Ninth Circuit Win Under The FDCPA
We are happy to announce that our associate, Alex Wade, received a favorable ruling from the Ninth Circuit Court of Appeals on December 2, 2020, in a case titled Adams v. Skagit Bonded Collectors, LLC, No. 20-35158, 2020 U.S. App. LEXIS 37627 (9th Cir. Dec. 2, 2020). Before joining our firm, Alex handled the case from the inception, where he originally defeated Plaintiff’s FDCPA class action lawsuit as a result of his motion for judgment on the pleadings. Thereafter, the Plaintiff appealed to the Ninth Circuit Court of Appeals, where the court ultimately ruled in favor of Alex’s prior client. Alex handled many of the briefings before the Ninth Circuit Court of Appeals and was instrumental in crafting the arguments that ultimately won at both the district court level and on appeal.
This ruling is important for financial institutions in California, and throughout the Ninth Circuit. While the plaintiff (Brett Adams) argued that the defendant debt collector violated the FDCPA, the court ultimately found that Adams did not have “standing” to bring the claim. While Adams argued that the debt collector’s initial letters violated specific disclosure requirements, federal courts require that plaintiffs show a “concrete injury.” Further, “a bare procedural violation, divorced from any concrete harm,” does not confer standing. This holding extends the Supreme Court’s 2016 Spokeo ruling narrowly to the FDCPA. But the ruling certainly suggests that this rule extends beyond its prior limited applications. Federal statutes or regulations that allow for a private right of action against financial institutions, such as the Fair Credit Reporting Act and the Telephone Consumer Protection Act, could only be brought if the plaintiff was actually harmed by the financial institution’s alleged violation of the corresponding statute or regulation. Without actual injury, federal courts would lack subject matter jurisdiction to hear the case.
This change opens important avenues for defense against such claims in federal court. Such defenses are important to limit recourse in litigation where the real impact is to enrich attorneys.