United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Honorable Edmond E. Chang, United States District Judge.
Flores claims that Portfolio Recovery Associates, LLC (which
does business under the acronym “PRA”) violated
the Fair Debt Collection Practices Act, 15 U.S.C. § 1692
et seq., by communicating information about her
consumer debt to a credit reporting agency without disclosing
that the debt was disputed. R. 1, Cmplt. ¶¶
9-16. After discovery, Flores moved for summary
judgment, R. 38, Pl. Mot. Summ. J. PRA cross-moved for
summary judgment, arguing that Flores lacked standing, that
she had failed to establish elements of her FDCPA claim, and,
in the alternative, that PRA's actions were bona fide
error. R. 45, Def. Resp. and Cross-Mot. Summ. J. For the
reasons stated below, summary judgment is granted to Flores.
PRA's cross-motion for summary judgment is denied.
in the business of collecting defaulted consumer debts. R.
38-2, PSOF ¶ 3. In July 2012, PRA purchased a credit card
obligation owed by Flores. R. 46, DSOF ¶ 1. Flores used
the card in question to buy clothes. PSOF ¶ 6; PSOF Exh.
G at 82:3-16. Sometime after PRA bought the credit card
obligation, Flores met with and retained attorneys at the
Debtors Legal Clinic, because she was worried that PRA would
take legal action to collect the obligation. PSOF ¶ 8;
PSOF Exh. G at 74:21-75:11. Flores reviewed her credit report
with her attorneys, and told them that she thought the $748
balance claimed by PRA was not accurate. PSOF ¶ 10; PSOF
Exh. G at 60:17-20.
3, 2014, Debtors Legal Clinic faxed PRA a letter about
Flores's account. PSOF ¶ 11. The contents of the
letter are undisputed. The letter informed PRA that Debtors
Legal Clinic represented Flores, and stated: “This
client regrets not being able to pay, however, at this time
they are insolvent, as their monthly expenses exceed the
amount of income they receive, and the amount reported is not
accurate.” R. 49-1, DSOF Exh. C. PRA's records for
Flores's account show that it received and processed the
letter the next day.
December 2014 (months after PRA received the letter from
Flores's lawyers), PRA provided information about
Flores's obligation to Experian, a credit reporting
agency. PSOF ¶ 15. PRA communicated a balance of $748 to
Experian, but did not inform Experian that the amount of the
obligation was disputed. PSOF ¶¶ 16-17.
Summary Judgment Standard
judgment must be granted “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). A genuine issue of material fact exists
if “the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In
evaluating summary judgment motions, courts must view the
facts and draw reasonable inferences in the light most
favorable to the non-moving party. Scott v. Harris,
550 U.S. 372, 378 (2007). The Court may not weigh conflicting
evidence or make credibility determinations, Omnicare,
Inc. v. United Health Grp., Inc., 629 F.3d 697, 704 (7th
Cir. 2011), and must consider only evidence that can
“be presented in a form that would be admissible in
evidence.” Fed.R.Civ.P. 56(c)(2). However, affidavits,
depositions, and other written forms of testimony can
substitute for live testimony. Malin v. Hospira,
Inc., 762 F.3d 552, 554-55 (7th Cir. 2014). The party
seeking summary judgment has the initial burden of showing
that there is no genuine dispute and that they are entitled
to judgment as a matter of law. Carmichael v. Village of
Palatine, 605 F.3d 451, 460 (7th Cir. 2010); see
also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986);
Wheeler v. Lawson, 539 F.3d 629, 634 (7th Cir.
2008). If this burden is met, the adverse party must then
“set forth specific facts showing that there is a
genuine issue for trial.” Anderson, 477 U.S.
threshold matter, the Court cannot hear this case unless
Flores has Article III standing. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-561 (1992). At minimum,
Flores must show that she has (1) an injury in fact, (2)
which is fairly traceable to the defendant's challenged
conduct, and (3) which is likely to be redressed by a
favorable judicial decision. Id. An “injury in
fact” is an invasion of a legally protected interest
which is concrete and particularized, and actual or imminent
(as opposed to conjectural or hypothetical). Lujan,
504 U.S. at 560. PRA argues that Flores has not alleged an
injury in fact that is sufficient to establish Article III
standing. Def. Cross-Mot. Summ. J. at 17.
Flores stake out two extreme positions on standing, and
neither is quite right. On one hand, PRA claims that Flores
does not have standing because she seeks only statutory
damages. Def. Cross-Mot. Summ. J. at 18. On the other hand,
Flores argues that an FDCPA violation alone is enough to
constitute an injury in fact for standing purposes. R. 59,
Pl. Resp. at 20. The truth is somewhere in the middle. In
Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), the
Supreme Court reiterated that a “bare procedural
violation” is not necessarily an injury in fact.
Id. at 1549. Article III requires a concrete injury
even in the context of a statutory violation. Id.
But Spokeo also affirmed that Congress has
“the power to define injuries and articulate chains of
causation that will give rise to a case or controversy where
none existed before.” Id. (quoting
Lujan, 504 U.S. at 580 (Kennedy, J., concurring in
part)). The Supreme Court noted that Congress's judgment
is “instructive and important, ” because
“Congress is well positioned to identify intangible
harms that meet minimum Article III requirements.”
Spokeo, 136 S.Ct. at 1549. Crucially,
Spokeo held that “the real risk of harm”
from violation of a procedural right may be enough to
establish injury. Id. Spokeo did
not hold that a plaintiff must suffer measurable
financial harm in order to establish an injury in fact. To
the contrary, the Supreme Court reiterated that
difficult-to-measure intangible harms may be concrete
injuries in fact. Id; see also Lane v. Bayview
Loan Servicing, LLC, 2016 WL 3671467, at *3 (N.D. Ill.
July 11, 2016) (discussing the distinction between actual
damages and the concrete-harm requirement).
case, PRA disclosed Flores's debt to a credit reporting
agency without reporting that the debt was disputed.
Congress, with its unique fact-finding ability and
sensitivity to the public interest, made the judgment that
communicating credit card information without communicating
that the debt is disputed is a “false, deceptive, or
misleading representation” in violation of the FDCPA.
15 U.S.C. § 1692e(8). Reporting a debt on a credit
report without noting a dispute poses a real risk of serious
economic and reputation consequences. An incorrectly reported
debt can be a “red flag” to “anyone who
runs a background or credit check, including landlords and
employers, ” and thus could be used to pressure a
debtor to pay a debt without exploring their legal options.
See Phillips v. Asset Acceptance, LLC, 736 F.3d
1076, 1082-83 (7th Cir 2013) (pending legal actions, even if
not served, constituted a sufficient harm for standing);
see also Bowse v. Portfolio Recovery Assocs., LLC,
218 F.Supp.3d 745, 749 (N.D. Ill. 2016) (“[A]n
inaccurate credit rating creates a substantial risk of
harm”). This violation is not a harmless procedural
misstep like disseminating an incorrect zip code; it is an
error with easily appreciable real-world effects. See
Spokeo, 136 S.Ct. at 1550. The substantial risk of harm
from an inaccurate credit report is a concrete injury for
Article III standing.