Third Circuit finds confusing collection letters provide standing, but not informational standing

Jamie Huber brought a putative class action under the FDCPA, alleging that confusing collection letters she received from Simon’s Agency, Inc. were misleading and deceptive. A district court certified a class, and granted summary judgment in its favor. In so doing, it found that Ms. Huber had standing based on an informational injury, and that all the class members “inevitably” had standing on the same grounds.

On appeal, a divided Third Circuit affirmed in part and vacated in part.

First, as to standing, the court rejected the applicability of the informational injury theory of standing, finding that the case did not involve a deprivation of information that the plaintiff was legally entitled to. Nonetheless, the court found standing “under traditional standing principles.” Applying the Supreme Court’s TransUnion decision, the court analogized the plaintiff’s FDCPA claim to the tort of fraudulent misrepresentation, and found that an injury will only exist where a plaintiff can show some “some cognizable harm that flows from th[e] confusion” caused by the misrepresentation.  Here, this requirement was satisfied, as the named plaintiff had alleged she had consulted with a financial advisor, at her own additional cost, in response to the letters. Notably, a footnote indicated Judge Bibas, who otherwise joined the majority opinion, would not have found such allegations sufficient.

Next, the court upheld the FDCPA finding on the merits.

Finally, the court vacated the class certification and damages award. While concluding that the unnamed class members may not have standing under the theory of injury it adopted, the court held this did not make the class action as a whole nonjusticiable. Nor did it impact commonality or typicality. It did, however, impact the predominance requirement of Rule 23(b)(3). On remand, the district court was directed to “assess the implications of” individualized showings of injury for predominance, and for feasibility.

Dissenting in part, Judge Rendell would have found that the fraudulent misrepresentation analog –without any independent harm–was sufficient to establish standing under Spokeo and Transunion.

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