United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Honorable Edmond E. Chang United States District Judge
Asarael Zuniga brings this case
against Assert Recovery Solutions, LLC and Bureaus Investment
Group Portfolio No. 15, LLC (which the parties call
“BIG15”). R. 1, Compl. Zuniga alleges that Asset
Recovery Solutions and BIG15 violated the Federal Debt
Collection Practices Act (FDCPA) when they sent him a letter
attempting to collect a debt. Zuniga alleges that the letter
failed to identify “the creditor to whom the debt is
owed, ” which is a disclosure required by the FDCPA.
Id. ¶ 16; 15 U.S.C. § 1692g(a)(2). Zuniga
alleges that an “unsophisticated consumer” would
have misunderstood who was the current debt owner,
see Compl. ¶¶ 14, 16- but Zuniga does not
allege that he was confused or misled by the letter.
See generally Compl. Defendants jointly move to
dismiss the complaint, arguing that Zuniga does not
sufficiently allege an injury-in-fact that meets Article III
standing requirements. R. 19, Mot. to Dismiss at 1. In the
alternative, Defendants argue that the complaint fails to
state a claim upon which relief could be granted, and that
Zuniga does not adequately allege that BIG15 is a debt
collector for FDCPA purposes. Id. As discussed
below, the motion to dismiss is granted. Zuniga lacks
standing, and even if he had it, the complaint fails to state
Legal Standards: Rule 12(b)(1) and 12(b)(6)
Recovery Solutions and BIG15 move to dismiss under Federal
Rules of Civil Procedure 12(b)(1) and 12(b)(6). A Rule
12(b)(1) motion tests whether the Court has subject-matter
jurisdiction, Hallinan v. Fraternal Order of Police of
Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009);
Long v. ShoreBank Dev. Corp., 182 F.3d 548, 554 (7th
Cir. 1999), whereas a Rule 12(b)(6) motion tests the
sufficiency of the complaint, Hallinan, 570 F.3d at
820; Gibson v. City of Chi., 910 F.2d 1510, 1520
(7th Cir. 1990). In order to survive a Rule 12(b)(1) motion,
the plaintiff must establish that the district court has
subject-matter jurisdiction. United Phosphorous, Ltd. v.
Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2011),
overruled on other grounds, Minn-Chem, Inc. v.
Agrium, Inc., 683 F.3d 845 (7th Cir. 2012). “If
subject matter jurisdiction is not evident on the face of the
complaint, [then] the ... Rule 12(b)(1) [motion is] analyzed
[like] any other motion to dismiss, by assuming for the
purposes of the motion that the allegations in the complaint
are true.” Id. In contrast, “[a] motion
under Rule 12(b)(6) challenges the sufficiency of the
complaint to state a claim upon which relief may be
granted.” Hallinan, 570 F.3d at 820.
“[A] complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
These allegations “must be enough to raise a right to
relief above the speculative level.” Twombly,
550 U.S. at 555. The allegations that are entitled to the
assumption of truth are those that are factual, rather than
mere legal conclusions. Iqbal, 556 U.S. at 678-79.
noted earlier, Asset Recovery Solutions and BIG15 argue that
Zuniga lacks standing because the complaint fails to allege
that he himself suffered a concrete and
particularized injury and (alternatively) because, as a
matter of law, the letter was sufficiently clear under the
FDCPA. R. 19-1, Defs.' Br. at 3, 8-10. Zuniga loses on
standing, but the Court will address both arguments for the
sake of completeness.
satisfy Article III standing requirements, Zuniga must show
that he suffered an injury-in-fact that is fairly traceable
to the conduct of the defendant and can be redressed by a
favorable decision. Spokeo, Inc. v. Robins, 136
S.Ct. 1540, 1547-48 (2016) (citing Lujan v. Defenders of
Wildlife, 504 U.S. 555, 559-60 (1992)). An
injury-in-fact must be both concrete and particularized.
Spokeo, 136 S.Ct. at 1548. A concrete injury must be
“de facto; that is, it must actually
exist.” Id. (cleaned up). An injury can be
intangible, but not every statutory violation by itself is
enough. Id. at 1549. To determine if an intangible
injury's concreteness rises to the level required to
satisfy standing, “both history and the judgment of
Congress play important roles.” Id. A
“violation of a procedural right granted by statute can
be sufficient in some circumstances … [so that] a
plaintiff in such a case need not allege any
additional harm beyond the one Congress has
identified.” Id. And the risk of harm
might be concrete enough to meet standing requirements.
Id. With regard to the
“particularized”-injury requirement, the injury
must “affect the plaintiff in a personal and individual
way.” Id. at 1548. So, at minimum,
Zuniga must allege facts from which a concrete and
particularized injury or risk of injury can be inferred.
Groshek v. Time Warner Cable, Inc., 865 F.3d 884,
889 (7th Cir. 2017).
first argues that the injury-in-fact requirement is satisfied
just by the mere alleged violation of the FDCPA, because
Congress “conferred” Article III standing by
enacting the FDCPA. R. 29, Pl. Resp. at 8-9; R. 39, Pl. Supp.
Resp. at 5-6. That is wrong. As noted earlier, a bare
statutory violation is not necessarily enough-especially
after Spokeo-to establish standing. Not all
statutory violations are enough to “confer”
Article III standing by themselves. See Spokeo, 136
S.Ct. at 1549.
Zuniga argues that the failure to provide statutorily
required information-here, the identity of the creditor to
whom the debt is owed-is an injury that is concrete and
particularized enough to establish standing. Pl. Resp. at 9.
It is true that, in some cases (and maybe many of
them) the failure to identify the current creditor would
constitute a concrete and particularized injury sufficient to
establish standing. The FDCPA aims to protect consumers from
risks of fraud, deception, and abusive collecting practices.
Janetos v. Fulton, Friedman, & Gullace, 825 F.3d
317, 320-22 (7th Cir. 2016). A debt collector's failure
to identify the current creditor could create a concrete risk
of Article III harm, because a debtor who is confused about
the identity of the creditor might be misled into making
payments to the wrong entity. See Id. at 324-25.
problem in this case, however, is that Zuniga failed to plead
that the alleged injury-in-fact was concrete and particular
to him. Yes, Zuniga alleged that the letter failed
to explain the difference between the current creditor versus
the original creditor, as well as what Asset Recovery
Solutions' relationship was to the creditors. Compl.
¶ 10. But Zuniga did not allege-even after the Court
flagged this issue explicitly, R. 35, 11/07/17 Minute
Entry-that he himself was confused about what the
letter was saying about the current creditor. In the
analogous context of the Fair Credit Reporting Act, the
Seventh Circuit recently held that a mere statutory violation
without concrete harm was not by itself enough to establish
standing. Groshek v. Time Warner Cable, Inc., 865
F.3d 884, 889 (7th Cir. 2017). In Groshek, the
plaintiff alleged that a prospective employer gave him
extraneous information while obtaining his consent to a
background check, supposedly violating the Fair Credit
Reporting Act, 15 U.S.C. § 1681 et seq.
Id. at 885-86. The Seventh Circuit held that the
plaintiff had not established standing, reasoning that
“[Groshek's] complaint contained no allegation that
any of the additional information caused him to not
understand the consent he was giving; no allegation that he
would not have provided consent but for the extraneous
information on the form; [and] no allegation that additional
information caused him to be confused.”
Groshek, 865 F.3d at 887. On these facts, the
Seventh Circuit held that the plaintiff had alleged only
“a statutory violation completely removed from any
concrete harm or appreciable risk of harm, ” which is
not enough for standing. Id.
the plaintiff in Groshek, Zuniga did not plead
“factual allegations from which [the court] could infer
harm.” Groshek, 865 F.3d at 889. Zuniga does
not “plausibly suggest that he was confused” by
the letter or that he would have acted differently if the
letter had used different words. See Id. Instead, he
alleges only (in a conclusory fashion) that an
unsophisticated consumer would be confused. Compl.
¶¶ 10, 12-16. Zuniga argues that is all that is
needed, but that argument mixes up the substantive
standard for liability under the FDCPA-whether an
unsophisticated consumer would be confused by a
debt-collection letter-with the requirements of Article III
standing. Whether the hypothetical unsophisticated
consumer would be confused does not matter for the standing
inquiry, which instead asks whether the plaintiff in this
case has shown concrete and particularized harm. Zuniga
has not, and so he lacks standing to bring this lawsuit. The
case must be dismissed for lack of subject matter
Zuniga has standing to pursue the case, the complaint fails
to state a claim on which relief can be granted. The FDCPA
requires that a debt collector disclose to the debtor
“the name of the creditor to whom the debt is
owed.” 15 U.S.C. §1692g(a)(2). When examining a
debt-collection letter, the question is whether the letter
would be confusing to the unsophisticated consumer.
Pantoja v. Portfolio Recovery Assocs., LLC, 852 F.3d
679, 686 (7th Cir. 2017). The unsophisticated consumer is
“uninformed, naïve, and trusting, but possesses
rudimentary knowledge about the financial world, is wise
enough to read collection notices with added care, possesses
reasonable intelligence, and is capable of making basic
logical deductions and inferences.” Pantoja,
852 F.3d at 686 (quoting Williams v. OSI Educ. Servs.,
Inc., 505 F.3d 675, 678 (7th Cir. 2007)) (cleaned up).
This is an objective standard. Pettit v. Retrieval
Masters Creditor Bureau, Inc., 211 F.3d 1057, 1060 (7th
Cir. 2000). There need not be “evidence that the
recipient was confused- or even … [that] he read the
letter.” Bartlett v. Heibl, 128 F.3d 497,
500-01 (7th Cir. 1997). “[A] district court must tread
carefully before holding that a letter is not confusing as a
matter of law … because district judges are not good
proxies for the unsophisticated consumer whose interest the
statute protects.” McMillan v. Collection
Prof'ls Inc., 455 F.3d 754, 759 (7th Cir. 2006)
(quoting Walker v. Nat'l Recovery Inc., 200 F.3d
500, 501 (7th Cir. 1999) (cleaned up). Section 1692g is
violated when “a significant fraction of the
population” might be confused. Zemeckis ...