United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM ORDER AND OPINION
Virginia M. Kendall Judge
Kevin Wheeler brought this putative class action against
Midland Funding, LLC., Midland Credit Management, Inc.
(“MCM”), and Encore Capital Group, Inc. alleging
that Defendants violated the Fair Debt Collection Practices
Act, 15 U.S.C. § 1692 et. seq. (“FDCPA”),
when MCM's website failed to inform him that his debt was
not collectible under the applicable statute of limitations.
Defendants now move to dismiss Wheeler's claim for lack
of subject matter jurisdiction, arguing that Wheeler lacks
Article III standing because he has failed to articulate a
concrete injury. For the reasons set forth below,
Defendants' Motion to Dismiss is denied.
in 2015, Wheeler noticed that Midland Credit Management
(“MCM”) was pulling his credit report. (Dkt. 1
¶ 33.) MCM is a collection agency that collects charged
off-debts for owners of debt, specifically for Midland
Funding LLC. (Id. 17.) As such, MCM is a debt
collector as defined in the FDCPA. See Henson v.
Santander Consumer USA Inc., 137 S.Ct. 1718, 1720
(2017). Wheeler contacted MCM and was told that it was
attempting to collect an alleged credit card balance and
offered Wheeler a 40% discount to settle the debt.
(Id. ¶¶ 33-35, 38.)
on October 4, 2015, Wheeler noticed that MCM had pulled his
credit again. (Id. at ¶ 40.) When Wheeler
called MCM, a representative provided him with an account
number to obtain information about his debt from MCM's
website. (Id.) MCM's website indicated: (1) that
Wheeler last made payment on the debt on September 18, 2009;
(2) that the original creditor had given up on being repaid
as of April 30, 2010; (3) a settlement offer whereby
plaintiff would save 40%; and (4) notice that MCM was not
obligated to renew its settlement offer. (Id. at
¶¶ 44-45; Dkt.1, Ex. B.) The website did not
indicate that the statute of limitations on Wheeler's
debt had expired.
the statute of limitations for his credit card debt had
expired, Wheeler asserts that his debt could not be forcibly
collected and that Defendants violated the FDCPA and related
rules because they failed to inform him of that fact.
(Id. ¶ 46.) He also alleges that Defendants
regularly attempt to collect debts from other debtors where
the statute of limitations on the debt has expired.
(Id. at ¶ 48.)
addition to the facts alleged by Wheeler in his Complaint,
both sides submit facts elicited during discovery.
Specifically, prior to accessing MCM's website in
September 2015, Wheeler's credit card debt was bought by
non-party Asset Acceptance, LLC, a subsidiary of Defendant
Encore. (Dkt. 44-1 at 99:10-20; Dkt. 44 at 3.) In early April
2015, approximately six months before he accessed MCM's
website, Asset sent Wheeler a letter notifying him that the
statute of limitations applicable to his credit card debt had
expired. (Dkt. 44-1 at 133:1-135:15.) At his deposition,
Wheeler conceded that he received the notice from Asset
regarding the statute of limitations, understood what it
meant, and admitted that he did not intend to make any
further payments on the debt. (Id.) In a response to
a Request for Admission, Plaintiff admitted that he has not
“sustained any actual damages relating to this lawsuit,
” (Dkt. 44-2 at 5), and testified that he did not
believe he had “any actual damages” or
“other kind of injuries . . . as a result of Midland
failing to put on its website the Statute of Limitations
disclosure.” (Dkt. 44-1 at 152:20-153:5.)
Wheeler, however, also testified that he felt misled by
Midland's offer to settle the debt without informing him
that the statute of limitations had run, because he did not
“know the consequences of making a payment.”
(Dkt. 49-1 at 127:22-128:15.) Wheeler also testified that in
light of the statute of limitations information he received
from Asset, the lack of notice about the statute of
limitations from MCM confused him because he believed the
account had been closed. (Dkt. 44-1 at 131:6-24.) At the time
he accessed the website, Wheeler did not know how MCM
calculated the applicable statute of limitations, including
whether they applied a different statute of limitations to
the debt. (Id. at 174:14 -176:1.) He also did not
know whether MCM had any reason to consider his account to be
restarted by the statute of limitations. (Id. at
motion to dismiss under Rule 12(b)(1) challenges the
Court's subject matter jurisdiction. Fed.R.Civ.P.
12(b)(1). When a defendant brings a facial challenge to
subject matter jurisdiction, “the district court must
accept as true all material allegations of the complaint,
drawing all reasonable inferences therefrom in the
plaintiff's favor, unless standing is challenged as a
factual matter.” Remijas v. Neiman Marcus Group,
LLC, 794 F.3d 688, 691 (7th Cir. 2015). If, however, as
here, a defendant factually challenges the basis for federal
jurisdiction, “the district court may properly look
beyond the jurisdictional allegations of the complaint and
view whatever evidence has been submitted on the issue to
determine whether in fact subject matter jurisdiction
exists.” Apex Digital, Inc. v. Sears, Roebuck &
Co., 572 F.3d 440, 444 (7th Cir. 2009) (citation and
internal quotation marks and annotation omitted).
argue that Wheeler lacks Article III standing because he did
not suffer any concrete harm or even the risk of harm
resulting from Midland's alleged violations of the FDCPA.
(Id. at 9.) Defendants focus on Plaintiff's
admissions during discovery that he was aware that the
statute of limitations had expired on his debt before he
accessed MCM's website, he had no intention of making any
payment to MCM, and that he testified he did not suffer an
injury from the alleged FDCPA violation. (Dkt. 44 at 1-2.)
Wheeler responds even though he did not suffer a pecuniary
injury, he suffered an informational injury-the deprivation
of critical account information regarding his debt-which the
Seventh Circuit recognizes as a “concrete injury”
for the purposes of Article III standing. (Dkt. 49 at 2.)
Article III Standing
is “[n]o principle . . . more fundamental to the
judiciary's role in our system of government than the
constitutional limitation of federal court jurisdiction to
actual cases or controversies.” Meyers v. Nicolet
Restaurant of De Pere, LLC, 843 F.3d 724, 726 (7th Cir.
2016), cert. denied, No. 16-1113, 2017 WL 1001378
(U.S. June 19, 2017) (quoting Spokeo, Inc. v.
Robbins, 136 S.Ct. 1540, 1547 (2016)). Whether a
claimant has standing to sue is an important component of the
case and controversy limitation because it ensures
“that courts do not decide abstract principles of law.
. . .” Meyers, 843 F.3d at 726 (quoting
Sierra Club v. Marita, 46 F.3d 606, 613 (7th Cir.
1995.) “The law of Article III standing, which is built
on separation-of-powers principles, serves to prevent the
judicial process from being used to usurp the powers of the
political branches.” Clapper v. Amnesty Int'l
USA, 133 S.Ct. 1138, 1146 (2013).
III standing consists of three elements, requiring the
plaintiff to “have: (1) suffered an injury in fact, (2)
that is fairly traceable to the challenged conduct of the
defendant, and (3) that is likely to be redressed by a
favorable judicial decision.” Spokeo, 136
S.Ct. at 1548 (citing Lujan v. Defenders of
Wildlife, 504 U.S. at 560-61 (1992)). The plaintiff
bears the burden of ...