Eleventh Circuit Clarifies Testing for Article III, Changes Focus on FDCPA and Mail Providers | Strawberry and Forman


On September 8, 2022, at Hunstein v. Preferred Collection and Management Services, Inc. No. 19-14434, the Eleventh Circuit Court of Appeals issued a bench decision that departs materially from the panel’s decision on the standing Article III issues and legal causes of action. The case has broad implications for how the Eleventh Circuit applies the Article III standing analysis, particularly in consumer credit cases, but also in other cases where a breach of law has a dubious connection to any actual harm caused to the plaintiff.

The applicant in hunstein sued a debt collector who was attempting to collect a medical bill incurred by the plaintiff for the medical treatment of his young son. The plaintiff alleged that when the debt collector called upon a mail seller to send a dunning letter, he disclosed to that mail seller the name of his son, the fact that he had received medical treatment and the amount allegedly due for this medical treatment. According to the plaintiff, this violated the Fair Debt Collection Practices Act (“FDCPA”) prohibition against disclosing information about a consumer debt to a third party. See 15 U.S.C. 1692c(b). There was no allegation that the leaked information caused monetary harm or traveled further than the postal service provider’s employees. Instead, the harm alleged was actually the intangible harm associated with an invasion of a person’s privacy, which would otherwise be actionable at common law as a tort of “public disclosure of private facts.” Plaintiff argued that this entitled him to modest statutory damages under the FDCPA, and perhaps most importantly, substantial attorneys’ fees.

In a now superseded panel decision, the Eleventh Circuit Court of Appeals reversed the district court’s order dismissing the case, stating that plaintiff had plausibly alleged concrete harm in fact sufficient to demonstrate standing to act under Article III. The opinion was based largely on Spokeo, Inc. vs. Robins578 US 330 (2016) and TransUnion LLC vs. Ramirez, 141 S.Ct. 2190 (2021) for his analysis. However, in his bench opinion, the Eleventh Circuit came to the opposite conclusion and affirms the dismissal of the case on the basis of Article III.

The key analysis in Huntstein, a sin Spokeo and Ramirez, is whether the plaintiff has alleged more than mere violation of law, and instead has alleged concrete harm in fact. As the bench the opinion states, “[w]hen it comes to determining whether an alleged immaterial harm is concrete or “real”, we seek to see if it corresponds to harm “traditionally recognized as the basis of a lawsuit in American courts”. . . . Although an “exact copy” of a traditionally recognized harm is not required, the new claims cannot miss an element “essential to liability” under the tort of comparison. ” citing Ramirez, 141 S.Ct. at 2204-2209.

In hunstein, all parties agreed that the comparator common law tort for the FDCPA’s prohibition against disclosure to third parties is the common law tort of “public disclosure of private facts”. The bench The decision found that the alleged violation of the law in question was not sufficiently analogous to the tort because Hunstein lacked the element that the disclosure must be made “public”. Specifically, the Eleventh Circuit ruled that a public disclosure “requires far more than Hunstein has offered – it does not simply include ‘any communication from the defendant to a third person'”. a.

While the majority of the Eleventh Circuit and the dissenting opinion agree that the correspondence need not be “accurate,” the justices disagreed on whether or not Hunstein’s case had a “close relationship” to the alleged harm traditionally recognized by the common law tort. The dissent seemed willing to treat as actionable any disclosure of private facts to employees of a third-party company if it could be inferred that the employees were reading those private facts, even if it was necessary to do their jobs and not to other purposes. The implications of such a detention would be widespread and would cast doubt on the ability of debt collectors to employ providers not only for mail, but also for cloud computing, records management, file storage or any other service where the information would have been read by employees of a provider. However, the majority takes a narrower view, that the “publicity” element of the tort of public disclosure of private facts means that the court must engage in a qualitative inquiry to determine whether or not the disclosed information ” reaches, or is sure to reach, the public.” According to the Eleventh Circuit, this generally cannot be inferred from an “electronic transfer between two companies,” without some additional facts to support an inference of actual publicity that has a closely related to what was actionable in tort.

Read it hunstein broader view, it is clear that the Eleventh Circuit will require pleas of facts from which actual harm can be inferred from legal causes of action to satisfy Article III. This is something most litigants will accomplish by alleging physical injury or financial loss as a result of the violation of the law. However, where the alleged harm caused by a violation of law is intangible, the Eleventh Circuit will take an “element-for-element” approach to determining whether the alleged intangible injury has a common law analog, and will not find concrete injury caused by intangible elements. harm where “a pleading [] completely fails to allege an element essential to the harm presented as a common law comparator” because “the common law analogy breaks down if we can rewrite a traditional tort to exclude an essential element”. Given the case-by-case analysis required in such cases, this issue will certainly be the subject of much litigation in the future.

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