Late last month, the Ninth Circuit, in a split decision, overturned a lower court’s dismissal of FDCPA claims related to debt collection letters that the plaintiff/debtor admittedly never even read.  

The plaintiff defaulted on a debt incurred when he purchased a Dell computer. At the time of purchase, the plaintiff lived in Mexico, but he had the computer shipped to his parents’ home in California. Following the plaintiff’s default, the debt was eventually sold to one of the defendants, which mailed three letters to the plaintiff’s attention at his parents’ address in California. Each letter misidentified the original creditor. Later, a law firm hired to pursue a debt collection lawsuit used the same incorrect creditor name when it filed the lawsuit.

Plaintiff sued, claiming that the misidentifications constituted violations of the FDCPA, specifically 15 U.S.C. § 1692e, which prohibits “false, deceptive, or misleading representation or means in connection with the collection of any debt.”

The district court sided with the defendants and granted summary judgment in their favor, in large part because the plaintiff admittedly never received and thus never read the letters containing the errors. But, the majority of a three-judge panel on the Ninth Circuit reversed. The appellate court found that the plaintiff had Article III standing even though he did not receive the letters at issue, because the alleged violation of his statutory right not to be the target of misleading debt collection communications constituted a cognizable injury. Moreover, the panel held that “the letters and the complaint were materially misleading, and that the plaintiff was entitled to judgment under §1692e(2) and (10),” and the case thus was remanded for further proceedings.

Tourgeman v. Collins Financial Servs., et al., – F.3d – (publication pending) (9th Cir. 2014)