Wednesday, February 23, 2022

FYI: 8th Cir Holds FDCPA Plaintiff Lacked Article III Standing in Garnishment Communication Case

The U.S. Court of Appeals for the Eighth Circuit, recently reversed a trial court's judgment in favor of a consumer for claims of alleged violation of the federal Fair Debt Collection Practices Act (FDCPA), finding that consumer lacked Article III standing to bring his claim in federal court as the consumer failed to allege or later show a concrete injury in fact.


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


In Minnesota, a creditor may issue a garnishment summons to any third party "at any time after entry of a money judgment in [a] civil action." Minn. Stat. § 571.71(3). The statute further provides that a copy of the garnishment summons, copies of other papers served on the third-party garnishee, and the applicable garnishment disclosure form "must be served by mail at the last known mailing address of the debtor not later than five days after the service is made upon the garnishee." § 571.72, subd. 4 and 5.


This appeal arose out of a judgment creditor's attorney ("Creditor") mailing a consumer debtor ("Debtor") a copy of a garnishment summons which was served on garnishee, and other state-law-mandated garnishment forms, knowing that Debtor had retained counsel after the default judgment was entered and knowing that Debtor "dispute[d] the debt."


Debtor brought suit under 15 U.S.C. § 1692c(a)(2) of the FDCPA.


The trial court, held that § 571.72, subd. 4 was inconsistent with and preempted by the FDCPA provision stating "[w]ithout the prior consent of the consumer…or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with collection of any debt…if the debt collector knows the consumer is represented by an attorney with respect to such debt." § 1692c(a)(2). This court expressly disagreed with the opinion of another District of Minnesota district judge.


The parties stipulated as to remedy, and the trial court entered final judgment awarding Debtor statutory damages plus attorney's and filing fees. Creditor appealed.


On appeal, the Eighth Circuit held that it could not resolve the merits of the intra-district conflict, finding that Debtor lacked Article III standing to pursue his claim in federal court because he failed to allege and the record did not show that Debtor suffered a concrete injury in fact from Creditor's violation of § 1692c(a)(2).


Debtor had the burden of proving Article III standing by showing "(i) that he suffered an injury in fact that [wa]s 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 LLC v. Ramirez, 141 S. Ct.  2190, 2203 (2021).


The Court further noted that a concrete and particularized injury is required even when Congress creates a private cause of action, such as it did in the FDCPA. See § 1692k.


The Eighth Circuit found that Creditor's mailing of the garnishment summons on Debtor caused him no tangible injury. The Court further found that serving the summons on Debtor was a benefit to him, as it gave him timely notice and an opportunity to claim an exemption to satisfy the garnishment in such a way that did not disturb his relations with the garnishee.


Debtor alleged that the mailing of the garnishment summons resulted in intangible injury as held by prior courts, "actual damages in the form of fear of answering the telephone, nervousness, restlessness, irritability, amongst other negative emotions." But, "In determining whether an intangible harm constitutes injury in fact, both history and the judgment of Congress play important roles."  Spokeo, 578 U.S. 330, 340 (2016).


The historical analysis is used to determine whether the alleged injury has "a close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts." TransUnion, 141 S. Ct. at 2204. The role of Congress is important, as, by statute, it may "elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate at law. Spokeo, 578 U.S. at 341 (quotation omitted).


However, Congress "may not simply enact an injury into existence, using its lawmaking power to transform something that is not remotely harmful into something that is.'" TransUnion, 141 S. Ct. at 2205 (quotation omitted).


Using this analysis, the Eighth Circuit found that the intangible injuries alleged by Debtor were insufficient to establish concrete injury in fact. Debtor was not caused to act to his detriment or fail to protect his interests. The Court further found that Debtor's alleged tangible injuries "f[e]ll short of cognizable injury as a matter of general tort law. Buchholz v. Meyer Njus Tanick, PA, 946 F.3d 855, 864 (6th Cir. 2020).


The Eighth Circuit also found that Debtor failed to show that his "negative emotions" were caused by Creditor commencing a lawful garnishment action.

Finally, the Court emphasized the relevance of the fact that Debtor's attorney notified Creditor that Debtor disputed the debt. 


Subsection 1692c(c)(3) provides that, "[i]f a consumer notifies a debt collector in writing that the consumer refuses to pay a debt . . . the debt collector shall not communicate further with the consumer with respect to such debt, except . . .to notify the consumer that the debt collector or creditor intends to invoke a specified remedy." 


In Heintz v. Jenkins, the Court addressed this exception finding that "Courts can read these exceptions [in §§ 1692c(c)(2), (3)], plausibly, to imply that they authorize the actual invocation of the remedy that the collector 'intends to invoke.'...  [This] interpretation is consistent with the statute's apparent objective of preserving creditors' judicial remedies." § 514 U.S. 291 (1995).


The Eighth Circuit noted that the comment was not obviously applicable as Debtor did not assert a violation of § 1692c(c), the Court nevertheless found it reinforced its conclusion that Debtor failed to allege a concrete injury in fact as, under Minnesota law, garnishment is an independent proceeding ancillary to "an ordinary debt-collecting lawsuit."


As such, the Eighth Circuit found that the Debtor lacked Article III standing because Debtor failed to plausibly allege or later show a concrete injury in fact. The judgment of the trial court was vacated and the case remanded with instructions to dismiss the complaint. However, the parties were granted leave to file supplemental briefs on the issue of Article III standing.




Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874


Admitted to practice law in Illinois




Alabama   |   California   |   Florida   |   Illinois   |   Massachusetts   |   New Jersey   |   New York   |   Ohio   |   Pennsylvania   |   Tennessee   |   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




The Consumer Financial Services Blog