The Eighth Circuit Court of Appeals (the Court) recently ruled that a judgment debtor who was mailed a copy of a garnishment summons which was served on his bank did not have standing to pursue a claim under the Fair Debt Collection Practices Act (FDCPA) because the mere receipt of a copy of the summons did not cause a concrete and particularized injury as required by Article III of the Constitution. Ojogwu v Rodenburg Law Firm, 2022 WL 433034 (8th Cir. 2/14/22).
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A judgment creditor’s attorneys, Rodenburg Law Firm (Rodenburg), mailed consumer judgment debtor Benjamin Ojogwu (Ojogwu) a copy of a garnishment summons it served on garnishee US Bank as required by Minnesota law. Minnesota law provides that garnishment is an ancillary proceeding to a civil action for the recovery of money and that a judgment creditor may issue a garnishment summons to any third party after entry of a money judgment. Minn. Stat. § 571.71(3). At the time Rodenburg mailed the summons and other pertinent papers to Ojogwu, it was aware that he was represented by an attorney who had advised them that Ojogwu was disputing the debt, which had been obtained by default.
The district court ruled that the Minnesota statute was preempted by the provisions of the FDCPA which prohibited direct contact with a consumer debtor without prior consent or express permission if the debt collector knows the debtor is represented by an attorney. 15 U.S.C. § 1692c(a)(2). Therefore, the district court entered a final judgment for Ojogwu, awarding statutory damages and attorney’s fees.
Rodenburg appealed to the Court, which vacated the order and remanded with instructions to dismiss the action.
The Court never reached the issue of whether the FDCPA preempted the Minnesota statute. Instead, because all federal courts must first ascertain their jurisdiction to resolve a case or controversy, it first considered whether Ojogwu had standing and concluded he did not under the recent Supreme Court cases, Spokeo, Inc v. Robins, 136 S.Ct. 1540 (2016) and TransUnion LLC v. Ramire, 141 S. Ct. 2190 (2021). It concluded that Ojogwu bore the burden of proving Article III standing by showing “(i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief.” TransUnion, 141 S.Ct. at 2203.
The Court noted the difference between an injury in law and an injury in fact, which would confer standing on Ojogwu. An injury in law can be a plaintiff’s statutory cause of action to sue a defendant over its violation of federal law, whereas an injury in fact requires that the plaintiff suffer concrete harm as a result of the violation. The summons mailed to Ojogwu imposed tangible compliance obligations on US Bank but no obligations on Ojogwu. Ojogwu did nothing more than send the notice to his attorney, who then sued.
The Court found that the injury to Ojogwu was particularized, but not sufficiently concrete to create standing. It recognized that in certain circumstances intangible injuries might rise to an injury in fact if an historical analysis showed “a close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts.” TransUnion, at 2204. But the type of intangible injuries alleged by Ojogwu – nervousness, confusion, irritability, fear in answering the phone – did not cause any real detriment to him nor force him to act to protect his interest. Thus, they fell short of the required injury in fact. Therefore, even if Rodenburg facially violated the FDCPA, Ojogwu had no remedy for that violation without suffering a harm traditionally recognized as adequate to support a case for damages in American courts.
This case follows the direction that federal courts have taken since Spokeo was decided. The burden on plaintiffs to allege and prove an identifiable harm, as opposed to just “an injury in law,” which can be a technical violation of a federal statute, has made gaining a foothold in federal courts difficult for plaintiffs. The intriguing part of the ruling is the Court’s discussion of what is sufficient “intangible harm” to qualify as an injury in fact. The reference to “harms traditionally recognized as providing a basis for lawsuits in American courts” leads one to believe that in some circumstances emotional distress damages can be enough, since claims for emotional distress damages have been recognized in courts since at least the 1970’s. My advice to practitioners fighting the standing battle with only intangible harm is to ask a medical expert to diagnose any emotional injury if no physical manifestations are apparent. Such diagnosis should support the concrete injury needed for Article III standing.
This review was written by the Hon. Meredith Jury (U.S. Bankruptcy Judge, C.D. CA., ret.), a member of the ad hoc group. Thomson Reuters holds the copyright to these materials and has permitted the Insolvency Law Committee to reprint them. This material may not be further transmitted without the consent of Thomson Reuters.