Court Opinion

ID: 4880437
Source: CourtListenerOpinion
Date Created: 2021-08-31 19:01:07.134384+00
Date Added: 2024-06-11T08:02:21.628093
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 19-1400
AUDREY WADSWORTH,
                                                   Plaintiff-Appellee,
                                 v.

KROSS, LIEBERMAN & STONE, INC.
                                               Defendant-Appellant.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
           No. 17 C 8167 — Virginia M. Kendall, Judge.
                     ____________________

   ARGUED FEBRUARY 17, 2021 — DECIDED AUGUST 31, 2021
                ____________________

   Before SYKES, Chief Judge, and FLAUM and ROVNER, Circuit
Judges.
   SYKES, Chief Judge. This case presents a problem that has
become familiar to our circuit: alleged violations of the Fair
Debt Collection Practices Act that have not caused the
plaintiff any concrete harm. These claims allege nothing
more than “bare procedural violation[s],” which Article III
precludes us from adjudicating. Spokeo, Inc. v. Robins,
136 S. Ct. 1540, 1549 (2016). We therefore reverse and re-
2                                                  No. 19-1400

mand with instructions to dismiss for lack of subject-matter
jurisdiction.
                        I. Background
    In September 2016 Pharmaceutical Research Associates,
Inc. (“PRA”), hired Audrey Wadsworth as a study manager
responsible for developing clinical trials. In its offer letter,
PRA described a signing bonus that Wadsworth would
receive—$3,750 payable after 30 days of employment, fol-
lowed by another $3,750 payable after 180 days of employ-
ment. But there was a catch. If Wadsworth voluntarily ended
her employment or PRA fired her for cause within
18 months of the second payment, she was obligated to
repay the full bonus. In her employment agreement, which
Wadsworth signed the day after she accepted the offer letter,
she agreed to promptly reimburse PRA for any amounts
owed as of the final date of her employment. Wadsworth
collected both signing payments, but in September 2017,
after completing one year of employment, PRA fired her.
    Within a week, PRA tasked Kross, Lieberman, & Stone
(“Kross”), a debt-collection agency, with clawing back the
bonus payments. Kross mailed Wadsworth a collection letter
shortly after her employment ended, and in the coming
weeks, a Kross employee called Wadsworth by telephone
four times. Wadsworth then sued Kross claiming that its
letter and phone calls violated the Fair Debt Collection
Practices Act (“FDCPA” or “the Act”), 15 U.S.C. §§ 1692 et
seq., in two ways. First, she claimed that Kross failed to
provide complete written notice of her statutory rights
within five days of the initial communication. 15 U.S.C.
§ 1692g(a). Second, she alleged that the Kross employee who
called her never identified herself as a debt collector or
No. 19-1400                                                    3

stated that she was attempting to collect a debt. Id.
§§ 1692d(6), 1692e(11).
    Both parties moved for summary judgment. Kross did
not contest Wadsworth’s allegations about its conduct but
argued instead that the FDCPA is inapplicable for two
reasons: the signing bonus was not a “debt” within the
meaning of the Act, id. § 1692a(5), and the firm was not
acting as a “debt collector” under the Act because
Wadsworth’s debt was not in default at the time of the letter
and phone calls, id. § 1692a(6). The district court rejected
both arguments and entered summary judgment for
Wadsworth. Kross timely appealed.
                        II. Discussion
    The parties’ briefs and the district judge’s order focus on
whether Wadsworth’s obligation to PRA qualifies as a
“debt” and whether Kross is a “debt collector” within the
meaning of the FDCPA. But no one addressed a more fun-
damental issue: Wadsworth’s standing to sue, which “is
jurisdictional and cannot be waived.” Nettles v. Midland
Funding LLC, 983 F.3d 896, 899 (7th Cir. 2020). Because
Wadsworth has not suffered a concrete injury traceable to
Kross’s alleged FDCPA violations, she lacks standing to sue
and her suit must be dismissed on jurisdictional grounds.
     To establish standing to sue in federal court, “[t]he plain-
tiff 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, 136 S. Ct. at 1547. This case concerns the
injury-in-fact requirement, which is the “[f]irst and fore-
most” of standing’s three elements. Steel Co. v. Citizens for a
4                                                     No. 19-1400

Better Env’t, 523 U.S. 83, 103 (1998). The injury analysis often
occurs at the pleading stage, where we are limited to the
complaint’s “general factual allegations of injury resulting
from the defendant’s conduct” to evaluate standing. Lujan v.
Defs. of Wildlife, 504 U.S. 555, 561 (1992). But the burden
increases at the summary-judgment stage: The plaintiff must
“suppl[y] evidence of ‘specific facts’ that, taken as true, show
each element of standing.” Spuhler v. State Collection Serv.,
Inc., 983 F.3d 282, 286 (7th Cir. 2020) (quoting Lujan, 504 U.S.
at 561). Because we are reviewing a summary judgment, we
must look to evidence in the record to evaluate whether
Kross has suffered an injury in fact.
    To be cognizable in federal court, an injury must be con-
crete; that is, it must be “‘real,’ and not ‘abstract.’” Spokeo,
136 S. Ct. at 1548 (quoting WEBSTER’S THIRD NEW INT’L
DICTIONARY 472 (1971)). Though “traditional tangible harms,
such as physical harms and monetary harms,” most readily
qualify as concrete injuries, “[v]arious intangible harms can
also be concrete.” TransUnion LLC v. Ramirez, 141 S. Ct. 2190,
2204 (2021). “Congress has the power to define intangible
harms as legal injuries for which a plaintiff can seek re-
lief … .” Casillas v. Madison Ave. Assocs., 926 F.3d 329, 333
(7th Cir. 2019). Still, Congress must remain within the
bounds of Article III in creating causes of action for intangi-
ble injuries, and even when it does, not every statutory
violation implicates an interest that Congress sought to
protect. Larkin v. Fin. Sys. of Green Bay, Inc., 982 F.3d 1060,
1064–65 (7th Cir. 2020). Therefore, a plaintiff cannot establish
standing simply by pointing to a mere procedural violation
of a statute. Spokeo, 136 S. Ct. at 1549; Casillas, 926 F.3d at 333.
Rather, he “must show that the violation harmed or ‘pre-
sented an “appreciable risk of harm” to the underlying
No. 19-1400                                                   5

concrete interest that Congress sought to protect.’” Casillas,
926 F.3d at 333 (quoting Groshek v. Time Warner Cable, Inc.,
865 F.3d 884, 887 (7th Cir. 2017)).
    In applying those principles to the FDCPA, we have re-
peatedly recognized a fundamental point: When a debt
collector fails to inform a debtor of his statutory rights, then
the debtor has suffered a concrete injury “only if it impairs
the [debtor’s] ‘ability to use [that information] for a substan-
tive purpose that the statute envisioned.’” Bazile v. Fin. Sys.
of Green Bay, Inc., 983 F.3d 274, 280 (7th Cir. 2020) (quoting
Robertson v. Allied Sols., LLC, 902 F.3d 690, 694 (7th Cir.
2018)). Here, that means Wadsworth incurred a concrete
injury only if Kross’s failure to provide notice of her statuto-
ry rights caused her to suffer a harm identified by the Act,
“such as paying money she did not owe” or would have
disputed. Smith v. GC Servs. Ltd. P’ship, 986 F.3d 708, 710 (7th
Cir. 2021); see also 15 U.S.C. § 1692(a) (finding that abusive
debt-collection practices lead to “personal bankruptcies,”
“marital instability,” “loss of jobs,” and “invasions of indi-
vidual privacy”).
   But Wadsworth has not established that Kross’s commu-
nications caused her any harm related to the Act. Indeed, she
admitted at her deposition that she has not paid either Kross
or PRA in the wake of Kross’s mailings and telephone calls.
Wadsworth has offered us no basis to believe that her sub-
stantive interests under the Act would have been better
protected if Kross had complied with the FDCPA.
   Instead, in her complaint and testimony, Wadsworth
contends only that she suffered emotional harms. The com-
plaint merely alleges that she “has suffered, and continues to
suffer, personal humiliation, embarrassment, mental anguish
6                                                 No. 19-1400

and emotional distress.” The evidentiary record adds little
more. Wadsworth testified at her deposition that she never
paid Kross or PRA any money after Kross contacted her, nor
did she rely on Kross’s communication to her detriment in
any other way. Instead, she stated that she got less sleep and
felt intimidated, worried, and embarrassed. Indeed,
Wadsworth’s own attorney asked her about the “specific
types of injuries” caused by Kross’s letter, to which
Wadsworth merely replied: “Stress, anxiety.” And when her
attorney asked if there were any other injuries, Wadsworth
responded, “Just that’s pretty much it.”
     As our bevy of recent decisions on FDCPA standing
makes clear, anxiety and embarrassment are not injuries in
fact. Indeed, we have expressly rejected “stress” as constitut-
ing concrete injury following an FDCPA violation. Pennell v.
Global Tr. Mgmt., 990 F.3d 1041, 1045 (7th Cir. 2021). Like-
wise, it is not enough for a plaintiff to be “annoyed” or
“intimidated” by a violation. Gunn v. Thrasher, Buschmann &
Voelkel, P.C., 982 F.3d 1069, 1071 (7th Cir. 2020). Nor is it
enough for a plaintiff to experience “infuriation or disgust”
or “a sense of indignation.” Id. Likewise, a plaintiff’s “state
of confusion” resulting from an FDCPA-deficient communi-
cation, without any ensuing detriment, is not a concrete
injury for if it were, “then everyone would have standing to
litigate about everything.” Brunett v. Convergent Outsourcing,
Inc., 982 F.3d 1067, 1068–69 (7th Cir. 2020). These are quin-
tessential abstract harms that are beyond our power to
remedy. The same is true of the stress and embarrassment
that Wadsworth complains of in this case.
   Being informed of an outstanding debt can sometimes be
a stressful experience, but federal courts may entertain
No. 19-1400                                             7

FDCPA claims only when the plaintiff suffers a concrete
harm that he wouldn’t have incurred had the debt collector
complied with the Act. Casillas, 926 F.3d at 334. Because
Wadsworth has not established standing, we REVERSE the
judgment and REMAND with instructions to dismiss this case
for lack of jurisdiction.