Perkins v. Mandarich Law Group, LLP

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

Steven Perkins, )

)

Plaintiff, )

)

)

v. ) No. 23 C 80

)

)

Mandarich Law Group, LLP, )

)

Defendant. )

Memorandum Opinion and Order

Defendant previously sued plaintiff in Illinois state court

on behalf of JPMorgan Chase Bank, N.A., based on an allegedly

outstanding debt. In this suit, plaintiff asserts that at the time

of the state court action, he lived in Texas, not Illinois, such

that defendant violated two provisions of the Fair Debt Collection

Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. First, plaintiff

claims defendant violated § 1692f, which prohibits the use of

unfair or unconscionable means to collect debt. Second, he claims

defendant violated § 1692i(a)(2) by bringing the action in a

judicial district other than where plaintiff resided at the

commencement of the action.1 Defendant moves to dismiss the amended

1 Plaintiff does not say anything in the amended complaint to

suggest that his § 1692f claim is premised on different conduct

than is his § 1692i claim, so the only inference I can draw is

complaint under Federal Rule of Civil Procedure 12(b)(1) for lack

of subject-matter jurisdiction because, in its view, plaintiff

lacks Article III standing to bring either claim. I agree and grant

the motion.

Article III standing has three components: “The plaintiff

must have (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) (citing Lujan v.

Defs. Of Wildlife, 504 U.S. 555, 560–61 (1992)). The injury-in-

fact element requires “‘an invasion of a legally protected

interest’ that is ‘concrete and particularized’ and ‘actual or

imminent, not conjectural or hypothetical.’” Id. at 339 (quoting

Lujan, 504 U.S. at 560). As the proponent of federal jurisdiction,

plaintiff bears the burden of establishing standing. Id. at 338.

In reviewing a facial challenge to standing like the one here, I

accept as true the operative complaint’s well-pleaded factual

allegations and draw all reasonable inferences in plaintiff’s

favor. Silha v. ACT, Inc., 807 F.3d 169, 173 (7th Cir. 2015).

Defendant challenges only the first two elements of standing.

The concrete injury requirement for plaintiffs bringing claims

under consumer protection statutes has undergone extensive

that both claims are aimed at defendant’s allegedly improper filing

of its suit in Illinois instead of Texas.

litigation since the Supreme Court decided Spokeo and TransUnion

LLC v. Ramirez, 594 U.S. 413 (2021). In the wake of those

decisions, the bar has been raised for plaintiffs to make out a

concrete injury in such suits.2 The second element, traceability,

concerns whether “the line of causation between the illegal conduct

and injury [is] too attenuated.” Allen v. Wright, 468 U.S. 737,

752 (1984).

Plaintiff articulates three harms he suffered, each of which

confers standing in his view. The first is that, as a result of

the suit filed in Illinois state court, he “has suffered and

continues to suffer stress, aggravation, frustration, emotional

distress, and mental anguish.” Am. Compl., ECF 19 ¶ 14. However,

the Seventh Circuit has made emphatically clear that

“[p]sychological states induced by” a debt collector’s conduct

“fall short” of meeting the concrete injury requirement. Pierre v.

Midland Credit Mgmt., Inc., 29 F.4th 934, 939 (7th Cir. 2022); see

also Pucillo v. Nat’l Credit Sys., Inc., 66 F.4th 634, 639 (7th

Cir. 2023) (“[T]he plaintiff must show a harm beyond emotional

response, such as an adverse credit rating or detrimental action

that the plaintiff took in reliance on the [debt collection]

2 As Judge Hamilton observed in a dissent from rehearing a case en

banc, “[o]ur recent cases have restricted standing so sharply that

we may be close to a tipping point, leaving at least the FDCPA

largely neutered in the three states of the Seventh Circuit.”

Pierre v. Midland Credit Mgmt., Inc., 36 F.4th 728, 736 (7th Cir.

2022) (Hamilton, J., dissenting).

letters.”); Pennell v. Glob. Tr. Mgmt., LLC, 990 F.3d 1041, 1045

(7th Cir. 2021) (“Nor does stress by itself with no physical

manifestations and no qualified medical diagnosis amount to a

concrete harm.”). Plaintiff’s allegations of emotional harm are

therefore insufficient.

Next, plaintiff asserts that because of the time he spent

“corresponding with attorneys and preparing to defend himself” in

the state court suit, he “lost hours of productivity in his job,

for which his pay is determined by the commissions he earns from

sales,” and that this “cost him an unknown sum in commissions.”

Am. Compl. ¶¶ 15–16. To the extent plaintiff claims that the need

to correspond with attorneys was itself a concrete harm, that

possibility has been foreclosed by the Seventh Circuit. See Nettles

v. Midland Funding LLC, 983 F.3d 896, 900 (7th Cir. 2020)

(“[Plaintiff] argued that becoming annoyed and consulting a lawyer

suffice to establish injury for standing purposes. We rejected

that argument in Gunn v. Thrasher, Buschmann & Voelkel, P.C., 982

F.3d 1069, 1071–72 (7th Cir. 2020).”); Brunett v. Convergent

Outsourcing, Inc., 982 F.3d 1067, 1069 (7th Cir. 2020) (“A desire

to obtain legal advice is not a reason for universal standing.”).

Plaintiff’s allegation that the time he spent corresponding

with attorneys took him away from his commission-based work, thus

causing him to lose out on compensation, presents a closer

question. In Brown v. Weltman, Weinberg & Reis Co., L.P.A., No. 21

C 1120, 2021 WL 3910748 (N.D. Ill. Sept. 1, 2021), the plaintiff

sued under the FDCPA claiming that a debt collector sent her a

letter regarding a debt without disclosing that the debt was too

old to collect on. The plaintiff alleged that “she had to take

time away from her self-employment work to scour her records to

attempt to get to the bottom of the claims about her debt made in

the letter” and that, had she known the debt was time-barred, “she

would not have spent any of her self-employment work time

investigating.” Id. at *2. From this, the court drew the inference

that she suffered a harm fairly traceable to the defendant’s

conduct, since she forwent money she would have earned absent

defendant’s FDCPA violation. Id.

The situation here is different. Unlike in Brown, where the

defendant’s failure to disclose the debt as time-barred caused the

plaintiff to look into the matter, nothing in the amended complaint

in this case makes it plausible, as opposed to merely speculative,

that plaintiff would have spent less time corresponding with

counsel if defendant had filed its action in the proper venue. In

other words, plaintiff’s claimed harm is not traceable to

defendant’s allegedly wrongful conduct. The injury § 1692i

contemplates, after all, is “measured by the costs of travelling

or sending a lawyer to the remote court and moving for a change of

venue.” Harold v. Steel, 773 F.3d 884, 886 (7th Cir. 2014).

Plaintiff does not suggest that he or his attorney had to travel

to Illinois to defend against the state court action or that there

was some other reason why filing the suit in Illinois exacerbated

his lost working time, so the harm as framed cannot provide

standing.

Plaintiff further maintains that he suffered reputational

harm because the legal filings in the state court action were

accessible to the public. Am. Compl. ¶ 17. Like the previous one,

this proposed harm falters at the traceability prong because it is

implausible that defendant’s alleged conduct--filing suit in

Illinois instead of Texas--damaged plaintiff’s reputation.

Plaintiff offers nothing to suggest that if the suit had been filed

in Texas, reputational harm would have been avoided or subdued.

I need not delve into the cases plaintiff cites that predate

TransUnion and the spate of Seventh Circuit decisions that followed

to parse which have survived those developments. The law as it

stands today compels the result described above. Thus, defendant’s

motion to dismiss for lack of standing is granted. Plaintiff may

file a second amended complaint within 21 days of this order. If

no second amended complaint is filed by then, the case will be

dismissed without prejudice--as it must be when dismissal is on

jurisdictional grounds--and the case will be terminated.

ENTER ORDER:

Elaine E. Bucklo

United States District Judge

Dated: July 29, 2024