Supreme Court Ruling in FCRA Lawsuit Applied to FDCPA Debt Collection Case

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

In a sign that courts may begin to apply the Supreme Court of the United States (SCOTUS) ruling in the case of TransUnion LLC v. Ramirez to federal statutes beyond the Fair Credit Reporting Act (FCRA), the decision by SCOTUS on Article III standing in TransUnion was applied by the Tenth Circuit Court of Appeals in the lawsuit Lupia v. Medicredit, Inc. that was filed for alleged violations of the Fair Debt Collection Practices Act (FDCPA).

Defendant Medicredit was retained to collect an unpaid debt for medical services allegedly owed by Plaintiff Lupia. After receiving a letter demanding payment from Medicredit, Lupia sent a letter to them disputing the debt and requesting that they cease communications. The letter was received on May 7, 2018, but not processed until May 10, 2018. Medicredit placed a debt collection call on May 8, 2018, forming the basis of Lupia’s FDCPA claim.

Lupia sued Medicredit in federal district court seeking damages under the FDCPA. Preliminarily, she alleged standing based on intangible but “legally cognizable” harms. Lupia then alleged that Medicredit had violated FDCPA § 1692g(b) by attempting to collect the debt despite receiving her written notice disputing the debt, and also violated FDCPA § 1692c(c) by continuing to call her despite receiving her cease-and-desist letter.

Medicredit argued that Lupia did not suffer any actual harm because her complaint was based on receiving a single phone call. The Tenth Circuit Court analyzed SCOTUS rulings in two FCRA cases – Spokeo v. Robins and TransUnion LLC v. Ramirez – and immediately focused its attention on the “concrete” harm requirement. The Tenth Circuit Court concluded that Lupia’s injury was sufficiently concrete to confer Article III standing.

“Though a single phone call may not intrude to the degree required at common law, that phone call poses the same kind of harm recognized at common law – an unwanted intrusion into a plaintiff’s peace and quiet,” United States Circuit Judge Gregory Alan Phillips wrote in the ruling. A copy of the complete ruling in the lawsuit is available at www.ca10.uscourts.gov/sites/ca10/files/opinions/010110562706.pdf.

On June 25, 2021, SCOTUS ruled in the TransUnion case that a Plaintiff must suffer a “concrete harm” resulting from a Defendant’s violation of federal law such as the FCRA to have sufficient standing to sue under Article III of the United States Constitution. “To have Article III standing to sue in federal court, plaintiffs must demonstrate, among other things, that they suffered a concrete harm,” Justice Brett M. Kavanaugh wrote in the Opinion.

On May 16, 2016, SCOTUS ruled in a related case on whether consumers must prove a “concrete” injury in class action lawsuits. The ruling in the case of Spokeo v. Robins found that consumers must prove “an injury in fact” in class action lawsuits for alleged “bare” violations of a federal statute such as the FCRA. The case involved a man who filed a lawsuit against an online “people search engine” for alleged FCRA violations.

The FCRA 15 U.S.C § 1681 was enacted by Congress in 1970 to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRAs), protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulate the collection, dissemination, and use of consumer information, including consumer credit information.

The FDCPA 15 U.S.C. § 1692 –1692p was approved in 1977 to eliminate abusive practices in the collection of consumer debts, promote fair debt collection, provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure accuracy, and prescribe penalties and remedies for violations of the Act. The FDCPA is sometimes used in conjunction with the FCRA.

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