Last month the U.S. Court of Appeals for the Eleventh Circuit clarified and effectively expanded provisions of the Fair Debt Collection Practices Act (“FDCPA”) in Hunstein v. Preferred Collection & Mgmt. Services, Inc., 19-14434, 2021 WL 1556069 (11th Cir. Apr. 21, 2021). In Hunstein, the debtor (Hunstein) incurred debt due to medical treatment his son received at Johns Hopkins All Children’s Hospital.i Johns Hopkins assigned Hunstein’s debt to Preferred Collection & Management Services (“Preferred”) for collection. Preferred hired a commercial mail vendor (“Compumail”) to send out a dunning letter and, to facilitate that, Preferred sent Compumail information about Hunstein’s collections account including: “(1) his status as a debtor, (2) the exact balance of his debt, (3) the entity to which he owed the debt, (4) that the debt concerned his son’s medical treatment, and (5) his son’s name.”
As a result of the dunning letter, Hunstein filed a complaint in federal court alleging Preferred violated § 1692c(b) (titled “Communication with third parties”) of the FDCPA, which reads:
Except as provided in section 1692b of this title, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.
15 U.S.C. § 1692c(b). The district court dismissed Hunstein’s complaint concluding Preferred’s communications with Compumail did not “qualify as a communication ‘in connection with the collection of a[ny] debt.’” Hunstein appealed that dismissal to the Eleventh Circuit.
The Court’s first consideration on appeal was whether it had subject matter jurisdiction pursuant to Article III of the U.S. Constitution. The Court’s Article III standing analysis centered around whether Hunstein suffered an “injury in fact” based on Preferred’s violation of § 1692c(b). The Court explained “that in determining whether a statutory violation confers Article III standing, we should consider ‘history and the judgment of Congress.’”ii As to history, the Court stated if the § 1692c(b) claim “has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts” then such violation would constitute an “injury in fact” under the Article III analysis.
The Court surmised that “invasions of personal privacy” through the “public disclosure of private facts” have long formed the basis for tort claims. The Court then looked to the FDCPA’s own statutory findings which it noted “explicitly identif[ied] ‘invasions of individual privacy’ as one of the harms against which the statute is directed.”iii The Court concluded claims brought under § 1692c(b) bore a close relationship to invasion of privacy tort claims so history favored Article III standing. The Court then surmised that the “judgment of Congress” also weighed in favor of standing since Congress identified invasion of privacy as a harm against which the statute was directed. The Court concluded Hunstein had standing to sue Preferred.
The Court then narrowed the issue on appeal to “whether Preferred’s communication with Compumail was ‘in connection with the collection of any debt,’ such that it violates § 1692c(b).”iv Looking to the plain meaning of the phrase “in connection with” the Court concluded that Preferred’s communication with Compumail “concerned,” was related to and was in “reference to” the collection of Hunstein’s debt. The Court rejected Preferred’s three rebuttal arguments. First, Preferred argued that there must be “a demand for payment” in the communication in order for the communication to be considered made “in connection with the collection of any debt.” The Court disagreed explaining that such a requirement would render the exceptions under § 1692c(b) “superfluous.”v The Court elaborated that four of the six excepted parties – the debtor’s attorney, a consumer reporting agency, the creditor, and the creditor’s attorney – “would never include a demand for payment.” Since every word and provision in a statute is to be given effect, the Court concluded a demand for payment was not a requirement for a communication to be considered made “in connection with the collection of any debt.”
The Court also refused to adopt the “multi-factoring balancing test” urged by Preferred.vi Under that test the Court would consider a list of seven factors and based on those factors determine whether the communication was made “in connection with the collection of any debt.” In rejecting this approach the Court again explained the phrase “in connection with the collection of any debt” had a “discernible ordinary meaning that obviates the need for resort to extratextual factors” which “all too often…obscure more than they illuminate.”vii Lastly, the Court acknowledged its holding “runs the risk of upsetting the status quo in the debt-collection industry” but still rejected Preferred’s “industry practice argument.” The Court explained it was obliged to “interpret the law as written, whether or not…the resulting consequences are particularly sensible or desirable.” The Court invited Congress to comment or amend § 1692c(b) if it thought the Court misread the statute. The Court reversed the lower court’s dismissal and remanded the matter for further proceedings.
i Hunstein, at *2. All future citations and quotations are to this cite unless indicated otherwise.
iii Hunstein, at *4.
iv Hunstein, at *5. All future citations and quotations are to this cite unless indicated otherwise.
v Hunstein, at *6. All future citations and quotations are to this cite unless indicated otherwise.
vi Hunstein, at *7-8.
vii Hunstein, at *8. All future citations and quotations are to this cite unless indicated otherwise.