Eleventh Circuits Orders Rehearing En Banc In Hunstein – Consumer Protection

Eleventh Circuits Orders Rehearing En Banc In Hunstein – Consumer Protection

November 24, 2021 0 By administrator

In a move that shocked no one, including the Czar of TCPAWorld, the Eleventh
Circuit Court of Appeals issued an order vacating its last opinion
in Hunstein vs. Preferred Collection & Management
Services, Inc.
, and ordered the case to be reheard en
banc
. This development is just the latest in one of the most
significant financial privacy litigations this year, with
widespread implications for the debt collection industry regardless
of how the Eleventh Circuit subsequently rules.

First, a recap of the facts and procedural history of the
litigation-including all of its twists and turns before the
Eleventh Circuit.

In Hunstein v. Preferred Collection and Management
Services, Inc.
, the Eleventh Circuit issued a ground
breaking decision concerning application Section 1692c(b) of the
Fair Debt Collection Practices Act (“FDCPA”). Plaintiff
incurred a debt to a hospital arising out of his son’s medical
treatment. The hospital assigned the debt to a debt collector. The
debt collector in turn hired a California-based commercial mail
vendor to handle the collection. The debt collector transmitted
certain information about Plaintiff to the mail vendor. The mail
vendor used that information to generate and send a dunning letter
to Plaintiff.

Plaintiff filed suit, alleging violations of Florida consumer
protection law and the FDCPA. The district court, however,
dismissed the Complaint for failure to state a claim, concluding
that Plaintiff had not sufficiently alleged that the debt
collector’s transmittal to the mail vendor violated Section
1692c(b) of the FDCPA. According to the court, this was because it
did not qualify as a communication “in connection with the
collection of a[ny] debt.”

The Eleventh Circuit reversed. In a case of first impression,
the Court first held that Plaintiff had alleged a concrete
statutory injury under Section 1692c(b) for purposes of satisfying
Article III, even where he had not
alleged a “risk of real harm” or a “tangible
harm,” such as a financial loss or emotional distress. The
Court additionally held that a debt collector’s transmittal of
a consumer’s personal information to its letter vendor
constituted a prohibited third-party communication “in
connection with the collection of any debt” as used in the
FDCPA.

Following Hunstein I, which came out in April 2021, the Supreme Court decided TransUnion
in June 2021. In Ramirez v. TransUnion, the Supreme Court
reconsidered the question of what constitutes an “injury in
fact” under Article III, five years after its significant
holding in Spokeo, Inc. v. Robins, 136 S. Ct. 1540. The
Supreme Court held that “[o]nly plaintiffs
concretely harmed by a defendant’s statutory violation have
Article III standing to seek damages against that private defendant
in federal court.”
(emphasis added).

In a footnote in TransUnion, the Supreme Court
additionally addressed (as relevant to Hunstein I) the
Plaintiffs’ argument that “TransUnion…

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