7th Circuit affirms dismissal of FDCPA case

Courts Seventh Circuit FDCPA Appellate Debt Cancellation Debt Buying

On August 11, the U.S. Court of Appeals for the Seventh Circuit affirmed a lower court’s decision to grant defendants’ motion to dismiss, ruling that the plaintiff lacked standing. Plaintiff defaulted on a credit card debt that was purchased by one of the defendants and hired another defendant to collect said debt. The debt collector defendant sued plaintiff for the outstanding debt along with "statutory attorney fees,” but also appended an affidavit to the complaint asserting that no additional amounts were being pursued beyond the charge-off date, including attorney's fees. Plaintiff sued under the Fair Debt Collection Practices Act (FDCPA) in federal district court, claiming that the two declarations were in conflict and amounted to false, misleading, and deceptive communications.

The U.S. District Court for the Northern District of Illinois held that plaintiff did not show concrete harm for Article III standing, adding that plaintiff did not raise an FDCPA claim in the amended complaint regarding the underlying debt, and that plaintiff made conflicting statements. The court granted defendants’ motions to dismiss for failure to state a claim.

On appeal, the 7th Circuit affirmed the district court ruling, holding that plaintiff did not demonstrate harm to establish Article III standing, and that the complaint was properly dismissed for lack of subject matter jurisdiction in the district court. In doing so, the 7th Circuit noted that plaintiff’s decision to hire an attorney was insufficient to establish standing and that plaintiff made contradictory statements when he denied owing the debt during discovery, but on appeal contended he would have paid the debt but for defendants’ contradictory statements.