FYI: 7th Cir Holds Plaintiff Lacked Standing in ADA "Website Accessibility" Case Against Credit Union

The U.S. Court of Appeals for the Seventh Circuit recently held that a blind plaintiff lacked standing to sue under the Americans with Disabilities Act (ADA) for alleged accessibility problems with a credit union's website because he could not establish an injury in fact as a non-member.

 

A copy of the opinion is available at:  Link to Opinion

 

Plaintiff, who is blind, sued a Credit Union, alleging that the Credit Union's website violated his rights under the ADA because it was not accessible to blind people. Specifically, Plaintiff claimed that the Credit Union's website discriminated against him on the basis of his disability and failed to make "reasonable modifications" to comply with the ADA in violation of 42 U.S.C. § 12812(a), (b). Plaintiff sought injunctive relief, court costs, and attorneys' fees.

 

Plaintiff uses a "screen reader," that reads text aloud to him to access otherwise inaccessible visual content online. However, a screen reader only works when websites support its software. Plaintiff alleged that the Credit Union's website did not support screen reader software.

 

Illinois has a Credit Union Act.  The Credit Union is charted under the Act.  The Act only requires that credit unions to open their membership to persons that share a "common bond." 205 ILCS 305/2(1). This common bond includes "[p]ersons belonging to a specific association, group or organization," "[p]ersons who reside in a reasonably compact and well-defined neighborhood or community," and "[p]ersons who have a common employer." The Credit Union membership is limited to certain local city and county employees.  Only members may use the Credit Union's services.

 

Plaintiff is not a Credit Union member and is not eligible for membership. Instead, Plaintiff is a tester.  He uses websites to test their compliance with the ADA.

 

The trial court granted the Credit Union's motion to dismiss on the grounds that the plaintiff lacked standing to sue.  This appeal followed.

 

As you may recall, to establish standing, a "plaintiff must allege an injury in fact that is traceable to the defendant's conduct and redressable by a favorable judicial decision."

 

The Seventh Circuit observed that this appeal turned on the injury-in-fact requirement.  Under, Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016), plaintiff must allege that he suffered an injury that is "both concrete and particularized." Plaintiff must also show that he faces a "real and immediate" threat of future injury because he seeks injunctive relief.

 

Plaintiff argues the trial court wrongly denied him standing on the grounds that he was a tester. The Seventh Circuit rejected this argument because although "tester status does not defeat standing, it does not automatically confer it either."  Instead, like all plaintiffs, a "tester must still satisfy the elements of standing, including the injury-in-fact requirement."

 

Plaintiff also claimed he had standing to sue because the Credit Union caused him a dignitary harm.  Although the Seventh Circuit acknowledged that a dignitary harm can be cognizable, it noted that "not all dignitary harms are sufficiently concrete to serve as injuries in fact."

 

Here, the Court held, any dignitary harm did not rise to the level of a concrete injury because Illinois "erected a neutral legal barrier to Plaintiff's use of the Credit Union's services." The fact that the Credit Union does not "accommodate the visually impaired" does not personally affect the Plaintiff, the Court held. 

 

Put differently, the alleged harm is not particularized as it does not affect Plaintiff individually. And because Plaintiff cannot claim that if he visited the Credit Union's website again, he would be able to use the Credit Union's services even though he is not a member, he is not entitled to injunctive relief.

 

Finally, the Seventh Circuit examined Plaintiff's argument that the Credit Union's failure to make its website accessible to his screen reader caused him an informational harm that created standing to sue.  The Seventh Circuit had little trouble rejecting this argument because an "informational injury" is not based solely on an inability to access information.  Instead, "[a]n informational injury occurs when the defendant refuses to provide the plaintiff with information that a law — typically, a sunshine law — entitles him to obtain and review for some substantive purpose." 

 

Here, Plaintiff complained about the ease of access, not a failure to disclose information that the law entitles him to receive so he may exercise his substantive rights.  Moreover, the Court held, Plaintiff could have had a sighted person read him the information. 

 

His complaint was that the Credit Union should have made it easier to access the information on its website for blind people, not that the website lacked information.  Put differently, Plaintiff did not seek an order forcing the Credit Union to disclose information, rather he wanted the Credit Union to update its website to support screen reader software.  The Seventh Circuit held that this is not an informational injury.

 

Thus, the Seventh Circuit affirmed the trial court order that Plaintiff lacked standing.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

Alabama   |   California   |   Florida   |   Georgia  |   Illinois   |   Massachusetts   |   New Jersey   |   New York   |   Ohio   |   Pennsylvania   |   Texas   |   Washington, DC

 

 

NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.

Our updates and webinar presentations are available on the internet, in searchable format, at:

 

Financial Services Law Updates

 

and

 

The Consumer Financial Services Blog™

 

and

 

Webinars

 

and

 

California Finance Law Developments 

 

FYI: Cal App Ct (1st Dist) Holds Rosenthal Act Allows Class Actions, Cure Provisions Apply to Debtor Notices

In an unreported opinion, the Court of Appeal for the First District of California recently held that a debt collector that violated the minimum type-size requirement for collection letters under Cal. Civil Code § 1812.701(b) may utilize the procedure for curing violations under California's Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) to correct its violations.

 

However, the Appellate Court reversed the dismissal because the trial court should have allowed the consumer to amend the complaint or locate a suitable class representative after granting summary judgment in favor of the debt collector on her individual claim.

 

In so ruling, the Court also held that Rosenthal Act violations may be brought as class actions under a 1999 amendment essentially incorporating the federal Fair Debt Collection Practices Act's provisions into the Rosenthal Act.

 

A copy of the opinion is available at:  Link to Opinion

 

The consumer received a debt collection letter from the debt collector that did not provide certain statutorily required language in the proper type-size.  The consumer filed a complaint on behalf of a putative class alleging violation of Cal. Civil Code § 1812.701(b).  As you may recall, a violation of section 1812.701(b) is "considered a violation of the Rosenthal Fair Debt Collection Practices Act".  Cal. Civil Code § 1812.702

 

Nine days after it was served with the consumer's complaint, the debt collector sent a revised collection letter that contained the required language in the same type-size as that which was used to inform her of her debt.

 

The debt collector argued that it cured the alleged violation within the 15-day period prescribed by Cal. Civil Code § 1788.30(d) for a curable Rosenthal Act violation.  The debt collector moved for summary judgment on the consumer's individual claim. 

 

The trial court found that the "cure" provision under section 1788.30(d) applied to the debt collector's section 1812.701(b) violation, and granted the debt collector's motion for summary judgment and dismissed the entire putative class action.

 

This appeal followed.

 

As you may recall, debt collection practices in California are governed by federal law and by California's Rosenthal Fair Debt Collection Practices Act, Cal. Civil Code § 1788, et seq.

 

Originally the Rosenthal Act did not permit class actions.  In 1999, the Legislature passed Assembly Bill No. 969, adding Cal. Civil Code B' 1788.17 to the Rosenthal Act, which provides in relevant part:  "[n]otwithstanding any other provision of this title, every debt collector collecting or attempting to collect a consumer debt shall comply with the provisions of Sections 1692b to 1692j, inclusive, of, and shall be subject to the remedies in Section 1692k of [the FDCPA]."  

 

Section 1692k of the FDCPA specifically provides for both individual and class action remedies, but does not contain a cure provision like the Rosenthal Act.

 

Then in 2003, the Legislature enacted the Consumer Collection Notice law, Cal. Civil Code §§ 1812.700-1812.702, which required third party debt collectors subject to the FDCPA, in their first written notice to debtors, to provide a description of debtor rights under state and federal law.  Cal. Civil Code B' 1812.700(a).

 

As relevant in this case, "[t]he type-size used in the disclosure shall be at least the same type-size as that used to inform the debtor of his or her specific debt, but is not required to be larger than 12-point type."    Cal. Civil Code § 1812.701(b).

 

The cure provision in the Rosenthal Act states:  "[a] debt collector shall have no civil liability under this title if, within 15 days either after discovering a violation which is able to be cured, or after the receipt of a written notice of such violation, the debt collector notifies the debtor of the violation, and makes whatever adjustments or corrections are necessary to cure the violation with respect to the debtor."  Cal. Civil Code § 1788.30(d).

 

The consumer argued that the trial court erred in applying section 1788.30(d) because the cure provision was repealed when the Legislature enacted section 1788.17 to require debt collector to comply with listed provisions of the FDCPA and subjected them to the remedies in section 1692k of the federal act. 

 

The Appellate Court disagreed.  Finding no express repeal language in Civil Code § 1788.18, the Appellate Court explained that an implied repeal will be found "only when there is no rational basis for harmonizing the two potentially conflicting statutes."  Garcia v. McCutchen (1997) 16 Cal.4th 469, 477.  The Appellate Court observed that the Ninth Circuit Court of Appeals addressed this very issue in Afewerki v. Anaya Law Grp. (9th Cir. 2017) 868 F.3d 771, and held that section 1788.17 did not remove or impliedly repeal section 1788.30b's defense for cured violations.

 

The Appellate Court noted that while section 1788.17 applied "[n]otwithstanding any other provision" of the Rosenthal Act, the mere incorporation of certain provisions from the FDCPA -- none of which says anything about curing violations -- did not render sections 1788.17 and 1788.30(d) so inconsistent that the two cannot operate concurrently.

 

Moreover, the Appellate Court found nothing in the legislative history of section 1788.17 indicating an intent to repeal section 1788.30(d).

 

The consumer also argued that the type-size violation cannot be cured under section 1788.30(d) because the statute requires compliance in the debt collector's first written communication to the consumer. 

 

Alternatively, the consumer argued that the cure provision did not apply to the debt collector's section 1812.701(b) violation.

 

The Appellate Court rejected these arguments, citing the floor analysis of Senate Bill No. 1022 -- the bill that enacted the Consumer Collection Notice Law -- and noted that the Legislature intended a violation of the type-size requirement to be a Rosenthal Act violation and subject to the 15-day correction period. 

 

Thus, the Appellate Court found no error in the trial court's application of section 1788.30, and its determination that the debt collector's violation could be cured in a writing sent after the first written communication with the debtor.

 

Next, the Appellate Court turned to the consumer's argument that the trial court erred by dismissing the entire putative class action after granting summary judgment on her individual claim.

 

To resolve this issue, the Appellate Court began by considering whether the language "individual action" in section 1788.30 barred a class action based on alleged violations of section 1812.701(b).

 

As you may recall, the remedies provision of the Rosenthal Act state that "[a]ny debt collector who violates this title with respect to any debtor shall be liable to that debtor only in an individual action, and his liability therein to that debtor shall be in an amount equal to the sum of any actual damages sustained by the debtor as a result of the violation."  Cal. Civil Code B' 1788.30(a). 

 

The debt collector may also be liable for statutory damages for a willful violation.   Cal. Civil Code § 1788.30(b). 

 

However, in the Appellate Court's view, section 1788.17 may be reasonably read to incorporate the class action remedies of the FDCPA into the Rosenthal Act, "[n]otwithstanding any other provision" of the Rosenthal Act, such as the individual action provisions in section 1788.30.b

 

The Appellate Court observed that several federal courts faced with this questions have concluded that "class actions may proceed under the amendment to the Rosenthal Act."  Gonzales v. Arrow Fin. Servs., LLC (9th Cir. 2011) 660 F.3d 1055, 1066 (collecting cases).

 

Thus, the Appellate Court determined that the consumer could bring a putative class action for claim under section 1812.701(b).

 

Finally, the Appellate Court turned to the issue of the pick off exception in putative class actions.

 

As you may recall, a typical pick off situation arises when prior to class certification, a defendant gives the named plaintiff the entirety of the relief claimed by that individual and then attempts to obtain dismissal of the action, on the basis that the named plaintiff can no longer pursue a class action. 

 

The involuntary receipt of relief does not, of itself, prevent the class plaintiff from continuing as a class representative.  Wallace v. GEICO General Ins. Co. (2010) 183 Cal.App.4th 1390, 1399.  Rather, the trial court must decide whether the named plaintiff can continue to fairly represent the class in light of the individual relief offered by the defendant.  Id., at pp. 1399-1400.

 

The debt collector argued that it did not pick off the named plaintiff, but rather, it substantively prevailed on the merits of her individual claim based upon the cure defense under section 1788.30(d).

 

However, the Appellate Court determined that the debt collector did not prevail against the consumer in the sense that her allegations were disproven or shown to be meritless.  Instead, her allegations were implicitly conceded and the debt collector did not produce any evidence that it corrected the alleged violations as to the rest of the putative class.

 

In the Appellate Court's view, the debt collector voluntarily gave special treatment to the named plaintiff only, resulting in the elimination of her standing to maintain a putative class action.

 

Thus, the Appellate Court held that the trial court erred in dismissing the entire putative class action without affording the consumer the opportunity to amend her complaint, redefine the putative class, or locate a suitable class representative. 

 

Accordingly, the Appellate Court reversed the trial court's judgment and remanded for further proceedings.

 

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

Alabama   |   California   |   Florida   |   Georgia  |   Illinois   |   Massachusetts   |   New Jersey   |   New York   |   Ohio   |   Pennsylvania   |   Texas   |   Washington, DC

 

 

NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.

Our updates and webinar presentations are available on the internet, in searchable format, at:

 

Financial Services Law Updates

 

and

 

The Consumer Financial Services Blog™

 

and

 

Webinars

 

and

 

California Finance Law Developments