ASBURY v. CREDIT CORP SOLUTIONS, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

RANDY ASBURY, on behalf of )

himself and others similarly situated, )

)

Plaintiff, )

)

v. ) 1:21-CV-650

)

CREDIT CORP SOLUTIONS, INC., )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

Catherine C. Eagles, District Judge.

The plaintiff, Randy Asbury, filed suit in state court alleging that the defendant,

Credit Corp Solutions, Inc., communicated information about his alleged debt to a third

party. Credit Corp removed the case to this court, asserting federal question jurisdiction

based on Mr. Asbury’s federal Fair Debt Collection Practices Act claim. When the Court

questioned whether the plaintiff had standing to pursue that claim in federal court, and

despite its burden to show subject matter jurisdiction, Credit Corp declined to identify the

concrete injury-in-fact allegations necessary to establish jurisdiction. When a litigant

invokes the jurisdiction of the court and then fails to identify the alleged facts necessary

to show that jurisdiction exists, remand is appropriate.

I. Procedural History

In July 2021, Mr. Asbury brought this putative class action in North Carolina state

court, alleging Credit Corp violated the North Carolina Debt Collection Act, N.C. Gen.

Stat. § 75-50 et seq., the North Carolina Unfair and Deceptive Trade Practices Act, N.C.

Gen. Stat. § 75.1-1, and the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692

et seq. Doc. 3. The putative class consists of consumers in North Carolina whose debt

information Credit Corp sent to a third party without their consent. Doc. 3 at ¶ 28; Doc.

16 at ¶ 27.

Credit Corp removed the action to this court based on federal question jurisdiction

arising out of the FDCPA claim. Doc. 1 ¶ 4. The Court sua sponte questioned standing

in light of TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021) and ordered the parties to

show cause why the case should not be remanded to state court for lack of subject matter

jurisdiction. Doc. 25.

II. Facts

The Court has the original and amended complaints before it.1 Doc. 3; Doc. 16.

The Court offered the parties an opportunity to present evidence in support of subject

matter jurisdiction, Doc. 25 at 2; neither party responded to that invitation. The Court

will apply the usual test for analyzing standing at the pleadings stage and will accept as

true the factual allegations in the complaints.2 See Beck v. McDonald, 848 F.3d 262, 270

(4th Cir. 2017) (accepting as true factual allegations in complaint when analyzing

standing at the pleadings stage).

1 Mr. Asbury amended the complaint, Doc. 16, after the case was removed. Doc. 1. Credit

Corp, the removing party, bears the burden of demonstrating subject matter jurisdiction when the

case is removed and thereafter. See Strawn v. AT&T Mobility LLC, 530 F.3d 293, 296–97 (4th

Cir. 2008). The Court will consider allegations in both the original and amended complaints.

2 The factual allegations in Mr. Asbury’s original complaint, Doc. 3, and amended complaint,

Doc. 16, as relevant to Mr. Asbury’s FDCPA claim are almost identical. Any differences are

minor and do not influence the standing analysis.

According to the complaints, Mr. Asbury owes money to an unidentified creditor,

and that debt was in default. Docs. 3, 16 at ¶¶ 13, 18. The creditor “transferred” the debt

to Credit Corp, a debt collector. Docs. 3, 16 at ¶¶ 9, 11, 17.

As part of attempting to collect that debt, Credit Corp used a third-party vendor to

prepare and send letters to Mr. Asbury from Credit Corp about his debt. Docs. 3, 16 at

¶¶ 19–20. Credit Corp sent information about Mr. Asbury’s debt to the third-party

vendor, Docs. 3, 16 at ¶ 21, who “populated” some or all the debt information into a

“prepared template,” printed the resulting letter, and mailed it to Mr. Asbury. Docs. 3, 16

at ¶ 24.

The vendor prepared and sent two such letters from Credit Corp to Mr. Asbury,

who received and read the letters. Docs. 3, 16 at ¶ 25. Mr. Asbury did not consent to

Credit Corp sharing his debt information with the third-party vendor. Doc. 3 at ¶¶ 47–49;

Doc. 16 at ¶¶ 46–48.

III. Fair Debt Collection Practices Act

Section 1692c(b) of the FDCPA, titled “Communication with third parties,”

prohibits debt collectors from communicating with “any person other than the consumer”

in connection with an alleged debt held by the consumer, with only limited exceptions.

See Bryan v. Allied Interstate LLC, 513 F. Supp. 3d 686, 691 (W.D.N.C. 2021). As is

relevant here, the statute provides that:

Except as provided in section 1692b of this title, without the

prior consent of the consumer given directly to the debt

collector . . . a debt collector may not communicate, in

connection with the collection of any debt, with any person

other than the consumer, his attorney, a consumer reporting

agency if otherwise permitted by law, the creditor, the attorney

of the creditor, or the attorney of the debt collector.

15 U.S.C. § 1692c(b). The § 1692b exceptions to this “no communication” rule address

the way a debt collector may communicate “with any person other than the consumer for

the purpose of acquiring location information.” Id.

The FDCPA thus broadly prohibits a debt collector from communicating with

anyone other than the consumer “in connection with the collection of any debt,” subject

to several carefully crafted exceptions—some enumerated in § 1692c(b), and others in

§ 1692b. Mr. Asbury alleges that the third-party vendor does not fall within any of the

exceptions and that Credit Corp violated the FDCPA when it “communicated” with the

third-party vendor “in connection with the collection of a debt” by giving the vendor

information about Mr. Asbury’s debt.3

IV. Standing and TransUnion

The United States Constitution limits federal courts to deciding “cases” or

“controversies.” U.S. Const. art. III § 2; see also TransUnion, 141 S. Ct. at 2203.

“Standing to sue is a doctrine rooted in the traditional understanding of a case or

3 This case is one of many where a debtor/letter recipient is pursuing FDCPA liability

based on disclosure to the debt collector’s mailing vendor. See Hunstein v. Preferred Collection

& Mgmt. Servs, 17 F.4th 1016 (11th Cir. 2021), reh’g en banc granted, opinion vacated, 17

F.4th.1103 (11th Cir. 2021); Stewart v. Healthcare Revenue Recovery Grp., No. 20-CV-00679,

2022 WL 200371 (M.D. Tenn. Jan 21, 2022); Nyanjom v. NPAS Sols., LLC, No. 21-CV-1171,

2022 WL 168222 (D. Kan. Jan. 19, 2022); Sputz v. Alltran Fin., LP, No. 21-CV-4663, 2021 WL

5772033 (S.D.N.Y. Dec. 5, 2021); Liu v. MRS BPO, LLC, No. 21-C-2919, 2021 WL 5630764

(N.D. Ill. Nov. 30, 2021); Ciccone v. Cavalry Portfolio Servs., LLC, No. 21-CV-2428, 2021 WL

5591725 (E.D.N.Y. Nov. 29, 2021); Shields v. Prof’l Bureau of Collections of Md., Inc., No. 20-

CV-02205, 2021 WL 4806383 (D. Kan. Oct. 14, 2021); Thomas v. Unifin, Inc., No. 21-CV-

3037, 2021 WL 3709184 (N.D. Ill. Aug. 20, 2021); In re FDCPA Mailing Vendor Cases, No. 21-

CV-2312, 2021 WL 3160794 (E.D.N.Y. July 23, 2021).

controversy.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). “For there to be a case

or controversy under Article III, the plaintiff must have a personal stake in the case—in

other words, standing.” TransUnion, 141 S. Ct. at 2203 (cleaned up).

To satisfy the standing requirement, a “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, 578 U.S. at 338. The

burden of establishing standing here is on the defendant, Credit Corp, because it is Credit

Corp that has invoked the jurisdiction of this court. See Lujan v. Defenders of Wildlife,

504 U.S. 555, 561 (1992); Bryant v. Woodall, 1 F.4th 280, 285 (4th Cir. 2021). Credit

Corp must show that the complaint includes “clearly allege[d] facts demonstrating each

element” of standing. Spokeo, 578 U.S. at 338 (cleaned up).

To establish injury in fact, the allegations must be sufficient to show a plaintiff has

suffered a concrete harm. Id. at 339–40. Tangible harms, such as physical harm and

monetary harm, “readily qualify as concrete injuries under Article III.” TransUnion, 141

S. Ct. at 2204. Although less readily identifiable, intangible harms, too, can be concrete.

See Spokeo, 578 U.S. at 340. Intangible harms are concrete when the asserted harm has a

“close relationship to harms traditionally recognized as providing a basis for lawsuits in

American courts.” TransUnion, 141 S. Ct. at 2204.

While Congress’s views on harm may be “instructive,” a plaintiff does not

“automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person

a statutory right and purports to authorize that person to sue to vindicate that right.”

Spokeo, 578 U.S. at 341. “Only those plaintiffs who have been concretely harmed by a

defendant’s statutory violation may sue that private defendant over that violation in

federal court.” TransUnion, 141 S. Ct. at 2205. In other words, “an injury in law is not

an injury in fact.” Id.

The Supreme Court recently applied these standards in TransUnion. In that case,

a class of consumers sued TransUnion, a credit reporting agency, alleging violations of

the Fair Credit Reporting Act. Id. at 2200. Specifically, the class members claimed that

TransUnion did not adopt reasonable procedures to ensure the accuracy of their

internally-maintained credit files when it used a product that wrongfully designated the

class members as potential terrorists, drug traffickers, or other serious criminals. Id. at

2200–01.

For some of the class members, TransUnion provided internal credit reports with

this misleading information to third-party businesses, but for others, it did not share the

misleading internal credit files with any third party. Id. at 2200. In analyzing whether

the class members suffered an intangible concrete harm arising from TransUnion’s

FCRA violation, the Court separately examined whether the two categories of class

members had standing.

The Supreme Court compared the harm suffered by class members whose

misleading credit reports TransUnion had shared with third-party businesses to the kind

of harm in a defamation action and determined that the class members’ harm had a “close

relationship” to the reputational harm associated with defamation. Id. at 2208–09.

“Under longstanding American law, a person is injured when a defamatory statement that

would subject him to hatred, contempt, or ridicule is published to a third party,” id. at

2208, and the TransUnion plaintiffs who were falsely labeled as potential terrorists, drug

traffickers, or serious criminals in reports disseminated to third parties faced a closely-

related concrete harm. Id. at 2209.

The result was different for those class members whose credit files TransUnion

did not share with a third party. Although the internal credit files contained misleading

information, there was no historical or common law analogue “where the mere existence

of inaccurate information, absent dissemination, amounts to concrete injury.” Id.

Likewise, the risk of harm if the information was disseminated did not create a concrete

harm, as there was no historical analogue, and the risk of harm was speculative in nature.

Id. at 2211–12.

V. Analysis

The Court assumes without deciding that it was a violation of the Fair Debt

Collection Practices Act for Credit Corp to share Mr. Asbury’s debt information with its

vendor. But a statutory violation alone is not sufficient to confer standing. As the

Supreme Court has made clear, a statutory violation does not necessarily cause concrete

harm. See Spokeo, 578 U.S. at 341; TransUnion, 141 S. Ct. at 2205.

Nor is it enough that both parties agree that Mr. Asbury has standing. See Doc. 22

at 9; Doc. 23 at 9. The parties cannot avoid the requirements of standing through

consent, see Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474,

480 (4th Cir. 2005) (stating that parties cannot consent to subject matter jurisdiction that

does not otherwise exist), and it is a requirement that cannot be waived or forfeited. See,

e.g., United States v. Wilson, 699 F.3d 789, 793 (4th Cir. 2012). The Court “has an

independent obligation to assure that standing exists,” Summers v. Earth Island Inst., 555

U.S. 488, 499 (2009), and it is not required to manufacture standing arguments the parties

do not present. See United States v. Sineneng-Smith, 140 S. Ct. 1575, 1579 (2020) (“[A]s

a general rule, our system is designed around the premise that parties represented by

competent counsel know what is best for them and are responsible for advancing the facts

and argument entitling them to relief.”) (cleaned up).

As the Supreme Court noted in TransUnion, American courts have traditionally

recognized disclosure of private information and intrusion upon seclusion as intangible

harms that are an appropriate basis for a lawsuit. 141 S. Ct. at 2204.4 On suitable facts,

violations of the FDCPA could cause intangible harm closely related to the harm caused

by these invasion of privacy torts. See Foley v. Mary Washington Healthcare Servs.,

Inc., No. 21-CV-239, 2021 WL 3193177, at *3 (E.D. Va. July 28, 2021).

But the question is not a generic one. See Smith v. GC Servs. Lim. P’ship, 986

F.3d 708, 711 (7th Cir. 2021) (“Standing often depends on what theory a plaintiff

advances and how injury would be proved.”). The question is whether the complaint

includes allegations that Mr. Asbury suffered harms with a “close relationship” to the

harms caused by those or other traditional torts. TransUnion, 141 S. Ct. at 2208–10

4 Both torts are part of a general category of “invasion of privacy” tort that future-Justice

Louis Brandeis and Samuel D. Warren identified in 1890. See Samuel D. Warren & Louis D.

Brandeis, The Right to Privacy, 4 HARV. L. REV. 193 (1890). In 1960, William Prosser split the

general “invasion of privacy” tort into four separate causes of action recognized by many courts

today: appropriation of one’s name or likeness, intrusion upon the seclusion of another, public

disclosure of private facts, and placing another in a false light before the court. See William L.

Prosser, Privacy, 48 CALIF. L. REV. 383 (1960).

(distinguishing between class members with the same cause of action when analyzing

standing because of different evidence of harm).

The original and amended complaint are almost silent on the kind of harm Mr.

Asbury says he has suffered from Credit Corp’s illegal sharing of his debt information

with the third-party vendor. He alleges with no detail that “[t]he unauthorized disclosure

of a consumer’s private and sensitive information is both unfair and unconscionable,”

Doc. 3 at ¶ 55; Doc. 16 at ¶ 54, and makes a passing reference to “the harm to [the]

plaintiff” caused by the “unauthorized disclosure of private and sensitive information.”

Doc. 3 at ¶ 53; Doc. 16 at ¶ 52.

Credit Corp has the burden to show Mr. Asbury has standing, but it has not

pointed to any allegations of concrete harm, tangible or intangible, to Mr. Asbury. See

Doc. 29. Indeed, Credit Corp relies exclusively on the fact that Mr. Asbury has alleged a

violation of federal law, id. at 8–10, and on Mr. Asbury’s general assertion that this court

has subject matter jurisdiction. See id. at 6–7. It makes no argument that the allegations

are sufficient to confer standing and contends that Mr. Asbury “did not suffer any injury”

from Credit Corp’s statutory violations. Id. at 5. Credit Corp does little more than

suggest “[h]ypothetical jurisdiction [that] produces nothing more than a hypothetical

judgment.” Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 101 (1998). This

“comes to the same thing as an advisory opinion,” which the Supreme Court has

“disapproved . . . from the beginning.” Id.

In his briefing, Mr. Asbury agrees there is subject matter jurisdiction and asserts

he has suffered intangible concrete harm similar to that caused by the torts of intrusion

upon seclusion and disclosure of private information. See Doc. 26 (discussing only

intangible harm). But he has not explained how his conclusory allegations support his

contentions. The facts alleged do not show the kind of harm that gives rise to intrusion

upon seclusion liability, such as “physically invading a person’s home or other private

place, eavesdropping by wiretapping or microphones, peering through windows,

persistent telephoning, unauthorized prying into a bank account, and opening personal

mail of another.” Tillet v. Onslow Mem’l Hosp., Inc., 215 N.C. App. 382, 384, 715

S.E.2d 538, 540 (2011) (listing examples of conduct supporting intrusion upon seclusion

action); see also Restatement (Second) of Torts § 652B cmt. b. Nor has he alleged the

kind of public disclosure or reputational harm caused by tortious disclosure of private

information.5 See In re FDCPA Mailing Vendor Cases, No. 21-CV-2312, 2021 WL

3160794, at *6 (E.D.N.Y. July 23, 2021) (noting that “[i]t would be difficult to suggest”

that a communication about “a relatively de minimis debt to a mailing vendor” is “highly

offensive to a reasonable person”).

Mr. Asbury also contends that his allegations of harm are sufficient at this stage

and that he is entitled “to the benefit of discovery” before being required to factually

establish his injuries. Doc. 26 at 8. Yet he has not explained what kind of discovery

would shed light on his harm or why he does not know how he was harmed.

5 Even applying the broadest definition of public disclosure adopted by some courts, see, e.g.,

McSurely v. McClellan, 753 F.2d 88, 112–13 (D.C. Cir. 1985) (applying Kentucky law and

holding disclosure of premarital relationships to spouse gave rise to disclosure of private

information action), Mr. Asbury has not alleged a harm closely related to the harm occurring

from tortious disclosure of information.

Allowing Credit Corp to remove a case based on subject matter jurisdiction that it

is unwilling to defend at the outset increases the likelihood that the Court will issue a

hypothetical decision of no consequence. It also precludes the Court from addressing

objections to subject matter jurisdiction that Credit Corp can later raise on appeal, should

it lose a dispositive motion. See Wilson, 699 F.3d at 793 (noting subject matter

jurisdiction cannot be waived). If Credit Corp wants this court to exercise jurisdiction

over the merits, which it says it does, see, e.g., Doc. 29 at 9, then it must demonstrate that

the Court has jurisdiction—jurisdiction to rule against it as well as in favor of it.

Spokeo requires the complaint to include “clearly alleged facts demonstrating each

element” of standing. 578 U.S. at 338 (cleaned up). In the absence of specific

allegations of injury in fact from the alleged disclosure at issue, the Court does not have

subject matter jurisdiction and remand is appropriate.

It is ORDERED that:

1. The case is remanded to the Superior Court of Davidson County.

2. No decision is made on the motion to dismiss, Doc. 17, which can be heard in

state court.

This the 8th day of February, 2022.

Mk oe

UNITED STATES DIS SJUDGE

11