Petition for Writ of Certiorari — Ashley Nettles, Petitioner v. Midland Funding LLC, et al.

No. 20- _______

In the Supreme Court of the United States

__________

ASHLEY NETTLES, PETITIONER,

v.

MIDLAND FUNDING LLC & MIDLAND CREDIT

MANAGEMENT, INC.

__________

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Seventh Circuit

__________

PETITION FOR A WRIT OF CERTIORARI

__________

CURTIS C. WARNER

5 E. Market St., Suite 250

Corning, NY 14830

(888) 551-8685

cwarner@warner.legal

JAMES C. PHILLIPS

Donald P. Kennedy Hall

One University Dr.

Orange, CA 92866

714-628-2543

jcphillips@chapman.edu

GENE C. SCHAERR

Counsel of Record

HANNAH C. SMITH

SCHAERR | JAFFE LLP

1717 K Street NW, St. 900

Washington, DC 20006

(202) 787-1060

gschaerr@schaerr-jaffe.com

Counsel for Petitioner

QUESTIONS PRESENTED

Congress enacted the Fair Debt Collection

Practices Act to protect individuals against debt

collectors’ abusive and deceptive tactics. With eighty

percent of Americans in debt, and conditions only

worsening with the pandemic-induced recession, few

statutes have more relevance to the average

American. Yet five years after Spokeo v. Robins, 136

S.Ct. 1540 (2016), the circuits are almost evenly split

on what a plaintiff must allege under the Act to satisfy

Article III standing’s concrete-injury requirement.

The questions presented are:

1. Whether, under Spokeo, it is sufficient for

standing simply to allege a violation of the procedural

rights created by the Fair Debt Collection Practices

Act, as six circuits have held, or must a plaintiff also

always allege an additional injury beyond such a

violation, as five circuits (including the Seventh in this

case) have held?

2. If some additional injury is required for standing

under the Act, is it sufficient to allege mental distress

or lost time dealing with a violation of the Act, as the

Fourth, Eleventh, and D.C. Circuits have held, or is

something more than mental distress or lost time

required, as the Seventh (in this case) and Ninth

Circuits have held?

ii

PARTIES TO THE PROCEEDING

Petitioner Ashley Nettles was Plaintiff-Appellee in

the court of appeals in No. 19-3327.

Respondents Midland Funding LLC and Midland

Credit Management, Inc., were DefendantsAppellants in the court of appeals in No. 19-3327.

iii

TABLE OF CONTENTS

QUESTIONS PRESENTED......................................... i

TABLE OF CONTENTS ........................................... iii

TABLE OF AUTHORITIES ....................................... vi

INTRODUCTION ........................................................ 1

OPINIONS BELOW .................................................... 2

JURISDICTION .......................................................... 2

RELEVANT STATUTORY PROVISIONS ................. 2

STATEMENT .............................................................. 3

A. Legal Framework: Spokeo and the Fair Debt

Collections Practices Act .................................. 3

B. Factual Background ......................................... 8

C. Procedural History .......................................... 12

REASONS FOR GRANTING THE PETITION........ 14

I. The First Question Involves A Wide And Widely

Acknowledged Circuit Split That Is in Dire Need

of Resolution by this Court. ................................. 14

A. To Establish Standing, Six Circuits Merely

Require That A Plaintiff Allege a Violation of

the Act. ............................................................ 14

B. By Contrast, Five Circuits Require an

Allegation of Additional Harm Beyond a

Violation of the Act. ........................................ 21

C. The Decision Below, and the Multiple Circuits

that Agree with Its Analysis and Conclusion,

iv

Misinterpret This Court’s Standing Doctrine.

24

II. The Second Question Is The Subject Of A

Separate Circuit Split That Needs Resolution

Depending Upon How the Court Resolves the

First Question. ..................................................... 26

III.The Questions Presented Are of National Scope

and Growing Importance. .................................... 29

A. Millions of Americans are in Debt and

Protected by the Act........................................ 29

B. The Pandemic-induced Recession Has

Significantly Increased the Number of

Americans in Need of the Act’s Protections. .. 30

C. By Raising the Standing Bar Higher Than

Article III Requires, Many Circuits are

Violating the Separation of Powers. .............. 31

IV. The Facts in This Case Make It an Ideal Vehicle

to Resolve these Issues. ....................................... 33

A. This Case Presents Both Issues, Allowing for

More Efficient Resolution. .............................. 33

B. The Court Has Often Granted Certiorari with

Only Eight Justices Participating. ................. 34

CONCLUSION .......................................................... 35

v

APPENDIX

Seventh Circuit, No. 19-3327

(Dec. 21, 2020) ................................................. 1a

Seventh Circuit Oral Argument Transcript

(June 4, 2020) .................................................. 9a

Northern District of Illinois,

No. 18-cv-7766 Memo. Opinion & Order

(Sept. 30, 2019) ............................................. 22a

vi

TABLE OF AUTHORITIES

Cases

Adams v. Skagit Bonded Collectors, LLC, 836 F. App’x

544 (9th Cir. 2020) ........................................... 23, 28

Beckles v. United States, 136 S.Ct. 2510 (Mem)

(2016) ...................................................................... 34

Beckles v. United States, 137 S.Ct. 886 (2017) ......... 34

Ben-Davies v. Blibaum & Assocs., P.A., 695 F. App’x

674 (4th Cir. 2017) ........................................... 23, 27

BP P.L.C. v. Mayor and City Council of Baltimore, 141

S.Ct. 222 (Mem) (2020) .......................................... 34

Cohen v. Rosicki, Rosicki & Assocs., P.C., 897 F.3d 75

(2d Cir. 2018).............................................. 17, 18, 24

Dahda v. United States, 138 S.Ct. 1491 (2018) ........ 34

Dahda v. United States, 138 S.Ct. 356 (Mem)

(2017) ...................................................................... 34

Demarais v. Gurstel Chargo, P.A., 869 F.3d 685 (8th

Cir. 2017) ................................................................ 16

DiNaples v. MRS BPO, LLC, 934 F.3d 275 (3d Cir.

2019) ....................................................................... 19

Donovan v. FirstCredit, Inc., 983 F.3d 246 (6th Cir.

2020) ....................................................................... 16

Fern Kottler v. Gulf Coast Collection Bureau, Inc., No.

20-12239, 2021 WL 529425 (11th Cir. Feb. 12, 2021)

................................................................................ 26

Frank v. Autovest, LLC, 961 F.3d 1185 (D.C. Cir. 2020)

.................................................................... 21, 24, 27

vii

Henson v. Santander Consumer USA Inc., 137 S.Ct.

1718 (2017) ............................................................... 6

Honig v. Doe, 484 U.S. 305 (1988) .............................. 5

Johnson v. Riddle, 305 F.3d 1107 (10th Cir. 2002) .... 7

Macy v. GC Services Ltd. Partnership, 897 F.3d 747

(6th Cir. 2018) ...................................... 14, 15, 16, 24

Midland Funding, LLC v. Johnson, 137 S.Ct. 1407

(2017) ...................................................................... 11

Opati v. Republic of Sudan, 139 S.Ct. 2771 (Mem)

(2019) ...................................................................... 34

Opati v. Republic of Sudan, 140 S.Ct. 1601 (2020) .. 34

Pennell v. Global Trust Management, LLC, No. 201524, 2021 WL 925494 (7th Cir. Mar. 11, 2021)... 28

Pollard v. Law Office of Mandy L. Spaulding, 766 F.3d

98 (1st Cir. 2014) .................................................... 20

Royal v. Murphy, 138 S.Ct. 2026 (Mem) (2018) ....... 34

Sayles v. Advanced Recovery Sys., Inc., 865 F.3d 246

(5th Cir. 2017) ........................................................ 19

Sharp v. Murphy, 140 S.Ct. 2412 (Mem) (2020) ...... 34

Sierra v. City of Hallandale Beach, Fla., No. 19-13694,

2021 WL 1799848 (11th Cir. May 6, 2021) ........... 24

Spokeo v. Robins, 136 S.Ct. 1540 (2016)........... passim

St. Pierre v. Retrieval-Masters Creditors Bureau, Inc.,

898 F.3d 351 (3d Cir. 2018) ................................... 18

Thornley v. Clearview Ai, 984 F.3d 1241 (7th Cir.

2021) ......................................................................... 1

viii

Trichell v. Midland Credit Mgmt., Inc., 964 F.3d 990

(11th Cir. 2020) ................................................ 22, 24

United States Agency for Int’l Dev. v. All. for Open

Soc’y Int’l, Inc., 140 S.Ct. 2082 (2020)................... 35

United States Agency for Int’l Dev. v. All. for Open

Soc’y Int’l, Inc., 140 S.Ct. 660 (Mem) (2019) ......... 35

Statutes

15 U.S.C. §1692 ........................................................... 7

15 U.S.C. §1692a ....................................................... 30

15 U.S.C. §1692b ......................................................... 7

15 U.S.C. §1692c .......................................................... 7

15 U.S.C. §1692d ......................................................... 7

15 U.S.C. §1692e.......................................... 2, 7, 12, 16

15 U.S.C. §1692f .......................................... 2, 7, 12, 16

15 U.S.C. §1692g ......................................................... 7

15 U.S.C. §1692j .......................................................... 7

15 U.S.C. §1692k ................................................... 8, 15

Other Authorities

Adam McCann, What is the Average Credit Card

Interest Rate?, WalletHub (Jan. 5, 2021) ................ 9

Alan Goforth, Rising Household Debt in 2020 Could

Have Snowball Effect, BenefitsPRO (Nov. 16, 2020,

3:42 PM) ................................................................. 31

Average American Household Debt in 2020: Facts and

Figures, The Ascent (Nov. 18, 2020) ..................... 29

ix

Comptroller of the Currency Administrator of

National Banks, Public Disclosure, Community

Reinvestment Act Performance Evaluation (Mar.

31, 2007) ................................................................... 8

Erin El Issa, 2020 American Household Credit Card

Debt Study, NerdWallet (Jan. 12, 2021) ............... 30

Federal Reserve Bank of New York, Quarterly Report

on Household Debt and Credit—2020: Q3 (Nov.

2020) ....................................................................... 29

Heather Elliott, Balancing as Well As Separating

Power: Congress’s Authority to Recognize New Legal

Rights, 68 Vand. L. Rev. En Banc 181 (2015) ....... 32

Jeff Desjardins, $69 Trillion of World Debt in One

Infographic, Visual Capitalist (Nov. 14, 2019) ..... 29

Jessica Dickler, 51 Million Americans Increased Their

Credit Card Debt Because of Covid, CNBC........... 31

Jon Romberg, Trust the Process: Understanding

Procedural Standing Under Spokeo, 72 Okla. L.

Rev. 517 (2020) ....................................................... 33

Megan DeMatteo, The Average American Has $90,460

in Debt—Here’s How Much Debt Americans Have at

Every Age, CNBC ................................................... 29

Ronald J. Mann, Bankruptcy Reform and the “Sweat

Box” of Credit Card Debt, 2007 U. Ill. L. Rev. 375

(2007) ...................................................................... 11

INTRODUCTION

This is a separation-of-powers case—but an

unusual one. The typical such case involves one

branch of the federal government attempting to tread

on the constitutional turf of another. Here instead, one

branch is pulling back to nullify the power of another:

Lower federal courts are refusing to exercise Article

III judicial power because of a crabbed and erroneous

reading of standing doctrine, thus subverting

Congress’s attempt to grant certain statutory

protections and private rights of action to individual

debtors under the Fair Debt Collection Practices Act.

This is also a case affecting scores of millions of

Americans. While in the past, few things were as

American as baseball and apple pie, it is now

quintessentially American to be in debt: According to

a recent study, 80% of Americans carry debt. Thus,

few statutes touch more American lives than the one

here. And the Act’s importance has only increased as

the COVID-19 pandemic has caused a major recession,

resulting in more Americans going further into debt.

Finally, nearly every U.S. Court of Appeals has

weighed in on the questions presented. And the

circuits, some of which have acknowledged the split,

are nearly evenly divided. There is no need for further

percolation below. What is needed now, for both lower

courts and the millions of Americans in debt, is clarity

from this Court. See Thornley v. Clearview Ai, 984

F.3d 1241, 1251 (7th Cir. 2021) (Hamilton, J.,

concurring) (“Sooner or later, *** I hope, the Supreme

Court will revisit the problem of standing in private

actions based on intangible injuries under a host of

federal consumer-protection statutes.”)

2

OPINIONS BELOW

The Seventh Circuit’s opinion was filed on

December 21, 2020 and is reprinted at Pet.App.1a.

The district court’s order denying Respondent’s

motion to compel arbitration was filed on September

30, 2019 and is reprinted at Pet.App.22a.

JURISDICTION

The Seventh Circuit entered judgment on

December 21, 2020. Pet.App.1a. This Court has

jurisdiction under 28 U.S.C. §1254(1).

RELEVANT STATUTORY PROVISIONS

15 U.S.C. §1692e(2)(A) & (10) provide in part:

A debt collector may not use any false, deceptive,

or misleading representation or means in

connection with the collection of any debt. Without

limiting the general application of the foregoing,

the following conduct is a violation of this section:

*** (2) The false representation of—(A) the

character, amount, or legal status of any debt. ***

(10) The use of any false representation or

deceptive means to collect or attempt to collect any

debt or to obtain information concerning a

consumer.

15 U.S.C. §1692f & f(1) provide in part:

A debt collector may not use unfair or

unconscionable means to collect or attempt to

collect any debt. Without limiting the general

application of the foregoing, the following conduct

is a violation of this section: (1) The collection of

any amount (including any interest, fee, charge, or

3

expense incidental to the principal obligation)

unless such amount is expressly authorized by the

agreement creating the debt or permitted by law.

STATEMENT

A. Legal Framework: Spokeo and the Fair

Debt Collections Practices Act

1. In Spokeo v. Robins, 136 S.Ct. 1540 (2016), this

Court clarified how an alleged violation of a federal

statute’s so-called “procedural” rights could satisfy

Article III standing. The case dealt with a statute

closely related to the one at issue here: the Fair Credit

Reporting Act. Id. at 1544. That act “imposes a host of

requirements concerning the creation and use of

consumer reports.” Id. at 1545. It “also provides that

‘[a]ny person who willfully fails to comply with any

requirement [of the Act] with respect to any

[individual] is liable to that [individual]’ for, among

other things, either ‘actual damages’ or statutory

damages of $100 to $1,000 per violation, costs of the

action and attorney’s fees, and possibly punitive

damages.” Ibid. (quoting 15 U.S.C. §1681n(a)).

In Spokeo, Thomas Robins discovered that a search

for him on Spokeo’s informational website showed

incorrect data regarding his marital status, parental

status, age, job type, wealth level, economic health,

and education status, as well as an incorrect profile

picture. See 136 S.Ct. at 1546, 1554. So Robins sued

Spokeo for allegedly violating the statute. Id. at 1546.

This Court granted certiorari to determine whether

Robins had satisfied the concreteness prong of Article

III standing’s injury-in-fact element by merely

4

alleging a violation of the Act without any additional

harm. Id. at 1546, 1548.

Subsequently, the Court in Spokeo defined a

“‘concrete’ injury” as one that “must actually exist.”

136 S.Ct. at 1548. But the Court “confirmed *** that

intangible injuries can nevertheless be concrete.” Id.

at 1549. To “determin[e] whether an intangible harm

constitutes injury in fact,” Spokeo taught that “both

history and the judgment of Congress play important

roles.” Ibid. As to history, “it is instructive to consider

whether an alleged intangible harm has a close

relationship to a harm that has traditionally been

regarded as providing a basis for a lawsuit in English

or American courts.” Ibid.

As to Congress’s judgement, “because Congress is

well positioned to identify intangible harms that meet

minimum Article III requirements, its judgement is

also instructive and important.” 136 S.Ct. at 1549.

Thus, “Congress may elevate to the status of legally

cognizable injuries concrete, de facto injuries that

were previously inadequate in law.” Ibid. (cleaned up).

In other words, “Congress has the power to define

injuries *** that will give rise to a case or controversy

where none existed before.” Ibid. (citation omitted).

Granted, Spokeo cautioned that one cannot “allege

a bare procedural violation, divorced from any

concrete harm, and satisfy the injury-in-fact

requirement of Article III.” 136 S.Ct. at 1549. Yet

“[t]his does not mean *** that the risk of real harm

cannot satisfy the requirement of concreteness.” Ibid.

Hence, “the violation of a procedural right granted by

statute can be sufficient in some circumstances to

constitute injury in fact.” Ibid. Therefore, “a plaintiff

5

in such a case need not allege any additional harm

beyond the one Congress has identified.” Ibid.

In the end, the Court took “no position as to

whether the [lower court’s] ultimate conclusion—that

Robins adequately alleged an injury in fact—was

correct,” and remanded the case because the lower

court “did not address *** whether the particular

procedural violations alleged in this case *** meet the

concreteness requirement.” 136 S.Ct. at 1549.

Justice Thomas concurred, but raised two points.

136 S.Ct. at 1550-1554. (Thomas, J., concurring).

First, he noted that, historically, “[c]ommon-law

courts more readily entertained suits from private

plaintiffs who alleged a violation of their own rights,

in contrast to private plaintiffs who asserted claims

vindicating public rights.” Id. at 1550. This is

important, he observed, because, “[t]o understand the

limits that standing imposes on ‘the judicial Power,’

*** we must ‘refer directly to the traditional,

fundamental limitations upon the powers of commonlaw courts.’” Id. at 1550-1551 (quoting Honig v. Doe,

484 U.S. 305, 340 (1988) (Scalia, J., dissenting)). And

“[h]istorically, common-law courts possessed broad

power to adjudicate suits involving the alleged

violation of private rights, even when plaintiffs alleged

only the violation of those rights and nothing more.”

Id. at 1551. So “[i]n a suit for the violation of a private

right, courts historically presumed that the plaintiff

suffered a de facto injury merely from having his

personal, legal rights invaded.” Ibid. In contrast,

“[c]ommon-law courts *** have required a further

showing of injury for violations of ‘public rights’—

rights that involve duties owed ‘to the whole

6

community, considered as a community, in its social

aggregate capacity.’” Ibid. (quoting 4 W. Blackstone,

Commentaries *5).

Second, Justice Thomas pointed out that “[t]hese

differences between legal claims brought by private

plaintiffs for the violation of public and private rights

underlie modern standing doctrine.” 136 S.Ct. at 1552.

Based on precedent, Justice Thomas concluded that

“Congress can create new private rights and authorize

private plaintiffs to sue based simply on the violation

of those private rights.” Id. at 1553. In short, a

“plaintiff seeking to vindicate a statutorily created

private right need not allege actual harm beyond the

invasion of that private right.” Ibid. (citing cases). But

Justice Thomas agreed a remand was necessary for

the lower court to determine in the first instance

whether the statutory provision upon which Robins’

claim rests on provides a private or a public right. Id.

at 1553-1554.

In a dissent joined by Justice Sotomayor, Justice

Ginsburg saw no need to remand to the lower court

because, in her view, Robins had clearly satisfied

Article III standing. 136 S.Ct. at 1554-1556.

(Ginsburg, J., dissenting).

2. The statute at issue in this case, the Fair Debt

Collection Practices Act (“Act”), preceded Spokeo by

nearly forty years.

At that time, “[d]isruptive

dinnertime calls, downright deceit, and more besides

drew Congress’s eye to the debt collection industry.”

Henson v. Santander Consumer USA Inc., 137 S.Ct.

1718, 1720 (2017). And “[f]rom that scrutiny emerged

*** a statute that authorizes private lawsuits and

weighty fines designed to deter wayward collection

7

practices.” Ibid. Specifically, Congress enacted the Act

after finding “abundant evidence of *** abusive,

deceptive, and unfair debt collection practices by

many debt collectors.” 15 U.S.C. §1692(a). Further,

Congress found that “[a]busive debt collection

practices contribute to the number of personal

bankruptcies, to marital instability, to the loss of jobs,

and to invasions of individual privacy.” Ibid. Thus, one

of the Act’s purposes is “to eliminate abusive debt

collection practices by debt collectors.” Id. §1692(e).

To that end, the Act “takes a strict liability

approach to prohibiting misleading and unfair debt

collection practices,” Kaiser v. Cascade Capital, LLC,

No. 19-35151, 2021 WL 868522, at *1 (9th Cir. Mar. 9,

2021), imposing a series of requirements on debt

collectors. These requirements fall into two categories.

First are per se violations that are expressly spelled

out, such as how debt collectors can communicate with

others about a consumer’s debt, see 15 U.S.C. §1692b,

or with the consumer, see id. §1692c; how debt

collectors can validate debts, see id. §1692g; or what

forms they can provide, see id. §1692j.

Other subsections prohibit more general behavior,

such as “any conduct *** which *** harass[es],

oppress[es], or abuse[s] any person,” 15 U.S.C. §1692d,

“any false, deceptive, or misleading representation[s]

or means,” id. §1692e, or “unfair or unconscionable

means to collect or attempt to collect any debt,” id.

§1692f. These three subsections are the “substantive

heart of the [Act].” Johnson v. Riddle, 305 F.3d 1107,

1117 (10th Cir. 2002). And these general prohibitions

also include specific examples that the Act considers

to be a violation of a particular section. So, for

8

example, Congress deemed it a violation of §1692e for

a debt collector to provide “[t]he false representation

of *** [the] amount *** of any debt,” 15 U.S.C.

§1692e(2)(A), or “[t]he use of any false representation

*** to collect or attempt to collect any debt,” id.

§1692e(10).

Finally, to ensure harmed consumers could have

their day in federal court, Congress provided that “[a]n

action to enforce any liability created by this

subchapter may be brought in any appropriate United

States district court without regard to the amount in

controversy.” 15 U.S.C. §1692k(d). And to give the Act

bite, Congress imposed civil liability for violations,

including not only actual damages, but additional

damages “not exceeding $1,000,” and costs and

attorneys’ fees. See id. §1692k(a). Thus, if a debt

collector violates the Act with respect to someone, that

person can still collect up to $1,000—even if there

were no actual damages.

B. Factual Background

Like millions of Americans, Ashley Nettles opened

her first credit card to build credit. But with no credit

history, her only option was a predatory card that

targets consumers with subprime credit.1 The card

had a limit of only $300 and a well-above-average

1 See Comptroller of the Currency Administrator of National

Banks, Public Disclosure, Community Reinvestment Act

Performance Evaluation, 2 (Mar. 31, 2007) (“Credit One’s target

market is subprime borrowers who desire to either build or repair

credit”), https://www.occ.gov/static/cra/craeval/Nov07/20291.pdf.

9

interest rate of 23.9%.2 See 19-1 Exhibits, at 26. And

$75 of that limit was instantly gone because of the

card’s annual fee. Ibid.

Ashley made purchases with the card for only the

first month after she received it. See 19-1 Exhibits, at

27. She used the card at K-Mart, Target, The

Children’s Place, Meijer Superstore, Value Center

Marketplace, and A & W to buy food for her family,

clothes for her kids, and various household necessities.

See ibid.

But then misfortune struck. Ashley suffered a

cerebral spinal fluid leak that took years to

investigate, diagnose, and treat. As a result, for a

three-year period, she had to repeatedly take medical

leaves from work as she dealt with symptoms from the

leak, including chronic fatigue, migraines, and pain.

Additionally, appointments and procedures for the

ongoing medical treatments led to additional missed

work, with her husband also taking time off from his

job to accompany Ashley to doctor’s appointments.

When she was at work, she often worked second and

third shifts to try and make up for lost pay.

Furthermore, her husband’s own medical condition

of cluster headaches would leave him out of work with

no paychecks coming in for weeks. Her oldest child

was also diagnosed with anxiety and ADHD, with

Ashley often called to school to deal with his

2 “The average credit card interest rate is 17.87% for new

offers.” Adam McCann, What is the Average Credit Card Interest

Rate?,

WalletHub

(Jan.

5,

2021),

https://wallethub.com/edu/cc/average-credit-card-interestrate/50841.

10

behavioral issues, attend counseling appointments,

and the like. And to add injury to injury, she had to

undergo left hip surgery, putting her out of work for a

while, followed a year later by right hip surgery. Not

surprisingly, she and her family were living paycheck

to paycheck, when those even came.

Despite this, initially Ashley dutifully sought to

make a monthly minimum payment, though the

byzantine website for making online payments was

hard to navigate. She also called once to make a

payment, but was placed on perpetual hold and

couldn’t get through to a live person.

As often happens, Ashley was losing more ground

than she was gaining. Two months after receiving the

card, she made her first minimum payment of $25, but

that month she also incurred a $35 late fee and $5.68

in interest, putting her further in the hole despite not

making a single purchase that month. See Doc. 19-1

Exhibits, at 28. The same thing happened the next

month. See id. at 29. After this, making payments

slipped through the cracks of her chaotic life.

Yet late fees and interest continued to accrue. See

Doc. 19-1 Exhibits, at 30-35. And the interest rate

crept even higher. See ibid. In the first six months

after she stopped making payments, Ashley’s account

accrued $245 in fees and $57.26 in interest. See id. at

35. She now owed more than $600—almost triple what

she had charged on the card and double the card’s

limit. See ibid. All of this is not unusual, though,

because to turn a healthy profit, credit card companies

count on folks like Ashley who rack up late fees and

interest. See Ronald J. Mann, Bankruptcy Reform and

the “Sweat Box” of Credit Card Debt, 2007 U. Ill. L.

11

Rev. 375, 385 (2007) (“The successful credit card

lender profits from the borrowers who become

financially distressed. Financially secure customers or

‘convenience users’ do not generate any interest

income, late fees, or overlimit penalties.”).

As is also common in the industry, the bank that

had issued Ashley’s card sold her account, which then

passed through multiple affiliated entities under

common ownership until Respondent Midland

Funding purchased her account as part of a portfolio

of debts. Pet.App.3a. “Because creditors themselves

have given up trying to collect the debts they sell to

debt buyers, they sell those debts for pennies on the

dollar[:] *** close to eight cents per dollar for debts

under three years old[.]” Midland Funding, LLC v.

Johnson, 137 S.Ct. 1407, 1416 (2017) (Sotomayor, J.,

dissenting) (quoting Consumer Financial Protection

Bureau, Fair Debt Collection Practices Act: Annual

Report 23-24 (2016)).

Shortly after acquiring the account, Midland

Funding sued Ashley in Michigan state court,

demanding she pay the $601.97 past due on her

account. Pet.App.3a. After negotiations, the state

court entered a consent judgment that required

Ashley to make a monthly payment of $50 until the

balanced was paid. Pet.App.3a. The judgement

expressly excluded statutory interest. Pet.App.3a.

And the amount she owed after the consent judgment

increased to $689.37 because of court costs.

Pet.App.3a.

For the next three months, Midland Funding’s law

firm withdrew the $50 monthly payment from

Ashley’s bank account. Pet.App.4a. Then the firm

12

suddenly dissolved and stopped withdrawing the

amounts. Pet.App.4a.

About six months later, Ashley received a letter—

addressed to her but mailed to her attorney—from a

related entity, Midland Credit, informing her that it

had taken over her account, which letter, as admitted

by stipulation, “was an attempt to collect on the

Consent Judgment.” Pet.App.11a. The letter also

alleged that she owed $104.22 more than she did, and

nowhere did the letter reference the consent judgment

or her three $50 monthly payments. Doc. 46,

PageID#:405.3 While, at first blush, a little over $100

might not seem like a big deal, it was to Ashley, given

her finances and family situation.

C. Procedural History

Ashley sued both Midland Funding and Midland

Credit (collectively, “Midland”) in federal district court

as part of a putative class action, alleging that they

violated the Fair Debt Collection Practices Act. In

particular, she alleged that Midland violated the Act

by misrepresenting the amount she owed in the letter,

failing to credit her past payments, and thereby

attempting to collect more money than she actually

owed. Midland’s actions, she claimed, violated 15

U.S.C. §1692e(2)(A) & (10), as well as §1692f & f(1).

See Doc. 1 ¶¶, 37-38, 50-51, PageID #:6-7.

3 The District Court transposed the 9 with a 4 in the amount

Ashley claimed she still owed, according to the briefing the

District Court was relying on. See Doc. 25, PageID #:180. She

owed $539.37. See Doc. 1, PageID #:5 ¶ 29.

13

Midland countered by arguing that Ashley’s

federal claim must be arbitrated under her credit

card’s agreement. Pet.App.4a. The District Court

ultimately denied Midland’s motion to compel

arbitration as Midland’s collection activities and

Ashley’s claims under the Act were solely based upon

the state court consent judgment. Pet.App.32a.

On appeal, the Seventh Circuit ignored the

arbitration issue and dismissed the case on standing

grounds. The panel4 noted that Ashley’s “complaint

does not allege that the statutory violations harmed

her in any way or created any appreciable risk of harm

to her.” Pet.App.7a. The panel reached this conclusion

even though, during oral argument, Ashley’s attorney

had raised additional injuries: that she was “upset,”

“completely confused,” and “fearful,” because she

might owe more money than she thought, and she

“ha[d] to go consult an attorney” and suffered “loss of

time” in dealing with the letter. Pet.App.18a. The

panel, however, concluded that under circuit

precedent, these kinds of injuries are not cognizable

for standing purposes. Pet.App.7a-8a.

Having so limited the types of injuries it would

consider real, and relying on circuit precedent that

had interpreted Spokeo, the panel ruled that,

“[b]ecause Nettles has not alleged that she suffered an

injury from the claimed [statutory] violations, she has

Justice Barrett was part of the original Seventh Circuit

panel below and participated in oral argument in June 2020. But

she was not part of the Seventh Circuit’s decision, as that issued

about three months after her nomination to this Court.

Pet.App.1a n.1.

4

14

failed to plead facts to support her standing to sue.”

Pet.App.8a. In so concluding, the panel did not

conduct the Spokeo inquiry of looking first to

Congress’s judgment and then to history to determine

whether standing existed. Thus, the Seventh Circuit

vacated the district court’s denial of Midland’s motion

to compel arbitration and remanded the case,

instructing the lower court to dismiss for lack of

jurisdiction. Pet.App.8a.

REASONS FOR GRANTING THE PETITION

I. The First Question Involves A Wide And

Widely Acknowledged Circuit Split That Is in

Dire Need of Resolution by this Court.

Eleven Circuits have considered the first question

presented here, that is, whether a plaintiff must allege

something more than a mere violation of the Act to

establish standing. In conflict with the Seventh

Circuit here, six circuits allow an allegation of a

simple violation of the Act’s procedural requirements

to satisfy the concrete injury requirement, and four

other circuits agree with the Seventh Circuit that an

allegation of additional harm is required.

A. To Establish Standing, Six Circuits

Merely Require That A Plaintiff Allege a

Violation of the Act.

The First, Second, Third, Fifth, Sixth, and Eighth

Circuits hold that Article III standing can be satisfied

simply by alleging a violation of the Act in regard to

the plaintiff. For example, as the Seventh Circuit

pointed out below, the Sixth Circuit is in direct conflict

with it in Macy v. GC Services Ltd. Partnership, 897

F.3d 747 (6th Cir. 2018). See Pet.App.7a n.3. In Macy,

15

plaintiffs sued after receiving debt collection letters

that left out information on how they were to properly

dispute their debts under the Act. 897 F.3d at 751. The

defendant challenged the plaintiffs’ standing. Ibid.

The court determined that Spokeo left undisturbed

Supreme Court precedent “recognizing that a direct

violation of a specific statutory interest recognized by

Congress, standing alone, may constitute a concrete

injury without the need to allege any additional

harm.” 897 F.3d at 751. Thus, Macy interpreted

Spokeo as providing two categories of violations of the

Act. Id. at 756. The first is “where the violation of a

procedural right granted by statute is sufficient in and

of itself to constitute concrete injury in fact because

Congress conferred the procedural right to protect a

plaintiff’s concrete interests and the procedural

violation presents a material risk of real harm to that

concrete interest.” Ibid. The second is “where there is

a ‘bare’ procedural violation that does not meet this

standard, in which case a plaintiff must allege

‘additional harm beyond the one Congress has

identified.’” Ibid. (quoting Spokeo, 136 S.Ct. at 1549).

Macy also observed that the Act provides “consumers

a private right of action to enforce its provisions

against debt collectors.” Id. at 757 (citing 15 U.S.C.

§1692k(a)).

The Sixth Circuit further noted that the debt

collector’s “letters [there] present a risk of harm to the

[Act’s] goal of ensuring that consumers are free from

deceptive debt-collection practices because the letters

provide misleading information.” 897 F.3d at 757.

Further, the court observed that “[p]laintiffs allege a

risk of harm that is traceable to [the debt collector’s]

16

purported failure to comply with federal law, namely,

the possibility of an unintentional waiver of [the Act’s]

debt-validation rights, including suspension of

collection of disputed debts under Section 1692g(b).”

Id. at 758.

Thus, Macy found that the alleged violation fell in

the first category because the plaintiffs “demonstrated

a sufficient ‘risk of real harm’ to the underlying

interest to establish concrete injury without the “need

[to] allege any additional harm beyond the one

Congress has identified.” Id. at 757 (cleaned up)

(quoting Spokeo 136 S.Ct. at 1549).

So Macy

concluded that the plaintiffs’ allegations of violations

were alone sufficient to satisfy the concreteness

requirement of injury in fact for Article III standing.

Id. at 761. See also Donovan v. FirstCredit, Inc., 983

F.3d 246, 251-252 (6th Cir. 2020) (concluding the same

for alleged violation of §1692f(8)).

The Eighth Circuit joined this side of the split in

Demarais v. Gurstel Chargo, P.A., 869 F.3d 685 (8th

Cir. 2017). With facts very similar to those in this

petition, see id. at 689-690, plaintiff sued in federal

district court, alleging the defendants had “violated 15

U.S.C. §§1692e and 1692f by falsely representing the

amount of debt, falsely threatening to take action,

using unfair means to attempt to collect debt, and

attempting to collect debts not owed.” Id. at 690.

On appeal, defendants argued that plaintiff failed

to allege that he suffered a concrete injury, and thus

lacked standing. 869 F.3d at 690. And the court

acknowledged that the plaintiff “d[id] not allege any

tangible harms from the *** letter.” Id. at 691. But

applying Spokeo, the court recognized that “[w]ith

17

§ 1692f(1), Congress identified a harm—being

subjected to attempts to collect debts not owed.” Id. at

691. And applying the history prong of the Spokeo

inquiry, the Eighth Circuit determined that the harm

“is similar to the harm suffered by victims of the

common-law torts of malicious prosecution, wrongful

use of civil proceedings, and abuse of process.” Ibid.

“The harm of being subjected to baseless legal claims,”

which the court noted necessarily “creat[es] the risk of

mental distress, provides the basis for both § 1692f(1)

claims and the common-law unjustifiable-litigation

torts.” Id. at 692.

Turning to the congressional-judgment prong of

Spokeo, the Eighth Circuit observed that “Congress

recognized that abusive debt collection practices

contribute to harms that can flow from mental

distress, like ‘marital instability’ and ‘the loss of jobs.’”

869 F.3d at 692. (quoting 15 U.S.C. §1692(a)). Thus,

“Congress created a statutory right to be free from

attempts to collect debts not owed, helping to guard

against identified harms.” Ibid. And “[t]his is not a

situation where it is difficult to imagine how the

violation of a statutory right alone could cause

concrete harm.” Ibid. (cleaned up). So the court

concluded that the “alleged violations of [plaintiff’s]

§ 1692f(1) rights were concrete injuries in fact.” Ibid.

The Second Circuit is also in this camp. In Cohen

v. Rosicki, Rosicki & Assocs., P.C., 897 F.3d 75 (2d Cir.

2018), the plaintiff, alleging violations of sections

1692e and 1692g of the Act, brought a putative class

action against his mortgage-loan servicer and its law

firm when they attempted to start foreclosure

proceedings on his home. Id. at 78. The defendants

18

challenged plaintiff’s standing “because he has alleged

only a bare statutory procedural violation, divorced

from any concrete harm.” Id. at 80 (cleaned up).

Cohen observed that “Congress enacted the [Act] to

protect against the abusive debt collection practices

likely to disrupt a debtor’s life,” and determined that

“[s]ections 1692e and 1692g further this purpose.” 897

F.3d at 81 (cleaned up). “Congress thus sought to

protect consumers’ concrete economic interests in

enacting these provisions.” Ibid. Therefore, the court

concluded that “§§ 1692e and 1692g protect an

individual’s concrete interests, so that an alleged

violation of these provisions satisfies the injury-in-fact

requirement of Article III.” Ibid. The Second Circuit so

held because the written misrepresentations plaintiff

identified “might have deprived [plaintiff] of

information relevant to the debt prompting the

foreclosure proceeding, posing a ‘risk of real harm’

insofar as it could hinder the exercise of his right to

defend or otherwise litigate that action.” Id. at 81-82.

Hence, Cohen held that the plaintiff had alleged

injury-in-fact and so had standing. Id. at 82.

Likewise, the Third Circuit found standing when a

plaintiff alleged a mere violation of §1692(f) of the Act.

In St. Pierre v. Retrieval-Masters Creditors Bureau,

Inc., 898 F.3d 351, 355 (3d Cir. 2018), the defendant

“argue[d] that [plaintiff] failed to make that showing

[of standing] because he alleged only a de minimis

procedural violation of the [the Act] and not an injuryin-fact.” Id. at 356-357. The Third Circuit read Spokeo

as “reemphasizing that Congress has the power to

define injuries that were previously inadequate at

law, rather than erecting any new barriers that might

19

prevent Congress from identifying new causes of

action though they may be based on intangible

harms.” Id. at 357 (cleaned up). And the court noted

Spokeo’s two-part test. “[F]irst ask ‘whether an alleged

intangible harm has a close relationship to a harm

that has traditionally been regarded as providing a

basis for a lawsuit in English or American Courts.’” Id.

at 357 (quoting Spokeo, 136 S.Ct. at 1549). If the

answer is yes, then “it is likely to satisfy the injury-infact element of standing.” Ibid. “[I]f not, we next ask

whether Congress has expressed an intent to make an

injury redressable by ‘elevating it to the status of a

legally cognizable injury’ even if that injury was

previously inadequate in law.” Ibid. (quoting Spokeo,

136 S.Ct. at 1549) (cleaned up). If Congress has, then

Article III is likely satisfied. Ibid.

The Third Circuit thus concluded that the

plaintiff’s allegation of defendant’s behavior

“implicates a core concern animating the [Act]—the

invasion of privacy—and thus is closely related to

harm that has traditionally been regarded as

providing a basis for a lawsuit in English and

American courts.” 898 F.3d at 357-358. So the court

concluded that standing was satisfied. Id. at 358. See

also DiNaples v. MRS BPO, LLC, 934 F.3d 275 (3d Cir.

2019) (same).

In the same vein is the Fifth Circuit’s decision in

Sayles v. Advanced Recovery Sys., Inc., 865 F.3d 246

(5th Cir. 2017). There the plaintiff alleged a debt

collection agency violated the Act by failing to

communicate to credit bureaus that he disputed his

debts. Id. at 248. Defendant challenged plaintiff’s

standing, arguing that he “did not suffer, nor did he

20

risk suffering, a concrete injury as is required under

Spokeo.” Id. at 250. The Fifth Circuit disagreed.

Turning to Spokeo, the court pointed out that “the

violation of a procedural right granted by statute can

be sufficient in some circumstances to constitute

injury in fact,” and “[a]mong those circumstances are

cases where a statutory violation creates the risk of

real harm.” Ibid. (citations omitted). The court

determined that the defendant’s statutory “violation

exposed [plaintiff] to a real risk of financial harm

caused by an inaccurate credit rating.” Ibid. Hence,

the Fifth Circuit concluded the plaintiff’s “injury was

concrete.” Ibid.

Finally, the First Circuit is on this side of the split

because of a pre-Spokeo decision, Pollard v. Law Office

of Mandy L. Spaulding, 766 F.3d 98 (1st Cir. 2014).

There a consumer alleged a debt collection letter

violated the Act. Id. at 100. On appeal, the defendant

challenged plaintiff’s Article III standing. Id. at 101.

But the court rejected the defendant’s argument “that

the plaintiff lacks a constitutionally cognizable injury

because she was not flummoxed about her statutory

rights after reading the collection letter, as evidenced

by the fact that she exercised those rights.” Id. at 102.

That is because, “[r]efined to its bare essence, the [Act]

bestows upon consumers a right not to receive

communications that overshadow or are inconsistent

with the validation notice.” Ibid. The First Circuit

recognized that “[t]he invasion of a statutorily

conferred right may, in and of itself, be a sufficient

injury to undergird a plaintiff's standing even in the

absence of other harm.” Ibid. “That is the case here:

the [Act] does not require that a plaintiff actually be

confused.” Id. at 103. So the court concluded that “the

21

plaintiff adequately alleged that her personal right

was violated when she received the collection letter.”

Ibid. “That comprised an injury attributable to the

defendant’s actions—an injury that will be redressed

by an award of damages.” Ibid. Hence, “[n]o more is

exigible to confirm the plaintiff's Article III standing.”

Ibid.

B. By Contrast, Five Circuits Require an

Allegation of Additional Harm Beyond a

Violation of the Act.

On the other hand, the Fourth, Seventh, Ninth,

Eleventh, and D.C. Circuits always require additional

harm beyond a violation of the Act to find standing.

For instance, in Frank v. Autovest, LLC, 961 F.3d

1185, 1186 (D.C. Cir. 2020), after plaintiff lost her job

and became homeless, she defaulted on her auto loan

and surrendered her vehicle. After her debt changed

hands several times, defendant acquired it and sued

to collect. Ibid. Plaintiff subsequently filed a putative

class action against defendant and its debt collection

agent for three misrepresentations in the court filings,

alleging such violated sections 1692e and 1692f of the

Act. Id. at 1886-1887.

On appeal the D.C. Circuit found that, while

plaintiff had satisfied her burden at the pleading stage

for standing, at the summary judgment stage she

failed to demonstrate a concrete injury sufficient for

standing. The court found she had not taken any

action based on the alleged misrepresentations. 961

F.3d at 1188. Further, the court rejected plaintiff’s

argument “that the alleged [Act’s] violations

encompass injuries of the type Congress sought to

22

curb, and thus that she need not prove any additional

harm, such as reliance on false information.” Ibid.

(cleaned up). The court did so because, while “[a]

misrepresentation in a debt collector’s court

affidavit—including a false statement about the

affiant’s employer—is certainly capable of causing a

concrete and particularized injury,” plaintiff “ha[d]

not demonstrated that these statements had that

effect.” Id. at 1189.

The Eleventh Circuit is also in this camp in a case

involving these very Respondents, namely, Trichell v.

Midland Credit Mgmt., Inc., 964 F.3d 990, 995 (11th

Cir. 2020). In Trichell, the plaintiffs alleged the Act

was violated when they received misleading and

unfair letters from Midland that gave them the false

impression their previously owed debts were still

legally enforceable. On appeal, the court rejected a

historical analog “to causes of action for fraudulent or

negligent misrepresentation.” Id. at 998. The court

opined that the “serious harms” Congress identified in

enacting the Act “are a far cry from whatever injury

one may suffer from receiving in the mail a misleading

communication that fails to mislead [plaintiffs].” Id. at

999. Further, the court concluded that “any risk that

the letters may have posed to them had dissipated by

the time they filed suit.” Id. at 1000. So, over a dissent,

the court found the plaintiffs lacked standing. Id. at

1005. And the majority acknowledged that it was

following the Seventh and D.C. Circuits, and

disagreeing with the Sixth and Second Circuits. See

id. at 1002.

The Ninth Circuit joined this camp just last year,

in Adams v. Skagit Bonded Collectors, LLC, 836 F.

23

App’x 544, 545 (9th Cir. 2020). There a plaintiff sued

a debt collector for violating the Act, including its

prohibition on false or misleading representations

under section 1692e, after receiving debt collection

letters. The Ninth Circuit observed that plaintiff’s

“[c]omplaint include[d] a bare allegation of confusion.”

Id. at 547. But the court concluded that more than a

mere violation of the Act is required, and that

“confusion does not constitute an actual harm to

[plaintiff’s] concrete interests.” Ibid. Given that

“[n]othing in the Complaint suggests [plaintiff] took or

forewent any action because of the allegedly

misleading statements in the letters,” the court held

that he lacked standing. Ibid.

Likewise, in the Fourth Circuit case of Ben-Davies

v. Blibaum & Assocs., P.A., 695 F. App’x 674, 676 (4th

Cir. 2017), a debt collector attempted to collect a debt

arising out of a state court judgment by demanding

payment of an incorrect sum from calculating an

interest rate unauthorized by law. The court noted

that this was not a case in which the plaintiff had

alleged what in the court’s view would be insufficient,

namely, “a bare procedural violation of the [Act],

divorced from any concrete harm.” Ibid. Rather, the

plaintiff “sufficiently established the existence of an

injury in fact” because her “complaint alleged that, as

a ‘direct consequence’ of [the debt collector’s] alleged

violations of the [Act’s] proscribed practices, she

‘suffered and continues to suffer’ actually existing

intangible harms that affect her personally:

‘emotional distress, anger, and frustration.’” Id. at

676-677. Thus, the Fourth Circuit clearly required

more than a mere allegation of a violation of the Act.

24

In sum, the circuits are irreconcilably in conflict

and require this Court’s guidance. And numerous

circuit judges—including, most recently, Judge

Newsom of the Eleventh Circuit—have acknowledged

the conflict.5

C. The Decision Below, and the Multiple

Circuits that Agree with Its Analysis and

Conclusion, Misinterpret This Court’s

Standing Doctrine.

The Seventh Circuit below, and the four circuits

that join it in concluding that a plaintiff must always

allege an additional harm besides a violation of the

Act, are out-of-line with this Court’s standing

doctrine. Spokeo confirmed “that intangible injuries

can nevertheless be concrete.” 136 S.Ct. at 1549. To

“determin[e] whether an intangible harm constitutes

5 “[T]he courts have divided over whether certain statutory

violations are per se injuries in fact. For instance, the Second and

Sixth Circuits have held that any plaintiff who receives an

objectively misleading debt-collection letter in violation of the

Federal Debt Collection Practices Act suffers a concrete

injury. See Cohen v. Rosicki, Rosicki & Assocs., P.C., 897 F.3d 75,

81–82 (2d Cir. 2018); Macy v. GC Servs. Ltd. P'ship, 897 F.3d 747,

756–58 (6th Cir. 2018). We, by contrast, have joined the

D.C. Circuit in holding that there is no concrete injury unless the

letter actually misled the plaintiff herself. See Trichell v.

Midland Credit Mgmt., Inc., 964 F.3d 990, 1001–02 (11th Cir.

2020); Frank v. Autovest, LLC, 961 F.3d 1185, 1188 (D.C. Cir.

2020).” Sierra v. City of Hallandale Beach, Fla., No. 19-13694,

2021 WL 1799848, at *5 (11th Cir. May 6, 2021) (Newsom, J.,

concurring).

25

injury in fact,” Spokeo taught that “both history and

the judgment of Congress play important roles.” Ibid.

Yet these five circuits have failed to perform this

two-part inquiry, instead latching on to language in

Spokeo that one cannot “allege a bare procedural

violation, divorced from any concrete harm, and

satisfy the injury-in-fact requirement of Article III.”

136 S.Ct. at 1549. But as Spokeo plainly noted, “[t]his

does not mean *** that the risk of real harm cannot

satisfy the requirement of concreteness.” Ibid.

(emphasis added) Hence, “[t]he violation of a

procedural right granted by statute can be sufficient

in some circumstances to constitute injury in fact.”

Ibid. And “a plaintiff in such a case need not allege any

additional harm beyond the one Congress has

identified.” Ibid.

These five circuits missed this critical point of

Spokeo. If they had not, they would have looked to

Congress’s judgment. And as this Court observed,

“because Congress is well positioned to identify

intangible harms that meet minimum Article III

requirements, its judgement is also instructive and

important.” 136 S.Ct. at 1549. Thus, “Congress may

elevate to the status of legally cognizable injuries

concrete, de facto injuries that were previously

inadequate at law.” Ibid. (cleaned up). In other words,

“Congress has the power to define injuries *** that

will give rise to a case or controversy where none

existed before.” Ibid. (citation omitted).

In the Act, moreover, “Congress plainly sought to

curb the dissemination of false information by

adopting procedures designed to decrease that risk.”

Id. at 1550. Thus, under Spokeo, alleging a violation

26

of the Act suffices to provide a concrete injury given

the risks and harms Congress identified. The Seventh

Circuit and the four circuits joining it are thus

mistaken, and the six that have gone the other way

are correct.

II. The Second Question Is The Subject Of A

Separate Circuit Split That Needs Resolution

Depending Upon How the Court Resolves the

First Question.

If the Court decides that Article III standing

requires plaintiffs to allege additional harm besides a

mere violation of the Act, then additional guidance is

needed, as lower courts disagree regarding what

satisfies that requirement.

For instance, in Fern Kottler v. Gulf Coast

Collection Bureau, Inc., No. 20-12239, 2021 WL

529425, at *1 (11th Cir. Feb. 12, 2021) (per curiam),

the Eleventh Circuit faced the issue of whether a

plaintiff suffered a concrete injury after receiving a

letter and a telephone call that the plaintiff argued

violated the Act because they “falsely suggested she

was liable for medical bills owed by her employer.” In

reaction to receiving these communications, she

“testified that she was ‘clustered and jumbled’ why she

was receiving collection calls, the messages ‘scared’

her into calling back, and she feared that the company

would ‘ruin her credit.’” Ibid. The court determined

that these allegations constituted a concrete,

particularized, and imminent injury that invades a

legally protected interest because she (1) “was entitled

to avoid communication concerning collection of a debt

she did not owe” under the Act; (2) “she expended time

addressing unwarranted collection calls”; and (3)

27

“those calls upset her.” Ibid. So the panel concluded

Article III standing was satisfied. Ibid.

Likewise, in Frank v. Autovest, LLC, 961 F.3d

1185, 1188 (D.C. Cir. 2020), the D.C. Circuit refused

to find standing when the plaintiff failed to “testify

that she was otherwise confused [or] misled” by the

affidavits that allegedly provided misrepresentations

in violation of the Act. “And although [the plaintiff]

stated that [the defendant’s] suit caused her stress

and inconvenience, she never connected those general

harms to the [alleged misrepresentations she claimed

violated the Act].” Ibid. (citation omitted).

Additionally, while the plaintiff “points to pocketbook

injuries in the form of ‘court costs and attorney’s fees’

she incurred ‘defending [defendant’s] lawsuit,’” she

never “link[ed] these expenses to the alleged statutory

violations,” which occurred after litigation had begun.

Ibid. Thus, the court found “no evidence that the

contested statements rendered litigation more

expensive or onerous.” Ibid.

Also, in Ben-Davies v. Blibaum & Assocs., P.A., 695

F. App’x 674, 676 (4th Cir. 2017), a consumer

established that a debt collector “attempted to collect

from her a debt arising out of a state court judgment

by demanding payment of an incorrect sum based on

the calculation of an interest rate not authorized by

law.” The Fourth Circuit determined that the plaintiff

“sufficiently established the existence of an injury in

fact” because her “complaint alleged that, as a ‘direct

consequence’ of [the debt collector’s] alleged violations

of the [Act’s] proscribed practices, she ‘suffered and

continues to suffer’ actually existing intangible harms

28

that affect her personally: ‘emotional distress, anger,

and frustration.’” Id. at 676-677.

But the Seventh Circuit came out the opposite way

here. When at oral argument Ashley alleged the

mental distress of being “upset,” “completely

confused,” and “fearful,” the court concluded that was

insufficient to confer standing. Pet.App.18a. See also

Pennell v. Global Trust Management, LLC, No. 201524, 2021 WL 925494, *1-3 (7th Cir. Mar. 11, 2021)

(refusing to find Article III standing when plaintiff

claimed “stress and confusion” after receiving a letter

that allegedly violated the Act). Likewise, when a

plaintiff alleged a violation of the Act, the Ninth

Circuit concluded he lacked standing because his

complaint “include[d] a bare allegation of confusion,”

and “confusion does not constitute an actual harm to

[plaintiff’s] concrete interests” under the Act. Adams

v. Skagit Bonded Collectors, LLC, 836 F. App’x 544,

547 (9th Cir. 2020).

Furthermore, when during oral argument Ashley

alleged she had to spend time and consult an attorney

to address the false letter and Midland’s attempt to

collect more money than she owed, this lost time and

confrontation with her attorney were dismissed by the

Seventh Circuit as not rising to an injury in fact.

Pet.App.7a-8a.

Ashley thus had the misfortune of not living in the

Fourth, Eleventh, or D.C. Circuits—or in any of the

other circuits that recognize a simple violation of the

Act as sufficient to confer standing. Yet standing

under a federal law should not differ based on one’s

address. Assuming it provides a negative answer to

the first Question Presented, this Court needs to bring

29

clarity and uniformity to what qualifies as an

additional harm sufficient to satisfy the requirements

of a concrete injury under the Act.

III. The Questions Presented Are of National

Scope and Growing Importance.

The issues presented here, moreover, are of

enormous importance, both legally and practically.

A. Millions of Americans are in Debt and

Protected by the Act.

For one thing, scores of millions of Americans are

protected by the Act because they are in debt. And

those amounts are not trivial: “the average American

has $90,460 in debt,”6 and the average household is

about $145,000 in debt.7 In total, Americans have an

astonishing $14.35 trillion in household debt.8 That is

more debt than any country’s government debt, except

for the United States’.9

6 Megan DeMatteo, The Average American Has $90,460 in

Debt—Here’s How Much Debt Americans Have at Every Age,

CNBC, https://www.cnbc.com/select/average-american-debt-byage/ (last updated Jan. 22, 2021).

Average American Household Debt in 2020: Facts and

Figures, The Ascent (Nov. 18, 2020), https://www.fool.com/theascent/research/average-american-household-debt/.

7

8 Federal Reserve Bank of New York, Quarterly Report on

Household Debt and Credit—2020: Q3 3 (Nov. 2020),

https://www.newyorkfed.org/medialibrary/interactives/househol

dcredit/data/pdf/hhdc_2020q3.pdf.

See Jeff Desjardins, $69 Trillion of World Debt in One

Infographic,

Visual

Capitalist

(Nov.

14,

2019),

9

30

The Act’s protections are essential for many of

these Americans as they strive to stay financially

afloat—something that has only become more difficult

in recent years. That is why the Act covers all

Americans who are in debt if the “money, property,

insurance, or services” so obtained are used “primarily

for personal, family, or household purposes.” 15 U.S.C.

§1692a(5); see also id. §1692a(3) (“The term ‘consumer’

means any natural person obligated or allegedly

obligated to pay any debt.”). Thus, millions of

Americans in debt for those reasons currently rely on

the Act’s protections.

B. The Pandemic-induced Recession Has

Significantly Increased the Number of

Americans in Need of the Act’s

Protections.

These debt burdens are exacerbated by the

COVID-19 recession, which is financially straining

Americans. For example, one survey indicated that 42

percent of Americans said that “their household

financial situation has gotten worse since the

pandemic began,” and of that group, “45% say they’ve

taken on debt because of it.”10 Additionally, “[d]uring

the coronavirus crisis, more than half *** of adults

with credit card debt—roughly 51 million people—

added to their balances, according to a report by

https://www.visualcapitalist.com/69-trillion-of-world-debt-inone-infographic/.

10 Erin El Issa, 2020 American Household Credit Card Debt

Study,

NerdWallet

(Jan.

12,

2021),

https://www.nerdwallet.com/blog/average-credit-card-debthousehold/.

31

CreditCards.com. And 44% blame the pandemic, the

report found.”11

This additional debt greatly increases the

likelihood of late payments or even complete default.

For example, “54 percent of Americans said they’ve

missed or deferred at least one payment in 2020

compared to the 29 percent who were worried about

missing a payment in January [2020].”12 As more

Americans become financially unstable and take on

more debt during the pandemic, they need the Act’s

protections now more than ever.

C. By Raising the Standing Bar Higher

Than Article III Requires, Many Circuits

are Violating the Separation of Powers.

At the end of the day, this case is really about the

Constitution’s separation of powers. As the Court

noted in Spokeo, “to remain faithful to this tripartite

structure, the power of the Federal Judiciary may not

be permitted to intrude upon the powers given to the

other branches.” 136 S.Ct. at 1547. Standing helps

ensure that the judiciary does not intrude on the other

branches. But just as the “irreducible constitutional

minimum” for standing cannot be “erase[d],”

Jessica Dickler, 51 Million Americans Increased Their

Credit

Card

Debt

Because

of

Covid,

CNBC,

https://www.cnbc.com/2021/01/27/millions-of-americans-boostedtheir-credit-card-debt-because-of-covid.html (last updated Jan.

27, 2021).

11

12 Alan Goforth, Rising Household Debt in 2020 Could Have

Snowball Effect, BenefitsPRO (Nov. 16, 2020, 3:42 PM),

https://www.benefitspro.com/2020/11/16/rising-household-debtin-2020-could-have-snowball-effect/?slreturn=20210027182323.

32

consistent with separation-of-powers principles,

neither can it be “add[ed]” to. Id. at 1549. For that too

alters the balance of power between the Legislature

and the Judiciary.

That, moreover, is why “Congress has the power to

define injuries *** that will give rise to a case or

controversy where none existed before.” 136 S.Ct. at

1549. Because “Congress is well positioned to identify

intangible harms that meet minimum Article III

requirements,” ibid., if the judiciary narrows the scope

of standing by adding requirements to show an injuryin-fact, the judiciary necessarily intrudes on

Congress’s authority. And that is exactly what the five

circuits mentioned above—including the Seventh

Circuit in this case—have done.

The holdings of these circuits threaten the

separation of powers by thwarting Congress’s

constitutionally “enumerated” power to “legislate.”

136 S.Ct. at 1546-1547. These additional

requirements “usurp” Congress’s ability to enact

statutes that protect growing numbers of individuals,

such as Ashley, from being injured by unfair debt

collection practices. Id. at 1547.

Indeed, “[w]hen the Court rules whole categories of

plaintiffs out of the federal courts, it interferes with

Congress’s authority to recognize new societal

problems and to choose judicial mechanisms for

addressing those problems.” Heather Elliott,

Balancing as Well As Separating Power: Congress’s

Authority to Recognize New Legal Rights, 68 Vand. L.

Rev. En Banc 181, 182 (2015). Accordingly, “[j]udicial

respect for separation of powers *** includes

respecting Congress’s judgment underlying the

33

procedural rights it enacts” and “defer[ing] to

‘Congress[’s] *** power to define injuries and

articulate chains of causation that *** give rise to a

case or controversy where none existed before.’” Jon

Romberg, Trust the Process: Understanding

Procedural Standing Under Spokeo, 72 Okla. L. Rev.

517, 576-577 (2020) (quoting Spokeo, 136 S.Ct. at

1549) (citations omitted).

In sum, the judiciary can violate the separation of

powers as much by contracting its own power as by

expanding it. That is what has happened here. And

that is another powerful reason demanding this

Court’s review.

IV. The Facts in This Case Make It an Ideal

Vehicle to Resolve these Issues.

This case is also an ideal vehicle for resolving the

questions presented.

A. This Case Presents Both Issues, Allowing

for More Efficient Resolution.

Perhaps most important, if the Court decides to

answer the first Question Presented to always require

the allegation of an additional harm beyond just a

violation of the Act, it will need to answer the second

Question Presented. Otherwise, lower courts will

continue to be divided on that issue, leaving debtors

uncertain as to what types of harm will satisfy

standing.

This petition squarely presents both issues. The

lower court held that Ashley had not alleged any harm

beyond a mere violation of the Act. And it so held

because it found her allegations of additional harm did

34

not qualify as harm under its precedent. Thus, in this

case, the Court can kill two conflicts with one grant of

certiorari—and in so doing provide much needed

guidance to the badly divided lower courts.

B. The Court Has Often Granted Certiorari

with Only Eight Justices Participating.

Justice Barrett’s potential recusal in this case

should not deter a grant of certiorari. This Court has

frequently granted certiorari when only eight or fewer

Justices could hear the case on the merits.

For instance, the Court granted cert in Beckles v.

United States, 136 S.Ct. 2510 (Mem) (2016), despite

having only seven Justices to hear the merits because

Justice Kagan recused herself and Justice Scalia had

not yet been replaced, see 137 S.Ct. 886 (2017). And

just this term, the Court granted certiorari in BP

P.L.C. v. Mayor and City Council of Baltimore, 141

S.Ct. 222 (Mem) (2020), even though Justice Alito was

recused.

Furthermore, recusals of new Justices previously

involved in lower court decisions have not provided an

obstacle to granting certiorari. Thus, for example, the

Court granted certiorari in Dahda v. United States,

138 S.Ct. 356 (Mem) (2017), and Royal v. Murphy, 138

S.Ct. 2026 (Mem) (2018), despite Justice Gorsuch’s

recusal from considering the petitions and not

participating at the merits stage, see Dahda v. United

States, 138 S.Ct. 1491, 1493-1494 (2018); Sharp v.

Murphy, 140 S.Ct. 2412 (Mem) (2020). Similarly, the

Court granted certiorari when Justice Kavanuagh was

recused in Opati v. Republic of Sudan, 139 S.Ct. 2771

(Mem) (2019), 140 S.Ct. 1601 (2020).

35

Not only has certiorari been granted when new

Justices are recused, but also even when a more senior

Justice recuses because of previous involvement in a

long-running case. See United States Agency for Int’l

Dev. v. All. for Open Soc’y Int’l, Inc., 140 S.Ct. 660

(Mem) (2019), and 140 S.Ct. 2082 (2020) (Justice

Kagan recused from considering the petition and the

merits). And these examples do not include the more

than twenty petitions in recent terms when the Court

has granted certiorari and heard oral arguments

where the Court’s short-handedness was due to a

vacancy. In sum, under this Court’s common practice,

there is no reason to deny certiorari here on account of

Justice Barrett’s possible recusal.

CONCLUSION

The issues presented are in dire need of the Court’s

guidance, as almost every circuit has weighed in and

the lower courts are nearly evenly split. The issues

here also affect the majority of American adults—

scores of millions—given the ubiquity of debt and debt

collection. And that national importance has only

increased given the pandemic-induced recession. The

Court should grant this petition to provide clarity to

the lower courts and ensure the protection Congress

sought to provide with the Fair Debt Collection

Practices Act. Alternatively, given the important

federal interests reflected in that Act, the Court

should at least call for the views of the Solicitor

General.

36

Respectfully submitted,

CURTIS C. WARNER

5 E. Market St., Suite 250

Corning, NY 14830

(888) 551-8685

cwarner@warner.legal

JAMES C. PHILLIPS

1 University Dr.

Orange, CA 92866

714-628-2543

jcphillips@chapman.edu

May 20, 2021

GENE C. SCHAERR

Counsel of Record

HANNAH C. SMITH

SCHAERR | JAFFE LLP

1717 K Street NW, St. 900

Washington, DC 20006

(202) 787-1060

gschaerr@schaerr-jaffe.com