8th Cir. Adopts Materiality Standard for Misrepresentations under 1692e and Rejects “Ipso Facto” Rule for Debt Collectors Who Lose Debt Collection Litigation

In Hahn v. Triumph Partnerships LLC, 557 F.3d 755 (7th Cir. 2009), the Seventh Circuit addressed whether a materiality standard applies to § 1692e. The court explained that the Act “is designed to provide information that helps consumers to choose intelligently, … immaterial information neither contributes to that objective (if the statement is correct) nor undermines it (if the statement is incorrect).” Id. at 757-58 (citations omitted). The court reasoned that because “[a] statement cannot mislead unless it is material, [ ] a false but non-material statement is not actionable.” Id. at 758. We find this reasoning persuasive. We join the Seventh Circuit and the other circuits that have applied a materiality standard to § 1692e. Id. at 757-58; Elyazidi v. SunTrust Bank, 780 F.3d 227, 234 (4th Cir. 2015); Jensen v. Pressler & Pressler, 791 F.3d 413, 421 (3d Cir. 2015); Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 596 (6th Cir. 2009); Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1033 (9th Cir. 2010); see also Janson v. Katharyn B. Davis, LLC, 806 F.3d 435, 437-38 (8th Cir. 2015) (rejecting the argument that any false statement by a debt collector is a per se violation of § 1692e).  Hill argues that even under a materiality standard, Accounts Receivable made materially false representations by claiming that the documents submitted to the conciliation court were authentic. Hill does not deny that his family received medical care from Allina or that Allina assigned the debt to Accounts Receivable. Instead, he argues that Accounts Receivable cannot “acquir[e] documentation to establish its debt collection claims” and that the documents submitted to the conciliation court contained a number of false statements. In Hemmingsen v. Messerli & Kramer, P.A., 674 F.3d 814, 820 (8th Cir. 2012), we explained that a debt collector’s loss of a collection action—standing alone—does not establish a violation of the Act. “[T]he fact that a lawsuit turns out ultimately to be unsuccessful” does not “make the bringing of it an ‘action that cannot legally be taken.’ ” Id. (quoting Heintz v. Jenkins, 514 U.S. 291, 295-96, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995)). Accounts Receivable’s inadequate documentation of the assignment did not constitute a materially false representation, and the other alleged inaccuracies in the exhibits are not material.