In December 2020, the United States Court of Appeals for the Seventh Circuit issued six opinions addressing Article III standing issues related to violations alleged under the Fair Debt Collection Practices Act (“FDCPA”). These opinions revisit the Supreme Court’s decision in Spokeo, Inc. v. Robins and clarify that a plaintiff in an FDCPA case is required to provide proof of a concrete injury in fact to establish Article III standing.
Emotional distress damages as Article III standing
A violation of any provision of the FDCPA entitles the consumer to an award of actual damages, statutory damages up to $1,000, costs, and attorney’s fees. 15 U.S.C. § 1692k(a). The statute does not define “actual damages.” However, courts determined that actual damages under the FDCPA may include compensation for emotional distress. Thus, a plaintiff’s allegation of emotional harm provides Article III standing. Accordingly, consumer attorneys typically allege emotional distress damages in FDCPA complaints, whether they can later be proven or not.
Sarah Doerr, shareholder at Moss & Barnett, shared the following insight:
As clarified by the Seventh Circuit in the recent deluge of decisions, an FDCPA plaintiff must establish that the statutory violation presented an appreciable risk of harm. Bare allegations of emotional distress without any proof are insufficient for establishing an injury.
Burden of proof for claims of emotional distress
The Supreme Court has not opined on a standard applicable to emotional distress damages under the FDCPA. As a result, there is a split among district courts as to the degree of specificity that is needed to sustain a claim of emotional distress damages.
Some district courts have concluded that plaintiffs must meet the relevant state law standard for intentional infliction of emotional distress to prove emotional distress damages under the FDCPA. Other courts have applied a lower, more lenient standard. However, the recent Seventh Circuit decisions suggest that even under the less demanding standard, claims for emotional distress must be supported by “actual evidence.”
Jessica Klander, shareholder at Bassford Remele, shared the following insight:
Evidence needed to support a claim for emotional distress
Some district courts require that plaintiffs alleging damages for emotional distress under the FDCPA must provide some corroborative evidence of their emotional distress, apart from their own testimony.
John Boyle, shareholder at Moss & Barnett, shared the following insight:
Klander agreed, stating:
In addition to the need for providing relevant medical records, Doerr identified additional challenges associated with proving emotional distress:
The Seventh Circuit’s clarification relating to actual damages will be welcomed by defense counsel for collection agencies.
More to come from the perspective of collection agencies.
By Aylix Jensen