Eleventh Circuit Upholds Problematic FDCPA Decision Despite Rehearing and Dissent | Burr & Forman

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The Eleventh Circuit Court of Appeal issued its decision on the request for a new hearing in Hunstein v. Preferred Collection and Management Services, Inc., Case No 19-14434, but most of the troublesome aspects of the opinion of the Court panel remain. In Hunstein, the Eleventh Circuit overturned the dismissal of a lawsuit under the Fair Debt Collection Practices Act (“FDCPA”) alleging that the defendant, a debt collector, had violated the prohibitions on disclosure to third parties in the FDCPA using a mail provider to send its dunning letters. The theory of the applicant is that the use of such sellers necessarily requires communications about the debtor and the debt to the seller – a third party. The district court dismissed the complaint, arguing that the defendant had failed to demonstrate standing under Article III as long as the disclosure had not caused harm, relying heavily on the opinion of the Supreme Court of the United States in Spokeo, Inc. v. Robbins, 136 S. Ct. 1540 (2016).

However, in its original decision, the Eleventh Circuit reversed and found that the defendant had violated the FDCPA with his disclosures to his mail provider and that this had resulted in sufficient intangible harm, such as injury to life. private, to survive a motion to dismiss. The notice raised questions about the legality of various vendor services in the debt collection context and sparked great interest in the rehearing motion, including many amicus curie Report.

At the rehearing, and despite the decision of the Supreme Court of the United States in Transunion LLC v. Ramirez, 141 S.Ct. 2190 (2021), the Eleventh Circuit largely stuck to its guns, stating:

We consider (1) that the violation of § 1692c (b) alleged in this

the case gives rise to concrete prejudice in fact under Article III, and

(2) that the transmission by the collection agent of the consumer’s personal data

the information to his stimulus provider constituted a communication

“Within the framework of the recovery of any debt” within the meaning

of § 1692c (b). As a result, we overturn the judgment of the district

court and referral for further processing.

In strong dissent, Justice Newsom noted that the majority interpreted the exception to Speak for immaterial damages resulting from statutory violations far too widely. Justice Newsom’s dissent is notable because he originally wrote with the majority before the new hearing, but “changed his mind” following the United States Supreme Court’s application of Speak in Ramírez. Reading these opinions together, Justice Newsom observes that the majority opinion “derails because it does not know what [Ramirez] requires that a plaintiff allege in the context of intangible harm – facts which allow us to find a common law analogue to the alleged violation of the law. By making an analogy between Hunstein’s claim and the common law tort of public disclosure of private facts, Justice Newsom observed that several elements were missing, notably the publication of the facts to the general public, or that the disclosure was very offensive to a public. reasonable person. Thus, Justice Newsom argues in dissent that the District Court was correct in dismissing the action.

It remains to be seen whether this case will be argued again or whether the United States Supreme Court wishes to re-examine this area of ​​law, which it has done frequently in recent years. However, given the immense implications Hunstein may have for the financial services industry, and the wide interest aroused by the outcome of the case, as evidenced by friend briefing at the eleventh circuit, this might not be the last we hear about the Hunstein Case.

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