5th Cir. Sua Sponte Tosses FDCPA Dunning Letter Class Action for Lack of Art. III Standing

In Perez v. McCreary, Veselka, Bragg & Allen, P.C., No. 21-50958, 2022 U.S. App. LEXIS 22649, at *9 (5th Cir. Aug. 15, 2022), the Court of Appeals dismissed sua sponte an action where class certification had been granted because the representative lacked Article III standing.  The Court of Appeals summarized its holding as follows:

On appeal, MVBA does not contest Perez’s standing. But we have an “independent obligation to assure that standing exists, regardless of whether it is challenged by any of the parties.” Summers v. Earth Island Inst., 555 U.S. 488, 499 (2009). Perez has standing only if the letter inflicted an injury with a “close relationship to a harm traditionally recognized as providing a basis for a lawsuit in American courts.” TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2200 (2021) (quotation omitted). Because Perez hasn’t shown that she has suffered such an injury, we vacate the class-certification order and remand with instruction to dismiss for want of jurisdiction.

The Court of Appeals explained:

We begin with Perez’s request for damages. First, Perez claims that the violation of her statutory rights under the FDCPA itself qualifies as a concrete injury. The district court advanced a similar contention, reasoning that Perez’s suit related to her substantive right to be free from misleading information instead of a “bare procedural violation” of the FDCPA that would not be cognizable under Spokeo, 578 U.S. at 341. TransUnion forecloses those theories. It explicitly held that “Article III standing requires a concrete injury even in the context of a statutory violation.” 141 S. Ct. at 2205 (quoting Spokeo, 578 U.S. at 341); see also id. (“[U]nder Article III, an injury in law is not an injury in fact.”). It “reject[s] the proposition that ‘a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.’ “2 And it emphasizes that a hypothetical lawsuit based only on the violation of an environmental statute “may not proceed because that plaintiff has not suffered any physical, monetary, or cognizable intangible harm traditionally recognized as providing a basis for a lawsuit in American courts.” Id. at 2206.  Nor is Spokeo to the contrary. Granted, that opinion held that a “bare procedural violation” of a statute does not qualify as an injury-in-fact. 578 U.S. at 341. But Spokeo merely cited that as an “example” of a statutory violation that alone would not create an injury-in-fact. Id. Again, regardless of whether a statutory right is procedural or substantive, Spokeo emphasized that “Article III standing requires a concrete injury even in the context of a statutory violation.” Id. Its reference to procedural violations merely underscored that conclusion: The “[d]eprivation of a procedural right without some concrete interest that is affected by the deprivation . . . is insufficient to create Article III standing.” Id. (quoting Summers, 555 U.S. at 496). For Article III purposes, Spokeo never distinguished between substantive and procedural statutory rights. Accordingly, Perez’s first theory doesn’t establish that she has standing to bring suit.  Second, Perez maintains that MVBA’s letter subjected her to a material risk of financial harm and that that exposure qualifies as a concrete injury. Specifically, Perez claims that her receipt of the letter subjected her to a risk that she might accidentally pay her time-barred debts. This theory, too, is foreclosed by TransUnion . Remember: A plaintiff always must be able to point to a concrete injury to bring suit. And if a risk hasn’t materialized, the plaintiff hasn’t yet been injured. TransUnion held that merely being subjected to a risk of future harm cannot support a suit for damages. 141 S. Ct. at 2210-11. A plaintiff can sue for damages if the risk materializes or causes a separate injury-in-fact, such as emotional distress. Id. But those are suits based on those injuries, not the risk itself. Id. Once again, Spokeo doesn’t save this theory. That case acknowledged that a “material risk of harm” can “satisfy the requirement of concreteness.” 578 U.S. at 341-42. But TransUnion clarified that this language applied to “forward-looking” suits for declaratory or injunctive relief that seek to “prevent the harm from occurring.” 141 S. Ct. at 2210-11. A suit for damages demands compensation for injuries that a plaintiff has suffered in the past, so that principle doesn’t apply. True, we have previously held that a plaintiff’s “expos[ure] . . . to a real risk of financial harm” caused by an FDCPA violation can qualify as a concrete injury-in-fact in a suit for damages. See Sayles v. Advanced Recovery Sys., Inc., 865 F.3d 246, 250 (5th Cir. 2017), aff’g 206 F. Supp. 3d 1210 (S.D. Miss. 2016) (awarding damages to the plaintiff ). But that case predated TransUnion by nearly four years, and we aren’t bound by panel opinions that the Supreme Court has “implicitly overruled.” In re Bonvillian Marine Serv., Inc., 19 F.4th 787, 792 (5th Cir. 2021) (quotation omitted). One way that can happen is “if a subsequent Supreme Court opinion establishes a rule of law inconsistent with [our] precedent.” Id. (quotation omitted). Sayles can’t be squared with TransUnion, so TransUnion controls. And that means the unmaterialized risk Perez experienced can’t support her suit for damages.  Third, Perez says the confusion she experienced from MVBA’s letter qualifies as a concrete injury. The district court endorsed that theory, but we disagree.  Perez’s argument isn’t entirely clear, but we understand her to analogize the confusion she suffered to fraudulent-misrepresentation torts. Such torts make A liable for B’s pecuniary losses where A intentionally misleads B and B justifiably relies on that misrepresentation. Restatement (First) of Torts §§ 525, 549, 553 (Am. L. Inst. 1938).3 Perez’s confusion bears some similarities to those torts. After all, her confusion is the result of MVBA’s allegedly misleading letter, and those torts make tortfeasors liable for similar misrepresentations. But Perez’s problem is that her confusion isn’t similar “in kind” to the harm recognized by fraudulent misrepresentation, Gadelhak, 950 F.3d at 462, and that’s what matters for standing purposes. The nature of the harm recognized by fraudulent misrepresentation is a traditional, tangible harm: the “pecuniary loss” the plaintiff sustains.4 And that means Perez’s confusion—which can only be an intangible harm, if it’s a harm at all—is necessarily different “in kind” from her common-law analog. Gadelhak, 950 F.3d at 462. We thus join several of our sister circuits in holding that the state of confusion, absent more, is not a concrete injury under Article III. Fourth, Perez says the time she wasted by consulting with her lawyer after receiving the letter qualifies as a concrete injury. Absent an allegation that Perez paid her attorney anything for the consultation, we must assume that her purported injury is solely lost time. Perez doesn’t offer a common-law analog to the time-based injury she claims to have suffered. In other words, she has not met her “burden [to] demonstrate[e] that [she has] standing” based on that theory. TransUnion, 141 S. Ct. at 2207. After all, how can we decide whether two harms have a “close relationship” if we don’t know what one of them is? Id. at 2200 (quotation omitted). It is not our job to “conjure up possible theories” that could carry a litigant’s burden. Raley v. Hyundai Motor Co., 642 F.3d 1271, 1275 (10th Cir. 2011).  Besides, we are not aware of any tort that makes a person liable for wasting another’s time. Although tort plaintiffs can sometimes recover damages for the opportunity costs attributable to the tort, the nature of the underlying harm is different—e.g., physical damage in the case of a personal injury suit. Like at least one of our sister circuits, we are thus skeptical that a time-based injury alone could qualify as a concrete injury. Cf. Brunett, 982 F.3d at 1069. Still, we do not conclusively decide whether such injuries are closely related to traditional harms, permitting future parties to develop the question further. We hold only that Perez did not carry her burden to show that a time-based injury could sustain her claims. Finally, Perez claims that her receipt of an unwanted letter caused her to suffer a concrete injury analogous to the tort of intrusion upon seclusion. Once again, we disagree. A person commits the tort of intrusion upon seclusion by “intentionally intrud[ing], physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns . . . if the intrusion would be highly offensive to a reasonable person.” Restatement (Second) § 652B. One pattern of liability is for repeated, harassing communications. See id. cmt. d; Gadelhak, 950 F.3d at 462. TransUnion explicitly recognized that harms analogous to this tort can qualify as concrete. See 141 S. Ct. at 2204 (citing Gadelhak, 950 F.3d at 462). Before and after TransUnion, many of our sister circuits also held that unwanted communications could cause concrete injuries similar to intrusion upon seclusion or other privacy torts. Since the harms elevated by Congress need only be similar “in kind, not degree,” Gadelhak, 950 F.3d at 462, it seems to follow that a single unwanted communication could qualify as a concrete injury even though intrusion upon seclusion requires many. So how can we say that Perez’s receipt of the letter did not inflict a concrete injury? The answer is that Congress didn’t elevate the receipt of a single, unwanted message to the status of a legally cognizable injury in the FDCPA. Perez sued MVBA for violating the statute’s antifraud provision. 15 U.S.C. § 1692e. Congress’s concern in prohibiting “false, deceptive, or misleading representation[s] or means in connection with the collection of any debt” wasn’t consumer privacy. It was the economic harms that consumers suffered due to aggressive and unfair attempts to collect their debts. See id. § 1692(a) (finding that “[a]busive debt collection practices contribute to the number of personal bankruptcies, to marital instability, [and] to the loss of jobs”). Congress also expressed concern about “invasions of individual privacy.” Id. § 1692(a). But it addressed those problems through a different section of the FDCPA: the statute’s prohibition on harassment and abuse. Id. § 1692d. Perez hasn’t sued MVBA based on that provision, so she can’t bootstrap the harms it recognizes as actionable to demonstrate standing to sue based on a different provision. Anyway, the FDCPA’s harassment provision doesn’t recognize that a single unwanted message qualifies as a concrete harm. Instead, its closest analog to an unwanted letter—unwanted telephone calls—must be made “repeatedly or continuously.” 15 U.S.C. § 1692d(5). Its general prohibition on actions that “harass, oppress, or abuse” a debtor carries the same connotation. Id. § 1692d. Accordingly, even if Congress could elevate a single unwanted message to the status of a concrete injury, it hasn’t done so here. Perez does not have standing to bring her suit for damages.