The Sixth Circuit Court of Appeals opens new paths for debt-collection-practices defense by applying constitutional standing requirements to the FDCPA


In Hagy v Demers & Adams, Case No. 17-3696 (February 16, 2018), the Sixth Circuit Court of Appeals held that a plaintiff with an otherwise valid claim under the Fair Debt Collection Practices Act did not satisfy the “case and controversy” requirement under Article III of the federal constitution.

An attorney representing the creditor in Hagy sent a letter to the debtor’s attorney stating that the debtor didn’t owe anything else to the creditor. The letter didn’t include disclosures required under the FDCPA. So the debtor filed a lawsuit under the FDCPA and its Ohio-law analogue. The trial court declined to dismiss the debtor’s lawsuit, but the Sixth Circuit Court of Appeals reversed.

The Court of Appeals held that the debtor needed to show an injury beyond a “bare procedural violation.” It acknowledged that an FDCPA plaintiff might have an injury like anxiety or a risk of double payment. But the creditor’s notice was good news for the debtor. The letter didn’t actually injure the debtor at all, notwithstanding the missing disclosures. The Court of Appeals recognized that the debtor stated a claim under the FDCPA but held that the FDCPA was still subject to constitutional standing requirements. With no actual injury, a plaintiff with a statutory claim under the FDCPA lacks the standing necessary to create federal jurisdiction. The Court of Appeals therefore vacated the order granting summary judgment to the debtor and dismissed the case for lack of jurisdiction.

For plaintiffs’ attorneys, Hagy highlights the need to state an injury beyond a mere statutory violation. For defense attorneys, Hagy stresses the importance of considering constitutional standing defenses even when a plaintiff alleges an ostensibly valid claim under the FDCPA. And the Court’s rationale in Hagy may apply to statutes other than the FDCPA.

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