Hartman v. Medicredit, Inc.

BRIEF in Opposition re Motion to Dismiss

W.D. Pa.December 5, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA ------------------------------------------------------------------X MELISSA HARTMAN, on behalf of herself and all others similarly situated, Civil No.: 2:15-cv-1596-MRH-MPK Plaintiff, -against- MEDICREDIT, INC. and JOHN DOES 1-25, Defendant. -------------------------------------------------------------------X PLAINTIFF’S RESPONSE MEMORANDUM OF LAW SUBMITTED IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE COMPLAINT Respectfully submitted, MOYNIHAN LAW By: /s/ Mark G. Moynihan Mark G. Moynihan, Esq. Attorney for Plaintiff PA 307622 112 Washington Place, Suite 1-N Pittsburgh, PA 15219 Phone: (412) 889-8535 Fax: (800) 997-8192 Email: mark@moynihanlaw.net MARCUS & ZELMAN, LLC By: /s/ Ari H. Marcus_______________ Ari H. Marcus, Esq. Admitted Pro Hac Vice ATTORNEYS FOR PLAINTIFF 1500 Allaire Avenue, Suite 101 Ocean, New Jersey 07712 Phone: (732) 695-3282 Fax: (732) 298-6256 Email: Ari@MarcusZelman.com Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 1 of 27 i TABLE OF CONTENTS PRELIMINARY STATEMENT………………………………………………………………...1 ARGUMENT……………………………………………………………………………………..2 A. Plaintiff Has Article III Standing To Sue Where The Defendant Unlawfully Disclosed Her Personal Information That Was Protected By Law………….…………2 B. The Concrete Injury Caused By The Defendant’s Actions Is Not Conjectural……...15 C. Plaintiff Should Be Granted Leave To Amend Her Complaint To Supplement Her Article III Allegations……………………………………………………………...18 CONCLUSION…………………………………………………………………………………20 Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 2 of 27 ii TABLE OF AUTHORITIES Aranda v. Caribbean Cruise Line, Inc., No. 12 C 4069, 2016 WL 4439935 (N.D. Ill. Aug. 23, 2016)……………………………..13 Bernal v. NRA Grp., LLC, No. 16 C 1904, 2016 WL 4530321 (N.D. Ill. Aug. 30, 2016)……………………………..17 Blaha v. First National Collection Bureau, 2:16-cv-02791-WHW-CLW (D.N.J. November, 14, 2016)……………………………...17 Burke v. Fed. Nat'l Mortgage Ass'n, No. 3:16CV153-HEH, 2016 WL 4249496 (E.D. Va. Aug. 9, 2016)………………..…7, 16 Church v. Accretive Health, Inc., No. 15-15708, 2016 WL 3611543 (11th Cir. July 6, 2016)………………………………...6 Cruper-Weinmann v. Paris Baguette Am., Inc., No. 14-3709-CV, 2016 WL 3553448 (2d Cir. June 30, 2016)……………………………19 Daubert v. NRA Grp., LLC, 3:15-CV-00718, 2016 WL 4245560 (M.D. Pa. Aug. 11, 2016)……………………9, 10, 11 Davis v. Wells Fargo, 2016 WL 3033938 (3d Cir. May 27, 2016)…………………………………….…………..2 Dickens v. GC Servs. Ltd. P'ship, No. 16-cv-00803, 2016 WL 3917530 (M.D. Fla. July 20, 2016)…………………………17 Dittig v. Elevate Recoveries, LLC, No. 16CV1155, 2016 WL 4447818 (W.D. Pa. Aug. 24, 2016)……………………...........17 Douglass v. Convergent, 765 F.3d 299 (3rd Cir. 2014)…………………………………………………………….8, 9 Evankavitch v. Green Tree Serv., LLC, 793 F.3d 355 (3d Cir. 2015)…………………………………………………………..……8 Federal Election Comm'n v. Akins, 524 U.S. 11, 20–25, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998)……………………………..4 Fletcher-Harlee Corp. v. Pote Concrete Contrs., Inc., 482 F.3d 247 (3d Cir. 2007)………………………………………………………………19 Foman v. Davis, 371 U.S. 178 (1962)……………………………………………………………………...18 Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 3 of 27 iii Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167 (2000)……………………………………………………………………….2 Genova v. Total Card, Inc., No. 16CV1260WHWCLW, 2016 WL 3360662 (D.N.J. June 8, 2016)…………………..18 Goswami v. Am. Collections Enter., Inc., 377 F.3d 488 (5th Cir. 2004)………………………………………………………….……8 Hancock v. Urban Outfitters, Inc., 830 F.3d 511, 514 (D.C. Cir. 2016)………………………………………………………16 Havens Realty Corp. v. Coleman, 455 U.S. 363, 102 S.Ct. 1114, 71 L. Ed. 2d 214 (1982)………………………………...5, 6 Hawkins v. S2Verify, No. C 15-03502 WHA, 2016 WL 3999458 (N.D. Cal. July 26, 2016)……………………16 Hayes, v. Convergent Healthcare Recoveries, Inc., No. 14-1467, 2016 WL 5867818 (C.D. Ill. Oct. 7, 2016)…………………………………17 In re Nickelodeon Consumer Privacy Litig., 827 F.3d 262 (3d Cir. 2016)……………………………………………………………..6, 9 Jones v. Advanced Bureau of Collections LLP, No. 5:15-CV-16(MTT), 2016 WL 4499456 (M.D. Ga. Aug. 26, 2016)…………………..17 Lane v. Bayview Loan Servicing, LLC, No. 15-cv-10446, 2016 WL 3671467 (N.D. Ill. July 11, 2016)…………………………...17 Linehan v. Allianceone Receivables Mgmt., Inc., No. C15-1012-JCC, 2016 WL 4765839 (W.D. Wash. Sept. 13, 2016)…………………..17 Link ARS Nat'l Servs., Inc., No. CV 15-643, 2015 WL 8488674 (W.D. Pa. Nov. 2, 2015)………………………..11, 12 Lujan v. Defs. of Wildlife, 504 U.S. 555, 580, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992)……………………………..4 Macy v. GC Servs. Ltd. P'ship, No. 3:15-CV-819-DJH, 2016 WL 5661525 (W.D. Ky. Sept. 29, 2016)………………….17 Mogg v. Jacobs, No. 15-CV-1142-JPG-DGW, 2016 WL 4395899 (S.D. Ill. Aug. 18, 2016)……………….2 Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 4 of 27 iv Moody v. Ascenda USA Inc., No. 16-CV-60364-WPD, 2016 WL 5900216 (S.D. Fla. Oct. 5, 2016)……………………13 Perrill v. Equifax Info. Servs., LLC, No. A-14-CA-612-SS, 2016 WL 4572212 (W.D. Tex. Aug. 31, 2016)…………………..13 Public Citizen v. Department of Justice, 491 U.S. 440, 449, 109 S.Ct. 2558, 105 L.Ed.2d 377 (1989)………………………………4 Reilly v. Ceridian Corp., 664 F.3d 38 (3d Cir. 2011)…………………………………………………………..……15 Saenz v. Buckeye Check Cashing of Illinois, No. 16 CV 6052, 2016 WL 5080747 (N.D. Ill. Sept. 20, 2016)…………………………..17 Sayles v. Advanced Recovery Sys., Inc., No. 3:14-CV-911-CWR-FKB, 2016 WL 4522822 (S.D. Miss. Aug. 26, 2016)………….17 Schleisinger v. Reservists Comm. to Stop the War, 418 U.S. 208 (1974)……………………………………………………………………….2 Shane v. Fauver, 213 F.3d 113 (3d Cir. 2000)………………………………………………………………19 Smith v. Ohio State Univ., No. 2:15-CV-3030, 2016 WL 3182675 (S.D. Ohio June 8, 2016)……………………12, 13 Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016)…………………………………………………………………..2-6 Stoops v. Wells Fargo Bank, N.A., No. 3:15-83, 2016 WL 3566266 (W.D. Pa. June 24, 2016)……………………………….14 Styer v. Prof'l Med. Mgmt., Inc., No. 3:14-CV-2304, 2015 WL 4394032 (M.D. Pa. July 15, 2015)………………………….8 Sullivan v. Allied, 2:16-cv-00203-MRH-CRE (W.D. Pa. October 18, 2016)……………………………...6, 17 Tennessee Elec. Power Co. v. TVA, 306 U.S. 118, 59 S.Ct. 366, 83 L. Ed. 543 (1939)………………………………………….5 The Pitt News v. Fisher, 215 F.3d 354 (3d Cir. 2000)………………………………………………………………..2 Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 5 of 27 v Thomas v. FTS USA, LLC, No. 13-cv-00825, 2016 WL 3653878 (E.D. Va. June 30, 2016)………………………….16 United States v. Students Challenging Reg. Agency Procs., 412 U.S. 669 (1973)……………………………………………………………………….3 United States Dept. of Justice v. Reporters Comm. for Freedom of Press, 489 U.S. 749 (1989)……………………………………………………………………...15 Warth v. Seldin, 422 U.S. 490 (1975)…………………………………………………………………2, 5, 19 Witt v. Corelogic Saferent, LLC, No. 3:15-CV-386, 2016 WL 4424955 (E.D. Va. Aug. 18, 2016)…………………………16 Statutes And Other Sources 15 USC § 1692f(8)………………………………………………………………………………...8 12 U.S.C. § 3417…………………………………………………………………………………16 18 U.S.C. § 2707(c)………………………………………………………………………………15 18 U.S.C. § 2710(c)……………………………………………………………………………....16 FTC Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed.Reg. 50,097, 50,108 (Dec. 13, 1988)………………………………………………8 Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4 Harv. L. Rev. 193 (1890)……………………………………………………………….16 Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 6 of 27 1 PRELIMINARY STATEMENT This statement is submitted on behalf of the Plaintiff, Melissa Hartman, in this action brought pursuant to the Fair Debt Collection Practices Act (the “FDCPA”), codified at 15 USC § 1692. Congress enacted the FDCPA in 1977 in response to the “abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors.” 15 U.S.C. § 1692(a). At that time, Congress was concerned that “abusive debt collection practices contribute to the number of personal bankruptcies, to material instability, to the loss of jobs, and to invasions of individual privacy.” Id. (emphasis added). After determining that the existing consumer protection laws were inadequate, id. § 1692(b), Congress gave consumers a private cause of action against debt collectors who fail to comply with the Act. Id. § 1692k. The claims raised in the Plaintiff’s Complaint directly implicate the privacy concerns sought to be addressed by the FDCPA. Specifically, the portion of the FDCPA relevant to this action provides that a collection agency cannot use any language or symbols, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mail. See, 15 USC § 1692f(8). However, the Plaintiff in this action received a Collection Letter from the Defendant, which clearly displayed the Plaintiff’s Account Number assigned by the Defendant through the glassine window of the enclosing envelope. According to the Third Circuit’s unambiguous holding in Douglass v. Convergent, 765 F.3d 299 (3rd Cir. 2014), these simple facts support a finding (1) that the FDCPA was violated, and (2) that the Plaintiff suffered a concrete injury as a result of the Defendant’s violation of her substantive privacy rights. Defendant nevertheless moves to dismiss this action, claiming that the Plaintiff lacks Article III standing to bring this action. For the reasons set forth below, it is therefore respectfully submitted that the Defendant’s Motion to Dismiss should be denied in its entirety. Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 7 of 27 2 ARGUMENT A. Plaintiff Has Article III Standing To Sue Where The Defendant Unlawfully Disclosed Her Personal Information That Was Protected By Law. To have standing to bring a claim in federal court, Plaintiff must first have suffered an injury in fact. The Pitt News v. Fisher, 215 F.3d 354(3d Cir. 2000). This principle has long been established in this Circuit. See Warth v. Seldin, 422 U.S. 490 (1975) and Davis v. Wells Fargo, 2016 WL 3033938 (3d Cir. May 27, 2016). The Supreme Court’s recent reminder of Article III standing requirements in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) has led to a fair amount of litigation over the past several months even though it made no new holdings, but instead simply reiterated long standing case law that this Circuit has already been following. Despite this, “the issue of standing has been a hot topic this summer following the Supreme Court's decision in Spokeo, Inc. v. Robins.” Mogg v. Jacobs, No. 15-CV-1142-JPG-DGW, 2016 WL 4395899, at *3 (S.D. Ill. Aug. 18, 2016). Spokeo reaffirms the nearly fifty-year old rule that an Article III injury must be “concrete and particularized.” Spokeo, 136 S.Ct. at 1545, citing Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180–81 (2000) (italics in original); see also, Schleisinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 220-21 (1974). A “concrete” injury is simply one that is real or de facto, i.e., not abstract. Spokeo, 136 S.Ct. at 1548. The extent of the injury is irrelevant, as even an “identifiable trifle” is sufficient: “Injury in fact” reflects the statutory requirement that a person be “adversely affected” or “aggrieved,” and it serves to distinguish a person with a direct stake in the outcome of a litigation -- even though small -- from a person with a mere interest in the problem. We have allowed important interests to be vindicated by plaintiffs with no more at stake in the outcome of an action than a fraction of a vote, see Baker v. Carr, 369 U.S. 186; a $5 fine and costs, see McGowan v. Maryland, 366 U.S. 420; and a $ 1.50 poll tax, Harper v. Virginia Bd. of Elections, 383 U.S. 663. …. As Professor Davis has put it: “The basic idea that comes out in numerous cases is that an identifiable trifle is enough for standing to fight out a question of Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 8 of 27 3 principle; the trifle is the basis for standing and the principle supplies the motivation.” United States v. Students Challenging Reg. Agency Procs., 412 U.S. 669, fn.14 (1973). In Spokeo, the Supreme Court held that a plaintiff seeking statutory damages still must establish Article III standing by showing that he “suffered an invasion of a legally protected interest that is concrete and particularized.” Id., at 1548. The Spokeo plaintiff had filed a class action under the Fair Credit Reporting Act (“FCRA”) after learning that searches on Spokeo's web site returned inaccurate information about him. Among other things, the site incorrectly reported that the plaintiff was married, had children, was relatively affluent, and held a graduate degree. See id., at 1546. The Ninth Circuit held that Mr. Robins had standing to bring this claim, since he had suffered a ‘particularized’ injury, i.e., since it was his credit information that was mis-reported. The Supreme Court reversed the Ninth Circuit, because the Court of Appeals had found that Mr. Robins had established Article III standing to bring an FCRA action, without also exploring whether he had suffered a ‘concrete’ injury. The Supreme Court went on to clarify that statutory injuries alone may not always be sufficient to establish Article III standing: “Congress' role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies 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. Article III standing requires a concrete injury even in the context of a statutory violation.” Id., at 1549. The Supreme Court did not find that the Spokeo plaintiff lacked standing to sue. Instead, the Spokeo court reversed the Ninth Circuit because it failed to determine if the plaintiff’s injury was concrete, and sent the case back to the Ninth Circuit to make that determination. In doing so, the Supreme Court explained that although tangible injuries (like physical or economic harm) are “perhaps easier to recognize” as concrete, “intangible injuries can nevertheless be concrete,” as Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 9 of 27 4 can injuries based on a “risk of harm.” Id. at 1549–50. And “[i]n determining whether an intangible harm constitutes injury in fact,” the Court continued, “both history and the judgment of Congress play important roles.” Id. at 1549. The Spokeo court further explained that “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact. In other words, a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.” Id., citing Federal Election Comm'n v. Akins, 524 U.S. 11, 20–25, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998) (confirming that a group of voters' “inability to obtain information” that Congress had decided to make public is a sufficient injury in fact to satisfy Article III); Public Citizen v. Department of Justice, 491 U.S. 440, 449, 109 S.Ct. 2558, 105 L.Ed.2d 377 (1989) (holding that two advocacy organizations' failure to obtain information subject to disclosure under the Federal Advisory Committee Act “constitutes a sufficiently distinct injury to provide standing to sue”). The Supreme Court thus recognized that “Congress may “elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law” and that “Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before.” Id., citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 580, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992). It is important to recognize that Spokeo held that the violation of a procedural right may, or may not be, sufficient to provide standing. The Spokeo majority did not discuss the concrete injury requirement in the context of substantive rights, which is what Plaintiff complains of here. Justice Thomas’s concurrence fills this gap, confirming that in the context of substantive or “private” rights, the violation alone meets the concrete injury requirement: Common-law courts imposed different limitations on a plaintiff’s right to bring suit depending on the type of right the plaintiff sought to vindicate. Historically, Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 10 of 27 5 common-law courts possessed broad power to adjudicate suits involving the alleged violation of private rights, even when plaintiffs alleged only the violation of those rights and nothing more. “Private rights” are rights “belonging to individuals, considered as individuals.” 3 W. Blackstone, Commentaries *2 (hereinafter Blackstone). …. In a suit for the violation of a private right, courts historically presumed that the plaintiff suffered a de facto injury merely from having his personal, legal rights invaded. Thus, when one man placed his foot on another’s property, the property owner needed to show nothing more to establish a traditional case or controversy. * * * A plaintiff seeking to vindicate a statutorily created private right need not allege actual harm beyond the invasion of that private right. See Havens Realty Corp. v. Coleman, 455 U.S. 363, 373–374, 102 S.Ct. 1114, 71 L. Ed. 2d 214 (1982) (recognizing standing for a violation of the Fair Housing Act); Tennessee Elec. Power Co. v. TVA, 306 U.S. 118, 137–138, 59 S.Ct. 366, 83 L. Ed. 543 (1939) (recognizing that standing can exist where “the right invaded is a legal right,—one of property, one arising out of contract, one protected against tortious invasion, or one founded on a statute which confers a privilege”). Spokeo, 136 S.Ct. at 1551 and 1553 (Thomas, J., concurring). The Havens Realty case Justice Thomas cites is particularly instructive. A unanimous Supreme Court ruled that the violation of the plaintiff’s statutory right not to be lied to about available housing was an “injury in fact” even if the plaintiff had no intention of doing business with the defendant, and interacted with the defendant fully expecting it to violate her rights: As we have previously recognized, “[the] actual or threatened injury required by Art. III may exist solely by virtue of ‘statutes creating legal rights, the invasion of which creates standing . . . .’” Warth v. Seldin, supra, at 500, quoting Linda R. S. v. Richard D., 410 U.S. 614, 617, n. 3 (1973). Accord, Sierra Club v. Morton, 405 U.S. 727, 732 (1972); Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 212 (1972) (WHITE, J., concurring). Section 804(d), which, in terms, establishes an enforceable right to truthful information concerning the availability of housing, is such an enactment. A tester who has been the object of a misrepresentation made unlawful under § 804(d) has suffered injury in precisely the form the statute was intended to guard against, and therefore has standing to maintain a claim for damages under the Act’s provisions. That the tester may have approached the real estate agent fully expecting that he would receive false information, and without any intention of buying or renting a home, does not negate the simple fact of injury within the meaning of § 804(d). Havens Realty Corp., 455 U.S. at 373-74 (emphasis added). Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 11 of 27 6 Needless to say, one who interacts with a firm having no intention of doing business with it, and expecting the firm to lie, suffers no harm beyond the statutory violation. Nevertheless, in the context of substantive rights, the Court ruled nothing more is required to meet cross the Article III threshold. See Havens Realty Corp., 455 U.S. at 373-74; see also Church v. Accretive Health, Inc., No. 15-15708, 2016 WL 3611543 (11th Cir. July 6, 2016) (“Congress has created a new right—the right to receive the required disclosures in communications governed by the FDCPA— and a new injury—not receiving such disclosures…”); Sullivan v. Allied, 2:16-cv-00203-MRH- CRE (W.D. Pa. October 18, 2016)(“Here, Plaintiff has alleged more than a mere technical procedural violation…The FDCPA expressly prohibits the use of any false, deceptive, or misleading representation or means in connection with the collection of any debt….. This provision provides Plaintiff with substantive rights, the violation of which Congress has elevated to the status of a legally cognizable injury through the FDCPA”). In this action, the Plaintiff is not complaining of a mere procedural violation of her rights, but rather, the Plaintiff complains of a substantive right not to have her protected private information disclosed to the public. As recently noted by the Third Circuit, the Supreme Court in Spokeo “provided two examples [of procedural violations], including a defendant's failure to comply with a statutory notice requirement and, in the context of the Fair Credit Reporting Act, the dissemination of inaccurate information about a plaintiff, such as an incorrect zip code, that does not ‘cause harm or present any material risk of harm.’ ” In re Nickelodeon Consumer Privacy Litig., 827 F.3d 262, 274 (3d Cir. 2016), citing Spokeo, 136 S.Ct. at 1550. Such a procedural violation, with no ability to harm the Plaintiff, simply is not an accurate characterization of the facts in this action. Instead, the disclosure of an individual’s private information is clearly a substantive and particularized right, the violation of which is a concrete injury under Article III. Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 12 of 27 7 This distinction was recently drawn by the district court in Burke v. Fed. Nat'l Mortgage Ass'n, No. 3:16CV153-HEH, 2016 WL 4249496 (E.D. Va. Aug. 9, 2016). The Burke plaintiff filed suit under the FCRA, alleging that Fannie Mae violated her rights by unlawfully obtaining her credit report under the false pretense of an “account review,” even though no account existed. Id., at *1. As here, the Burke defendant moved to dismiss the Complaint pursuant to FRCP 12(b)(1), claiming that because the Burke plaintiff had not alleged a concrete injury but only a bare procedural violation, she lacked Article III standing to sue. See id. In applying Spokeo’s directive to “defer to history and the judgment of Congress in deciding whether the alleged harm constitutes an injury-in-fact”, the Burke court first found that “the FCRA was meant to protect the interest of privacy. The portion of the FCRA at issue here is clear that one's consumer report is not to be obtained except for the limited purposes specifically provided by the statute.” Id., at *4. The Burke court noted that “the language and context of this provision seem to establish a statutory right to privacy based in one's consumer report.” Id. The Burke court then drew the same distinction set forth in Justice Thomas’ concurrence in Spokeo, distinguishing between procedural and substantive harms, finding that “In some sense, the right at issue can appear procedural, as it is a mechanism intended to prevent further harms. Yet, given the purposes, framework, and structure of the FCRA, the right to privacy established by the statute appears to be more substantive than procedural.” Id. The Burke court accordingly declined to dismiss the claims before it, concluding that “Plaintiff's alleged violation of privacy is a concrete harm, even if that harm does not lead to other, more tangible harms. Therefore, by claiming that the Defendant obtained her consumer report without a lawful purpose under the FCRA, Burke has pleaded a concrete harm.” Id. (emphasis added). The Burke court thus correctly found that when substantive rights are violated, no more is needed to establish Article III harm. Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 13 of 27 8 Similar to the substantive privacy rights implicated in Burke - and in contrast to the procedural harms at issue in Spokeo - the Plaintiff’s claims in this action center on the invasion of privacy caused by the unlawful disclosure of her account number, a harm the FDCPA was directly enacted to prevent. As noted by the Third Circuit “the invasion of privacy, we recently explained, is a core concern animating the FDCPA.” Evankavitch v. Green Tree Serv., LLC, 793 F.3d 355, 360 (3d Cir. 2015). This invasion of privacy was explicitly detailed by the Third Circuit in Douglass v. Convergent Outsourcing, LLC, 765 F.3d 299 (3rd Cir. 2014), and is a concrete injury sufficient to convey Article III standing to sue. In Douglass v. Convergent Outsourcing, LLC, the Third Circuit has already made specific factual findings of the potential harm caused by the unlawful disclosure of a debtor’s account number. These finding definitively establish Plaintiff’s standing to bring this action. As relevant here, 15 U.S.C. § 1692f(8) prohibits the use of “any language or symbol” other than the debt collector’s address, on any envelope when communicating with a consumer by mail. In Douglass, the Third Circuit found that an account number, displayed through the enclosing envelope’s glassine window, violated this provision. See, Douglass, 765 F.3d at 303. The Douglass defendant nonetheless urged the Third Circuit to adopt the ‘benign language’ exemption adopted by a number of courts. Under this exemption, a debt collection envelope would not violate Section 1692f(8) if it includes “words or notations that do not suggest the debt related purpose of the communication”, since those words are essentially harmless. Styer v. Prof'l Med. Mgmt., Inc., 114 F. Supp. 3d 234, 238 (M.D. Pa. 2015); Goswami v. Am. Collections Enter., Inc., 377 F.3d 488, 494 (5th Cir. 2004), citing FTC Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed.Reg. 50,097, 50,108 (Dec. 13, 1988). Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 14 of 27 9 The Third Circuit rejected this argument, and found that it did not need to decide whether a benign exception should be read into the FDCPA, as “Douglass's account number is not benign.” Douglass, 765 F.3d at 303. Instead the Third Circuit found that “the account number is a core piece of information pertaining to Douglass's status as a debtor and Convergent's debt collection effort.” Id. The Third Circuit in Douglass thus specifically found that displaying the account number to be visible to the public has a risk of real harm. Those specific findings of harm were most recently analyzed several months ago, by the court in Daubert v. Nra Grp., LLC, No. 3:15- CV-00718, 2016 WL 4245560 (M.D. Pa. Aug. 11, 2016): In Douglass, the Third Circuit emphasized the “potential to identify the debtor and her debt,” not just whether the markings at issue “on its face” or to the “naked eye” revealed any identifying information. See, e.g., Douglass, 765 F.3d at 303 (“The account number is a core piece of information pertaining to Douglass's status as a debtor and Convergent's debt collection effort. Disclosed to the public, it could be used to expose her financial predicament.”) (emphasis added); id. at 304 (distinguishing other out-of-district cases where courts permitted an exception for seemingly benign markings because “they did so in the context of envelope markings that did not have the potential to cause invasions of privacy”); id. at 305 (distinguishing cases where markings were found to fall within the benign exception because they “did not confront an envelope that displayed core information relating to the debt collection and susceptible to privacy intrusions”) (emphasis added). The Third Circuit was quite explicit in holding that Douglass' account number “is not meaningless” because it is a “piece of information capable of identifying Douglass as a debtor. And its disclosure has the potential to cause harm to a consumer that the FDCPA was enacted to address.” Id. at 305–06. Id., at *7. (emphasis in original). As this summary succinctly reflects, the Third Circuit was quite clear in Douglass about the risk of harm caused by a violation of Section 1692f(8), which is all that is needed to demonstrate a concrete injury under Spokeo. The Third Circuit’s most recent post-Spokeo analysis of Article III standing similarly demonstrates that Ms. Hartman has standing to bring her FDCPA claims. See, In re Nickelodeon Consumer Privacy Litig., 827 F.3d 262, 2016 WL 3513782 (3d Cir. June 27, 2016). In Nickelodeon, the Third Circuit found Article III standing was established Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 15 of 27 10 where online information regarding Nickelodeon’s users was improperly gathered and shared. As specifically relevant here, the Third Circuit found that such harm is “concrete in the sense that it involves a clear de facto injury, i.e., the unlawful disclosure of legally protected information” and that “Congress has long provided plaintiffs with the right to seek redress for unauthorized disclosures of information that, in Congress's judgment, ought to remain private.” See, In re Nickelodeon Consumer Privacy Litig., 2016 WL 3513782 at *7. The Third Circuit’s guidance in Nickelodeon is directly controlling here. In enacting Section 1692f(8), Congress has specifically found that a consumer’s account number should be protected and not disclosed by debt collectors. Here, however, it is beyond dispute that protected information was unlawfully disclosed. The Third Circuit expressly found in Nickelodeon that the unlawful disclosure of legally protected information gives rise to a concrete injury. There can therefore be no question that the Plaintiff has Article III standing to bring her FDCPA claim. Indeed, this exact issue was recently decided by the district court in Daubert v. NRA Grp., LLC, supra, 2016 WL 4245560. In Daubert, the defendant's independent letter vendor mailed the plaintiff a collection letter, which included a barcode that was visible through a glassine window on the envelope. If scanned, the Barcode would reveal Plaintiff's account number. See id., at *1. As in this action, the Daubert plaintiff filed suit pursuant to 15 USC § 1692f(8). Defendant then filed a motion in limine to dismiss Plaintiff's FDCPA claim for lack of Article III standing, based on the Supreme Court's decision in Spokeo v. Robins. The Daubert defendant argued that an FDCPA plaintiff must “identify a specific harm he suffered outside of the mere procedural violation of the FDCPA” and “that Plaintiff failed to identify such a harm.” Id., at *3. Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 16 of 27 11 Judge Caputo found that, just as in Nickelodeon, the Daubert plaintiff had established Article III standing to sue, since “plaintiff has alleged facts sufficient to show that he has suffered a particularized and concrete injury–the disclosure of legally protected information.” Id., at *4. This injury was “clearly particularized,” since the Daubert plaintiff alleged that “it was his personal identifying information that was disclosed.” Id. This injury was also concrete “because as the Third Circuit explained in Nickelodeon, both history and the judgment of Congress demonstrate that the unlawful disclosure of legally protected information is a concrete harm that is sufficient to confer standing.” Id. The Daubert court concluded that “based on the Supreme Court's opinion in Spokeo and the Third Circuit's opinion in Nickelodeon, I find that Plaintiff here has alleged a sufficiently concrete injury to confer standing.” Id. This analysis of the Third Circuit’s finding - that a violation of §1692f(8) has a risk of real harm - was the same as that conducted by the court in Link v. ARS Nat'l Servs., Inc., No. CV 15- 643, 2015 WL 8488674 (W.D. Pa. Nov. 2, 2015), report and recommendation adopted sub nom. Link v. Ars Nat'l Servs., Inc., No. CV 15-643, 2015 WL 8271651 (W.D. Pa. Dec. 8, 2015). In finding that the barcode printed on the collection letter in Link violated the FDCPA, the Honorable Magistrate Judge Mitchell found that the barcode could identify “the plaintiff as a debtor” and that “the disclosed information has the potential to cause a debtor the invasion of privacy that the FDCPA was enacted to prevent.” Id., at *4. Magistrate Mitchell accordingly declined to find that a benign exception applied to this barcode, finding that “Plaintiff's complaint, taken as true and viewed in the light most favorable to her, alleges that ARS printed a barcode on a debt collection letter's envelope that when scanned reveals account information capable of identifying Plaintiff.” Id. In adopting Magistrate Mitchell’s findings, the Honorable Judge Bissoon then specifically overruled the Link defendant's contention that the Magistrate Judge improperly applied a “potential Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 17 of 27 12 to cause harm standard” to the Defendant’s application for a benign language exemption. The Link court found that the “potential to cause harm” consideration is analytically consistent with the “benign language exception,” and that “something that causes harm necessarily fails to qualify as ‘benign.’ ” Link v. Ars Nat'l Servs., Inc., No. CV 15-643, 2015 WL 8271651, at *1 (W.D. Pa. Dec. 8, 2015). As emphasized by the Daubert and Link courts, the Third Circuit thoroughly analyzed the potential harm posed by displaying a consumer’s account number to be visible to the public. The Third Circuit explicitly found that doing so could be used to expose a debtor’s financial predicament, and that the account number was not meaningless, as it was capable of identifying the consumer as a debtor. The Third Circuit further expressly found that its disclosure has the potential to cause the exact harm to a debtor that the FDCPA was enacted to prevent. This Court is bound by the Third Circuit’s express finding that the exposure of a debtor’s account number to the public subjects that debtor to the real risk of an invasion of privacy. Defendant points to zero on-point caselaw in support of its position that an FDCPA plaintiff has not suffered a concrete harm when his substantive rights under the Act have been violated. Defendant first cites to Smith v. Ohio State Univ., No. 2:15-CV-3030, 2016 WL 3182675 (S.D. Ohio June 8, 2016), which involved a claim arising under the Fair Credit Reporting Act (the FCRA). Specifically, the Smith plaintiffs had applied to work at Ohio State University, and alleged that the university had violated the FCRA during the hiring process when it asked for consent to pull their credit reports to do background checks. The plaintiffs alleged that the university violated their rights in providing a disclosure and authorization form to the plaintiffs that included extraneous information such as a liability release, rather than on a stand-alone document. The Smith plaintiffs eventually were hired by the university, but claimed that they suffered injury in Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 18 of 27 13 the application process by being asked to authorize the release of their credit reports via a defective consent form. Relying on Spokeo and other cases, the university moved to dismiss for lack of jurisdiction, and the district court agreed: In determining whether Congress has elevated FCRA breaches to the status of legally cognizable injuries, the Supreme Court held that [a] violation of one of the FCRA's procedural requirements may result in no harm. In this case, plaintiffs allege they suffered harm when their “privacy was invaded and they were misled as to their rights under the FCRA.” However, plaintiffs admitted that they did not suffer a concrete consequential damage as a result of OSU's alleged breach of the FCRA. Without a concrete and particularized injury-in-fact, there is no Article III standing in this Court. Smith v. Ohio State Univ., 2016 WL 3182675 at *4. By contrast to the procedural violations at issue in Smith, the instant action involves a substantive right granted by the FDCPA to have certain account information – including account numbers - protected. Given this arguably procedural violation1, the Smith court found that dismissal was appropriate, since the plaintiffs had not suffered any concrete damages by receiving an authorization form which was not on a stand-alone document as required by law. Whether this result was right or wrong has zero impact on this case. See, Perrill v. Equifax Info. Servs., LLC, No. A-14-CA-612-SS, 2016 WL 4572212, at *4 (W.D. Tex. Aug. 31, 2016) (expressly declining to follow Smith, noting that the Smith court “improperly focus[es] on the plaintiffs' failure to allege actual damages…the Court is not convinced by this reasoning since Spokeo does not require a plaintiff to allege actual damages”); Aranda v. Caribbean Cruise Line, Inc., No. 12 C 4069, 2016 WL 4439935, at *5 (N.D. Ill. Aug. 23, 2016)(distinguishing Smith because the statute in that action 1 At least one District Court expressly disagreed with Smith and found that the stand-alone disclosure requirement at issue in that action was a substantive right, rather than a procedural right: “the FCRA rights Plaintiffs have alleged to have been violated by Defendant Ascenda's alleged violations of § 1681b(b)(2)(A) are not merely ‘bare procedural violations’…. Based on the foregoing, the Court holds that Plaintiffs have sufficiently alleged a concrete and particularized injury and thus have standing to sue pursuant to Spokeo.” Moody v. Ascenda USA Inc., No. 16-CV-60364-WPD, 2016 WL 5900216, at *6 (S.D. Fla. Oct. 5, 2016). Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 19 of 27 14 “imposed record-keeping and procedural obligations on the defendants” as opposed to substantive rights). The plain and simple fact is that this action does not involve a merely procedural prohibition. Rather, the FDCPA protects the disclosure of the Plaintiff’s account number, and creates a substantive right to have that information protected. The unlawful disclosure of that protected information automatically gives rise to a concrete harm sufficient to convey Article III standing. See, In re Nickelodeon Consumer Privacy Litig., supra, 2016 WL 3513782 at *7. Defendant’s reliance on Stoops v. Wells Fargo Bank, N.A., No. 3:15-83, 2016 WL 3566266 (W.D. Pa. June 24, 2016) similarly is entirely inapposite. The district court in Stoops found that a plaintiff who abused the Telephone Consumer Protection Act and admitted to signing up for thirty- five cell phone numbers in order to engender TCPA violations was not a person the statute was enacted to protect, and that the Stoops plaintiff therefore lacked standing to sue under the statute. The Stoops court did not find that the violation of a privacy interest was not a sufficiently concrete harm. Instead, the Stoops court found that those privacy interests were not implicated at all: “Defendant's calls did not adversely affect the privacy rights that the TCPA is intended to protect. Because Plaintiff has admitted that her only purpose in using her cell phones is to file TCPA lawsuits, the calls are not a nuisance and an invasion of privacy.” Id., at *11. This case is nothing like Stoops, and there is no indication that Ms. Hartman welcomed the invasion of her privacy caused by the Defendant’s actions, so as to bring this case within the scope of the Stoops holding. As set forth above, the Plaintiff clearly has Article III standing to maintain this FDCPA action. The FDCPA protects the disclosure of certain information, and the Plaintiff’s privacy was invaded when the Defendant unlawfully disclosed that protected information. As set forth in the following section, the Plaintiff’s concrete injury is not conjectural, but has already occurred. Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 20 of 27 15 B. The Concrete Injury Caused By The Defendant’s Actions Is Not Conjectural. Defendant next attempts to conflate the undisputed violation of Ms. Hartman’s privacy interests, which has already occurred, with the harms which may eventually be suffered by victims of identity theft. Defendant cites to a number of cases which have found - in identity theft cases - that Article III standing is only established if the plaintiff can articulate what harm has already occurred, or which may imminently occur. See, Deft. MOL, at 8, citing Reilly v. Ceridian Corp., 664 F.3d 38, 43-46 (3d Cir. 2011)(finding no injury in fact when unauthorized person accessed but did not yet misuse plaintiffs' data). However, the courts have drawn a very distinct line between identity theft cases – where actual harm may not have yet incurred since that information was not misused and may never be misused – with invasions of privacy, where the harm occurs at the time of the invasion. See e.g., Perrill v. Equifax Info. Servs., LLC, supra, 2016 WL 4572212, at *4 (noting that Reilly involved a data breach caused by a hacker, and not an invasion of privacy caused by the defendant’s unlawful disclosure of lawfully protected information). The law is clear that when an individual’s private information is unlawfully disseminated, that individual has immediately suffered an actionable claim for breach of privacy. The common law has long recognized a right to personal privacy, and “both the common law and the literal understandings of privacy encompass the individual's control of information concerning his or her person.” United States Dept. of Justice v. Reporters Comm. for Freedom of Press, 489 U.S. 749, 763 (1989) (defining “private” as “intended for or restricted to the use of a particular person or group or class of persons: not freely available to the public”). Furthermore, it is well-settled that Congress may create a statutory right to privacy in certain information that strengthens or replaces the common law, and citizens whose statutory right to informational privacy has been invaded may bring suit under the statute to vindicate that right. See, e.g., 18 U.S.C. § 2707(c) (authorizing Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 21 of 27 16 statutory damages for violations of the Electronic Communications Privacy Act of 1986 (“ECPA”)); 12 U.S.C. § 3417 (statutory damages available under the Right to Financial Privacy Act (“RFPA”)); 18 U.S.C. § 2710(c)(1) (establishing a private right of action under the Video Privacy Protection Act (“VPPA”)). In contrast to cases that involve identity theft, and as made clear by the Third Circuit in Nickelodeon, the disclosure of statutorily protected information is, in itself, a concrete harm. That harm occurs at the time of the unlawful disclosure, not at the time the unlawfully disclosed information is misused. “It has long been the case that an unauthorized dissemination of one's personal information, even without a showing of actual damages, is an invasion of one's privacy that constitutes a concrete injury sufficient to confer standing to sue.” Witt v. Corelogic Saferent, LLC, No. 3:15-CV-386, 2016 WL 4424955, at *12 (E.D. Va. Aug. 18, 2016), citing Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4 Harv. L. Rev. 193 (1890). See also, Thomas v. FTS USA, LLC, No. 3:13-CV-825, 2016 WL 3653878, at *10 (E.D. Va. June 30, 2016)(same); Burke v. Fed. Nat'l Mortg. Ass'n, No. 3:16cv153–HEH, 2016 WL 4249496, at *4 (E.D.Va. Aug. 9, 2016) (“Plaintiff's alleged violation of privacy is a concrete harm, even if that harm does not lead to other, more tangible harms.”); Hawkins v. S2Verify, No. C 15-03502 WHA, 2016 WL 3999458, at *5 (N.D. Cal. July 26, 2016) (Despite Congress’ decision to restrict access to information regarding arrests older than seven years, “S2Verify published plaintiff's stale arrests. S2Verify thereby sent restricted information about plaintiff into the world and as such caused injury to plaintiff's privacy interest. Plaintiff's alleged injury is concrete; therefore, plaintiff has established standing”); Hancock v. Urban Outfitters, Inc., 830 F.3d 511, 514 (D.C. Cir. 2016) (Plaintiffs' allegations that Defendant violated two of Washington, DC's consumer protection laws Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 22 of 27 17 did not confer standing because Plaintiffs did “not allege for example, any invasion of privacy, increased risk of fraud or identify theft, or pecuniary or emotional injury”). In sum, Defendant’s Motion to Dismiss cannot possibly be granted, where the Plaintiff has suffered a concrete injury that the FDCPA was enacted to prevent. Defendant’s Article III argument is clearly contrary to the Third Circuit’s specific findings of harm in Douglass and Nickelodeon, along with the findings of harm in Daubert and Link, and the overwhelming authority across the country, which has found that FDPCA plaintiffs have Article III standing to sue.2 2 See e.g., Blaha v. First National Collection Bureau, 2:16-cv-02791-WHW-CLW (D.N.J. November, 14, 2016)(declining to dismiss an FDCPA claim, and noting that the Court was “unpersuaded by the argument that Plaintiff has alleged a bare procedural violation that does not give rise to an injury-in-fact” because “the right Congress sought to protect in enacting this legislation was therefore not merely procedural, but substantive and of great importance. Further, the harm claimed by Plaintiff is precisely that which the statute was intended to guard against”); Sullivan v. Allied, 2:16-cv-00203-MRH-CRE (W.D. Pa. October 18, 2016) (“Since Spokeo was decided, the overwhelming majority of courts that have faced Article III standing challenges in FDCPA cases, including this Court, have determined that a violation of the FDCPA produces a ‘concrete injury’ ”); Hayes v. Convergent Healthcare Recoveries, Inc., No. 14-1467, 2016 WL 5867818, at *5 (C.D. Ill. Oct. 7, 2016)(finding Article III standing and noting that a debt collector's violation of the FDCPA is not a “bare procedural violation”); Dittig v. Elevate Recoveries, LLC, 2016 WL 4447818, at *2 (W.D. Pa. Aug. 24, 2016) (finding a concrete injury where plaintiff alleged defendant violated the FDCPA by sending him a collection notice containing a “settlement offer” for a time-barred debt); Macy v. GC Servs. Ltd. P'ship, No. 3:15-CV-819-DJH, 2016 WL 5661525, at *3 (W.D. Ky. Sept. 29, 2016)(finding that FDCPA plaintiff had Article III standing where Defendant failed to include the words “in writing” in its Validation Notice, which could have caused Plaintiff to waive his right to dispute the debt, and noted that “it does not matter whether such a waiver actually occurred”); Saenz v. Buckeye Check Cashing of Illinois, No. 16 CV 6052, 2016 WL 5080747, at *2 (N.D. Ill. Sept. 20, 2016); Linehan v. Allianceone Receivables Mgmt., Inc., No. C15-1012-JCC, 2016 WL 4765839, at *8 (W.D. Wash. Sept. 13, 2016)(“The goal of the FDCPA is to protect consumers from certain harmful practices; it logically follows that those practices would themselves constitute a concrete injury”); Bernal v. NRA Grp., LLC, No. 16 C 1904, 2016 WL 4530321, at *5 (N.D. Ill. Aug. 30, 2016)(“NRA's collection letter allegedly violated Bernal's right to be free from such misleading communication….The type of injury alleged here, receiving a debt collection letter that, it is alleged, wrongly assesses percentage-based collection costs, is concrete”); Jones v. Advanced Bureau of Collections LLP, No. 5:15-CV-16(MTT), 2016 WL 4499456, at *2 (M.D. Ga. Aug. 26, 2016)(“Jones has sufficiently alleged a concrete injury to satisfy the injury-in-fact requirement by alleging his debt collection letter failed to include the words ‘in writing,’ as allegedly required by the FDCPA”); Sayles v. Advanced Recovery Sys., Inc., No. 3:14-CV-911-CWR-FKB, 2016 WL 4522822, at *2 (S.D. Miss. Aug. 26, 2016)(Finding standing in an FDCPA action, since “Plaintiff's alleged injury is more than a bare procedural violation, it is the very type of injury Congress sought to eradicate and thus created a right of action to protect consumers”); Dickens v. GC Servs. Ltd. P'ship, No. 16-cv-00803, 2016 WL 3917530, at *1-2 (M.D. Fla. July 20, 2016) (plaintiff had Article III standing to pursue FDCPA claims based on defendant's alleged failure to specify that certain rights under the FDCPA must be exercised “in Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 23 of 27 18 C. Plaintiff Should Be Granted Leave To Amend Her Complaint To Supplement Her Article III Allegations. The law in the Third Circuit is clear that leave to amend the Complaint should ordinarily be granted if a district court dismisses that Complaint for pleading deficiencies. As one district court recently stated “if a complaint fails to state a claim upon which relief can be granted, a plaintiff should ordinarily be granted the right to amend its complaint.” Genova v. Total Card, Inc., No. 16CV1260WHWCLW, 2016 WL 3360662, at *3 (D.N.J. June 8, 2016). The Supreme Court has instructed that “the grant or denial of an opportunity to amend is within the discretion of the District court, but outright refusal to grant the leave without any justifying reason ... is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.” Foman v. Davis, 371 U.S. 178, 182 (1962). In this action, the Plaintiff has sufficiently alleged the harms that she suffered in order to establish Article III standing. The Complaint specifically alleges that, on at least two occasions, the Defendant mailed Collection Letters to the Plaintiff with the Plaintiff’s consumer number displayed on the exterior of the Letters. See, Docket 1, ¶11-14. The Complaint then alleges that this consumer number constitutes personal identifying information. See id, ¶15. The Complaint further alleges that this number is not meaningless – it is a piece of information capable of identifying the consumer as a debtor, and its disclosure has the potential to cause harm to a consumer that the FDCPA was enacted to prevent. See id, ¶17. As the Third Circuit has made clear in Douglass and Nickelodeon, this is all the Plaintiff need allege to establish Article III standing. writing”); Lane v. Bayview Loan Servicing, LLC, No. 15-cv-10446, 2016 WL 3671467, at *3-5 (N.D. Ill. July 11, 2016) (plaintiff adequately established a concrete injury resulting from defendant's provision of an allegedly misleading debt collection notice in violation of the FDCPA, because plaintiff alleged that defendant “denied him the right to information due to him under the FDCPA”). Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 24 of 27 19 Should this Court find that more is needed in order to cross the Article III threshold, Plaintiff should be given leave to amend what is, at most, a pleading deficiency. In the Third Circuit, plaintiffs whose complaints fail to state a cause of action are entitled to amend their complaint unless doing so would be inequitable or futile. Genova v. Total Card, Inc., supra; Fletcher-Harlee Corp. v. Pote Concrete Contrs., Inc., 482 F.3d 247, 252 (3d Cir. 2007). In Shane v. Fauver, 213 F.3d 113 (3d Cir. 2000), the Third Circuit counseled: [W]e suggest that district judges expressly state, where appropriate, that the plaintiff has leave to amend within a specified period of time, and that application for dismissal of the action may be made if a timely amendment is not forthcoming within that time. If the plaintiff does not desire to amend, he may file an appropriate notice with the district court asserting his intent to stand on the complaint, at which time an order to dismiss the action would be appropriate. Shane, 213 F. 3d at 116. Should this Court dismiss the Plaintiff’s claim for failure to properly state a claim, it is respectfully submitted that Foman and Fletcher-Harlee stand for the proposition that the Plaintiff should be granted leave to amend her Complaint as a matter of course. The Second Circuit recently noted that such post-Spokeo motions should be granted. “Given the change Spokeo effected in the standing doctrine, we remand to allow plaintiffs an opportunity to replead their claims to comport with the pleading standards set forth in Spokeo, and to allow the district courts to address any standing questions in the first instance.” Cruper-Weinmann v. Paris Baguette Am., Inc., No. 14- 3709-CV, 2016 WL 3553448, at *1 (2d Cir. June 30, 2016) citing Warth v. Seldin, 422 U.S. 490, 501–02, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (“[I]t is within the trial court's power to allow or to require the plaintiff to supply, by amendment to the complaint or by affidavits, further particularized allegations of fact deemed supportive of plaintiff's standing. If, after this Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 25 of 27 20 opportunity, the plaintiff's standing does not adequately appear from all materials of record, the complaint must be dismissed”).3 As set forth above, the Plaintiff’s Complaint should not be dismissed, where the Plaintiff clearly has Article III standing to bring this action. Moreover, if this Court determines that dismissal of the Complaint is warranted, caselaw is clear that such dismissal should be without prejudice, and with leave to re-plead. Plaintiff’s proposed Amended Complaint is annexed hereto as Exhibit A. CONCLUSION It is therefore respectfully submitted that the Defendant’s Motion to Dismiss the Complaint be denied in its entirety. First, the Plaintiff has clearly established that the Defendant violated the FDPCA by disclosing the Plaintiff’s account number through the glassine window of the enclosing envelope, where it was plainly visible to the public. As set forth above, that conclusion is mandated by the Third Circuit’s holding in Douglass. Second, the Third Circuit’s analysis in Douglass similarly militates towards a finding that the Defendant’s violation of the FDCPA carried the risk of real harm, where the Third Circuit expressly found that such a violation had the potential to cause an invasion of privacy. Third, as found by the Douglass court, that invasion of privacy was exactly the sort of harm the FDCPA was enacted to prevent in the first place. Finally, as found by 3 Prior to seeking Court approval to amend the Complaint, the Plaintiff’s counsel attempted to obtain the Defendant’s consent to this relief. Plaintiff’s counsel outlined what recently occurred at the oral argument conducted by this Court in the matter of Dinaples v. MRS BPO, LLC (2:15-cv-01435-MRH), a case involving nearly identical facts. In Dinaples, the Collection Letter displayed a barcode on the outside of the envelope, which would reflect the recipient’s account number when scanned (as opposed to displaying the actual account number, which is what the Defendant did in this action). On August 29, 2016, the undersigned flew from New York to Pittsburgh for oral argument on the defendant’s Motion to Dismiss based, as here, on the plaintiff’s supposed lack of Article III standing to maintain her FDCPA claim. At that time, this Court granted the Plaintiff’s request to amend her Complaint to supplement her allegations regarding the harm she suffered, in light of Spokeo and the Third Circuit’s holding in Foman. Despite relaying this series of events in an effort to avoid duplicative motion practice, the Defendant has inexplicably refused to consent to the Plaintiff’s amendment of her Complaint. Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 26 of 27 21 the Nickelodeon court, the disclosure of lawfully protected information is a concrete injury sufficient to convey Article III standing. It is therefore respectfully submitted that the Defendant’s Motion be dismissed in its entirety, where it is directly contradicted by the Third Circuit’s unambiguous holding in Douglass and Nickelodeon. Dated: December 5, 2016 Respectfully submitted, /s/ Ari H. Marcus Ari H. Marcus, Esq. (02966010) Admitted pro hac vice /s/ Mark G. Moynihan Mark G. Moynihan, Esq. PA 307622 Attorneys for Plaintiff Case 2:15-cv-01596-MRH-MPK Document 46 Filed 12/05/16 Page 27 of 27 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA MELISSA HARTMAN, on behalf of herself and Civil No.: 2:15-cv-1596-MRH-MPK all others similarly situated, Plaintiff AMENDED COMPLAINT – CLASS ACTION v. MEDICREDIT, INC. JURY TRIAL DEMANDED and JOHN DOES 1-25, Defendants AMENDED COMPLAINT INTRODUCTION 1. Defendant, MEDICREDIT, INC. ("Medicredit"), violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”) by exposing personal identifying information visibly on the outside of its self-mailing collection letters placed in the mail. 2. As a direct and foreseeable result of Medicredit’ wrongful actions, Plaintiff suffered injury including exposure of her financial information. 3. Medicredit is subject to strict liability for sending collection letters that exposed personal identifying information visibly on the envelope placed in the mail. 4. According to 15 U.S.C. § 1692: a. There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy. b. Existing laws and procedures for redressing these injuries are inadequate to protect consumers. Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 1 of 12 c. Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts. d. Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce. e. It is the purpose of the FDCPA to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses. JURISDICTION AND VENUE 5. The Court has jurisdiction over this class action under 28 U.S.C. § 1331, 15 U.S.C. § 1692 et seq. and 28 U.S.C. § 2201. 6. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b)(2) because Plaintiff resides in Westmoreland County, Pennsylvania, which is within this District, and because a substantial part of the events giving rise to the claim occurred in this District. 7. This Court further has jurisdiction over this action because the Plaintiff has suffered an actual injury as a result of the Defendant’s action. In Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) the Supreme Court reaffirmed the well-established principle “a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Id. At 7 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 2 of 12 8. Spokeo also reaffirms the longstanding principle that the required “legally protected interest” may be an interest that Congress has granted legal protection by creating a statutory right. See id. at 9 (reaffirming that “Congress may ‘elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law’” (quoting Lujan, 504 U.S. at 578) (alteration omitted)); accord Warth v. Seldin, 422 U.S. 490, 500 (1975) (“The actual or threatened injury required by Art. III may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing” (quotations omitted)). 9. An intangible injury can also be concrete. Id. at 9. 10. In assessing whether an intangible injury is sufficiently “concrete,” the Court recognized that “Congress is well positioned to identify intangible harms that meet minimum Article III requirements” and, thus, that “its judgment is … instructive and important.” Id. 11. Plaintiff alleges that Medicredit violated the FDCPA by exposing personal identifying information when it mailed her a Collection Letter that exposed her account number through the glassine window of the enclosing envelope. 12. Plaintiff has therefore suffered the “invasion of a legally protected interest” by having her personal financial information made available to the public by being visible through the glassine window contained in Medicredit’s collection envelope. 13. The FDCPA prohibits debt collectors from “us[ing] unfair or unconscionable means” to collect a debt, 15 U.S.C. § 1692f, and it authorizes a consumer to recover actual and statutory damages from “any debt collector who fails to comply with” that provision “with respect to” the consumer, id. § 1692k(a). 14. Together, these provisions grant consumers like Plaintiff and the Class members a legally protected interest in not being subjected to unfair or unconscionable debt collection tactics - an interest that MRS invaded. Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 3 of 12 PARTIES 15. Plaintiff, Melissa Hartman (“Hartman”), is a natural person who resides in the Commonwealth of Pennsylvania and is a consumer as defined in the FDCPA. 16. Medicredit is a business entity with offices at 3620 Interstate 70 Drive SE, Columbia, MO 65201-6582. 17. Medicredit acts as a debt collector as defined by § 1692a of the FDCPA because it regularly uses the mail and/or the telephone to collect, or attempt to collect, directly or indirectly, delinquent consumer debts. 18. John Does 1-25 are fictitious names of individuals and businesses alleged for the purpose of substituting names of Defendants whose identities will be disclosed in discovery and should be made parties to this action. STATEMENT OF CLAIM 19. Hartman allegedly incurred two “UPP University of Pittsburgh Phys” debts (the "Debt"). 20. The Debt was a medical debt incurred as the result of medical services provided for personal purposes, and is therefore a “debt” as that term is defined by 15 U.S.C. § 1692a(5). 21. On or about December 7, 2014, Medicredit mailed two collection letters to Hartman in an attempt to collect the Debt (the “December 7 Letters”). A copy of the December 7 Letters, redacted for security purposes, are attached hereto as Exhibit A. 22. The December 7 Letters were collection letters that were placed into the mail. 23. Visible on the exterior of the the December 7 Letters, above Hartman’s name and address, was a number ending in 8651. Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 4 of 12 24. The December 7 Letters identified the number ending in 8651 as being the consumer number for Hartman. 25. On at least two occasions, and maybe more, Medicredit exposed Hartman’s personal identifying information the letters it sent through the mail. 26. The account number ending in 8651 is a unique account number, assigned by Medicredit solely to the Plaintiff’s collection file. 27. The account number ending in 8651 is used by Medicredit to identify the Plaintiff as a debtor whose account is being collected on by Medicredit. 28. On at least one occasion, and maybe more, Medicredit exposed Hartman's account number on the letter it sent through the mail. 29. The account number constitutes personal identifying information, which is protected by law. 30. Congress has identified, at section 1692f(8) of the FDCPA, the risk of harm caused by disclosing personal identifying information on debt collection envelopes. Congress therefore has prohibited a debt collector such as Defendant from using unfair or unconscionable means to collect or attempt to collect a debt, specifically including “[u]sing any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.” 15 U.S.C. § 1692f(8). 31. The account, or consumer number assigned by Defendant to the Plaintiff is a piece of information capable of identifying Plaintiff as a debtor, and thus the disclosure has the potential to cause harm to a consumer and directly implicates and controverts individual privacy concerns which are a core concern animating the FDCPA. 15 U.S.C. § 1692(a) (“Abusive debt collection practices Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 5 of 12 contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.”). 32. The account number is not meaningless – it is a piece of information capable of identifying Plaintiff as a debtor, and its disclosure has the potential to cause harm to a consumer that the FDCPA was enacted to address. 33. Defendant has violated section 1692f(8) of the FDCPA as to the Plaintiff and the members of the Class hereinafter defined, by disclosing the account, or consumer number assigned to consumers on the outside of the collection envelope. Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014); Palmer v. Credit Collection Services, Inc., 2015 WL 9315988 (E.D. Pa. Dec. 22, 2015) (granting summary judgment in favor of plaintiff); Kostik v. ARS National Services, Inc., 2015 WL 4478765 (M.D. Pa. July 22, 2015) (same). 34. Through the FDCPA, Congress created statutory legal rights for consumers to be free from certain abusive debt collection practices, including the disclosure of personal identifying information on the outside of the collection letter. 35. Specifically, the FDCPA prohibits the use of unfair or unconscionable means to collect or attempt to collect a debt, including the use of any language or symbol other than the debt collector’s name and address on any envelope when communicating with a consumer by mail. 15 U.S.C. § 1692f(8). 36. As a result of Defendant’s conduct, the consumer class members such as Plaintiff have suffered concrete injuries. In addition to having their privacy invaded, consumer class members have had their personal identifying and account-related information unnecessarily disseminated by the Defendant, and, upon information and belief, to its related information-sharing affiliates and/or other third parties. Defendant’s practice has subjected consumer class members to an imminent or substantial increased risk of identity theft and/or a data breach, resulting in consequential anxiety and Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 6 of 12 emotional distress. These injuries are particularized and concrete, but difficult to quantify, rendering the recovery of class statutory damages ideal and appropriate. 37. Upon receiving the December 7 Letters, Hartman read them. 38. On information and belief, the December 7 Letters were Medicredit’s initial communication with Hartman regarding the Debt. 39. The December 7 Letters contained validation notices. 40. The December 7 letters further stated in part: This is to inform you that Upp University of Pittsburgh Phys has placed your account with this agency with the full intention of collecting this account. Please give this past due account the attention it deserves: Please either: 1. Remit payment in full to this office or, 2. Contact this office in person or by telephone to arrange resolution of the account. 3. For payments, express mail, MoneyGram information, call… 41. After reading said statement, the consumer is left to believe that their only options to avoid further collection activity are paying the alleged debt or contacting them to “arrange resolution,” which is untrue. 42. There is a risk of real harm associated with the Defendant’s deceptive and misleading collection practices. 43. Congress adopted the debt validation provisions of section 1692g to guarantee that consumers would receive adequate notice of their rights under the FDCPA. Wilson, 225 F.3d at 354, citing Miller v. Payco–General Am. Credits, Inc., 943 F.2d 482, 484 (4th Cir.1991). 44. Congress further desired to “eliminate the recurring problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid.” S.Rep. No. 95–382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699. Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 7 of 12 45. The rights afforded to consumers under Section 1692g(a) are amongst the most powerful protections provided by the FDCPA. 46. Once a consumer makes a timely, written notice of dispute to the debt collector, the debt collector is required by law to cease collection of the account until verification of the debt is obtained. 47. Defendant’s violations of the FDCPA created the risk of real harm that the Plaintiff would overlook her right to dispute the debt, which was overshadowed by deceptive and misleading statements creating the impression that Plaintiff’s only options to avoid further collection activity was paying the alleged debt or contacting Defendant to “arrange resolution.” 48. Defendant’s violations of the FDCPA further harmed the Plaintiff by subjecting the Plaintiff to improper and deceptive collection activity, in violation of the Plaintiff’s statutorily created substantive rights to be from such a debt collector's inappropriate attempts to collect a debt, and from being subjected to false, deceptive, unfair, or unconscionable means to collect a debt. 49. Defendant’s actions as described herein are part of a pattern and practice used to collect consumer debts. 50. Defendant could have taken the steps necessary to bring its actions within compliance with the FDCPA, but neglected to do so and failed to adequately review its actions to ensure compliance with the law. 51. On information and belief, Defendant sent a collection letter in the form annexed hereto as Exhibit A to at least 50 natural persons in the Commonwealth of Pennsylvania within one year prior to the date of this Complaint. CLASS ACTION STATEMENT 52. Plaintiff brings this action on behalf of herself and of a Class designated pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure. Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 8 of 12 53. Plaintiff proposes to define the class as follows: a. All Pennsylvania consumers; b. Who were sent one or more collection letter(s) from Medicredit; c. Attempting to collect a consumer debt allegedly owed to UPP University of Pittsburgh Phys; d. Which contained a consumer number visible through the glassine window of the enclosing envelope; e. During the time period of December 7, 2014 to the present. 54. The Class satisfies all the requirements of Rule 23 of the FRCP for maintaining a class action. 55. Upon information and belief, the Class is so numerous that joinder of all members is impracticable because there are hundreds or thousands of persons who received debt collection letters or notices from the Defendant that violate specific provisions of the FDCPA. 56. There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. These common questions of law and fact include, without limitation: a. Whether Defendant violated the FDCPA; b. Whether Plaintiff and the Class have been injured by Defendant’s conduct; and c. Whether Plaintiff and the Class have sustained damages and are entitled to restitution as a result of Defendant’s wrongdoing and if so, the proper measure and appropriate statutory formula to be applied in determining such damages and restitution. Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 9 of 12 57. Plaintiff’s claims are typical of the Class, which all arise from the same operative facts and are based on the same legal theories. 58. Plaintiff has no interest adverse or antagonistic to the interest of the other members of the Class. 59. Plaintiff will fairly and adequately protect the interests of the Class and has retained experienced and competent attorneys to represent the Class. 60. A Class Action is superior to other methods for the fair and efficient adjudication of the claims herein asserted. Plaintiff anticipates that no unusual difficulties are likely to be encountered in the management of this Class Action. 61. A Class Action will permit large numbers of similarly situated persons to prosecute their common claims in a single forum simultaneously and without the duplication of effort and expense that numerous individual actions would engender. Class treatment will also permit the adjudication of relatively small claims by many Class members who could not otherwise afford to seek legal redress for the wrongs complained of herein. Most are probably unaware that the FDCPA, and their rights, have been violated. Absent a Class Action, Class members will continue to suffer losses of protected rights as well as monetary damages. COUNT I VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT 15 U.S.C. § 1692f 62. Medicredit violated 15 U.S.C. § 1692f by using unfair and unconscionable means to collect or attempt to collect a debt as described above. 63. Medicredit violated 15 U.S.C. § 1692f(8) by using language or a symbol on any envelope when communicating with a consumer by mail as described above. Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 10 of 12 COUNT II VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT 15 .S.C. § 1692e 64. Pursuant to 15 U.S.C. § 1692e, a debt collector may not use any false, deceptive or misleading representation or means in connection with the collection of any debt. 65. Defendant violated the FDCPA, including but not limited to 15 U.S.C. § 1692e, by sending collection letters to Plaintiff and the members of the class that violated provisions of the FDCPA for using language which materially misrepresents to the least sophisticated consumer that in order to avoid further collection activity a consumer must make payment or make other payments arrangements, when in fact pursuant to 15 U.S.C. § 1692c(c) a consumer only needs to inform a debt collector to cease all communications to avoid further collection activities. COUNT III VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT 15 U.S.C. § 1692g 66. Pursuant to 15 U.S.C. § 1692g, a debt collector must provide notice to consumers within five days of the initial communication regarding the debt, stating the amount of the debt, the name of the current creditor, and explaining the consumer’s right to dispute the debt and to obtain verification. 67. The validation notice cannot be overshadowed with other language in the letter. 68. Defendant violated 15 U.S.C. § 1692g by overshadowing the validation notice by stating that Plaintiff only had three options, when in fact Plaintiff also had an option to dispute the debt. PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment against Defendant as follows: a) Declaring that this action is properly maintainable as a Class Action and certifying Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 11 of 12 Plaintiff as Class representative and Mark G. Moynihan, Esq. and Ari H. Marcus, Esq. as Class Counsel; b) Awarding Plaintiff and the Class statutory damages; c) Awarding Plaintiff and the Class actual damages; d) Awarding Plaintiff costs of this Action, including reasonable attorneys’ fees and expenses; e) Awarding pre-judgment interest and post-judgment interest; and f) Awarding Plaintiff and the Class such other and further relief as this Court may deem just and proper. DEMAND FOR JURY TRIAL Plaintiff demands trial by jury as to all issues so triable. Respectfully submitted, Dated: December 5, 2016 By: /s/ Mark G. Moynihan Mark G. Moynihan, Esquire Attorney for Plaintiff PA 307622 112 Washington Place, Suite 1N Pittsburgh, PA 15219 Phone: (412) 889-8535 Fax: (800) 997-8192 Email: mark@moynihanlaw.net Case 2:15-cv-01596-MRH-MPK Document 46-1 Filed 12/05/16 Page 12 of 12