FDCPA Claims: Confusion Alone is not an Injury for Article III Standing Purposes

By: Kimberly Moyal

St. John's University School of Law

American Bankruptcy Institute Law Review Staff

 

The Fair Debt Collection Practices Act (FDCPA) generally prohibits debt collectors from misrepresenting their identity or using unfair practices to collect debts.[1] Under the FDCPA, a debtor may be entitled to certain remedies, including monetary damages and attorney’s fees, when a debt collector violates the FDCPA.[2] In Ward v. National Patient Account Services, Inc., the United States Court of Appeals for the Sixth Circuit held that Carl Ward, a debtor, lacked standing to bring a FDCPA claim under Article III of the U.S. Constitution, which generally gives an injured plaintiff the right bring a claim in federal court.[3]

In 2018, Ward owed $160 to Stonecrest Medical Center.[4] Thereafter, National Patient Account Services, Inc. (NPAS), a debt collector, was hired by Stonecrest to collect the outstanding balance from Ward.[5] Despite NPAS’s efforts, Ward failed to make payment and thus, NPAS returned Ward’s accounts to Stonecrest.[6] In response to NPAS’s collection attempts, Ward filed a complaint against NPAS with the United States District Court for the Middle District of Tennessee alleging that NPAS violated the FDCPA by misrepresenting the true name of its business, which resulted in Ward sending a cease-and-desist letter to the wrong business.[7] Ward sought actual and statutory damages, and costs and attorney’s fees.[8] NPAS moved for summary judgment.[9] The district court granted summary judgment in favor of NPAS holding that NPAS was not a “debt collector” under the FDCPA and thus, was not subject to the FDCPA.[10] Ward appealed the district court’s decision.[11] On appeal, the United States Court of Appeals for the Sixth Circuit “vacate[d] the district court's order entering summary judgment and remand[ed] the case with instructions that it be dismissed” because, according to the Sixth Circuit, Ward lacked standing to pursue an FDCPA claim under Article III of the U.S. Constitution.[12]

The Sixth Circuit applied the Article III standing analysis, which required Ward to prove the following three elements: “‘[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, (3) that is likely to be redressed by a favorable judicial decision.’”[13] The injury in fact element of standing has two sub-elements.[14] The injury must be particularized and concrete.[15] The Sixth Circuit analyzed whether “the violation of [Ward’s] procedural rights under the FDCPA alone [constituted] a concrete injury” and whether “the confusion [Ward] suffered, the expense of counsel, and the phone call that he received from NPAS, Inc. qualif[ied] as independent concrete injuries.”[16] First, Ward asserted that NPAS failed to state Ward’s full name in phone calls, resulting in the traditional harm of “invasion of privacy.”[17] But the Sixth Circuit noted that “the mere failure to provide certain information does not mirror an intentional intrusion into the private affairs of another.”[18] As for Ward’s confusion, the Sixth Circuit has “held before, [that] confusion alone is not a concrete injury for Article III purposes.”[19] Next, the Sixth Circuit reasoned that “applying Ward’s logic to any plaintiff who hires counsel to affirmatively pursue a claim would nullify the limits created by Article III.”[20] Last, Ward failed to “‘clearly allege’” a concrete injury in his complaint.[21]

Ultimately, the Sixth Circuit found that Ward did not satisfy his burden of “‘clearly alleg[ing] facts demonstrating’ each element” of standing, specifically, concrete injury.[22] Consequently, Ward did not have standing to bring an FDCPA claim.[23] And as a matter of public policy, the Sixth Circuit determined that broadening the limits of Article III to allow a party without a concrete injury to bring a claim would open the floodgates to additional FDCPA claims.[24]




[1] See 15 U.S.C. § 1692 (2021); Ward v. National Patient Account Services, Inc., 9 F.4th 357, 362-63 (6th Cir. 2021).

[2] Id.

[3] Ward, 9 F.4th at 360; see U.S. Const. art. III, §§ 1-2.

[4] Ward, 9 F.4th at 359 (“At the end of each visit, [Ward] owed a balance of $80.00.”).

[5] Id. (“Stonecrest tasked NPAS, Inc. with the job of collecting Ward’s outstanding balance on each of his accounts.”).

[6] Id. at 359–60. On October 3, 2018, NPAS sent Ward the first billing statement regarding the payment of the July treatment. On October 24, 2018, NPAS left a voice message. In November and December of 2018, NPAS sent a second billing statement and a second voice message. When Ward failed to pay NPAS, Inc. for the July treatment, NPAS “returned [Ward’s] account to Stonecrest. “Ward’s second account regarding his October visit followed a similar billing process.” And when Ward failed to pay NPAS for the October treatment, Ward’s second account was also returned to Stonecrest.

[7] Id. at 362 (“[Plaintiff Ward] argue[d] that the FDCPA created an enforceable right to know who is calling about a debt and that [Defendant National Patient Account Services Solutions, Inc.’s] failure to identify its full name concretely injured him.”). 

[8] Ward v. NPAS, Inc., 2020 WL 4287178, at *4 (M.D.Tenn., 2020).

[9] Id.

[10] Ward, 9 F.4th at 360.

[11] Id. (noting that the district court “dismissed the case in its entirety” and “Ward timely filed this appeal”).

[12] Id. at 363.

[13] Id.

[14] Ward, 9 F.4th at 361.

[15] Id.

[16] Id.

[17] Id. at 362.

[18] Ward, 9 F.4th at 362 (finding that Ward did not suffer an injury “[b]ecause the procedural injuries Ward assert[ed] do not bear a close relationship to traditional harms” and that Ward “cannot demonstrate standing based upon the statutory violations alone”).

[19] Id. at 363.

[20] Id. (noting that Ward’s claim that “he suffered concrete harm because NPAS, Inc.’s voice messages caused him to retain counsel to prevent NPAS, Inc. from making further calls” did not qualify as a concrete injury).

[21] Id. (“[T]o the extent that Ward argue[d] on appeal that the harm he suffered was the single voice message he received after he sent a cease-and-desist letter to the wrong entity, he did not ‘clearly allege’ that harm in his complaint.”).

[22] Ward, 9 F.4th at 360.

[23] Id. at 363.

[24] Id.