Stephenson-Ortiz v. Simons Agency, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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DAWN STEPHENSON-ORTIZ,

Plaintiff,

v. MEMORANDUM AND ORDER

SIMON’S AGENCY, INC., 19-CV-2639 (RPK) (RML)

Defendant.

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RACHEL P. KOVNER, United States District Judge:

Plaintiff Dawn Stephenson-Ortiz filed this action seeking damages for alleged violations

of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. Defendant moves

for summary judgment, arguing that plaintiff lacks Article III standing. For the reasons set forth

below, defendant’s motion is granted.

BACKGROUND

The following facts—taken from the parties’ Local Rule 56.1 statements, depositions, and

evidentiary filings—are uncontradicted by other evidence unless noted.

A. Factual Background

Simon’s Agency, Inc. is a collection agency that operates in New York. Def.’s Resp. to

Pl.’s Rule 56.1 Statement ¶¶ 3–4 (“Def.’s 56.1 Resp.”) (Dkt. #54). In December 2018, defendant

sent plaintiff a debt collection letter. Id. at ¶ 17; see Am. Compl., Ex. 1 (“Debt Collection Letter”)

(Dkt. #12-1). The letter indicated that plaintiff owed $2,257.87 to Raymour & Flanagan, a

furniture store. See Debt Collection Letter 1. The letter also stated in bold and capital letters, “we

report delinquent accounts to the credit bureau.” Ibid.

The parties dispute whether plaintiff owed a debt to Raymour on the date the letter was

sent and, if she did, in what amount. See Pl.’s Resp. to Def.’s Rule 56.1 Statement ¶ 1 (Dkt. #55-

1). According to defendant, plaintiff owed Raymour the amount stated in the letter. Id. at ¶¶ 1, 4.

Plaintiff contends that although she had previously incurred a $3,300 debt to Raymour, she had

fully paid off the debt by the time the letter was sent. Id. at ¶ 1. Plaintiff asserts that she “was

confused upon receipt of the Letter, insofar as she did not owe any monies to Raymour &

Flanagan.” Def.’s 56.1 Resp. ¶ 27; see Decl. of Matthew Bizzarro, Ex. 4, at 46:24–47:22

(“Stephenson-Ortiz Depo.”) (Dkt. #46-4).

Plaintiff did not send defendant any money, and defendant eventually reported the alleged

debt to Experian. See Def.’s 56.1 Resp. ¶ 36. Defendant asserts that it reported the debt in April

2019, but plaintiff contends that defendant did so in July 2019—more than two months after

plaintiff filed suit. Ibid.; see Compl. (Dkt. #1) (filed May 5, 2019). According to plaintiff,

defendant “never intended to report the alleged Debt to ‘the credit bureau’” and did so only in

response to plaintiff’s lawsuit. See Def.’s 56.1 Resp. ¶ 35.

Since plaintiff received the debt collection letter, there have been thirty-six “hard inquiries”

on plaintiff’s credit report. Letter in Resp. to Feb. 1, 2023 Order, Ex. 1, at 2–6 (Dkt. #79-1). “Hard

inquiries are requests for . . . consumer information based on an action or process initiated by [the

consumer] generally related to a credit or other monetary obligation . . . . Hard inquiries are

displayed to companies that receive [the] consumer report and may stay on [the] report at least two

years.” Id. at 1.

B. Procedural Background

In May 2019, plaintiff sued defendant, alleging five violations of the FDCPA. See Compl.

¶¶ 20–98. After summary judgment practice and plaintiff’s dismissal of two claims, three claims

remained: (i) sending a debt collection letter overstating the amount of debt owed in violation of

15 U.S.C. § 1692g(a)(1), Am. Compl. ¶¶ 27–38 (Dkt. #12); (ii) falsely representing the amount,

character, or legal status of debt and engaging in false, deceptive, or misleading tactics in

connection with the collection of debt in violation of 15 U.S.C. §§ 1692e, 1692e(2)(A), and

1692e(10), Am. Compl. ¶¶ 39–59; and (iii) threatening to report the alleged debt to “the credit

bureau” while lacking the intent to do so in violation of 15 U.S.C. §§ 1692e, 1692e(5), and

1692e(10), Am. Compl. ¶¶ 103–13. See Nov. 12, 2021 Order (dismissing a claim relating to

defendant’s website); Dec. 3, 2021 Order (dismissing an overshadowing claim).

Defendant filed a second motion for summary judgment, arguing that plaintiff lacks

Article III standing to bring her remaining claims. See Mem. in Supp. of Def.’s Second Mot. for

Summary Judgment 3–8 (Dkt. #75). I exercise my discretion to consider a second summary

judgment motion because the Court has “an independent obligation to assure that standing exists,”

Summers v. Earth Island Inst., 555 U.S. 488, 499 (2009), and defendant did not raise its standing

argument in the previous motion, see Mem. in Supp. of Def.’s First Mot. for Summary Judgment

5–13 (Dkt. #49).

STANDARD OF REVIEW

Summary judgment is appropriate when “there is no genuine dispute as to any material fact

and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A summary

judgment motion may be used to challenge whether there is any genuine dispute of material fact

as to the plaintiff’s standing. Baur v. Veneman, 352 F.3d 625, 642 (2d Cir. 2003) (collecting cases

and noting that standing may be challenged “on summary judgment or even at trial”); see also,

e.g., Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992).

A genuine issue of fact exists if “the evidence is such that a reasonable jury could return a

verdict for the nonmoving party,” and a factual dispute is material if it “might affect the outcome

of the suit under the governing law.” Frost v. New York City Police Dep’t, 980 F.3d 231, 242 (2d

Cir. 2020). In determining whether there is a genuine issue of material fact, a court evaluates the

whole record, resolving all ambiguities and drawing all permissible factual inferences in favor of

the non-movant. See ibid. A nonmoving party can survive summary judgment only if there is

sufficient evidence to permit a rational trier of fact to find in that party’s favor. Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); see Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 251 (1986). “The party asserting jurisdiction,” here plaintiff, “bears the burden of

proof as to standing.” Nat. Res. Def. Council, Inc. v. U.S. Food and Drug Admin., 710 F.3d 71,

79 (2d Cir. 2013). “To defend against summary judgment for lack of standing, a plaintiff ‘must

set forth by affidavit or other evidence specific facts’ supporting standing, as is generally required

under Rule 56.” Ibid. (citation omitted).

In assessing the record, I consider cited “depositions, documents, electronically stored

information, affidavits or declarations, stipulations . . . , admissions, [and] interrogatory answers.”

Fed. R. Civ. P. 56(c)(1)(A). I view “the evidence in the light most favorable to the nonmoving

party and draw all reasonable inferences in that party’s favor.” Tracy v. Freshwater, 623 F.3d 90,

95 (2d Cir. 2010). “It is a settled rule that credibility assessments, choices between conflicting

versions of the events, and the weighing of evidence are matters for the jury, not for the court on

a motion for summary judgment.” McClellan v. Smith, 439 F.3d 137, 144 (2d Cir. 2006) (quotation

marks, alterations, and citation omitted).

DISCUSSION

Defendant’s motion for summary judgment is granted.

Federal courts may adjudicate only lawsuits that present a “case or controversy.” U.S.

Const. art. III, § 2. And a lawsuit presents a case or controversy only if the plaintiff has standing

to litigate the grievance she presents. TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2205 (2021).

Standing does not exist in every case in which “a statute grants a person a statutory right and

purports to authorize that person to sue to vindicate that right.” Spokeo, Inc. v. Robins, 578 U.S.

330, 341 (2016). Instead, the plaintiff must have “suffered an injury in fact that is concrete,

particularized, and actual or imminent,” that “was likely caused by the defendant,” and that “would

likely be redressed by judicial relief.” TransUnion, 141 S. Ct. at 2203 (citing Lujan, 504 U.S. at

560–561). “[W]hether a harm qualifies as ‘concrete’ hinges on ‘whether the alleged injury to the

plaintiff has a “close relationship” to a harm “traditionally” recognized as providing a basis for a

lawsuit in American courts.’” Maddox v. Bank of N.Y. Mellon Tr. Co., N.A., 19 F.4th 58, 63 (2d

Cir. 2021) (quoting TransUnion, 141 S. Ct. at 2204). “If the plaintiff does not claim to have

suffered an injury that the defendant caused and the court can remedy, there is no case or

controversy for the federal court to resolve.” TransUnion, 141 S. Ct. at 2203 (citation and

quotation marks omitted).

“[I]n a suit for damages, the mere risk of future harm, standing alone, cannot qualify as a

concrete harm.” Id. at 2210–11. If a person is exposed to a risk, but the risk does not actually

manifest itself in some injury, that is generally “cause for celebration, not a lawsuit.” Id. at 2211

(discussing hypothetical in which a reckless driver is dangerously swerving across lanes, thereby

exposing a fellow driver “to a risk of future harm,” but no accident occurs). Accordingly, a

plaintiff seeking damages must demonstrate either “that the risk of future harm materialized” or

that the plaintiff was “independently harmed by [her] exposure to the risk itself.” Id. at 2211.

Plaintiff has not identified a harm sufficient to give rise to Article III standing. Plaintiff

asserts that she suffered a concrete injury because she experienced “a reduction in [her] consumer

credit rating” and because “there have been approximately [thirty-six] hard inquiries” on her credit

report. Pl.’s Mem. in Opp’n to Second Mot. for Summary Judgment 2, 4 (Dkt. #76). But these

allegations, standing alone, do not give rise to a concrete injury under Article III.

Courts in this Circuit have consistently held that “[a] lowered credit score in and of itself

is not a concrete harm” under Article III. Zlotnick v. Equifax Inf. Servs., LLC, 583 F. Supp. 3d

387, 392 (E.D.N.Y. 2022); see, e.g., Maddox, 19 F.4th at 65 (holding that an allegation that

defendant “adversely affected [plaintiffs’] credit . . . making it difficult to obtain financing” is

“incapable of giving rise to Article III standing” where “it is not alleged that this purported risk

materialized”); Grauman v. Equifax Inf. Servs., LLC, 549 F. Supp. 3d 285, 292 n.3 (E.D.N.Y.

2021); Krausz v. LoanDepot.com, LLC, No. 22-CV-152 (VB), 2022 WL 16960928, at *2

(S.D.N.Y. Nov. 16, 2022); Lodhi v. JHPDE Fin. 1, LLC, No. 22-CV-5434 (JMA) (JMW), 2022

WL 17363935, at *1 (E.D.N.Y. Oct. 21, 2022); Spira v. TransUnion LLC, No. 21-CV-2367

(KMK), 2022 WL 2819469, at *5 (S.D.N.Y. July 19, 2022). Accordingly, plaintiff cannot

establish Article III standing from the mere fact that her credit score may have been adversely

affected.

Likewise, courts in this Circuit have held that the mere “allegation that [plaintiff]

experienced ‘hard and soft pulls’ on his credit file is insufficient to confer standing.” Krausz, 2022

WL 16960928, at *4; see id. at *3 (“[E]ven if the Credit Reports clearly evidence a hard inquiry,

. . . they [do not] show plaintiff suffered an actual credit denial, reputational harm, or any other

concrete adverse consequences” sufficient to give rise to standing.”); see also Rosenberg v.

LoanDepot, Inc., No. 21-CV-8719 (PMH), 2023 WL 1866871, at *4 (S.D.N.Y. Feb. 9, 2023)

(finding no standing where “Plaintiff simply fails to allege that she faced any real-world—tangible

or intangible—consequences from any pulls on her Credit Report.”); Campbell v. Portfolio

Recovery Assocs., LLC, No. 21-CV-1322 (PKC) (RML), 2022 WL 657225, at *1 (E.D.N.Y. Mar.

4, 2022) (“Damage to personal credit and vague claims of ‘attempts to get financing’ and ‘negative

impact,’ without an allegation that such damage resulted in a materialized injury, or a sufficiently

imminent and substantial risk of injury, are insufficient to confer standing.”).

Plaintiff identifies no actual harm resulting from her damaged credit score or the hard

inquiries on her credit report. For example, plaintiff identifies no evidence from which a

reasonable jury could conclude that she experienced “denials of credit and financing opportunities,

limited access to credit, increased cost of credit, [or] increased costs for services factoring credit

rating in pricing.” Holland v. Chase Bank USA, N.A., 475 F. Supp. 3d 272, 274 (S.D.N.Y. 2020).

And while plaintiff asserts in her memorandum of law that defendant “caus[ed] her to either be

denied credit or increase the cost of obtaining such credit,” Pl.’s Mem. in Opp’n to Second Mot.

for Summary Judgment 2, plaintiff cites no evidence corroborating this assertion. See Dusanenko

v. Maloney, 726 F.2d 82, 84 (2d Cir. 1984) (holding that statements in a memorandum of law are

insufficient to defeat summary judgment). Indeed, the Court directed plaintiff to file a

supplemental letter identifying evidence supporting her asserted injuries, see Feb. 1, 2023 Order;

Fed. R. Civ. P. 56(e)(1), and plaintiff cited only her credit score and credit report, see Letter in

Resp. to Feb. 1, 2023 Order, neither of which demonstrates an injury sufficient to give rise to

Article III standing, see Nat. Res. Def. Council, 710 F.3d at 79 (stating that a plaintiff must set

forth “specific facts” supporting standing in order to defend against summary judgment).

Moreover, plaintiff does not argue that she suffered a reputational injury due to the

dissemination of her credit report. Cf. TransUnion, 141 S. Ct. at 2208 (holding that “the

publication to a third party of a credit report bearing a misleading” alert labeling the consumer as

a “potential terrorist” caused a harm analogous to “the reputational harm associated with the tort

of defamation”). Accordingly, the Court concludes that plaintiff has forfeited this argument. See

In re Congregation Birchos Yosef, 699 F. App’x 91, 92 (2d Cir. 2017) (holding that a party’s

“alternative theories of standing were not raised before the district court, and so they have

been forfeited”).

But even if the Court liberally construed plaintiff’s brief to raise a reputation-based

argument, it is not persuasive. In TransUnion, the Supreme Court concluded that a class of

plaintiffs suffered a reputational injury because “TransUnion provided third parties with credit

reports containing . . . alerts that labeled the class members as potential terrorists, drug traffickers,

or serious criminals.” 141 S. Ct. at 2209. The Court reasoned that “a person is injured when a

defamatory statement ‘that would subject him to hatred, contempt, or ridicule’ is published to a

third party,” and “[t]he harm from being labeled a ‘potential terrorist’ bears . . . a sufficiently close

relationship to the harm from a false and defamatory statement.” Ibid. “That type of allegation is

simply absent here. There is no comparable allegation of reputational harm where, via [hard

inquiries], existing creditors of Plaintiff’s were merely able to see her Credit Report.” Rosenberg,

2023 WL 1866871, at *4.

Finally, plaintiff’s assertion that she “was confused upon receipt of the Letter” is

insufficient to confer standing. Def.’s 56.1 Resp. ¶ 27. “[T]he state of confusion is not itself an

injury [for purposes of Article III].” Pennell v. Glob. Tr. Mgmt., LLC, 990 F.3d 1041, 1045 (7th

Cir. 2021) (citation omitted); see TransUnion, 141 S. Ct. at 2214; see also Garland v. Orlans, PC,

999 F.3d 432, 437 (6th Cir. 2021) (“Confusion does not have ‘a close relationship to a harm that

has traditionally been regarded as providing a basis for a lawsuit.’”) (quoting Spokeo, 578 U.S. at

341); Faherty v. Rubin & Rothman, LLC, No. 3:21-CV-650 (AWT), 2022 WL 1025958, at *5 (D.

Conn. Apr. 6, 2022) (collecting cases).

CONCLUSION

Defendant’s motion for summary judgment is granted.

SO ORDERED.

/s/ Rachel Kovner

RACHEL P. KOVNER

United States District Judge

Dated: March 28, 2023

Brooklyn, New York