Wisconsin federal court awards fees to plaintiff for defendant’s attempt to remove case where no federal jurisdiction exists

A court awarded plaintiff awarded attorney’s fees and costs in an FDCPA action because the defendant attempted to remove the case to federal court where it was clear there was no Article III standing to confer federal jurisdiction.

The consumer plaintiff in Currier v. Lawgix Laws., LLC, No. 21-CV-419-PP (E.D. Wis. Aug. 12, 2022) filed an action in Wisconsin state court against a debt collector under the FDCPA and Wisconsin’s consumer fraud statute, the Wisconsin Consumer Act (WCA), Wis. Stat. § 421.102(2). Plaintiff alleged she was sent a debt collection letter by the defendant which falsely implied that an attorney was meaningfully involved in the assessment of the validity of and collection of the debt. She also alleged the letter did not include disclaimer language notifying her that the lawyer was acting as a debt collector. Plaintiff alleged the unsophisticated consumer would be misled and confused by the letter.

Defendant removed the case to federal court. Plaintiff moved to remand, arguing that the federal court lacked subject matter jurisdiction. Defendant argued that the receipt of the letter, and the plaintiff’s allegation that she was misled and confused was sufficient to show a concrete injury. Moreover, falsely representing that the communication was from an attorney “inflict[s] deceptive harm” on its recipient, and thus that “receipt of a debt collection notice that violates this prohibition constitutes a concrete harm.”

The district court took notice that the Seventh Circuit, in a “slew of [recent] cases,” has held that complaints which do not allege in any way that the alleged violation injured the plaintiff do not sufficiently allege a concrete harm sufficient to confer Article III standing. Contrary to the defendant’s argument, the same Seventh Circuit authority also made it clear that confusion and aggravation are not injuries in fact. Rather, the plaintiff must allege that she acted to her detriment upon the false misrepresentations or because the required disclosures were not provided. While fraud and deception are indeed harms that Congress sought to shield debtors from in enacting the FDCPA, that is irrelevant to whether to whether the plaintiff has alleged a concrete injury in fact.

The court found that the plaintiff in Currier had not alleged her reputation was harmed. Nor did she allege she was defrauded insofar as she did not allege damages resulting from the alleged deception. She only alleged she was misled and confused which, by itself, does not allege a concrete injury. As such, there was no Article III standing and the case was remanded to state court.

The court also awarded the plaintiff fees and costs associated with the defendant’s improper attempt to remove the case. 28 U.S.C. § 1447(c) gives a court discretion to award attorneys’ fees and expenses due to a defendant’s removal attempt. They may be awarded only where the removing party lacked an objectively reasonable basis for seeking removal.

The court found it was objectively unreasonable for the defendant to remove the case to federal court because established case law was clear at the time of removal that the plaintiff had not alleged a concrete injury sufficient to confer Article III standing. It found that “[t]he defendant’s strenuous arguments that the plaintiff suffered a concrete injury are brazen” given it’s affirmative defense that plaintiff’s FDCPA claim was barred because she did not suffer any actual damages or an injury-in-fact, and thus, did not have standing to bring the claim. Moreover, the defendant’s assertion that deception by itself constitutes injury in fact is “disingenuous.” The cases defendant cited for that assertion were no longer binding precedent. “And the defendant’s failure to even attempt to distinguish the reasoning in [the Seventh Circuit authority] … most harmful to its position, is telling.”

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