Michigan Federal Court Grants Summary Judgment to Creditor on Standing Grounds in Case Alleging FDCPA Violation for Failure to Remove Dispute Notification

On September 7, the U.S. District Court for the Eastern District of Michigan granted summary judgment in the defendant’s favor finding that the plaintiff had not suffered a concrete injury and therefore lacked standing to assert a claim under the Fair Debt Collections Practices Act (FDCPA).

In Morgan v. LVNV Funding, LLC, the plaintiff failed to make the required payments due on his credit card account. The plaintiff’s account was later transferred to the defendant. After receiving a dispute letter from the plaintiff, the defendant’s servicer reported the account as “disputed.” Thereafter, counsel for the plaintiff sent a letter stating that the plaintiff no longer disputes the information reflected on his credit report and requesting that “the dispute comment” be removed. The servicer investigated the dispute and “followed the requirement in 15 U.S.C. § 1692e(8) by keeping the ‘disputed’ notation.” The plaintiff filed suit alleging that the defendant’s failure to remove the dispute comment, despite being requested to do so, violated the FDCPA.

The parties filed cross motions for summary judgment. In granting the defendant’s motion, the court found that the plaintiff’s statements as to his damages were nothing more than bare assertions of emotional distress. The court cited as an example the plaintiff’s deposition testimony where he stated, “I believe the damages are monetary damages. . . . The stress. The anxiety. It’s a lot.” The court ultimately found that the plaintiff had not provided sufficient evidence at the summary judgment stage that his anxiety and stress were concrete injuries establishing standing. Moreover, the court found that the plaintiff failed to show that any of his alleged harms were directly attributable to the defendant’s conduct rather than to his “general financial woes.”

The court also dismissed the plaintiff’s assertion that the procedural violation at issue was closely analogous to the harms traditionally associated with libel and slander claims. The court found that the plaintiff failed to show that the defendant’s failure to remove the “disputed” remark from his account would have any effect on his reputation. In fact, the court found that the opposite would be true. “If anything, it seems like removing the dispute comment — and thereby implicitly acknowledging the unpaid debt — would cause reputational harm, rather than alleviate it.”

Because the FDCPA claim was the only federal claim in the litigation, the court declined to exercise supplemental jurisdiction over the remaining state law claims.