Press "Enter" to skip to content

7th Cir. Holds Allegations of ‘Confusion’ and ‘Alarm’ Not Enough for Article III Standing

seventh circuit court of appeals editorialThe U.S. Court of Appeals for the Seventh Circuit recently affirmed the dismissal of a consumer’s lawsuit against a debt collector, holding that the consumer lacked Article III standing to sue because his allegations of ʺconfusion” and “alarm” were not sufficiently concrete to result in an injury in fact.

A copy of the opinion in Pucillo v. National Credit Systems, Inc. is available at:  Link to Opinion.

The consumer previously leased an apartment, and when he filed for Chapter 7 bankruptcy, he listed as a debt past‐due rent he allegedly owed the property management company. The bankruptcy court proceeded to grant the consumer a discharge, including any debt owed to the property manager.

That bankruptcy discharge was listed on the consumer’s credit reports, but the property manager was not notified of the consumer’s bankruptcy. Ten weeks before the discharge, the property manager placed the consumer’s account with a collection agency. Over the next 18 months, the collection agency sent the consumer two collection letters, stating that if payment was made, the collector “will update credit data it may have previously submitted regarding this debt.”

The week before the consumer received the second letter, he filed suit under the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692e, for allegedly demanding payment of a debt not owed and Section 1692c(c) for purportedly failing to cease communications and cease collections. The consumer alleged that the collection agency’s continued communications “confused and alarmed” him. The collection agency did not give information to a credit reporting agency — before or after his bankruptcy discharge.

The trial court dismissed the consumer’s complaint for lack of Article III standing, and the consumer timely appealed.

Article III of the U.S. Constitution limits the jurisdiction of federal courts to cases and controversies. U.S. CONST. art. III, § 2. To establish Article III standing to sue, “[a] plaintiff must have (1) a concrete and particularized injury in fact (2) that is traceable to the defendant’s conduct and (3) that can be redressed by judicial relief.” Pierre v. Midland Credit Mgmt., Inc., 29 F.4th 934, 937 (7th Cir. 2022).

On the first element, a concrete injury is “‘real,’ and not ‘abstract.’” Spokeo, Inc. v. Robins, 578 U.S. 330, 340 (2016). “Qualifying injuries are those with a close relationship to a harm traditionally recognized as providing a basis for a lawsuit in American courts.” Pierre, 29 F.4th at 938.

The Seventh Circuit began by noting that the ruing of the Supreme Court of United States in TransUnion LLC v. Ramirez limited the intangible harms that can be considered concrete. 141 S. Ct. 2190, 2210 (2021). Specifically, the Supreme Court held that a risk of harm qualifies as a concrete injury only for claims for “forward‐looking, injunctive relief to prevent the harm from occurring.” Id.

The Seventh Circuit reasoned that the Supreme Court’s TransUnion decision weakened the consumer’s standing argument because he was only seeking monetary damages in this action. Additionally, although the consumer claimed that he was “confused and alarmed” about the status of his bankruptcy discharge and his credit score, he provided no facts showing that his emotional response led to actionable injury. Because the consumer did not “otherwise act to [his] detriment in response to anything,” Pierre, 29 F.4th at 939, the Court concluded that the risk he pleaded of possible futility to his bankruptcy or potential harm to his credit did not satisfy the standing requirement of a concrete and particularized injury in fact.

Resisting this conclusion, the consumer argued that his injuries were of the same kind held actionable under common law invasion of privacy tort theories, specifically “invasion of privacy” and “intrusion upon seclusion.” An intangible harm can qualify as a concrete injury in fact, but only when the harm bears a “close relationship” to a traditional harm given redress in courts at common law. Spokeo, 578 U.S. at 340–341.

The Seventh Circuit observed that ʺinvasion of privacy” and “intrusion upon seclusion” are actually not distinct torts. Instead, “invasion of privacy” encompasses four theories of wrongdoing, including “intrusion upon seclusion.” Persinger, 20 F.4th at 1192. Intrusion upon seclusion “occurs when a person ‘intrudes … upon the solitude or seclusion of another or his private affairs or concerns’ and this ‘intrusion would be highly offensive to a reasonable person.’” Persinger, 20 F.4th at 1192 (quoting RESTATEMENT (SECOND) OF TORTS § 652B).

The Seventh Circuit noted that the phrase “intrusion upon seclusion” did not appear in the consumer’s complaint or his supporting declaration. Conceding that the consumer did not need to include this precise phrase in his pleadings, the Court determined that none of his allegations spoke to such a theory of injury in any way. Instead, the consumer’s appellate briefing tried to shoehorn his allegations within that tort theory.

Furthermore, each time the consumer invoked “intrusion upon seclusion,” he claimed that the collection agency’s letters undermined his belief that his bankruptcy discharge created a “fresh start.” However, the Court held that this specific injury was not actionable under the “intrusion upon seclusion” theory, as the potential for the consumer’s bankruptcy case to be undone presented only a risk of harm.

Accordingly, the Seventh Circuit concluded that the trial court correctly found that the consumer had not alleged a concrete and particularized injury in fact, and that there was no Article III standing. Therefore, the Court affirmed the dismissal of the case for lack of standing.

Photo: JHVEPhoto –

Print Friendly, PDF & Email

The attorneys of Maurice Wutscher are seasoned business lawyers with substantial experience in business law, financial services litigation and regulatory compliance. They represent consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. They have defended scores of putative class actions, have substantial experience in federal appellate court litigation and bring substantial trial and complex bankruptcy experience. They are leaders and influencers in their highly specialized area of law. They serve in leadership positions in industry associations and regularly publish and speak before national audiences.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.