In an unusual move, an Eleventh Circuit panel doubled down on its earlier industry disruptive decision that a debt collector can violate the Fair Debt Collection Practices Act (“FDCPA”) by transmitting private information to a vendor. third-party commercial mail. The panel overturned its earlier decision spontaneous sua, issuing a new opinion to take his place, even though a request for review in bench remains on hold. A panel judge, however, withdrew his support for this result by concluding that the court’s continuing analysis sweeps more broadly than the interim decision of the United States Supreme Court in TransUnion LLC v. Ramirez would allow.
District court rejects Hunstein’s trial
In district court, Hunstein (the plaintiff) alleged that Preferred (a debt collector) violated the FDCPA by sending information about a medical debt he had, including his name, his outstanding balance, the fact that his debt resulted from her son’s medical examination. processing — to Compumail (Preferred’s commercial mail provider), which used the information to create, print and mail a letter requesting payment. Such subcontracting is common in the debt collection industry. The district court dismissed Hunstein’s allegations that Preferred’s communications to Compumail did not constitute “an attempt to collect a debt” within the meaning of the FDCPA.
The eleventh circuit is reversed
On April 21, 2021, the Eleventh Circuit overturned the district court’s decision dismissing Hunstein’s complaint, ruling that Preferred’s transmission of specific information to its mail provider was sufficiently related to its debt collection business to fall under the FDCPA. Although the court recognized that its ruling would upset the status quo in the industry and was unlikely to significantly improve the protection of consumer privacy, it nonetheless determined that its role was to interpret the law as it was written, whether the resulting implications are reasonable or desirable.
The Eleventh Circuit’s initial decision to revive Hunstein’s FDCPA claim led to a tidal wave of consumer lawsuits that prompted the debt collection industry to rethink its widespread outsourcing practices and prompted federal regulators to intervene. Preferred petitioned for in bench hearing, joined by a flurry of amicus briefs from the debt collection industry.
The Supreme Court decides TransUnion LLC v. Ramirez
In June, the Supreme Court issued the judgment TransUnion LLC v. Ramirez decision, the latest Supreme Court ruling on standing under Article III. In this case, the Court explores the limits of when the harm is concrete. In dicta which undoubtedly aimed at the Hunstein decision, the Supreme Court questioned whether providing consumer information to a print supplier could be considered a “publication” (citing the Eleventh Circuit precedent) and observed that the theory was not similar enough to a traditional tort action in defamation to give standing.
Intrepid, the eleventh double circuit
Rather than backtracking by following Ramírez, or simply wait for the eleventh circuit to decide on the request pending a new hearing in bench, the Eleventh Circuit panel overturned its earlier decision spontaneous sua, and issued a replacement. In this document, the majority recognizes that Ramírez was “somewhat in tension with our decision in this case” and “loomed large”, but nonetheless concludes that the initial opinion was correct, concluding that Preferred’s alleged violation of the law was “sufficiently analogous” to common law tort of public disclosure of private facts. The majority held that statutory prejudice need not have an “exact duplicate” of the common law tort, and drew a distinction that a plaintiff “need only show that his alleged prejudice is similar in nature to the harm contemplated by a common law statute. cause of action, not that it is of the same degree.
In a dazzling dissent, Judge Tjoflat declared that the majority’s analysis “derailed”, ignoring that Ramírez demands that a plaintiff allege sufficient facts to find a common law analogue, and that Preferred’s communication to Compumail was not “public” and did not meet the first element of the offense of public disclosure of private facts: publicity private information. Without public disclosure, Judge Tjoflat said, Hunstein cannot adequately satisfy the other two elements, namely that it would be very offensive to a reasonable person and that it is not a legitimate public interest.
While the Eleventh Circuit panel managed to provide more food for thought with their new decision, Ramírez, and the strong dissent in the replacement decision, simply underscores the need for in bench consideration, particularly relevant here in light of the disruptive implications of the decision for the industry and the wave of consumer actions that will continue as debt collectors decide whether wholesale changes are needed to mitigate risk in a business environment. company already saturated with litigation.