Fifth Circuit Pumps The Brakes On Arbitration https://t.co/1M9RuXMhjb
House Financial Services Committee Considers Amendments to the FDCPA https://t.co/joLGqaAVZj
Eleventh Circuit Refuses to Impose a ‘Least Sophisticated Consumer’ Standard to Discharge Violations https://t.co/FwkJpuXtnq
A district court out of Missouri has served up a reminder as to the limitations of a motion to dismiss based upon subject matter jurisdiction. In May v. Consumer Adjustment Co.,the consumer filed an FDCPA complaint is state court alleging that the initial demand letter violated 15 U.S.C. §1692g. May v. Consumer Adjustment Co., 2017 U.S. Dist. LEXIS 7401 (E.D. Mo. Jan. 19, 2017). Specifically, the plaintiff alleged that defendants had failed to disclose the amount they sought to collect included accruing interest. The plaintiff, however, failed to allege that she incurred any actual harm as a result. Instead, Ms. May alleged only a statutory violation. The debt collector removed the case to federal court and then proceeded to file a motion to dismiss asserting that the federal court lacked subject matter jurisdiction because the plaintiff had failed to allege a concrete injury.
In reviewing the substance of the complaint, the court agreed with the debt collector that Ms. May had failed to show a concrete injury. While the court acknowledged that violations of the FDCPA disclosure requirements might result in concrete injuries, the plaintiff had pled none in this matter. “[H]er only alleged injury is that Defendants failed to include in the collection letter that interest was continuing to accrue. Such a bare procedural violation does not constitute an intangible harm that satisfies the injury-in-fact requirement.” Id. at *12.
Had that been the end of the story, it would have been good news: case dismissed. In fact, had the case been originally filed in federal court that would have been the end of the story and the case would have been dismissed. However, because the case had been removed from state court based upon the federal court’s jurisdiction, the court (now divested of subject matter jurisdiction) had no alternative but to remand the matter to state court.
The case brings home a couple of key points about the Supreme Court’s decision in Spokeo v. Robins:
Caren Enloe leads Smith Debnam’ s consumer financial services litigation and compliance group. In her practice, she defends consumer financial service providers and members of the collection industry in state and federal court, as well as in regulatory matters involving a variety of consumer protection laws. Caren also advises fintech companies, law firms, and collection agencies regarding an array of consumer finance issues. An active writer and speaker, Caren currently serves as chair of the Debt Collection Practices and Bankruptcy subcommittee for the American Bar Association’s Consumer Financial Services Committee. She is also a member of the Defense Bar for the National Creditors Bar Association, the North Carolina State Chair for ACA International’s Member Attorney Program and a member of the Bank Counsel Committee of the North Carolina Bankers Association. Most recently, she was elected to the Governing Committee for the Conference on Consumer Finance Law. In 2018, Caren was named one of the “20 Most Powerful Women in Collections” by Collection Advisor, a national trade publication. Caren oversees a blog titled: Consumer Financial Services Litigation and Compliance dedicated to consumer financial services and has been published in a number of publications including the Journal of Taxation and Regulation of Financial Institutions, California State Bar Business Law News, Banking and Financial Services Policy Report and Carolina Banker. ...LEARN MORE