Gunn v. Thrasher, Buschmann & Voelkel, PC, No. 19-3514 (7th Cir. 2020)
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When the Gunn's debt for homeowners' association assessments reached $2,000, the association hired a law firm, which sent the Gunns a letter demanding payment. The letter states: If Creditor has recorded a mechanic’s lien, covenants, mortgage, or security agreement, it may seek to foreclose such mechanic’s lien, covenants, mortgage, or security agreement. The Gunns did not pay. The law firm filed suit in state court, seeking damages for breach of contract rather than foreclosure. The Gunns filed suit under the Fair Debt Collection Practices Act (FDCPA), which forbids false or misleading statements in dunning letters, 15 U.S.C. 1692e(2), (4), (5) & (10). The Gunns acknowledge that the statement is true but contend that it must be deemed false or misleading because the law firm would have found it too costly to pursue foreclosure to collect a $2,000 debt.
The Seventh Circuit ordered the dismissal of the suit for lack of jurisdiction. The contested sentence did not injure the Gunns. They argued that they were annoyed or intimidated but did not contend that the letter was a forbidden invasion of privacy. The association and its law firm were entitled to communicate with them, If annoyance were enough, the very fact that a suit was filed would show the existence of standing. The asserted violation of a substantive FDCPA right does not guarantee standing. There must still be a concrete injury.
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In the United States Court of Appeals For the Seventh Circuit ____________________ No. 19-3514 LINDA GUNN and CHRISTOPHER GUNN, Plaintiffs-Appellants, v. THRASHER, BUSCHMANN & VOELKEL, P.C., Defendant-Appellee. ____________________ Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:19-cv-01385-JMS-MPB — Jane Magnus-Stinson, Chief Judge. ____________________ ARGUED MAY 19, 2020 — DECIDED DECEMBER 15, 2020 ____________________ es. Before EASTERBROOK, BRENNAN, and ST. EVE, Circuit Judg- EASTERBROOK, Circuit Judge. Linda and Christopher Gunn fell behind in paying assessments owed to their homeowners’ association. When the debt reached about $2,000, the association hired a law rm (Thrasher, Buschmann & Voelkel). It sent the Gunns a leber demanding payment. One sentence in this leber reads: 2 No. 19-3514 If Creditor has recorded a mechanic’s lien, covenants, mortgage, or security agreement, it may seek to foreclose such mechanic’s lien, covenants, mortgage, or security agreement. This leber did not induce the Gunns to pay, and the law rm led suit in state court—but the remedy it sought was damages for breach of contract rather than foreclosure. The Gunns replied with this suit under the Fair Debt Collection Practices Act (FDCPA), part of which forbids false or misleading statements in dunning lebers. 15 U.S.C. §1692e(2), (4), (5) & (10). Although the Gunns acknowledge that the leber’s statement is true both factually and legally, they contend that it must be deemed false or misleading because the law rm would have found it too costly to pursue foreclosure to collect a $2,000 debt. The district court dismissed the complaint on the pleadings, ruling that a true statement about the availability of legal options cannot be condemned under the Act just because the costs of collection may persuade a law rm to seek one remedy (damages) rather than another (foreclosure). 2019 U.S. Dist. LEXIS 195718 (S.D. Ind. Nov. 12, 2019), reconsideration denied, 2019 U.S. Dist. LEXIS 219829 (S.D. Ind. Dec. 23, 2019). The parties’ briefs in this court locked horns on the question whether a true statement violates the statute when it mentions a remedy that a creditor probably will not use. In addition to supporting the district court’s legal analysis, the law rm observes that sometimes creditors will take steps that seem uneconomic when viewed by themselves but that are necessary to make threats credible. In the language of game theory, rational creditors pursue mixed strategies. The Gunns do not o er any data showing that homeowners’ as- No. 19-3514 3 sociations never seek foreclosure as a means to collect unpaid assessments. But we do not reach the merits. Like the district court’s opinions, neither side’s brief mentions an antecedent question: whether the complaint presents a case or controversy within the scope of Article III. For neither the complaint nor the plainti s’ brief explains how the contested sentence injured the Gunns. They did not pay anything in response and do not say that the sentence about foreclosure could have reduced their credit rating. And the leber could not have a ected their ownership interest. That would require a foreclosure judgment in state court—and, even after such a judgment, owners may retain possession by paying the debt and redeeming their property interests. We directed the parties to le supplemental briefs addressing the question whether plainti s have standing to sue. We directed their abention to Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), and Casillas v. Madison Avenue Associates, Inc., 926 F.3d 329 (7th Cir. 2019), both of which hold that concrete harm is essential to standing. Spokeo concerns the Fair Credit Reporting Act, while Casillas concerns the same statute as the Gunns’ suit. The Gunns’ main argument is that they were annoyed or intimidated by the leber, which as a maber of law satis es the constitutional injury requirement. The principal decision on which they rely is Gadelhak v. AT&T Services, Inc., 950 F.3d 458 (7th Cir. 2020). It does not help them. Gadelhak dealt with uninvited and unintelligible text messages, which intruded on the plainti s’ seclusion. Pestiferous text messages, spam phone calls, and unwelcome faxes can cause cognizable injury, for the reasons we gave in Gadelhak when explaining how the common law treats noises and other aggravating intru- 4 No. 19-3514 sions. Yet the Gunns do not contend that the law rm’s leber was a forbidden invasion of privacy. They owned a home and owed a debt; the association and its law rm were entitled to communicate with them, no maber how unwelcome the Gunns found the demand for payment. Their claim is that legally sound language in an otherwise proper leber violated the Act. Nothing in Gadelhak implies that this has ever been deemed a concrete injury. Consider the upshot of an equation between annoyance and injury. Many people are annoyed to learn that governmental action may put endangered species at risk or cut down an old-growth forest. Yet the Supreme Court has held that, to litigate over such acts in federal court, the plainti must show a concrete and particularized loss, not infuriation or disgust. See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). Similarly many people are put out to discover that a government has transferred property to a religious organization, but Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464 (1982), holds that a sense of indignation (= aggravated annoyance) is not enough for standing. See also, e.g., Freedom from Religion Foundation, Inc. v. Obama, 641 F.3d 803 (7th Cir. 2011) (no standing to litigate about a presidential declaration of a day of prayer, when the declaration vexes the plainti but does not cause concrete loss). Indeed, it is hard to imagine that anyone would le any lawsuit without being annoyed (or worse). Litigation is costly for both the pocketbook and peace of mind. Few people litigate for fun. Yet the Supreme Court has never thought that having one’s nose out of joint and one’s dander up creates a case or controversy. No one can doubt that the plain- No. 19-3514 5 ti in Spokeo was sore annoyed. If that were enough, however, then the very fact that a suit had been led would show the existence of standing, and the need to have a concrete injury that could be cured by a favorable judicial decision would be abolished. The Gunns make one additional argument: that Spokeo and Casillas involved procedural rights, while their claim arises under one of the Act’s substantive provisions. That’s true enough, but it does not show that they have standing. Article III of the Constitution does not distinguish procedural from substantive claims; it makes injury essential to all litigation in federal court. In Thole v. U.S. Bank N.A., 140 S. Ct. 1615 (2020), where the plainti asserted the violation of a substantive right, the Supreme Court found no standing using the approach of Spokeo. And this court has recently held that the asserted violation of a substantive right conferred by the Fair Debt Collection Practices Act does not guarantee the plainti ’s standing. There must still be a concrete injury. See Larkin v. Finance System of Green Bay, Inc., No. 18-3582 (7th Cir. Dec. 14, 2020). See also Trichell v. Midland Credit Management, Inc., 964 F.3d 990 (11th Cir. 2020). Because the Gunns do not contend that the contested sentence in the defendant’s leber caused them any concrete harm, the judgment of the district court is vacated and the case remanded with instructions to dismiss for want of subject-maber jurisdiction.
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