foreclosure
Fifth Circuit

Where a Statutory Violation Creates the ‘Risk of Real Harm’

Procedurally, while the summary judgment did not follow the traditional Rule 56 schedule, the Fifth Circuit found no harm because ARS had admitted to the district court that there were no remaining issues of fact.

FDCPA Win for Plaintiff

By summary judgment, Advanced Recovery Systems lost a case brought under section 8 of the Fair Debt Collection Practices Act, alleging that it failed to disclose on credit reports that the plaintiff disputed two allegedly unpaid debts.

Procedurally, while the summary judgment did not follow the traditional Rule 56 schedule, the Fifth Circuit found no harm because ARS had admitted to the district court that there were no remaining issues of fact.

Substantively, the Court rejected a challenge to Article III standing, finding that the plaintiff’s injury was sufficiently “tangible” — “[T]he violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact .. . .

Among those circumstances are cases where a statutory violation creates the ‘risk of real harm’ . . . Unlike an incorrect zip code, the ‘bare procedural violation’ in [Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016)], an inaccurate credit rating creates a substantial risk of harm.”

Sayles v. Advanced Recovery Systems, Inc., No. 16-60640 (July 6, 2017).

In Spokeo, 136 S. Ct. at 1548, the Supreme Court reiterated that “[a] ‘concrete’ injury must be ‘de facto’; that is, it must actually exist.” However, it also stated that “’

Concrete’ is not . . . necessarily synonymous with ‘tangible.’” Id. at 1549. Instead, “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact.” Id.

Among those circumstances are cases where a statutory violation creates the ‘risk of real harm.’” Bowse v. Portfolio Recovery Assocs., LLC, 218 F. Supp. 3d 745, 749 (N.D. Ill. 2016) (quoting Spokeo, 136 S. Ct. at 1549). Here, ARS’s § 807(8) violation exposed Sayles to a real risk of financial harm caused by an inaccurate credit rating.

See Spokeo, 136 S. Ct. at 1549; see also Bowse, 218 F. Supp.3d at 749 (“Unlike an incorrect zip code, the ‘bare procedural violation’ in Spokeo, an inaccurate credit rating creates a substantial risk of harm.”).

Consequently, the district court did not err when it determined that Sayles’ injury was concrete and that he satisfied all elements of standing.

See Spokeo, 136 S. Ct. at 1547.

Click to comment

Leave a Reply

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

Most Popular

texas lawyers

Laws In Texas is a blog about the Financial Crisis and how the banks and government are colluding against the citizens and homeowners of the State of Texas and relying on a system of #FakeDocs and post-crisis legal precedents, specially created by the Court of Appeals for the Fifth Circuit to foreclose on homeowners around this great State. We are not lawyers. We do not offer legal advice. We are citizens of the State of Texas who have spent a decade in the court system in Texas and have been party to during this period to the good, the bad and the very ugly.

Copyright © 2020 Laws In Texas. | All Rights Reserved.

To Top