Eleventh Circuit to Hear Hunstein En Banc Debt Collection Case | Waller Lansden Dortch & Davis, srl


The Eleventh Circuit last week overturned its most recent opinion in the debt collection case Hunstein v. Preferred Collection & Management Services, Inc., n ° 19-14434. Court to rehear in bench an appeal involving a claimant-debtor allegation that a debt collector violated the Fair Debt Collection Practices Act (“FDCPA”) by transmitting sensitive information about the debtor’s debt to employees from a third-party mail provider for the purpose of creating, printing and sending a notification to the debtor.

The next full-court hearing represents the second re-examination of an appeal of the district court’s order dismissing the action for lack of disclosure.

In a unanimous (and controversial) opinion published this spring, a panel of three judges from the Eleventh Circuit overturned the dismissal. Hunstein v. Favorite collection and management. Serv., Inc., 994 F.3d 1341 (11th Cir. 2021). At that point, the panel concluded that the debtor had alleged prejudice sufficiently concrete to confer standing, that is, the right to bring legal action or to seek judicial enforcement of a claim. duty or right, under Spokeo, Inc. v. Robins, 578 US 330 (2016). However, this summer the United States Supreme Court ruled TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), further specifying when intangible harm resulting from a violation of the law is sufficiently concrete for the purposes of representativeness.

The light at TransUnion LLC v. Ramirez, and after reviewing a request for a rehearing, the same panel canceled its prior notice and replaced a new one last month. Hunstein v. Favorite collection and management. Serv., Inc., __ F.4th __, 2021 WL 4998980 (11th Cir. 28 Oct 2021). The majority of the panel again concluded that (1) the alleged transmission of sensitive debt information to a third-party seller by post constituted material factual prejudice, and (2) the debtor had duly made a claim for redress in under the FDCPA. However, the panel was not unanimous: Judge Tjoflat dissented on the standing issue and said Congress did not intend the FDCPA to ban the use of vendors. by post by creditors.

Judge Tjoflat is not alone. Several courts outside the Eleventh Circuit have questioned the Hunstein permanent panel analysis in light of the Supreme Court decision Ramírez decision. See, for example, Shields v. Prof’l Bureau of Collections of Md., Inc., 2021 WL 4806383 (D. Kan. October 14, 2021); In the case of FDCPA mail providers, 2021 WL 3160794 (EDNY July 23, 2021). In addition, the Eleventh Circuit’s decision to rehear the bench case suggests that a significant number of circuit judges have doubts about the Hunstein panel decision.

The next hearing could represent a boon to the debt collection industry. Debt collectors regularly use third-party entities to facilitate communications with debtors, and the Hunstein the panel’s analysis casts doubt on the legality of this practice. Indeed, the panel itself acknowledged that its interpretation of the FDCPA “risks upsetting the status quo in the debt collection industry” by stifling common industry practice and imposing new costs that “don’t” may not buy much in terms of “real” consumer privacy “. 994 F.3d to 1352. These concerns will undoubtedly weigh on the Eleventh Circuit when it meets to hear the case again as a bench.


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