Court Opinion

ID: 9953366
Source: CourtListenerOpinion
Date Created: 2024-03-21 22:00:42.918942+00
Date Added: 2024-06-11T14:46:01.913525
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
Nos. 22-2602 & 22-3083
MARK A. PATTERSON,
                                                Plaintiff-Appellee,
                                v.

HOWARD HOWE,
                                            Defendant-Appellant.
                    ____________________

          Appeals from the United States District Court for the
          Southern District of Indiana, Indianapolis Division.
No. 1:16-cv-03364-DML-SEB — Debra McVicker Lynch, Magistrate Judge.
                    ____________________

  ARGUED SEPTEMBER 12, 2023 — DECIDED MARCH 21, 2024
               ____________________

   Before EASTERBROOK, HAMILTON, and PRYOR, Circuit
Judges.
    HAMILTON, Circuit Judge. Attorney Howard Howe ﬁled
suit for a client in an Indiana state court against Mark Patter-
son to collect an unpaid educational debt. Along with the
complaint and summons, Howe served Patterson with four
requests for admission, as allowed by Indiana law. Howe did
not warn Patterson that the requests would be deemed admit-
ted if Patterson did not respond within thirty days. Patterson
2                                       Nos. 22-2602 & 22-3083

answered the complaint but did not respond to the requests
for admission. As we explain below, however, Patterson did
not alter his behavior in response to the requests for admis-
sion, and during the state-court proceedings, Howe never
tried to take advantage of Patterson’s failure to respond.
    Instead, while that action was pending, Patterson ﬁled this
separate federal lawsuit alleging that Howe’s practice of serv-
ing requests for admission, at least without warning him of
the consequences of failing to respond, violated the federal
Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. The
district court granted summary judgment to plaintiﬀ Patter-
son. The parties later stipulated to an award of statutory dam-
ages of $1,000 to Patterson, and the court awarded him more
than $58,000 in attorney fees and costs. Defendant Howe has
appealed both the merits judgment and the award of fees and
costs. We vacate both judgments and order dismissal of the
case. Under circuit law, Patterson lacks standing to bring his
claim because he was not concretely harmed by Howe’s al-
leged statutory violation.
I. Factual and Procedural Background
    The parties do not dispute the facts of this case except in a
few instances noted below. In 2012, plaintiﬀ Mark Patterson
began studying at the Indiana Institute of Technology, also
known as Indiana Tech. Patterson thought ﬁnancial aid would
cover the cost of his classes. But he submitted his ﬁnancial aid
paperwork for the ﬁrst semester too late and lost his ﬁnancial
aid for that semester. Patterson contends that the school’s ﬁ-
nancial aid oﬃce was responsible for his tardiness because it
gave him the wrong deadline. Howe, who had ﬁled the col-
lection suit on behalf of Indiana Tech, disagreed with that as-
sessment. Regardless of fault, though, the parties agree that
Nos. 22-2602 & 22-3083                                        3

Patterson accumulated about $7,500 in student loan debt from
his ﬁrst semester. Indiana Tech then put a hold on his tran-
script, causing him to interrupt his education.
    For several years, Patterson tried to resolve his debt. He
emailed the school’s ﬁnancial aid oﬃce and tried to settle the
matter, but the parties could not reach a resolution. Eventu-
ally, in May 2016, Indiana Tech retained attorney Howe to sue
Patterson on the debt. When Howe ﬁled suit, he served four
documents: a summons, a complaint, a copy of the Payment
Options Form that Patterson had signed when he began tak-
ing classes, and a one-page document that listed four requests
for admission. Two requests were particularly signiﬁcant.
They asked Patterson to admit that the complaint’s allegations
were true and that Patterson had no valid counterclaim.
    Patterson answered the complaint but did not respond to
the requests for admission. Under Indiana Trial Rule 36,
which parallels Federal Rule of Civil Procedure 36, requests
for admission are deemed admitted if the recipient does not
respond within thirty days. Patterson claims that when the
thirty-day window expired, he did not know the requests for
admission would be deemed admitted. He learned of this con-
sequence later.
    Though he had no attorney in the state-court action
against him, Patterson hired an attorney to ﬁle this putative
class-action lawsuit against attorney Howe for serving the re-
quests for admission without warning that they would be ad-
mitted absent a response within thirty days. Patterson alleged
that this practice violated 15 U.S.C. § 1692e and § 1692f of the
Fair Debt Collection Practices Act, which prohibit false, de-
ceptive, misleading, unfair, and unconscionable means in
4                                       Nos. 22-2602 & 22-3083

collecting consumer debts owed to someone other than the
collector.
    The state and federal cases proceeded separately for a few
months. Patterson and Indiana Tech then settled the state case.
Patterson agreed to pay $150 per month until he paid oﬀ his
outstanding student debt of $7,500. He also agreed to pay
$181 in court costs. In exchange, Indiana Tech agreed to re-
lease Patterson’s transcript, allowing him to continue his ed-
ucation elsewhere. For reasons not included in our record, the
settlement did not address Patterson’s related claim in this
federal case against attorney Howe.
    Patterson continued to press this FDCPA action in federal
court. In 2017, the parties ﬁled cross-motions for summary
judgment. Patterson argued that the requests for admission
violated the Act as a matter of law because they were a decep-
tive and misleading debt collection practice. Howe argued,
among other points, that Patterson lacked standing to pursue
his claim. The district court held in favor of Patterson, ﬁnding
that he had suﬀered an injury in fact when he was misled by
the requests for admission. Patterson v. Howe, 307 F. Supp. 3d
927, 939 (S.D. Ind. 2018). The district court also held that
Howe violated the Act because the requests for admission
“would confuse an unsophisticated debtor … about the re-
quired timing and manner of a response to the plaintiﬀ’s
claims.” Id. at 936. The district court later certiﬁed a class of
“All persons in the State of Indiana who received … from De-
fendant requests for admission served along with the com-
plaint or notice of claim that were not accompanied by the no-
tiﬁcation that the requests are deemed admitted unless the de-
fendant serves a written answer or objection to the requests
upon the plaintiﬀ within thirty days.”
Nos. 22-2602 & 22-3083                                          5

    In August 2020, Howe asked the district court to recon-
sider its decision regarding Patterson’s standing. Howe ar-
gued that our decision in Casillas v. Madison Avenue Associates,
Inc., 926 F.3d 329 (7th Cir. 2019), reshaped this circuit’s stand-
ing doctrine and undercut the district court’s decision that
Patterson had standing here. The district court granted
Howe’s motion for reconsideration insofar as it allowed him
to conduct additional discovery pertaining to Patterson’s
standing. Patterson v. Howe, No. 1:16-cv-3364, 2021 WL
1124610, at *1, *6 (S.D. Ind. Mar. 23, 2021).
    The district court ultimately still found that Patterson had
standing to pursue his individual claim under the Act.
Patterson v. Howe, No. 1:16-cv-3364, 2022 WL 20814938, at *6
(S.D. Ind. July 25, 2022). The district court found that
Patterson would have denied the requests for admission
within thirty days if he had known they would be deemed
admitted otherwise, and that his subjective perception that he
had lost negotiating leverage was a concrete injury suﬃcient
to support his standing. Applying the Supreme Court’s
intervening decision in TransUnion LLC v. Ramirez, 594 U.S.
413 (2021), however, the district court decertiﬁed the class.
The parties then stipulated to a statutory damages award of
$1,000. The district court later awarded Patterson $58,475.32
in attorney fees and costs under 15 U.S.C. § 1692k(a)(3).
II. Analysis
    Howe argues that the district court erred in its standing
determination, merits analysis, and award of costs and fees.
In our review here, we view the evidence in the light reason-
ably most favorable to Patterson, but we review de novo legal
issues concerning Patterson’s standing. Spuhler v. State Collec-
tion Service, Inc., 983 F.3d 282, 285 (7th Cir. 2020). The
6                                        Nos. 22-2602 & 22-3083

undisputed facts show here that Patterson did not have stand-
ing to bring his FDCPA claim. We therefore do not reach the
remaining issues raised by Howe.
    To establish standing, a plaintiﬀ must show that he has
suﬀered or is at imminent risk of suﬀering an injury caused
by the defendant and that the injury could likely be redressed
by favorable judicial relief. TransUnion, 594 U.S. at 423. Not all
injuries satisfy this requirement. Only injuries that are con-
crete, particularized, and actual or imminent qualify as inju-
ries in fact. Id. at 423–24.
    A concrete injury is one that is “real, and not abstract.” Id.
at 424. Tangible harms such as monetary loss and physical
damage ordinarily suﬃce. An intangible harm can also be
concrete if it bears “a close relationship to a harm traditionally
recognized as providing a basis for a lawsuit in American
courts.” Id. (internal quotations omitted). For example, repu-
tational and privacy harms are suﬃciently concrete because
they have established common-law analogues. Id. at 425. The
relationship between a harm made actionable under a statute
and a common-law counterpart need not be exact: the resem-
blance must exist only “in kind, not degree.” Nabozny v. Optio
Solutions LLC, 84 F.4th 731, 736 (7th Cir. 2023), quoting Gadel-
hak v. AT&T Services, Inc., 950 F.3d 458, 462 (7th Cir. 2020), cit-
ing Spokeo, Inc. v. Robins, 578 U.S. 330, 341 (2016).
    Intangible harms arising from statutory violations can
satisfy the injury-in-fact requirement so long as they are
suﬃciently concrete. Congress may create civil liability for
conduct that is not actionable under the common law, and
consumer-protection statutes like the Fair Credit Reporting
Act and the Fair Debt Collection Practices Act are prime
examples.
Nos. 22-2602 & 22-3083                                         7

    In TransUnion, the Supreme Court laid out how lower
courts should address standing based on an intangible harm
made actionable by a statute. Courts must consider whether
the harm bears a close relationship to any harms traditionally
recognized as providing a basis for lawsuits in American
courts, including those harms speciﬁed by the Constitution
itself, and must aﬀord “due respect to Congress’s decision” to
impose obligations on a defendant and to grant a private
cause of action. TransUnion, 594 U.S. at 425. Courts must not
defer automatically to Congress’s judgment, id. at 426–27, but
common-law and constitutional analogues need not provide
an exact match, id. at 424–25. Congress cannot “transform
something that is not remotely harmful into something that
is,” id. at 426, quoting Hagy v. Demers & Adams, 882 F.3d 616,
622 (6th Cir. 2018), but it may “elevate to the status of legally
cognizable injuries concrete, de facto injuries that were
previously inadequate in law,” id. at 425. This respect for
congressional action is “essential to the Constitution’s
separation of powers.” Id. at 429. Just as courts may not
overstep their role by adjudicating non-justiciable cases, so
too they should not overstep their role by refusing to allow
remedies for injuries that Congress reasonably deemed
compensable.
    The Supreme Court gave these general principles more
speciﬁc content in applying them to the plaintiﬀs’ Fair Credit
Reporting Act claims in TransUnion, allowing some class
members’ claims and rejecting others’ claims. The plaintiﬀ
class alleged that TransUnion had violated the Act by includ-
ing in credit reports unreliable information indicating that the
subjects had potential terrorist ties. Id. at 430.
8                                       Nos. 22-2602 & 22-3083

    The Supreme Court held ﬁrst that a subset of class mem-
bers—those whose reports with potential terrorist ties had
been disseminated to potential lenders—had standing. Their
asserted harm had a close relationship to harms long recog-
nized under the common law tort of defamation. Id. at 433.
Those class members had standing based on the distribution
of the information without showing more concrete harm,
such as an actual refusal to extend credit because of the dis-
tributed information.
    The Court then held that class members whose TransUn-
ion ﬁles included the misleading potential terrorism alerts,
but without evidence that the information had been dissemi-
nated any further, lacked standing. Id. at 433–34. The Court
compared the undisseminated information to a defamatory
letter that is never sent but kept in a desk drawer. In addition,
the Court held that the risk of future harm did not, considered
alone, support standing for a claim for damages. Id. at 436–37.
    Returning from these general principles to this case, plain-
tiﬀ Patterson oﬀers two related theories to establish standing.
First, he contends that he would have denied the requests for
admission if he had been warned they would be deemed ad-
mitted after thirty days without a response. The fact that he
would have taken a diﬀerent course of action, he argues, suf-
ﬁces to show a concrete injury. Second, Patterson argues that
his inadvertent admissions caused him to lose negotiating
leverage in the debt-collection suit, ultimately forcing him to
settle for the full amount he allegedly owed.
   Neither of these theories shows a concrete injury under
our circuit’s recent case law on standing under the Fair Debt
Collection Practices Act. First, even if we assume that Patter-
son’s behavior might have been altered by Howe’s alleged
Nos. 22-2602 & 22-3083                                          9

statutory violation, he still did not show that he suﬀered con-
crete harm from that change. Second, the harm that he alleges
he ultimately suﬀered—monetary loss due to a lack of lever-
age in settlement negotiations—occurred after he ﬁled his
complaint, which means it cannot provide the basis for stand-
ing in this case.
   A. Diﬀerent Course of Action
    Patterson contends that he would have denied the re-
quests for admission if he had known they would be deemed
admitted without a timely response. We assume that is correct
as a matter of fact. He argues that this alteration to his behav-
ior—misleading him into not denying the requests for admis-
sion instead of denying them—amounted to a concrete injury.
    Patterson’s argument picks up a thread in our case law rec-
ognizing that altered behavior can be a concrete harm. Re-
garding debt collection practices, we said in Markakos v. Medi-
credit, Inc., 997 F.3d 778, 780 (7th Cir. 2021), that “an FDCPA
violation might cause harm if it … alters a plaintiﬀ’s response
to a debt.” For example, a plaintiﬀ might suﬀer an injury if a
misleading debt collection practice “leads her to pay some-
thing she does not owe, or to pay a debt with interest running
at a low rate when the money could have been used to pay a
debt with interest running at a higher rate.” Brunett v. Conver-
gent Outsourcing, Inc., 982 F.3d 1067, 1068 (7th Cir. 2020).
   But not all actions taken or not taken due to confusion,
misunderstanding, or ignorance amount to concrete injuries.
Hiring an attorney to seek guidance or to ﬁle a lawsuit is not
a concrete harm, even though it is behavior in reaction to a
debt collection practice. Id. at 1069; Nettles v. Midland Funding,
LLC, 983 F.3d 896, 900 (7th Cir. 2020); cf. Choice v. Kohn Law
10                                      Nos. 22-2602 & 22-3083

Firm, S.C., 77 F.4th 636, 640–41 (7th Cir. 2023) (Hamilton, J.,
dissenting) (hiring lawyer to defend state-court debt collec-
tion action should support standing where debt collector al-
legedly violated FDCPA in connection with the suit). That is
because hiring an attorney to ﬁle a new lawsuit is not a per-
sonalized injury. Otherwise, anyone could sue for any alleged
FDCPA violation, whether or not he suﬀered any other injury
from the allegedly misleading practice.
    For an injury in fact, a statutory violation must cause a
plaintiﬀ to change his behavior in a way that inﬂicts concrete
harm on the plaintiﬀ. A good example is Lavallee v. Med-1
Solutions, LLC, 932 F.3d 1049 (7th Cir. 2019). A debt collector
had sued plaintiﬀ Lavallee in state court for unpaid medical
bills but did not send her written notice of her rights under
15 U.S.C. § 1692g(a) and (b). The plaintiﬀ responded to this
statutory violation by suing the debt collector in federal court.
We aﬃrmed summary judgment for the plaintiﬀ, holding that
she had standing to pursue her claims because it was
“reasonable to infer that she would have exercised her
statutory rights” to dispute and insist on veriﬁcation of her
debts if the debt collector had provided the required
disclosures. Id. at 1053. If she had exercised those rights, the
Act would have required a halt in the debt collection action
against her.
    To be sure, Patterson’s situation resembles that in Lavallee
in some ways. Both plaintiﬀs were victims of allegedly mis-
leading debt collection practices that caused them to forgo
taking actions they otherwise would have taken. The lack of
warning caused Patterson not to deny the requests for admis-
sion, which resembles the theory that the lack of written
Nos. 22-2602 & 22-3083                                                   11

notice caused the plaintiﬀ in Lavallee not to dispute or verify
her debts.
    The decisive diﬀerence, however, is that Patterson lacks
the most essential component for purposes of Article III
standing: concrete harm. Howe never so much as hinted that
he might use the admissions against Patterson. Any subjective
beliefs or fears that Patterson harbored about the admissions
imposed no greater injury than other mental states, like con-
fusion, that we have previously deemed inadequate to confer
standing. 1 If Patterson’s confusion had caused him to act to
his detriment, then he might have had standing. See Brunett,
982 F.3d at 1068. But Patterson’s confusion, by itself, was not
enough. Pierre v. Midland Credit Management, Inc., 29 F.4th 934,
939 (7th Cir. 2022), rehearing en banc denied, 36 F.4th 728 (7th
Cir. 2022).
    Patterson’s argument also fails because he has not identi-
ﬁed a “close historical or common-law analogue” that resem-
bles the eﬀects of failing to answer requests for admission. See
TransUnion, 594 U.S. at 424. Identifying such an analogue can
help show that intangible injuries can support standing even
if they are not easily reduced to monetary ﬁgures. See Ewing
v. MED-1 Solutions, LLC, 24 F.4th 1146, 1153–54 (7th Cir. 2022)
(holding that plaintiﬀs had standing because failing to report
to a credit reporting agency that plaintiﬀ disputed her debts
resembled common-law tort of defamation); Persinger v.
Southwest Credit Systems, L.P., 20 F.4th 1184, 1191–93 (7th Cir.

    1 We have previously implied, but not decided, that psychological

states like worry and confusion might confer standing if they manifest in
harm that is supported by a medical diagnosis. Pennell v. Global Trust Man-
agement, LLC, 990 F.3d 1041, 1045 (7th Cir. 2021). There is no such evidence
or claim here.
12                                             Nos. 22-2602 & 22-3083

2021) (concluding that plaintiﬀ had standing because unau-
thorized inquiry into consumer’s propensity-to-pay score re-
sembled common-law tort of intrusion upon seclusion). Pat-
terson’s brieﬁng did not try to identify any historical or com-
mon-law analogue for the harm he allegedly suﬀered. In re-
sponse to a question at oral argument, his counsel suggested
when asked that his claim was analogous to common-law
fraud. Oral argument is too late for such a new theory, which
in any event misses the point, which is whether the alleged
injury has a reasonable common-law (or constitutional) ana-
log. It is not the courts’ responsibility to develop an argument
for a party. 2

     2 The alleged unfair action here is the use of a common discovery

method authorized by both Indiana and federal rules of procedure, nei-
ther of which requires a party serving a request for admission on another
party to explain the applicable rules. The Ninth Circuit has held that a debt
collector can violate the FDCPA by serving requests for admission of facts
the debt collector knows are incorrect. McCollough v. Johnson, Rodenburg &
Lauinger, LLC, 637 F.3d 939, 952 (9th Cir. 2011) (affirming summary judg-
ment for plaintiff). In McCollough, the Ninth Circuit explained that debt
collection practices are viewed from the standpoint of “the least sophisti-
cated debtor,” who cannot be expected to anticipate that a response within
thirty days is required. Id. Our circuit uses a standard of “an unsophisti-
cated consumer.” See Gammon v. GC Services Ltd. P’ship, 27 F.3d 1254,
1258–60 & n.† (7th Cir. 1994) (Easterbrook, J., concurring) (noting that “the
least sophisticated consumers” believed that twelve United States Senators
were from other planets) (emphasis added). Such differences in the stand-
ard may not matter when it comes to consumer-debtors’ understanding of
discovery rules for litigation. In any event, a warning about failure to re-
spond to a request for admissions would seem readily comparable to the
requirements in Federal Rule of Civil Procedure 4(a)(1)(D) & (E) and Indi-
ana Trial Rule 4(C)(5) that a summons inform the defendant when a re-
sponse is due and that a failure to appear and defend may result in a de-
fault judgment. In another analogous situation—motions for summary
Nos. 22-2602 & 22-3083                                                     13

    B. Diminished Negotiating Leverage
    Patterson also argues that his uninformed failure to deny
the requests for admission left him with no negotiating lever-
age, causing him to settle the state-court action for more
money than he believed he owed. We see numerous problems
with this theory. For example, it seems to call for pure specu-
lation about how the state-court action might have been re-
solved absent the actual settlement. The theory also makes us
wonder about causation since (a) attorney Howe never took
any steps to take advantage of Patterson’s failure to respond
to the requests for admission, and (b) Patterson’s own lawyer
ﬁled this FDCPA action apparently without informing Patter-
son that he could ask the state court to allow him to withdraw
the admissions under the escape hatch in Indiana Trial Rule
36(B), which parallels that in Federal Rule of Civil Procedure
36(b).
    Without answering these questions, however, we ﬁnd this
theory for standing faces a more basic problem. Standing
must exist at the time a lawsuit is ﬁled. Milwaukee Police Ass’n
v. Board of Fire & Police Comm’rs, 708 F.3d 921, 928 (7th Cir.
2013). Patterson ﬁled his initial complaint in this case on De-
cember 14, 2016. He did not settle his state-court case until
four months later. When Patterson ﬁled his federal complaint,
the mere possibility that his deemed admissions might be

judgment filed against pro se prisoner-plaintiffs—this court has long re-
quired a moving defendant to notify the plaintiff of the consequences of
failing to respond to the motion with affidavits of his own. Lewis v. Faulk-
ner, 689 F.2d 100, 102 (7th Cir. 1982). But failure to give the required Lewis
notice means only that summary judgment may not be granted. We have
never suggested that such a failure is tortious or could support a separate
lawsuit akin to this one.
14                                      Nos. 22-2602 & 22-3083

used against him was neither concrete nor imminent. Such
speculative injuries do not support standing for damages
claims. TransUnion, 594 U.S. at 436–37. Any number of inter-
vening events could have prevented Patterson from feeling
obliged to settle for the full amount, including the possibility
that his attorney in this case—who presumably understood
Indiana Trial Rule 36, since the rule is at the heart of this
case—could have advised Patterson to move under Rule 36(B)
to withdraw the admissions.
     To the extent that Patterson argues that he was injured by
merely believing that he had lost negotiating leverage, as op-
posed to any monetary loss that resulted from that belief, he
still fails to establish standing. This sort of worry resembles
the psychological states we have previously deemed inade-
quate. See, e.g., Wadsworth v. Kross, Lieberman & Stone, Inc.,
12 F.4th 665, 668 (7th Cir. 2021) (listing psychological states
that do not support standing).
    Because Patterson lacks standing, the judgment of the dis-
trict court, ECF 155, is VACATED and the case is
REMANDED to the district court to dismiss the case for lack
of subject matter jurisdiction. The district court’s award of fees
and costs, ECF 168, is also VACATED.