Hargis v. Equinox Collection Services, Inc.

          OPINION & ORDER

          JOHN E. DOWDELL, CHIEF JUDGE.

         Plaintiff Michael Hargis has brought this putative class action against Equinox Collection Services, Inc. (“Equinox”), a debt collector, alleging violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. Plaintiff alleges that Equinox, in attempting to collect on a disputed medical bill on behalf of its client, Dr. ZZZ's Sleep Center, Inc. (“Dr. ZZZ's”), sent Plaintiff a collection letter that violated certain provisions under 15 U.S.C. § 1692g(a). Plaintiff alleges three separate violations: (1) that the letter failed to properly identify the name of the creditor to whom the debt was owed, (2) that the letter improperly required consumers to notify Equinox of debt disputes in writing, and (3) that it failed to inform consumers that requests for the name and address of the original creditor needed to be in writing. (Doc. 2 at 6-8). Plaintiff asserts that he and the putative class are entitled to an award of statutory damages, as well as costs and attorney's fees. (Id. at 7). Plaintiff also seeks a declaratory judgment finding that the collection letter violates the FDCPA. (Id.).

         Equinox has moved pursuant to Fed.R.Civ.P. 12(b)(1) for dismissal of Plaintiff's case based on a lack of subject matter jurisdiction. (Doc. 24). Citing the Supreme Court case Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), Equinox asserts that Plaintiff has failed to satisfy the injury-in-fact demands of Article III standing.

         Rule 12(b)(1) motions generally take the form of either a facial or a factual attack. Paper, Allied-Indus., Chem. & Energy Workers Int'l Union v. Cont'l Carbon Co., 428 F.3d 1285, 1292 (10th Cir. 2005) (citing Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir. 1995)). “Under a facial attack, the movant merely challenges the sufficiency of the complaint, requiring the district court to accept the allegations in the complaint as true.” Id. In contrast, the movant bringing a factual attack “goes beyond the allegations in the complaint and challenges the facts upon which subject matter jurisdiction depends.” Id. When reviewing a factual attack, the district court “may not presume the truthfulness of the complaint's factual allegations” and, instead, “has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts.” Holt, 46 F.3d at 1003. In this case, because Equinox's 12(b)(1) motion is accompanied by supporting evidence, the Court construes the motion as a factual attack on subject matter jurisdiction.

         The Court must then consider whether conversion of Equinox's 12(b)(1) motion into a Rule 56 summary judgment motion is appropriate here. The Tenth Circuit has instructed that a district court must convert a 12(b)(1) motion to dismiss into a Rule 12(b)(6) motion or a Rule 56 summary judgment motion “when resolution of the jurisdictional question is intertwined with the merits of the case.” Id. In other words, the district court must determine “whether resolution of the jurisdictional question requires resolution of an aspect of the substantive claim.” Pringle v. United States, 208 F.3d 1220, 1223 (10th Cir. 2000).

         The Court finds that it may consider evidence outside of the complaint in this case without converting Equinox's 12(b)(1) motion into one for summary judgment. There is essentially one issue raised by the substantive claims in this case: whether Equinox violated the requirements set out in § 1692g(a) of the FDCPA. The Court need not resolve this issue in order to rule on standing, as will become clear in the Court's analysis below.

         II. Legal Standards

         “Article III . . . gives the federal courts jurisdiction over only ‘cases and controversies,' and the doctrine of standing serves to identify those disputes which are appropriately resolved through the judicial process.” Whitmore v. Arkansas, 495 U.S. 149, 154-55 (1990). The Supreme Court has set forth three elements that constitute “the irreducible constitutional minimum of standing.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). In order to have standing, the plaintiff must have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (citing Lujan, 504 U.S. at 560-61; Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000)). Importantly, “[t]he party invoking federal jurisdiction bears the burden of establishing these elements.” Lujan, 504 U.S. at 561.

         In order to satisfy the injury-in-fact requirement, a plaintiff must show that he “suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Spokeo, Inc., 136 S.Ct. at 1548 (quoting Lujan, 504 U.S. at 560). “For an injury to be ‘particularized,' it ‘must affect the plaintiff in a personal and individual way.'” Id. (quoting Lujan, 504 U.S. at 560 n.1). To meet the concreteness requirement, the injury “must actually exist.” Id. It must be “real” and not “abstract.” Id.

         Intangible harm may still qualify as “concrete, ” and courts are instructed to consider both history and the judgment of Congress in determining whether a particular intangible harm constitutes injury in fact. Id. at 1549. As explained by the Court in Spokeo, “[i]t is instructive to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts.” Id. Congress may also “define injuries and article chains of causation that will give rise to a case or controversy where none existed before.” Id. (quoting Lujan, 504 U.S. at 580 (Kennedy, J., concurring in part and concurring in judgment)).

         Yet, a plaintiff does not “automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Id. One may not “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id. Whereas some alleged procedural violations may be sufficient to constitute injury in fact, others may not cause harm or present any material risk of harm. Id. In the latter cases, a plaintiff would need to allege “additional harm beyond the one Congress has identified.” Id. (emphasis in original).

         In Spokeo, the Supreme Court addressed the injury-in-fact requirement in the context of the Fair Credit Reporting Act of 1970 (“FCRA”). The Court found that the Ninth Circuit had failed to address whether the particular procedural violations alleged in the case “entail[ed] a degree of risk sufficient to meet the concreteness requirement.” Id. at 1550. On remand, the Ninth Circuit understood the Supreme Court as establishing a two-part inquiry for evaluating claims based on statutory violations:

In evaluating [plaintiff's] claim of harm, we thus ask: (1) whether the statutory provisions at issue were established to protect his concrete interests (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged in this case actually harm, or present a material risk of harm to, such interests.

Robins v. Spokeo, Inc., 867 F.3d 1108, 1113 (9th Cir. 2017). The Sixth Circuit has interpreted Spokeo in a similar manner, finding that statutory violations fall into ...