cir. 2002). Some say they do. Bishop v. Ross Earle & Bonan, P.A. , 817 F.3d 1268, 1271–72 (11th Cir. 2016); Allen ex rel. Martin v. LaSalle Bank, N.A. , 629 F.3d 364, 368 (3d Cir. 2011); Sayyed v. Wolpoff & Abramson , 485 F.3d 226, 232–33 (4th Cir. 2007). Some take a middle position. Powers v. Credit Mgmt. Servs., Inc. , 776 F.3d 567, 573–74 (8th Cir. 2015); Evory v. RJM Acquisitions Funding L.L.C. , 505 F.3d 769, 773–75 (7th Cir. 2007).
We have yet to take a position, and our stand on the issue will have to wait. Article III of the U.S. Constitution does not authorize federal courts to decide theoretical questions. Steel Co. v. Citizens for a Better Env’t , 523 U.S. 83, 102–04 & n.5 (1998). It extends the “judicial Power” only to concrete “Cases” and “Controversies.” U. S. Const. art. III, § 2. One telltale of a cognizable dispute suitable for reso lution by the federal cour ts is that the parties have standing to bring it. The “irreducible constitutional minimu m” for standing requires the Hagys to show (1) a particular and concrete injury (2) caused by Demers and (3) redressable by the courts. Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61 (1992). A claimant bears the burden of establishingNo. 17-3696 Hagy v. Demers & Adams Page 5

standing and must show it “for each claim he seeks to press.” DaimlerChrysler Corp. v. Cuno , 547 U.S. 332, 352 (2006). That did not happen.

Federal claim. The Hagys filed their federal clai m under the Fair Debt Collection Practices Act. Causes of action classically require a showing of duty, a breach of duty, and damages. The Act creates a cause of action that has all three component s: (1) Duty—a debt collector must include a required disclosure, usually to the effect “that the communication is from a debt collector,” in comm unications to a consum er; (2) breach of dut y—any debt collector who fails to comply with that requirement is liable to the consumer; and (3) damages—that consumer may recover actual damages and any additional damages up to $1,000 from the noncompliant debt collector. 15 U.S.C. §§ 1692e(11), 1692k(a).
In one sense, it seems easy to say that the Hagys have standing to bring a claim against Demers under the Act with respect to his June 30 letter. The complaint makes allegations with respect to each element of the cause of action: (1) Demers sent a letter to the Hagys about a debt implicating a duty established by the Act; (2) the le tter failed to include the required disclosure; and (3) the Hagys seek statutory damages. Th ese kinds of allegation s usually eliminate any doubts about Article III standing an d usually allow the parties and the court to move on to the
merits.
But usually is not always. What makes th is case different is that Demers challenges Congress’s authority to create this injury—to create an inju ry in fact that involves no harm of any sort that could satisfy the injury-i n-fact requirements of Article III. See Spokeo, Inc. v.
Robins , 136 S. Ct. 1540, 1546–48 (2016).
The relevant conduct is Demers’ June 30 letter to the Hagys’ lawyer, James Sandy.
Demers sent the letter to confirm that he had received the Hagys’ signed Deed and that Green Tree would no longer require the Hagys to pay thei r deficiency balance. In full, it said:
Dear Mr. Sandy: This letter is in follow up to our conversation of Monda y, June 28, 2010 wherein we discussed the above referenced matter. Pursuant to our conversation, I informed you that we have received the executed Warranty Deed in Lieu of Foreclosure si gned by the Hagy[s]. Furthermore, youNo. 17-3696 Hagy v. Demers & Adams Page 6

inquired as to should a deficiency balan ce be realized afte r the sale of the collateral would Green Tree pursue Mr. & Mrs. Hagy for the amount of the deficiency. I have been informed by my c lient that in return for Mr. & Mrs. Hagy executing the Warranty Deed in Lieu of Foreclosure Green Tree will not attempt to collect any deficiency balance which may be due and owing after the sale of the collateral.

I believe this letter satisfie s any and all of your concerns. Should you have any questions with respect to this matte r, please do not hesitate to contact me. Very truly yours, David J. Demers

R. 18-5 at 1.
James Hagy admits that what Demers said in hi s letter “turned out to be true.” R. 67 at 27. Far from causing the Hagys any injury, tangible or intangible, the J une 30 letter gave them peace of mind, and they have neve r testified otherwise. At th is point in the case, no one plausibly argues (or even alleges) that the Hagys suffered an actual injury and damages from the letter. Demers had nothing to do with the true source of their anxiet y—Green Tree’s phone calls seeking to collect the deficien cy weeks after the Hagys executed the Deed, which could be injury-causing.
That leaves the possibility that Congress’s creation of a statutory injury and damages suffices to satisfy Article III’s standing impera tive. Congress created a cause of action—and injury—that covers Demers’ failure to disclose in his June 30 letter “that the communication [wa]s from a debt collector.” 15 U.S.C. § 1692e( 11). But it is not that simple, as the Supreme Court recently established in Spokeo . To satisfy the injury in fact requirement, the Hagys must point to some harm other than the fact of “a bare procedural violation.” Spokeo , 136 S. Ct. at 1550. Not all procedural violations , not even all inaccuracies, cause real harm. “It is difficult to imagine,” for example, “how the dissemination of an incorrect zip code , without more, could work any concrete harm.” Id.
The Fair Debt Collection Practices Act protec ts consumers from abusive debt collection practices. And § 1692e(11)’s disclosure requirement serves that purpose. Fed. Home LoanNo. 17-3696 Hagy v. Demers & Adams Page 7

Mortg. Corp. v. Lamar , 503 F.3d 504, 508, 512 (6th Cir. 2007). But the Hagys have not shown, in truth have not even tried to show, that this failure to disclose caused them any actual harm beyond that “bare procedural violation.” As they argued in their briefs and as they reiterated at oral argument, the letter was “hurtful” only “be cause it did not provide the [required] notice.” Oral Arg. at 18:19–18:46. They do not say that the non-disclosure crea ted a risk of double payment, caused anxiety, or led to any other concrete harm. On this record, it is difficult to
see—and we cannot see—how the June 30 letter di d anything other than help the Hagys. When Green Tree came calling, in point of fact, Jame s Hagy relied on the June 30 letter to refuse to pay the deficiency balance. The letter was good ne ws when it arrived, and it became especially good news when Green Tree persisted in trying to collect a no-longer-collectible debt.
The district court thought a bare viol ation of § 1692e(11) sufficed, even after Spokeo

. “Congress,” it said, “has created a new right—the right to receiv e the required di sclosures in communications governed by the FDCPA—and a new injury—not receiving such disclosures.” R. 164 at 7 (quoting Church v. Accretive Health, Inc. , 654 F. App’x 990, 994 (11th Cir. 2016) (per curiam)). As it happens, this co urt recently considered and rejected this theory and rejected any reliance on Church —all, to be fair, after the district court’s decision. See Lyshe v. Levy , 854 F.3d 855, 860–61 (6th Cir. 2017). At this poi nt, it is not even clear whether the Church theory remains good law in the Eleventh Circuit. See Nicklaw v. CitiMortgage, Inc. , 839 F.3d 998, 1002–03 (11th Cir. 2016). We know of no circuit court decision since Spokeo that endorses an anything-hurts-so-long-as-Congress-says-it-hu rts theory of Article III injury. Although Congress may “elevate” harms that “exist” in the real world befo re Congress recognized them to actionable legal status, it may not simply enact an injury into existence, using its lawmaking power to transform something that is not re motely harmful into something that is. Spokeo , 136 S. Ct. at 1548–49.
Today’s case illustrates the necessity of this lim it. It’s not just that this letter gave the Hagys everything they wanted. Th ey insist that an even better letter—“Attached is a thousand dollars in cash, no strings attached, no response needed”—would cause a c oncrete injury if it omitted the required disclosure. Oral Arg. at 18 :50–19:30. That approach, if accepted, wouldNo. 17-3696 Hagy v. Demers & Adams Page 8

leave Congress as the sole author of any limits on the Article III judicial power to hear cases and
controversies.
We appreciate that Congress has some leeway “t o define injuries and articulate chains of
causation.” Lujan , 504 U.S. at 580 (Kennedy, J., concurring). And we appreciate that, “because Congress is well positioned to identify intang ible harms that meet minimum Article III requirements, its judgment is also instructive an d important.” Spokeo , 136 S. Ct. at 1549. But it did not purport to use that judgment or leeway he re. All it did was require debt collectors to disclose in their “communications [with consum ers] that the communication is from a debt
collector” and entitle in dividuals to sue for “f ail[ures] to comply” with that requirement—no matter whether the letter sought to collect a debt or release one. 15 U.S.C. §§ 1692e(11), 1692k(a). Nowhere in the Act (or for that matter the legislative record ) does Congress explain why the absence of such a warning always creates an Article III injury. As we have said before and repeat here, “standing is not met simply becau se a statute creates a le gal obligation,” as in § 1692e(11), “and allows a private right of action for failing to fulfil th is obligati on,” as in § 1692k(a). Lyshe , 854 F.3d at 860; see also Wall v. Mich. Rental , 852 F.3d 492, 495 (6th Cir. 2017); Soehnlen v. Fleet Owners Ins. Fund , 844 F.3d 576, 582 (6th Cir. 2016).
Congressional leeway cannot mean judicial abdication. Broad though Congress’s powers may be to define and create injuries, they cannot override constitutional limits. It may be true, for example, that it is difficult to think of “property” without law. In truth, there may be no such thing as “property” without law, and the law that creates property interests often will be legislative. But neither Congre ss nor a state legislature may defi ne “private property” in a way that eliminates an otherwise cognizable clai m under the Takings Clause of the Fifth (and Fourteenth) Amendment. See Murr v. Wisconsin , 137 S. Ct. 1933, 1942–45 (2017). And Congress may not make a First Amendment limit on its power go away by announcing that flag burning is not “speech.” See Texas v. Johnson , 491 U.S. 397, 402–06 (1989).

These limits are essential when it comes to preserving structural boundaries. To ensure that Congress does not eliminate one of the u ltimate safeguards of liberty—that the National Legislature does not have a gene ral police power—the federal courts do not permit Congress to label anything it wishes as “Commerce . . . among the several States.” See United States v.No. 17-3696 Hagy v. Demers & Adams Page 9

Lopez , 514 U.S. 549, 563 (1995) (noting th e absence of legislative fi ndings “that the [possession of guns near schools] substantially affected in terstate commerce”). Congress may not use its enforcement power under the Fourteenth Amendment to redefine the “free exercise” of religion however it wishes and in the process intrude on the States’ existing powers in the area. See City of Boerne v. Flores , 521 U.S. 507, 519–20, 535–36 (1997). So t oo with the horizontal separation of powers at the nationa l level. Congress may not enact a law that el iminates Article III safeguards that permit federal courts only to us e the “judicial Power” to hear “Cases” and
“Controversies.” U.S. Const. art. II I, § 2. That’s just what we take Spokeo to mean when it said that “Congress cannot erase Ar ticle III’s standing require ment.” 136 S. Ct. at 1547–48.
It’s difficult, we recognize, to identify the lin e between what Congress may, and may not, do in creating an “injury in fact.” Put five sm art lawyers in a room, a nd it won’t take long to appreciate the difficulty of the task at hand. But wh at spares us the task of precisely drawing that line, and what makes this case relatively easy, is that Congress did not even try to show that the absence of this warning would always create an injury. All we n eed say today is that Congress may not say that anything is an injury, and by saying so expect the federal courts to agree. Just
as there must be some limits on Congress’s power to regulate commerce, see NFIB v. Sebelius , 567 U.S. 519, 548–55 (2012); United States v. Morrison , 529 U.S. 598, 608, 613 (2000); Lopez , 514 U.S. at 565–66, there must be some limits on C ongress’s power to create injuries in fact suitable for judicial resolution. Because Congress made no effort to show how a letter like this would create a cognizable injury in fact and b ecause we cannot see any way in which that could be the case, we must dismiss th is claim for lack of standing.

State-law claims. The Hagys maintain that, even if we lack jurisdiction over their federal claim, we may still exercise supplemental jurisdiction over their state-law claims. See 28 U.S.C. § 1367(c)(3). But the doctrine of supplemental jurisdiction does not alte r Article III’s standing requirements. See DaimlerChrysler , 547 U.S. at 351–53. And those requirements apply to statelaw claims in federal court. See Coyne v. Am. Tobacco Co. , 183 F.3d 488, 495 (6th Cir. 1999); 13B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3531.14 (3d ed. 2017) (“Of course state rules th at recognize standing need not be honored [in federal courts] if Article III requirements are not met.”). For th e same reason that the Hagys lack standing toNo. 17-3696 Hagy v. Demers & Adams Page 10

bring the federal claim, they lack standing to bring the state-law claims, which rely on incorporating the federal law wholesale. Demers’ J une 8 letter, just like hi s June 30 letter, gave the Hagys good news; Green Tree’s ill-considered phone calls later on created the headache. Once again, the Hagys’ claims against Demers st and on “bare procedural violation[s]” of the
federal law. Spokeo , 136 S. Ct. at 1550.

For these reasons, we reverse the district court’s decision finding subject matter jurisdiction, vacate its orders entering summary judgment for the Hagys and awarding damages, fees, and costs, and dismiss this case for lack of jurisdiction.