Business Law
Six v. IQ Data International, Inc.
In a recent published opinion, the Ninth Circuit Court of Appeals held that an individual who receives a collection letter in violation of 15 U.S.C. 1692c(a)(2) of the Fair Debt Collection Practices Act (the “FDCPA” or “the Act ) has Article III standing. The plaintiff received a letter directly from a debt collector when the collector knew he was represented by counsel, which was a violation of the Act. Six v. IQ Data International, Inc., ___ F. 4th ____, 2025 U.S. App. LEXIS 4172 (9th Cir. February 24, 2025). To view the opinion, click here:
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/24/23-15887.pdf
FACTS:
IQ Data International Inc (IQ) is a debt collector. It acquired a debt obligation for Ryan Six’s purported breach of a residential lease. Six learned of the debt and on August 18, 2021, mailed a letter to Equifax, a debt reporting service, disputing the debt. On the same day, Six’s attorney mailed a letter to IQ, providing notice that Six was represented and that all correspondence should be sent to counsel. A few days later, IQ received Six’s dispute letter and began an internal process to send the requested documentation to Six’s mailing address. The following day IQ updated its records to show that it had received counsel’s letter so direct communication to Six must cease. But on the same date, IQ sent the verification of the debt directly to Six.
Six sued IQ in the Arizona District Court, asserting that his receipt of the letter after IQ knew he had counsel violated 15 U.S.C. § 1691(a)(2). On cross motions for summary judgment, the district court ruled that Six lacked constitutional standing and dismissed the case. Upon appeal, the Circuit reversed the district court, holding that Six did have Article III standing and remanded for the case to continue.
ANALYSIS:
Six claimed he had standing because his direct receipt of the letter after IQ knew he had counsel was an invasion of his privacy interests. IQ asserted that mere receipt of the letter was insufficient harm to establish standing because it was not analogous to the types of harm traditionally recognized by American courts.
Article III standing requires that the plaintiff “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). An “injury in fact” is an “invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical.” Spokeo, 578 U.S. at 339 A court must consider both Congress’s judgment and a comparison of the alleged harm to harms traditionally recognized by American courts. TransUnion LLC v. Ramirez, 594 U.S. 413, 425-26 (2021). Tangible harms easily qualify and various intangible harms can also be concrete.
Looking first at Congress’ judgment, the Court observed that Congress enacted the FDCPA to stop abusive debt collection practices which invaded privacy. Therefore, the Act prohibited debt collectors from communicating directly with consumers who were represented by counsel. Sending such letter directly to the plaintiff was an infringement of that privacy interest.
Next, the Court assessed whether Six had identified an historical or common-law claim for his injury. It observed that claims for invasion of privacy had long been heard by American courts and that most states recognized the right to privacy. This was the kind of traditional redressable harm necessary for standing. Unwanted communications, whether by phone call or letter, invade that privacy after the consumer has identified an attorney to receive the communication.
The Court rejected a distinction between letters and text messages raised by the Seventh Circuit in Pucillo v. National Credit Systems, Inc., 66 F. 4th 634 (7th Cir. 2023). It concluded that the line drawn by Pucillo rests on the degree of harm, rather than the kind. Supreme Court precedent focuses on the kind.
IQ had not challenged the other elements of standing, so reversal of summary judgment in its favor was warranted. However, since IQ had raised other defenses in its motion which the district court had not reached, the Court remanded the matter to that court for further proceedings.
AUTHOR’S COMMENTS:
The Ninth Circuit may have created a circuit split with the Seventh Circuit on this issue. Personally, I think the “injury in fact” is thin, especially when the letter sent was in response to an inquiry that Six personally had initiated before counsel had identified on his behalf. I agree that an invasion of privacy is the type of harm traditionally protected by our legal system. Perhaps the letter versus text distinction goes to the weight of the harm, as the Ninth circuit reasoned. However, a per se ruling that a letter sent to the consumer in response to his inquiry is a violation seems harsh.
[The Commercial Finance Newsletter is written by an ad hoc group of layers in the Business Law Section of the California Lawyers Association. This review was written by the Hon. Meredith Jury, U.S. Bankruptcy Judge, Central District of California (Ret.), a member of the ad hoc group. The opinions contained herein are solely those of the author.]