In 2018, a consumer brought a putative FDCPA class action based on a letter naming the collection arm of her credit card company, rather than the credit card company itself, as the “current/original creditor.” A federal district court granted the defendant’s motion to compel arbitration, and the parties arbitrated the dispute. After 4 years of arbitration, the arbitrator found the defendant not liable on the grounds that the plaintiff had never even read the letter at issue, and that even if she had, the letter wasn’t misleading, as the collection arm was the “current” creditor. The consumer then returned to district court seeking to vacate the arbitration award. The district court denied that request and the consumer appealed.
On appeal, after finding the denial of the vacatur motion itself a final appealable order, despite the lack of a corresponding final judgment confirming the award, the Third Circuit turned to standing. Citing TransUnion and Third Circuit precedent applying it, the court held that mere “confusion” was not sufficient to establish an injury in fact. And the consumer plaintiff had failed to allege specific adverse effects flowing from that confusion in her amended complaint, and thus had not pled either an “informational injury” or a “traditional injury.”
So what then was the remedy? The Third Circuit found that it was required to vacate the federal district court’s orders in the case, as it never had jurisdiction. But what about the arbitration award? The plaintiff had urged it must also be vacated, and the defendant argued that the court should affirm its enforceability. The Third Circuit declined to do either- holding that whether the arbitration award remained valid and enforceable was a question for “a court of competent jurisdiction—presumably a New Jersey state court or an AAA tribunal.”
