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Financial Services Law Insights and Observations

11th Circuit says wasted time, distress can confer FDCPA standing

Courts State Issues Appellate Eleventh Circuit Debt Collection Consumer Finance FDCPA Florida


On September 7, the U.S. Court of Appeals for the Eleventh Circuit vacated the dismissal of an FDCPA action after determining that wasted time and emotional distress can be sufficiently concrete as to confer Article III standing. After the plaintiff fell behind on his monthly condo association payments, the association referred the matter to a law firm (collectively, “defendants”). The defendant law firm eventually filed a claim of lien against the plaintiff’s condo and threatened foreclosure if the plaintiff did not pay more than $10,000 in past-due fees, interest, late fees, attorney’s fees, and costs. The plaintiff sued for violations of the FDCPA and state law, claiming, among other things, that the debt collection letters and claim of lien overstated the amount due by including interest, late fees, and other charges not permitted under Florida law. He also alleged that the law firm violated the FDCPA by filing the claim of lien in the public record, thereby communicating with a third party about his debt without permission. These actions, the plaintiff contended, caused him emotional distress and cost him time, money, and effort when “trying to ‘determine, verify, and dispute the amounts being sought against him.’” The plaintiff eventually voluntarily dismissed the claims against the association, and the law firm moved to dismiss for lack of jurisdiction. The district court determined that the plaintiff lacked standing because the law firm’s actions did not cause him any concrete injury and dismissed the suit.

On appeal, the 11th Circuit disagreed after finding that the time the plaintiff spent trying to determine the correct amount of debt and the emotion distress he suffered during the process were adequate to satisfy constitutional standing requirements. “[Plaintiff] presented evidence that he suffered injuries—including an inaccurate claim of lien against his property; time spent trying to determine the correct amount of his debt, resolve the lien, and avoid the threatened foreclosure; and emotional distress manifesting in a loss of sleep—which are sufficiently tangible to confer Article III standing,” the appellate court wrote. The 11th Circuit explained that while the time and money spent on the FDCPA lawsuit itself could not give rise to a concrete injury for standing purposes, the time and money spent by the plaintiff defending against a legal action taken by a debt collector was “separable” from the costs of bringing the FDCPA suit. Moreover, the appellate court determined that the defendants refusing to release the lien against the plaintiff’s home unless he paid more than what was actually owed “was a tangible harm sufficient to give [plaintiff] standing for his claims that the defendants’ conduct in filing the lien and threatening to foreclose on it violated the FDCPA.”