Medical Debt Collectors Beware: New Connecticut Law, Effective July 1, 2024, Prohibits Medical Debt Reporting to Credit Rating Agencies

On May 9, 2024, Connecticut Governor Ned Lamont signed Public Act 24-6, titled “An Act Concerning the Reporting of Medical Debt.”  The new law is significant for hospitals, health care providers and debt collectors attempting to collect and report on medical debt.

The new law prohibits Connecticut health care providers, hospitals, and collection entities from reporting a person’s medical debt to credit rating agencies for use in a credit report.  It also voids any medical debt that is reported to credit rating agencies.  The new law similarly requires health care providers to have a provision in their contracts with collection entities for the purchase or collection of medical debt that prohibits reporting the debt to credit rating agencies. Finally, the new law prohibits reporting an individual patient to a credit reporting agency and, on or after October 1, 2022, (i) initiating an action to foreclose a lien on an individual patient’s primary residence if the lien was filed to secure payment for health care provided by the hospital or entity that is owned by or affiliated with such hospital to such patient on or after October 1, 2022, or (ii) applying to a court for an execution of an individual patient’s wages under Conn. Gen. Stat. § 52-361a, or otherwise seeking to garnish such patient’s wages, to collect payment for health care provided by the hospital or entity that is owned by or affiliated with such hospital to such patient on or after October 1, 2022, if such patient is eligible for the hospital bed fund.  

The new law is effective July 1, 2024. To view P.A. 24-6, please click here. To learn more about this new legislation, please contact the author or your GRSM attorney.

Are Your Procedures Sufficient to Support a Bona Fide Error Defense – Not if You Only Rely on Creditor Information

Author: Lori Quinn

The plaintiff filed a lawsuit against the defendant for violating the Fair Debt Collection Practices Act (“FDCPA”) related to a medical debt placed with the defendant for collection. Flores v Frost-Arnett Company, 2023 WL 155859, USDC AZ (Jan. 11, 2023). The defendant used a keyword search on the data provided by the creditor, and the search did not find that the account was associated with a worker’s compensation claim. After that, the defendant commenced collections by sending an initial collection letter to the plaintiff.  The plaintiff did not respond to the letter but filed a lawsuit against the defendant for violating the FDCPA.

The defendant filed a motion for summary judgment on its bona fide error defense, and the plaintiff filed his motion for partial summary judgment on the liability issue. The court denied the defendant’s motion finding defendant’s bona fide error defense did not meet the elements to support the defense. The court cited Urbina v Nat’l Bus. Factors Inc., 979 F.3d 758 (9th Cir 2020) in outlining the required showing for a bona fide error defense – “The bona fide error defense requires a showing that the debt collector: (1) violated the FDCPA unintentionally; (2) the violation resulted from a bona fide error; and (3) the debt collector maintained procedures reasonably adapted to avoid the violation.”

Here, the court found the defendants keyword search was not “reasonably adapted to avoid the violation” relying on the Ninth Circuit’s holding in Urbina “…the Ninth Circuit has held that procedures that merely rely on a creditor to provide accurate information are insufficient.” While acknowledging the defendant ran a keyword search, the court found that the bona fide error defense failed because its procedure relied on information provided by the creditor. “Indeed, the procedure will detect a worker’s compensation related debt only when the creditor provides accurate information… If the creditor provides inaccurate information – as it did here – the software scrub won’t catch the worker’s compensation related keywords.” The court found that the procedure was inadequate to avoid an FDCPA violation “because, at bottom, those procedures rely on a creditor to provide accurate information.”

The Impact of Plaintiff’s Failure to Disclose and Limited Recovery of Attorney’s Fees

Authors: Lori Quinn and Chantel Wonder

In perfect litigation, all facts are disclosed, including those that adversely affect your causes of action. In Adonizio v Credit Control Services, Inc., 2023 WL 21953, M.D. Fl., a plaintiff who failed to disclose a home sale just months after commencing litigation, was penalized by the severely limited recovery of attorney’s fees.  

The litigation began with a complaint for violation of the Fair Debt Collections Practices Act (“FDCPA”) and Florida’s Consumer Collections Practices Act (“FCCPA”) related to the collection of an unpaid bill for medical laboratory work. The plaintiff claimed he had paid the bill and that credit reporting affected his ability to obtain favorable mortgage rates and insurance, resulting in significant actual damages.

The parties resolved the FDCPA and FCCPA claims and actual damages in March 2022 by way of an Offer of Judgment providing for $1,001 on the FDCPA claim, $1,001 on the FCCPA claim, and $448 in actual damages. The Offer included reasonable attorneys’ fees and costs as allowed by the Court. However, a fight ensued about reasonable attorney’s fees. The plaintiff claimed 133 hours of work and $1,481 in costs. The parties were ordered to mediate the fees and costs issue, but the plaintiff filed a Motion seeking relief from the mediation. The Court then ordered the parties to participate in a settlement conference, and no agreement was reached. The plaintiff filed his Motion for Attorney’s Fees, requesting $39,990 in fees for 133 hours and $1,481.10 in costs. The defendant filed its Response contesting the reasonableness of the number of hours on the basis that the plaintiff failed to disclose that he sold his home four to five months after initiating the litigation and continued to extend the litigation for approximately seven or eight months after the sale.

A Report and Recommendation was issued finding 20 hours or $6,000 in attorney’s fees to be reasonable and agreeing in large part with the defendant’s arguments that the hours claimed were unreasonable because the maximum amount and type of the plaintiff’s damages had changed shortly after the suit was filed with the home sale and the plaintiff unnecessarily extended and complicated the litigation by not disclosing the sale.

The plaintiff filed his Objections, including a claim for “fees on fees.” The defendant filed their Response, maintaining its position and endorsing the Magistrate Judge’s findings. The Court then issued its Order on the Report providing a detailed analysis of the litigation, noting the plaintiff’s failure to disclose the sale of the house and noting the defendant did not become aware of the home sale for seven or eight months after the litigation was filed. The Court found no error with the Magistrate Judge’s finding that 20 hours were reasonable but did point to the plaintiff’s objections criticizing how “the plaintiff repeatedly quibbles with the magistrate judge’s description of the nature of the plaintiff’s claims.” And the plaintiff’s “semantic attack about ‘damages’…” ultimately found an issue with “the plaintiff’s assault on the magistrate judge’s quite accurate description of plaintiff’s initial assertion of his damages.” The Court stated, “The magistrate judge clearly understood that… when the home was sold in June 2021, plaintiff’s actual damages ceased to accrue and noted the defendant’s argument that the home sale “reduc[ed plaintiff’s] potential claim (due to higher interest costs) from many years to just a few months”)) and that once the home sold, ‘the possible recoverable damages were no more than $1,000 per count,’ the settled amount of actual damages was $448—a proportionately de minimis sum that does not affect the accuracy of the Report’s description of the course of the case and the effect on the litigation of plaintiff’s failure to disclose the sale of the house.”

The Court took issue with the plaintiff and his counsel’s failure to disclose the home sale and their continued attempt to defend the failure stating, “Counsel refuses to state in his filings when he became aware of the sale.” While referencing emails between counsel “that seemed to reflect counsel knew that Plaintiff moved out of state around June 1, 2021, though counsel maintained that he did not deduce that Plaintiff had sold the house with the at-issue mortgage.” The Court then said, “And even if Plaintiff’s counsel did not know, Plaintiff certainly did, and he cannot expect Defendant to foot the bill for attorney hours expended unnecessarily because of his failure to disclose.” Ultimately, the Court agreed with the Report’s finding that “… Plaintiff’s failure to disclose the sale to Defendants and its prolonging effect on the litigation.”

In addition, the plaintiff objected to the finding that 20 hours were reasonable and accused the magistrate judge of “fabricat[ing] a timesheet” and calling the report “wholly unacceptable.” The plaintiff’s choice of words was met with ire by the Court, which noted, “plaintiff’s counsel’s disrespect for the Court—already apparent from the tone of the rest of the Objections—is palpable here. Counsel’s word choices are completely uncalled for. It is not for counsel to decide or declare what is or is not “wholly unacceptable” when speaking of a judicial officer’s work. And counsel’s repeated use of the word “fabricate” is especially troubling… in the legal arena, it is most often used in its underhanded sense: “to make up for the purpose of deception….” The Court chastised the plaintiff’s counsel declaring “…what is ‘wholly unacceptable’ here is the plaintiff’s counsel’s disrespectful and unfounded accusation against a member of the judiciary.” and made note that the plaintiff’s counsel came “…perilously close…” to violating the Florida Bar Rules reminding the plaintiff’s counsel that “…Ad hominem attacks are not persuasive to a reviewing court; in fact, they have the opposite effect—to diminish the credibility of the one spewing insulting hyperbole…”

The plaintiff argued that counsel was entitled to “fees on fees” related to the fee petition and time spent after the Offer of Judgment was accepted. In its analysis, the Court stated, “…under precedent, counsel is entitled to some compensation for litigating fees.” The Court conducted a detailed analysis of the additional 44.1 hours claimed and limited the plaintiff’s reasonable attorney’s fees to 9.65 hours, finding a majority of the time to be “grossly excessive,” excessive,” “unreasonable, and excessive” or that the plaintiff failed to show it was “necessary or reasonable.”

The Court then addressed recoverable costs allowing only for the $400 filing fee of the $1,481.10 claimed by the plaintiff. The Court agreed with the defendant’s argument that the plaintiff did not utilize Rule 4 and was not entitled to service costs and disallowed cost for mediation, stating “…district courts in this circuit have, with approval of the Eleventh Circuit, declined to award mediation costs under the FDCPA because such costs are not allowed under the general costs provision, 28 U.S.C. § 1920.”

Gordon Rees Scully Mansukhani Philadelphia Partner Lori J. Quinn and Miami Partner Chantel C. Wonder served as counsel for the defendant. 

FCC Declares that “Ringless Voicemails” are “Calls” that Require Consumer Consent to Avoid TCPA Liability

Author: Thomas Blatchley

On November 21, 2022, the Federal Communications Commission (FCC or Commission) issued a declaratory ruling finding that “ringless voicemails” to wireless telephones require consumer consent because they are “calls” made using an artificial or prerecorded voice, and thus are covered by the federal Telephone Consumer Protection Act, 47 U.S.C. § 227 (TCPA). See FCC 22-85 (CG Dkt. No. 02-278) (Nov. 21, 2022). The FCC ruling is significant because it clarifies that delivery of a ringless voicemail is a form of a robocall covered by the TCPA, and is illegal if the caller did not have the consumer’s prior express consent.


The TCPA, which protects consumers from unwanted robocalls, prohibits making any non-emergency call using an automatic telephone dialing system or an artificial or prerecorded voice to a wireless telephone number without the prior express consent of the called party.

On March 31, 2017, All About the Message, LLC (AATM) filed a petition with FCC seeking a declaration that ringless voicemail (e.g., delivery of a voicemail message directly to a consumer’s cell phone voicemail) is not subject to § 227(b)(1)(A)(iii) of the TCPA and therefore that AATM does not need consumer consent for the messages. AATM argued that its ringless voicemail message is not a “call” and that the TCPA should not apply, claiming that its proprietary software creates a landline session directly to the telephone company’s voicemail server without charge to the subscriber or appearing as a received call on a bill. AATM claimed that the ringless voicemail server, and the process by which the ringless voicemail is deposited on a carrier’s platform, is neither a call made to a mobile telephone number nor a call for which a consumer is charged and, therefore, is an unregulated service.

The FCC received over 8,000 comments and replies on the petition; almost all opposed it. On June 20, 2017, AATM filed a letter seeking withdrawal of the petition.1 Given the substantial attention from commenters, members of Congress, and the applicability of the TCPA to ringless voicemail technology, which has been the subject of considerable recent litigation,2 the FCC issued its declaratory ruling to resolve a controversy and remove uncertainly about ringless voicemail.


The FCC found that, based on its precedent, AATM’s ringless voicemail message is a call to a consumer’s wireless number and prerecorded voice messages sent via this technology are, therefore, subject to the TCPA. The FCC also found that AATM’s ringless voicemail constitutes a “call” subject to the TCPA’s protections for the same reasons the FCC found computer-generated text messages sent to a carrier’s text server to be calls under the TCPA.

In its analysis, the FCC found that the record supporting its conclusion that AATM’s ringless voicemail is identical in function to the Internet-to-phone testing the FCC in 2015 found subject to the TCPA. In the case of Internet-to-phone text messaging, the telephone number assigned to the consumer serves as a necessary and unique identifier. Similarly, the telephone number assigned to a consumer’s wireless phone and associated with the voicemail account is a necessary and unique identifier for the consumer in the ringless voicemail context. The FCC also found compelling the fact that the steps involved in sending ringless voicemail is substantially similar to the technology used, steps involved in, and software used to send text message en masse to cell subscribers. Notably, neither AATM nor any other commenter challenged the description of the technology used to deliver ringless voicemail messages or the assertion that it is essentially identical to the technology used to deliver Internet-to-phone text messages.

The FCC also stated that its finding is consistent with the ordinary meaning of “call.” Although the TCPA does not define “call,” courts have turned to dictionary definitions to determine its meaning. Webster’s Third New International Dictionary defines a call as “to communicate with or try to get into communication with a person by a telephone.” The FCC found that ringless voicemails meet this definition by directing the messages by means of wireless phone number and by depending on the transmission of a voicemail notification alert to the consumer’s phone (causing the consumer to retrieve the voicemail message).

The FCC also determined that its finding is consistent with the legislative history and purpose of the TCPA – eliminating illegal automated or prerecorded calls that are a nuisance and invasion of privacy. The FCC found ringless voicemails are unwanted messages the consumer has no control over and crowd potentially wanted messages out of the consumer’s voicemail capacity. Further, even when the consumer’s voicemail box is not full, consumers waste time listening to unwanted messages before deleting them because there is no mechanism for consumers to stop unwanted ringless voicemail calls before they reach the voicemail box. Consistent with such legislative history and purpose, the FCC concluded that Congress intended the TCPA to protect consumers from the nuisance and invasion of privacy caused by such artificial or prerecorded voice messages.

The FCC rejected AATM’s argument that ringless voicemail is not a TCPA call because it does not pass through consumers’ phone lines and that the TCPA protects only calls made directly to a wireless handset. The FCC also rejected AATM’s argument that ringless voicemail is non-intrusive since, among other things, consumers cannot block these messages, consumers experience an intrusion on their time and privacy being forced to spend time reviewing unwanted messages in order to delete them, and consumers must also content with their voicemail box filling with unwanted messages, which may prevent other callers from leaving important wanted messages.

The FCC also rejected the argument that the TCPA only applies when the consumer is charged. The FCC found that the restriction on autodialed or prerecorded calls to wireless numbers is separate from the restriction on calls to services where the call is charged. The FCC determined that ringless calls can also result in charges on retrieval of the message, including where minutes used for voicemail retrieval are deducted from a limited plan.

The FCC also rejected the notion that is ruling unnecessarily and improperly restricts political speech. The FCC found that ringless voicemail messages are “calls” subject to the TCPA, irrespective of content, and that this interpretation does not restrict any particular type of speech (putting aside that courts have found § 227(b)(1)(A)(iii) constitutional).

The FCC also found unpersuasive AATM’s argument that the Commission lacked the authority to regulate voicemail service at all because it is an enhanced service. The FCC concluded that AATM’s technology involves placing calls, not providing voicemail service.

Finally, the FCC disagreed with AATM that a Canadian regulator’s choice not to regulate voicemail broadcast for making telemarketing telecommunications should drive the FCC to conclude ringless voicemail is not subject to the TCPA. The FCC quickly dispatched this argument noting that another country’s construction of its laws does not bind the Commission’s interpretation of the TCPA.
1 At least two other entities filed similar petitions for declaratory rulings, which were withdrawn following significant opposition. Even though AATM withdrew its petition, the FCC chose to address the AATM petition because of its more detailed description of the technology at issue even though the other petitions raised the same legal question as AATM. Notably, the FCC stated that while its ruling is based on AATM’s petition and the record in that proceeding, “this Declaratory Ruling would apply to any entity that provides ringless voicemail using the end user’s mobile telephone number to direct the ringless voicemail to a mailbox associated with the end user’s mobile phone.” FCC 22-85 at 3, n.17.
2 See, e.g., Schaevitz v. Braman Hyundai, Inc., 437 F.Supp.3d 1237, 1249 (S.D. Fla. 2019) (the ringless voicemail, that is, a direct-to-voicemail message, is a “call” under the TCPA); Picton v. Greenway Chrysler-Jeep-Dodge, 2019 WL 2567971, at *2 (M.D. Fla June 21, 2019) (rejecting the argument that ringless voicemails are not subject to the TCPA); Gurzi v. Penn Credit Corp., 449 F.Supp.3d 1294, 1298 (M.D. Fla.) (direct-to-voicemail messages fall within the plain language of the TCPA); Grant v. Regal Automotive Group, 2020 WL 3250075, at *2 (M.D. Fla. Mar. 12, 2020) (“Several federal courts, including courts in this Circuit, have concluded that a ringless voicemail is a ‘call’ subject to the TCPA.”); Saunders v. Dyck O’Neal, Inc., 319 F.Supp.3d 907, 911 (W.D. Mich. 2018) (“Both the FCC and the courts have recognized that the scope of the TCPA naturally evolves in parallel with telecommunications technology as it evolves, e.g., with the advent of text messages and email-to-text messages, or, as we have here, new technology to get into a consumer’s voicemail box directly.”); Caplan v. Budget Van Lines, Inc., 2020 WL 4430966, at *4 (D. Nev. July 31, 2020) (ringless voicemail messages are still a nuisance delivered to the recipient’s phone by means of the phone number; they are calls as defined by the TCPA); see also Soppett v. Enhanced Recovery Co., LLC, 679 F.3d 637, 638 (7th Cir. 2012) “routing a call to voicemail counts as answering the call” and can violate the TCPA); Castro v. Green Tree Servicing, LLC, 959 F. Supp. 2d 698, 720 (S.D.N.Y. 2013) (holding that for purposes of TCPA liability, it is immaterial whether the calls were answered or went to voicemail).

Defendant Obtains Summary Judgment Against Serial Plaintiff in Heavily Litigated TCPA and MDTCPA Action

Author: Thomas Blatchley

In Worsham v. Discount Power, Inc., Civ. Action No. RDB-20-0008, 2022 WL 3100762 (D. Md. Aug. 4, 2022) (Bennett, J.), the United States District Court for the District of Maryland granted defendant’s motion for summary judgment and denied plaintiff’s cross-motion for summary judgment in an action wherein plaintiff asserted numerous violations of the federal Telephone Consumer Protection Act and Maryland Telephone Consumer Protection Act for alleged unwanted telemarketing calls.

Case Background

Plaintiff filed his original 17-count complaint in Maryland state court. After the case was removed to federal court, defendant successfully obtained dismissal without prejudice of plaintiff’s entire complaint for failure to state a claim. After plaintiff re-pled the complaint, Defendant again successfully obtained dismissal of 13 of the 17-counts, with prejudice, as well as plaintiff’s claims for treble damages and attorneys’ fees. During the pendency of the action, defendant also secured discovery sanctions against plaintiff, including the recovery of certain fees and costs, as well as an order precluding certain evidence.

Summary Judgment for Defendant

The parties filed cross-motions for summary judgment on the remaining four counts of the complaint alleging TCPA and MDTCPA violations for defendant’s alleged failure to (1) honor the National Do-Not-Call registry (Counts 1 and 5) and (2) provide telemarketer identifying information as required by FCC regulations. The district court ultimately found that defendant could not be held directly or vicariously liable for the numerous telemarketing calls since there was no evidence of any agency relationship between the defendant and its third-party telemarketing vendors, which the district court found were properly characterized as independent contractors. The district court found this distinction entitled the defendant to judgment on all counts as a matter of law.

The district court denied plaintiff’s motion for summary judgment, granted defendant’s summary judgment motion, entered judgment in favor of defendant as to all remaining counts, and closed the case.

Florida Supreme Court finds Workers’ Comp Law Does Not Bar Improper Debt Collections Action

Author: Melissa Manning

In Laboratory Corporation of America v. Davis, an injured employee attempted to bring an action under the Florida Consumer Collection Practices Act (FCCPA) claiming that providers had improperly billed her for medical treatment rather than her workers compensation carrier. She alleged that after she sought treatment for her injuries at two separate facilities, both improperly attempted to directly collect on the debt on multiple occasions. The trial court dismissed the claim for lack of subject matter jurisdiction holding that a provision of the Workers’ Compensation Law vested the Department of Financial Services with exclusive jurisdiction to decide any matters concerning reimbursement. The Appellate Court overturned the decision and the medical providers appealed to the Florida Supreme Court.

The Supreme Court drew a distinction between “matter concerning reimbursement” and a dispute alleging prohibited billing finding the former involves the relationship between the billing provider and insurance carrier while the latter involves the relationship between the provider and the injured worker. The Supreme Court concluded that the exclusive jurisdiction provision of the Workers Compensation Law does not extend to improper billing disputes between a provider and an injured worker. While a narrow decision, it is one to watch as the scope of debt collections actions continues to expand nationally.

Laboratory Corporation of America, et al v. Patty Davis, CASE NO.: SC19-1923 (Fla. Feb. 17, 2020)

Hunstein suit dismissed: Court finds no publicity = no harm

Author: Melissa Manning

A New York District Court has dismissed a Hunstein lawsuit for lack of standing, finding that plaintiff’s failure to plead an invasion of privacy was fatal to his claim. For followers of the Hunstein litigation saga, the facts are frustratingly familiar. In Weisz v. Sarma Collections, Inc., plaintiff alleged that defendant debt collector’s alleged disclosure of plaintiff’s personal information to a third-party vendor to send collection letters to plaintiff violated section 1692c(b) of the FDCPA. The relevant provision states, “a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.”

In granting defendant’s motion to dismiss, the court rejected plaintiff’s argument that the mere disclosure of his private information to a third party is analogous to public disclosure of his private information and presents the same kind of harm as common law invasion of privacy. Notably, plaintiff did not allege that anyone at the letter vendor ever viewed his private information. Moreover, the transmission of plaintiff’s information to a letter vendor does not remotely rise to the level of disclosing plaintiff’s private information to the public at large.

Here’s to hoping common sense gains traction throughout the courts.

Weisz v. Sarma Collections, Inc. (S.D. N.Y. 21-CV-06230 April 20, 2022).

Wisconsin state court compels arbitration in class action alleging scheme to dupe consumers into sharing sensitive financial information.

Author: Avanti Bakane and Neha Dagley

Plaintiff alleged a national debt buyer offered her the option of seeking hardship such that she would not have to pay off her delinquent account. Plaintiff further alleged this option was presented to her not as a reprieve but as a scheme to obtain financial information from her such that defendant could evaluate whether to file a collection lawsuit against her.

To quickly shut down this opportunistic claim, the defendant moved to compel arbitration before discovery commenced. Seeking to keep her class claims alive, Plaintiff vigorously opposed this motion, going to lengths to argue the ambiguity of straightforward purchase documents.

Much like her thin theory of the case, Plaintiff’s position on the arbitration issue lacked merit. The Court agreed with the defendant and granted its motion to compel arbitration of Plaintiff’s claims. In doing so, Judge Pedro Colon of the Milwaukee County, Wisconsin state court adopted the defendant debt buyer’s position that the Purchase Agreement was unambiguous in its sale of everything pertaining to the Accounts, including the account agreements, to PRA. Relying upon In re: May 591 B.R. 712 (Bankr. E.D. Ark. 2018), the Court stated:

As in May . . . the Credit Card Agreement states “we may sell all or any rights or duties under this agreement or your accounts,” which includes the right to convey the right to arbitration because all means all. There is no indication that Synchrony intended to retain any of its rights or duties in the event of a sale.

The Court also found the discussion of cases distinguishing receivables from accounts irrelevant to this case, which only dealt with accounts. Finally, the Court emphasized the “all means all” rationale underlying its ruling as follows:

The Purchase Agreement, by its clear and express use of the word “all,” . . . makes clear the act of sale was intended to assign the entirety of the account, including the right to arbitrate, and not just the account receivables. The language of the Bill of Sale also makes clear Synchrony had no intention of retaining any of its ownership in the Account. It states that Synchrony “transfers, sells, conveys, grants, and delivers to [PRA], it successors and assigns . . . to the extent of its ownership, the Accounts” (Doc. 55, Ex. A). When Synchrony assigned ownership of the Account to PRA, the assignment included the right to enforce arbitration.

The ruling comes as a welcome victory for Gordon & Rees and the industry, particularly in light of the growing trend of plaintiffs avoiding Article III standing requirements and selecting state court forums to file class action cases with potentially high exposure.

Cyneisha Hankins v. Portfolio Recovery Associates, LLC, No. 2021CV005172 (Wis. Cir. April 1, 2022).

To dispute or not to dispute? That may be the question for Plaintiffs’ counsel, but courts nationwide continue to say ‘tis nobler to show true inaccuracy.

Author: Avanti Bakane, Neha Dagley, and Melissa Manning

Eastern District of Michigan court dismisses Credit Repair Lawyers of America’s non-dispute claims under the FCRA.

While Plaintiff freely admitted that in the past she disputed her accounts with the credit reporting agencies, she subsequently had a change of heart. As a result, Plaintiff took umbrage with the ‘account in dispute’ notation appearing on her credit reports. Instead of communicating her current lack of dispute directly to the furnishers, Plaintiff alleged she provided notice only to the CRAs. Importantly, any supporting documentation was wholly missing from Plaintiff’s amended complaint. When the notation was not removed, Plaintiff filed suit alleging that defendants furnishers and credit reporting agencies violated the FCRA with their inaccurate reporting.

In a succinct opinion, without holding any oral argument, District Judge Nancy G. Edmunds disposed of Plaintiff’s claims against multiple furnisher defendants, granting their motions to dismiss.

First, the Court found that Plaintiff’s failure to allege that she sent her non-dispute letter directly to furnisher PRA was fatal to her claims.

Further, the court found that Plaintiff’s bare bones and boilerplate recitation that her prior dispute notations were no longer accurate failed to meet the standard of pleading an FCRA claim, i.e. to claim a reasonable investigation was not performed, in the first instance, Plaintiff must establish a true inaccuracy:

Plaintiff simply makes the conclusory allegation that these “dispute” notations are inaccurate, without further identifying how so. “It is well settled that, regardless of the particular breach of the FCRA that is alleged, ‘a threshold showing of inaccuracy or incompleteness is necessary in order to succeed on a claim under § 1681s-2(b).’” Tillman v. Michigan First Credit Union, 2021 WL 1267583 (E.D. Mich. Apr. 5, 2021) (discussed on summary judgment)(citing Pittman v. Experian Information Solutions, Inc., 901 F.3d 619, 629 (6th Cir. 2018)).

In denying leave to amend as futile, the Court found that Plaintiff’s amended complaint suffered the same deficiencies as her original. Also, Plaintiff has had the benefit of the “growing body of case law that address the deficiencies of her claims.”

The ruling comes as a welcome victory for Gordon & Rees and the industry as this theory spreads, albeit now under the FDCPA.

Chandra Young v. Portfolio Recovery Associates, et al. (E.D. Mich. 21-10095 March 29, 2022).

Second Circuit Says No Standing for Alleged ADA Website Violation Where Plaintiff Had No Intention of Visiting Defendant’s Hotel

Author: Thomas Blatchley

On March 18, 2022, the Second Circuit affirmed the judgment of the district court and held that a disabled plaintiff’s lawsuit alleging an ADA violation because defendant’s website deprived him of the information required to make meaningful hotel choices for travel failed to allege an informational injury sufficient for Article III standing since plaintiff had no intention of visiting defendant’s hotel. See Harty v. West Point Realty, Inc., No. 20-2672-cv, 2022 WL 815685 (2d. Cir. Mar. 18, 2022). Plaintiff lacked standing because he failed to allege a concrete injury in fact. The decision is a significant victory for defendants facing ADA website violations, especially where plaintiffs troll hotel websites to manufacture ADA website claims when they have no intention to visit the subject property.

The background is straightforward. Plaintiff, a disabled person that uses a wheelchair and is a self-proclaimed “advocate [for] the rights of similarly situated disabled persons” and “tester” who monitors ADA website compliance, appealed from the judgment of the Southern District of New York, which dismissed his complaint against defendant for alleged regulation violations under the Americans with Disabilities Act or ADA. Plaintiff did not allege in his complaint that he visited defendant’s website with the intention of visiting defendant’s hotel. Instead, plaintiff alleged that he frequently visits hotel websites to determine whether those websites comply with the ADA regulations. Looking only to the allegations of plaintiff’s complaint, and not at an affidavit filed by plaintiff in support of his opposition to defendant’s motion to dismiss for lack of subject matter jurisdiction, the district court dismissed plaintiff’s claims for lack of standing due to plaintiff’s failure to allege a concrete injury in fact.

On appeal, the Second Circuit affirmed the dismissal, holding that: (1) plaintiff failed to allege a concrete injury in fact and thus lacked standing to assert his ADA claim; (2) the district court did not abuse its discretion by considering only the allegations in plaintiff’s complaint when deciding defendant’s motion to dismiss; and (3) the district court did not dismiss plaintiff’s complaint with prejudice.

As to the standing issue, the Second Circuit began its analysis by setting forth the long established standard for a plaintiff to establish Article III standing: (1) plaintiff must have an injury in fact; (2) that there is a causal connection between plaintiff’s injury and the conduct complained of; and (3) that plaintiff’s injury will be redressed by a favorable judicial decision. The Second Circuit then highlighted the Supreme Court’s recent clarification in TransUnion LLC v. Ramirez, 141 S.Ct. 2190 (2021) that a plaintiff has standing to bring a claim for monetary damages following a statutory violation only when plaintiff can show a current or past harm beyond the statutory violation itself. Notably, the Supreme Court rejected the standard articulated in Strubel v. Comenity Bank, 842 F. 3d 181, 190 (2d Cir 2016), which held that a plaintiff has standing to sue for a violation of a procedural right created by Congress if (i) “Congress conferred the procedural right to protect a plaintiff’s concrete interests” and (ii) “the procedural violation presents a risk of real harm to that concrete interest.” (internal quotation marks omitted). TransUnion now makes clear that in a suit damages, mere risk of future harm, standing alone, cannot qualify as a concrete harm. 141 S.Ct. at 2210-11.

Plaintiff alleged in his complaint that because defendant’s website did not comply with the ADA, the website infringed his wright to travel free from discrimination. The Second Circuit acknowledged, however, that plaintiff did not allege in his complaint that he was using the website to arrange for future travel. Instead, plaintiff acknowledged that his review of defendant’s website was done in his capacity as a “tester” of ADA compliance, not as a prospective traveler seeking a wheelchair-accessible hotel. Looking to TransUnion and recent Circuit Court decisions, the Second Circuit found that because plaintiff asserted no plans to visit the defendant hotel property (or surrounding area), he could not allege that his ability to travel was hampered by defendant’s website in a way that caused him a concrete harm. See TransUnion, 141 S.Ct. at 2205 (“Article III grants federal courts the power to redress harms that defendants cause plaintiffs, not a freewheeling power to hold defendants accountable for legal infractions.”) (internal quotation marks omitted). Thus, the Second Circuit found that plaintiff lacked standing to bring a suit for damages.

As to plaintiff’s requests for prospective relief, the Second Circuit held that while plaintiff alleged that “in the near future” he intended to “utilize the website to reserve a guest room,” that was not sufficiently imminent to create an injury in fact. In other words, such “some day” intentions, without any description of concrete plans, or even any specification of when the some day will be, do not support a finding of the actual and imminent injury required by Article III.

The Second Circuit also rejected plaintiff’s claim that defendant deprived him of the information required to make meaningful choices for travel, which plaintiff asserted as an “informational injury” for purposes of standing. The Second Circuit found that even assuming that plaintiff could allege that he was deprived of information to which he was entitled under the ADA, he still failed to allege downstream consequences from failing to receive the required information. Put another way, plaintiff failed to show that he had an interest is using the information beyond bringing the lawsuit. Thus, the Second Circuit held that plaintiff failed to allege an information injury sufficient for Article III standing.

Lastly, the Second Circuit rejected plaintiff’s claim that he suffered and would continue to suffer direct and indirect injury as a result of “the discriminatory conditions present at [defendant’s] website.” The Second Circuit found that plaintiff’s complaint did not specify how defendant’s website violated the ADA regulations or how those alleged violations discriminated against disabled people. The Second Circuit also found that plaintiff’s complaint contained a boilerplate assertion that defendant failed to comply with the ADA regulations, and that TransUnion makes clear that a statutory violation alone, however labeled by Congress, is not sufficient for Article III standing.