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Bowse v. Portfolio Recovery Associates, LLC

United States District Court, N.D. Illinois, Eastern Division

November 2, 2016

PETER BOWSE, Plaintiff,



         In December 2014, Portfolio Recovery Associates (PRA) provided credit information about Peter Bowse to three credit reporting agencies without mentioning that Bowse disputed the amount of debt he owed PRA. Peter Bowse sued PRA, alleging that PRA violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et. seq. (FDCPA) by failing to communicate a dispute about his debt.

         Both Bowse and PRA now file for summary judgment. For the reasons stated below, the Court denies PRA's motion and grants Bowse's motion.


         The following facts are undisputed. Peter Bowse obtained a credit card from FIA Card Services/Bank of America and testifies that he used this card to purchase household items, gas, and school supplies. Bowse does not testify that he used the card for any business expense, nor has PRA put forward any evidence that the card was used for business purposes. The credit card account went into default, and PRA purchased the account from FIA in July 2013. PRA eventually filed a lawsuit against Bowse to collect $7, 528.84.

         Bowse met with the Debtors Legal Clinic about representing him in the PRA lawsuit and discussed his case with attorney Andrew Finko. After this discussion, Finko faxed a letter to PRA's general counsel on July 17, 2014 (“the July 2014 letter”) concerning Peter Bowse's debt. The five-paragraph letter, titled “Representation Letter, ” informed PRA that Bowse would be represented by Debtors Legal Clinic, that Bowse was not able to pay the debt, and that the “amount reported is not accurate.”

         After receiving this letter, PRA informed three credit reporting agencies, Transunion, Experian, and Equifax, that Bowse had a balance of $7, 528.84 on his account. PRA did not mention to these credit reporting agencies that the debt was disputed. Plaintiff argues that he disputed the debt when his attorney faxed the July 2014 letter to PRA's general counsel, and PRA's failure to indicate to the credit reporting agencies that the amount of debt was disputed violated 15 U.S.C. § 1692e(8), which requires debt collectors to “to communicate that a disputed debt is disputed.” Both Bowse and PRA now move for summary judgment.


         Summary judgment should be granted when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). A genuine issue of triable fact exists only if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Pugh v. City of Attica, Ind., 259 F.3d 619, 625 (7th Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

         When considering the Plaintiff's Motion for Summary Judgment, the Court considers the facts in the light most favorable to the Defendant, and when considering the Defendant's Motion for Summary Judgment, the facts are considered in the light most favorable to the Plaintiff. See First State Bank of Monticello v. Ohio Cas. Ins. Co., 555 F.3d 564, 567 (7th Cir. 2009) (“[B]ecause the district court had cross-motions for summary judgment before it, we construe all facts and inferences therefrom in favor of the party against whom the motion under consideration is made.”) (internal quotation marks omitted).


         I. Standing

         PRA contends that Bowse lacks Article III standing to sue in federal court. To establish Article III standing, a plaintiff must show “(1) an ‘injury in fact, ' that is, ‘an invasion of a legally protected interest which is...concrete and particularized, and...actual or imminent'; (2) a causal connection between the injury and the challenged conduct, meaning that the injury is ‘fairly traceable' to the challenged conduct; and (3) a likelihood ‘that the injury will be redressed by a favorable decision.'” Dunnet Bay Const. Co. v. Borggren, 799 F.3d 676, 688 (7th Cir. 2015) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). PRA argues that Bowse has not suffered an “injury in fact, ” citing the recent Supreme Court decision in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016).

         In Spokeo, the Court considered whether a violation of a statutory right granted by the Fair Credit Reporting Act (FCRA) was a sufficient injury in fact to maintain an action in federal court. Id. at 1544. The defendant website operator generated a consumer report that inaccurately reported the plaintiff's marital status, age, employment status, salary, and educational history. Id. at 1546. The plaintiff alleged that the website operator violated the FCRA by generating this report, but the plaintiff did not allege that he suffered any monetary harm as a result of the FCRA violation. Id. The Supreme Court held that a violation of the FCRA alone was insufficient for Article III standing, as the plaintiff was also required to show a “concrete harm” that flowed from the FCRA violation. Id. at 1549. The Court specifically limited its holding, noting that “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact.” Id. Among those circumstances are cases where a statutory violation creates the “risk of real harm.” Id. While the Court in Spokeo highlighted the need for an injury to be concrete, the Court also affirmed the power of Congress to “define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before.” Id.

         The alleged harm here is the harm that results when a debt collector fails to report relevant information about a consumer debt to a third party. Even though this harm was not defined and articulated before Congress passed the FDCPA, it remains a concrete harm. The risk of injury that § 1692e(8) addresses is the risk of substantial financial harm caused by an inaccurate credit rating. Unlike an incorrect zip code, the “bare procedural violation” in Spokeo, an inaccurate credit rating creates a substantial risk of harm. See Sayles v. Advanced Recovery Sys., Inc., No. 3:14-CV-911-CWR-FKB, 2016 WL 4522822, at *2 (S.D.Miss. Aug. 26, 2016) (“Congress intended [§ 1692e(8)] of the FDCPA to address the dissemination of false information and abusive practices employed by debt collectors. Plaintiff's alleged injury is more than a bare procedural violation, it is the very type of injury Congress sought to eradicate and thus created a right of action to protect consumers.”). Other courts in this District have affirmed, post-Spokeo, that harms identified by the FDCPA are sufficiently concrete to confer Article III standing. See Saenz v. Buckeye Check Cashing of Illinois, No. 16 CV 6052, 2016 WL 5080747, at *2 (N.D. Ill. Sept. 20, 2016) (“[N]othing in Spokeo overruled the Seventh Circuit's decisions that emphasized and affirmed the power of Congress to pass legislation creating new rights, which if violated, would confer standing under Article III.”); Quinn v. Specialized Loan Servicing, LLC, No. 16 C 2021, 2016 WL 4264967, at *4 (N.D. Ill. Aug. 11, 2016) (“[W]hile Spokeo held that a procedural violation of the FCRA does not necessarily give rise to an injury in fact, it does ...

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