This week’s 6-2 decision from the U.S. Supreme Court in Spokeo v. Robins concerning a Fair Credit Reporting Act (FCRA) violation should bolster the defense of debt buying companies in future Fair Debt Collection Practices Act (FDCPA) litigation. The ruling addresses lawsuits that claim an injury caused by the mere violation of a federal strict liability statute when no evidence of consumer harm has been shown. The high court’s decision requires the plaintiff to demonstrate not only that the statute was violated, but that the plaintiff actually suffered harm. Since the FCRA and FDCPA have similarly worded strict liability provisions, the thought is that with the right fact pattern the Spokeo decision will offer a compelling argument for debt buyer’s to cite in future FDCPA cases.
In the Spokeo case, Robins claimed Spokeo compiled a report about him that contained false information in violation of the Fair Credit Reporting Act (FCRA). The trial court dismissed his case finding Robins lacked standing because he had no tangible harm , he did not allege the information compiled by Spokeo lead to, for example, the denial of a job or credit. The Ninth Circuit Court of Appeals reversed and held that the statutory violation was enough to allow Robins his day in court; first, because his claims were associated with a violation of protections afforded to him by the FCRA and, second, because his lawsuit addressed the handling of his credit information.
The Supreme Court held that while Robins may have pleaded a violation of a legally protected interest under FCRA that was particular to him, he did not plead any actual or imminent harm stemming from the alleged FCRA violation. Simply stated, all Robins alleged was a technical violation of the FCRA, which he did not allege caused him any harm beyond a hypothetical or speculative harm.
Members may wish to discuss with their legal counsel the possibility of using the Spokeo decision in a future FDCPA defense when you have a compelling fact pattern that demonstrates that there was no consumer harm that resulted from the violation.
This Alert is intended for Members of DBA International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.