Seventh Circuit finds “no harm, no foul”, and hence no federal jurisdiction, on borrower’s FDCPA claim

In Casillas v. Madison Avenue Associates, Inc., No. 17-3162 (7th Cir. June 4, 2019) the Seventh Circuit affirmed a judgment for a debt collection agency on a FDCPA claim on the basis that while the borrower caught the debt collector in a mistake, it caused no harm to the borrower.

The debtor contended that the debt collector violated the FDCPA by failing to notify her about the process that the FDCPA provides for verifying a debt, as is required by the FDCPA. The debt collector sent a debt-collection letter describing the process, but it neglected to specify that she had to communicate in writing to trigger the statutory protections. The debtor noticed the omission and sued.

The only harm the debtor asserted, however, was the receipt of an incomplete letter. There was no contention that the debt collector’s actions harmed or posed any real risk of harm to her interests under the Act. She did not allege she tried to dispute or verify her debt orally and therefore lost or risked losing the statutory protections. Indeed, she did not allege that she ever even considered contacting the debt collector or that she had any doubt about whether she owed the stated amount of money. She complained only that her notice was missing information that she did not suggest she would ever have used.

Any risk of harm was entirely counterfactual: she was not at any risk of losing her statutory rights because there was no prospect that she would have tried to exercise them. Because the debt collector’s mistake didn’t put the debtor in harm’s way, it was nothing more than a “bare procedural violation.” The Court found this insufficient to establish federal jurisdiction for if the plaintiff does not claim to have suffered an injury that the defendant caused and the court can remedy, there is no case or controversy for the federal court to resolve. Because the debt collector’s violation of the statute did not harm the debtor, there was no injury for a federal court to redress.

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