Court Opinion

ID: 9892325
Source: CourtListenerOpinion
Date Created: 2023-10-23 17:00:52.888534+00
Date Added: 2024-06-11T08:04:06.416301
License: Public Domain

In the

    United States Court of Appeals
                for the Seventh Circuit
                    ____________________
No. 22-1202
MARY C. NABOZNY, on behalf of herself
and others similarly situated,
                                                Plaintiff-Appellant,

                                v.

OPTIO SOLUTIONS LLC d/b/a
QUALIA COLLECTION SERVICES,
                                               Defendant-Appellee.
                    ____________________

           Appeal from the United States District Court
               for the Western District of Wisconsin.
          No. 21-cv-297 — James D. Peterson, Chief Judge.
                    ____________________

  ARGUED SEPTEMBER 29, 2022 — DECIDED OCTOBER 23, 2023
                ____________________

   Before SYKES, Chief Judge, and ROVNER and JACKSON-
AKIWUMI, Circuit Judges.
   SYKES, Chief Judge. Optio Solutions LLC sent Mary
Nabozny a letter seeking to collect a defaulted credit-card
debt. Optio used RevSpring, Inc., a third-party mail vendor,
to print and send the letter. Nabozny responded with this
lawsuit accusing Optio of violating the Fair Debt Collection
2                                                 No. 22-1202

Practices Act (“FDCPA” or “the Act”), 15 U.S.C. §§ 1692
et seq. She claims that by using a third-party vendor to print
and mail the letter, Optio violated § 1692c(b) of the Act,
which bars debt collectors from communicating with anyone
other than the debtor when attempting to collect a consumer
debt. (There are several exceptions, but none apply here.)
Nabozny proposes to represent a class of debtors who
received similar letters from Optio.
    This lawsuit suffers from a jurisdictional defect: Nabozny
sustained no injury from the alleged statutory violation. The
district judge accordingly dismissed the suit for lack of
standing. Nabozny v. Optio Sols., LLC, 583 F. Supp. 3d 1209,
1215 (W.D. Wis. 2022). Nabozny appealed.
    After the parties filed their briefs, the Eleventh Circuit
addressed a materially identical FDCPA case and rejected a
standing argument much like the one Nabozny makes here.
Hunstein v. Preferred Collection & Mgmt. Servs., Inc., 48 F.4th
1236 (11th Cir. 2022) (en banc). Sitting en banc and applying
the Supreme Court’s instructions in Spokeo, Inc. v. Robins,
578 U.S. 330 (2016), and TransUnion LLC v. Ramirez, 141 S. Ct.
2190 (2021), the Eleventh Circuit held that this kind of
§ 1692c(b) violation—sharing a debtor’s data with a third-
party mail vendor to populate and send a form collection
letter—causes no harm that our legal tradition recognizes as
sufficient to support a suit in federal court under Article III
of the Constitution. Hunstein, 48 F.4th at 1245. The Tenth
Circuit has since reached the same conclusion. Shields v. Pro.
Bureau of Collections of Md., Inc., 55 F.4th 823, 828–29
(10th Cir. 2022) (adopting the reasoning of Hunstein). We
agree with our sister circuits and affirm the dismissal of
Nabozny’s suit.
No. 22-1202                                                  3

                       I. Background

    We take the following factual allegations from Nabozny’s
class-action complaint, accepting them as true for present
purposes. In July 2020 Nabozny received a letter at her home
in Ashland County, Wisconsin, offering to settle an unpaid
credit-card debt. The letter summarized basic information
about her debt: the creditor, the outstanding balance, the
account number, and her name and address. The letter was
from Optio Solutions under its operating name of Qualia
Collection Services, but it was printed and mailed by
RevSpring, Inc., a third-party printing and mail vendor.
Nabozny did not give Optio consent to share the infor-
mation about her debt with RevSpring.
    Nabozny sued Optio alleging that its communication
with RevSpring, the third-party mail vendor, violated
§ 1692c(b) of the FDCPA, which provides that “a debt collec-
tor may not communicate, in connection with the collection
of any debt, with any person other than the consumer”
without the consumer’s consent. (There are a few excep-
tions—e.g., the statute exempts communications with the
debtor’s attorney and the creditor and its attorney. None of
the exceptions are relevant here.) Nabozny’s lawsuit was
styled as a proposed class action: she sought to represent a
class of other Wisconsin residents who had received similar
collection letters from Optio via RevSpring.
    Optio moved to dismiss for lack of jurisdiction, arguing
that Nabozny lacks standing to sue because the alleged
statutory violation, even if it occurred, caused her no injury.
Nabozny responded, urging the court to follow a then-recent
decision by an Eleventh Circuit panel that had found stand-
4                                                  No. 22-1202

ing in a nearly identical § 1692c(b) case. See Hunstein v.
Preferred Collection & Mgmt. Servs, Inc., 994 F.3d 1341
(11th Cir. Apr. 21, 2021), vacated and superseded on reh’g,
17 F.4th 1016 (11th Cir. Oct. 28, 2021), reh’g en banc granted,
17 F.4th 1103 (11th Cir. Nov. 17, 2021).
    The Hunstein panel opinion had a short shelf life. By the
time the district court addressed Optio’s motion, the full
Eleventh Circuit had agreed to hear Hunstein en banc. Ac-
cordingly, the judge declined Nabozny’s invitation to follow
the now-vacated Eleventh Circuit panel opinion in Hunstein.
Nabozny, 583 F. Supp. 3d at 1214 & n.2. The judge instead
dismissed Nabozny’s suit for lack of subject-matter jurisdic-
tion, holding that Nabozny lacks standing to sue because she
“suffered no concrete injury.” Id. at 1215.
                        II. Discussion
    Article III of the Constitution limits the federal judicial
power to resolving “Cases” and “Controversies,”
U.S. CONST. art. III, § 2, a principle long understood to
confine the federal judiciary to its “constitutionally limited
role of adjudicating actual and concrete disputes” presented
in a form traditionally recognized as appropriate for judicial
decision and the resolution of which will “have direct con-
sequences on the parties involved,” Genesis Healthcare Corp.
v. Symczyk, 569 U.S. 66, 71 (2013). An essential component of
the case-or-controversy limitation is the requirement that a
plaintiff have standing to sue—that is, a “personal stake” in
the outcome of the suit sufficient to engage the jurisdiction
of the federal court. TransUnion, 141 S. Ct. at 2203.
   To establish standing, the “plaintiff must show (i) that he
suffered an injury in fact that is concrete, particularized, and
No. 22-1202                                                       5

actual or imminent; (ii) that the injury was likely caused by
the defendant; and (iii) that the injury would likely be
redressed by judicial relief.” Id. Without “an injury that the
defendant caused and the court can remedy, there is no case
or controversy” under Article III. Casillas v. Madison Ave.
Assocs., Inc., 926 F.3d 329, 333 (7th Cir. 2019).
    As the party seeking to invoke federal jurisdiction,
Nabozny bears the burden of establishing her standing to
sue. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992); Pierre v.
Midland Credit Mgmt., 29 F.4th 934, 939 (7th Cir. 2022). This
case comes to us from a dismissal at the pleading stage, so it
raises a facial challenge to standing. We therefore look to
Nabozny’s complaint to assess whether her allegations of
injury, accepted as true, are sufficient to support her stand-
ing to sue. Flynn v. FCA US LLC, 39 F.4th 946, 952 (7th Cir.
2022). Our standard of review is de novo. Id.
     This case turns on the injury-in-fact requirement and,
more specifically, whether Nabozny suffered an actual,
concrete injury. To be concrete, an injury must be “real, and
not abstract.” Spokeo, 578 U.S. at 340 (quotation marks omit-
ted). Tangible harms like monetary and physical harms are
the most obvious, but “[v]arious intangible harms can also
be concrete.” TransUnion, 141 S. Ct. at 2204. When a plain-
tiff’s claim involves an allegation of intangible harm, the
injury-in-fact inquiry turns on whether the harm “has a
‘close relationship’ to a harm ‘traditionally’ recognized as
providing a basis for a lawsuit in American courts.” Id.
(quoting Spokeo, 578 U.S. at 341). Examples include reputa-
tional harms, privacy harms like intrusion upon seclusion
and giving publicity to private information, and “harms
specified by the Constitution itself.” Id.
6                                                   No. 22-1202

    In some cases, Congress’s exercise of its legislative power
to promulgate regulatory obligations and create a private
cause of action for violations may serve to “elevate to the
status of legally cognizable injuries concrete, de facto injuries
that were previously inadequate in law.” Spokeo, 578 U.S. at
341 (quotation marks and alteration omitted). The judgment
of Congress is “instructive and important,” id., but the
judiciary has an independent duty to decide whether a
plaintiff has suffered an actual injury and thus has a suffi-
cient stake in the outcome to invoke the jurisdiction of a
federal court, TransUnion, 141 S. Ct. at 2205. Put slightly
differently, “Congress’s creation of a statutory prohibition or
obligation and a cause of action does not relieve courts of
their responsibility to independently decide whether a
plaintiff has suffered a concrete harm under Article III … .”
Id. Although “Congress may elevate harms that exist in the
real world” to actionable legal status, “it may not simply
enact an injury into existence, using its lawmaking power to
transform something that is not remotely harmful into
something that is.” Id. (quoting Hagy v. Demers & Adams,
882 F.3d 616, 622 (6th Cir. 2018)).
    Because Article III requires a concrete injury “even in the
context of a statutory violation,” Spokeo, 578 U.S. at 341,
legislatively identified intangible harms “must bear a close
relationship in kind to those underlying suits at common
law.” Pierre, 29 F.4th at 938. A claimed injury from a statuto-
ry violation need not be an “exact duplicate” of a harm
traditionally recognized as actionable at common law, but
the plaintiff must identify “a close historical or common-law
analogue.” TransUnion, 141 S. Ct. at 2204; Ewing v. MED-1
Sols., LLC, 24 F.4th 1146, 1151 (7th Cir. 2022).
No. 22-1202                                                 7

    Nabozny alleges in her complaint that Optio’s violation
of § 1692c(b) harmed her by “invading her privacy.” She
elaborates a bit in her brief, arguing that because Optio
disclosed information about her debt to its third-party mail
vendor, she suffered a loss of her ability to control her
personal financial information. And that harm, she contends,
is analogous to the harm caused by a tortious invasion of
privacy and thus qualifies as a concrete injury for standing
purposes.
    We disagree. And we are in good company in rejecting
this argument. In Hunstein—a materially identical § 1692c(b)
case involving a debt collector’s use of a third-party mail
vendor to process a form collection letter—the en banc
Eleventh Circuit considered the privacy-tort analogy in
depth and rejected it, concluding that the plaintiff lacked
standing to sue because he suffered no cognizable injury
from the alleged statutory violation. 48 F.4th at 1241–50. The
Tenth Circuit has since endorsed Hunstein. Shields, 55 F.4th
at 828–29. No other circuit has held to the contrary. It would
take a strong reason for us to create a circuit split, and we
decline to do so here.
    There is no need to repeat the Eleventh Circuit’s exhaus-
tive analysis in full; a briefer explanation of our reasoning
will suffice. As we’ve noted, Nabozny generically analogizes
her alleged injury to a tortious invasion of privacy, but at
common law an invasion of the right to privacy has tradi-
tionally encompassed four distinct torts: intrusion upon
seclusion, appropriation of another person’s name or like-
ness, publicity given to another person’s private life, and
publicity that places one in a false light. RESTATEMENT
(SECOND) OF TORTS § 652A (AM. LAW INST. 1977).
8                                                   No. 22-1202

    Looking beyond Nabozny’s bare invasion-of-privacy al-
legation to the relevant factual allegations in her complaint,
see Persinger v. Sw. Credit Sys., L.P., 20 F.4th 1184, 1191–92
(7th Cir. 2021), it becomes clear that only one of the four
privacy torts is even potentially relevant: the tort of publicity
given to another person’s private life or, as some sources
phrase it, the public disclosure of private facts. A person
commits this civil wrong if he “gives publicity” to a matter
that concerns “the private life of another,” is “highly offen-
sive to a reasonable person,” and is not of legitimate public
concern. RESTATEMENT § 652D.
    Nabozny’s attempt to analogize her case to this privacy
tort falls apart on the threshold element of publicity.
Hunstein, 48 F.4th at 1245–49. “‘Publicity’ … means that the
matter is made public, by communicating it to the public at
large, or to so many persons that the matter must be regard-
ed as substantially certain to become one of public
knowledge.” RESTATEMENT § 652D cmt. a. Nabozny’s com-
plaint is devoid of any allegations that Optio made her
private information public. Rather, she alleges no more than
the following: Optio disclosed pieces of her private debt
information to RevSpring, and RevSpring used this infor-
mation to populate a form collection letter and sent it to
Nabozny. Even as Nabozny sees it, that was the end of the
matter. Nothing in the complaint suggests any manner of
public disclosure or even that anyone at RevSpring read or
appreciated her information. Indeed, the final recipient of
the information was Nabozny herself.
    The transmission of information to a single ministerial
intermediary does not remotely resemble the publicity
element of the only possibly relevant variant of the privacy
No. 22-1202                                                     9

tort. See Hunstein, 48 F.4th at 1245; Shields, 55 F.4th at 828–29.
Publicity “does not include just ‘any communication by the
defendant to a third person.’” Hunstein, 48 F.4th at 1246
(quoting RESTATEMENT § 652D cmt. a). Nor is it enough “to
communicate a fact concerning the plaintiff’s private life …
to a small group of persons.” RESTATEMENT § 652D cmt. a. To
constitute publicity, a communication must “reach[], or [be]
sure to reach, the public.” Id.
    The distinction between public and private communica-
tion is not just a matter of numbers. “[T]his is a qualitative
inquiry, not a quantitative one.” Hunstein, 48 F.4th at 1246.
So while the number of recipients might be a relevant con-
sideration, we must do more than simply count heads. A
disclosure might be sure to reach the public, for example, if
communicated to a journalist—a single person—for later
publication in a newspaper or magazine. See id. at 1247. By
contrast, there is no “publicity” given to private facts when a
creditor writes to a debtor’s employer—also a single per-
son—to inform him that the debtor “owes [a] debt and will
not pay it.” RESTATEMENT § 652D cmt. a, illus. 1. Information
can remain private, too, even when disclosed to many. For
example, “[w]hen a trade secret is communicated to thou-
sands of new employees after a merger,” it does not sudden-
ly “become public information.” Hunstein, 48 F.4th at 1247.
As these illustrations show, when a private communication
is sent with no expectation of further disclosure, it is not one
that is “sure to reach[] the public.” RESTATEMENT § 652D
cmt. a. And in that case, there is no actionable “publicity”
given to private facts.
   Because Nabozny’s complaint does not allege that Optio
publicized her private information, she has not suffered a
10                                                No. 22-1202

cognizable injury—or as the Eleventh Circuit put it, “at least
not one that is at all similar to that suffered after a public
disclosure” of private facts. Hunstein, 48 F.4th at 1245. The
public-disclosure form of the privacy tort protects against
the humiliation that accompanies the disclosure of sensitive
or scandalizing private information to public scrutiny. See
RESTATEMENT § 652D cmt. b (“When … intimate details of …
life are spread before the public gaze in a manner highly
offensive to the ordinary reasonable man, there is an action-
able invasion of his privacy … .”). Without a public-
exposure component, Nabozny’s alleged injury is not analo-
gous to the harm at the core of the public-disclosure tort.
Indeed, “having some finite number of people know (true)
details about your life is fundamentally different than
having that information disseminated to the general public.”
Hunstein, 48 F.4th at 1249.
     Nabozny argues that Hunstein conflicts with our decision
in Gadelhak v. AT&T Services, Inc., 950 F.3d 458 (7th Cir.
2020). In Gadelhak we held that analogizing to common-law
harms requires us to look only for “a close relationship in
kind, not degree.” Id. at 462 (quotation marks omitted). That
remains true even after TransUnion. Still, Hunstein and
Gadelhak are easily reconcilable. As we’ve already explained,
“[p]rivate disclosure is not just a less extreme form of public
disclosure.” Hunstein, 48 F.4th at 1249; see also Shields,
55 F.4th at 829. Because Nabozny “did not allege any pub-
licity at all, we cannot analyze the degree of that non-
publicity.” Hunstein, 48 F.4th at 1249. In other words, be-
cause allegations of publicity are altogether missing from
Nabozny’s complaint, her injury from the alleged § 1692c(b)
violation—if one exists at all—is different in kind from that
No. 22-1202                                                  11

which the common law traditionally has recognized as
actionable.
    Nabozny also relies on Fox v. Dakkota Integrated Systems,
LLC, 980 F.3d 1146 (7th Cir. 2020), and Cothron v. White Castle
System, Inc., 20 F.4th 1156 (7th Cir. 2021), but those cases do
not help her. Fox and Cothron raised Article III standing
questions in the context of claims under the Illinois
Biometric Informational Privacy Act. In Fox we recognized
that biometric identifiers are uniquely “immutable, and once
compromised, are compromised forever.” 980 F.3d at 1155.
We explained that the unlawful collection or retention of
that kind of immutable personal identifying information
invades the “private domain, much like an act of trespass.”
Id. (quoting Bryant v. Compass Grp. USA, Inc., 958 F.3d 617,
624 (7th Cir. 2020)). Debt-related information, by contrast, “is
far less identifying,” id. at 1155 n.2, so the harm from its
disclosure is not comparable.
    The Court’s analysis in TransUnion itself bolsters our
conclusion. That case involved two large subclasses of
plaintiffs in a suit for violation of the Fair Credit Reporting
Act (“FCRA”). Both subclasses claimed that TransUnion’s
internal credit-report files contained misleading information
about them—specifically, alerts on their credit reports
indicating that their names matched those on a Treasury
Department list of “specially designated nationals” consid-
ered to be national security threats. 141 S. Ct. at 2201. One
subclass included those whose credit reports had been
disseminated to potential creditors; the other included those
whose credit reports were never shared with anyone outside
TransUnion. Id. at 2201–02.
12                                                 No. 22-1202

    For the first subclass of plaintiffs, the Court held that
their reputational harm from the disclosure of their mislead-
ing credit reports bore a close relationship to the harm
caused by the tort of defamation. Id. at 2209. Although the
information that TransUnion had disseminated was “only
misleading and not literally false” (as the common law
traditionally requires), the reputational “harm from being
labeled a ‘potential terrorist’” sufficiently resembled the harm
“from being labeled a ‘terrorist.’” Id. (emphasis added). So
the first group had “suffered a concrete injury under
Article III.” Id.
    But for the remaining plaintiffs—those whose credit re-
ports had not been disseminated—the Court held that they
had not suffered a concrete injury. “Publication is essential
to liability in a suit for defamation.” Id. (quotation marks
omitted). The mere existence or retention of false or mislead-
ing information in a database has never been recognized as
an actionable tort. Id. This is so because the basis of a defa-
mation action is “the loss of credit or fame, and not the
insult.” Id. (quoting J. BAKER, AN INTRODUCTION TO ENGLISH
LEGAL HISTORY 474 (5th ed. 2019)). So “the plaintiffs’ harm
[wa]s roughly the same, legally speaking, as if someone
wrote a defamatory letter and then stored it in her desk
drawer.” Id. at 2210. Without disclosure, the letter “does not
harm anyone, no matter how insulting [it] is.” Id.
    Nabozny’s case is comparable to this second subclass of
plaintiffs in TransUnion. Public disclosure is the gravamen of
the tort of giving publicity to another’s private life. But the
harm Nabozny claims to have suffered from the alleged
§ 1692c(b) violation is not remotely analogous to the harm
No. 22-1202                                                     13

caused by the tortious public dissemination of sensitive facts
about another’s private life.
    Another aspect of TransUnion supports our decision here.
In dicta the Supreme Court doubted whether the common
law had traditionally recognized as “actionable publica-
tions” disclosures to “vendors that print[] and sen[d] …
mailings.” TransUnion, 141 S. Ct. at 2210 n.6. Although the
Court made this observation in analogizing the harm from
the alleged FCRA violations to the tort of defamation, its
logic extends to this appeal. The “publication” element in a
defamation claim includes disclosure to just one person,
while the “publicity” element of the privacy tort at issue
here requires disclosure to many. RESTATEMENT § 652D
cmt. a. If a disclosure to a mail vendor is not “a publication”
for defamation purposes, it also cannot be “publicity” for
purposes of the tort of giving publicity to another’s private
life.
    TransUnion emphatically reminded us that “under
Article III, an injury in law is not an injury in fact.” 141 S. Ct.
at 2205. As both Spokeo and TransUnion make clear,
Congress’s enactment of statutory obligations and a private
cause of action for violations does not displace or dilute
Article III limitations on our jurisdiction. “A regime where
Congress could freely authorize unharmed plaintiffs to sue
defendants who violate federal law not only would violate
Article III but also would infringe on the Executive Branch’s
Article II authority.” TransUnion, 141 S. Ct. at 2207. Among
other concerns, “[p]rivate plaintiffs are not accountable to
the people and are not charged with pursuing the public
interest in enforcing a defendant’s general compliance with
regulatory law.” Id. (citing Lujan, 504 U.S. at 577). To enforce
14                                                No. 22-1202

the separation-of-powers boundaries in our constitutional
structure, “[o]nly those plaintiffs who have been concretely
harmed by a defendant’s statutory violation may sue that
private defendant over that violation in federal court.” Id. at
2205.
   Because Nabozny suffered no concrete injury from the
FDCPA violation she alleges here, she lacks standing to sue.
The judge was right to dismiss her suit.
                                                    AFFIRMED