By Ronald S. Canter, Esquire
The Law Offices of Ronald S. Canter, LLC
In Frank v. Autovest, LLC, 2020 WL 3053199 (D.C. Cir., June 9, 2020), the United States Court of Appeals for the District of Columbia Circuit dismissed for lack of Article III standing a consumer’s FDCPA lawsuit based on the filing of false affidavits in a debt collection lawsuit.
Phyllis Frank was first sued in state court by the purchaser of her delinquent automobile loan. Verifications supporting the collection lawsuit falsely stated that the affiants were employed by the debt buyer, when, in fact, the affiants worked for the collection agency hired by the debt buyer. The consumer also alleged that the debt buyer’s attorney filed a false affidavit in support of a request for attorney fees.
After the debt collection case was dismissed, the consumer filed an FDCPA suit based on the filing of false affidavits in the collection case. The Federal District Court hearing the case granted the collector’s motion for summary judgment on the basis that the false statements in the affidavit were immaterial. The appellate court took a different approach, dismissing the case for lack of standing.
Because Federal Courts are courts of limited jurisdiction, the appellate court first examined whether the consumer had standing under Article III of the United States Constitution which requires a “concrete and particularized injury and fact traceable to the Defendant’s conduct and redressable by a favorable judicial order”. See, Frank v. Autovest at *2. The consumer’s deposition testimony revealed that she did not take any action or fail to take any action because of the alleged false affidavits and that she was not subjectively confused or misled by the affidavits. The Court ruled that the consumer lacked standing and explained the difference between the objective “unsophisticated consumer” standard used to analyze claims under the FDCPA with the subjective standing inquiry, namely whether the Plaintiff suffered a cognizable injury based on misrepresentations in the affidavits.
The Court recognized that, in certain circumstances, a Plaintiff may be able to submit evidence of investigatory injuries such as resources spent in uncovering or confirming the truth or falsity of the statements. The Court held that a Plaintiff suffering a purported “informational injury” through denial of access to truthful information must establish that he or she suffered some particular harm that Congress sought to prevent by requiring the truthful disclosures. However, the Court reasoned that because the Plaintiff disclaimed detrimental reliance or any other harm based on the alleged false affidavits, she lacked standing to bring her claim. Frank v. Autovest at *3.
This decision may represent a turning point in FDCPA litigation where only statutory damages are sought. Defense counsel seeking to pursue a lack of standing argument should study this decision thoroughly and prepare for pre-trial discovery focusing on the Plaintiff’s detrimental reliance on alleged false statements and any harm flowing therefrom in order to put a standing argument in the proper framework.