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New but Not Improved: On Panel Rehearing, 11th Circuit Issues Revised FDCPA Decision in Hunstein v. Preferred Collection and Management Services

On defendant’s petition for rehearing in Hunstein v. Preferred Collection and Management Services, Inc., a panel of the 11th Circuit recently issued a new, but not improved, decision involving the Fair Debt Collection Practices Act (FDCPA).The Hunstein II decision continues to warrant attention for debt-collection businesses that outsource customer-related tasks to vendors.

In its April 2021 decision, the 11th Circuit panel ruled that a collector’s transmittal of a customer’s debt-related data to a third-party letter preparation vendor without authorization stated a claim under the FDCPA, 15 U.S.C. § 1692c(b).In its superseding decision, the 11th Circuit panel examined the impact of the Supreme Court’s holding in TransUnion LLC v. Ramirez.Ramirez addressed the basis for establishing Article III standing under a federal statutory cause of action.In Hunstein II, the panel ruled––by a 2-to-1 vote––that the plaintiff had pleaded a concrete injury-in-fact sufficient to satisfy Article III.According to the court, while he could not show standing through a “tangible harm” or a “risk of real harm,” the plaintiff did establish standing through an “intangible injury resulting from a statutory violation.”The court reasoned, relying on Ramirez, that (1) § 1692c(b) bears a close relationship to the “common-law tort of public disclosure of private facts” that courts have long recognized as sufficient to state a claim, and (2) “Congress’s judgment indicates that violations of § 1692c(b) constitute a concrete injury.”The 11th Circuit then reiterated its prior ruling, with no material changes, that plaintiff had adequately stated an FDCPA claim. In particular, the court ruled that the plaintiff’s assertion that the defendant had transmitted his medical information to a third-party vendor described a communication “in connection with the collection of any debt” within the meaning of § 1692c(b).8

One of the panel members, the Hon. Gerald Tjoflat, issued a sharp dissent. Judge Tjoflat’s dissent highlighted three points.First, he reasoned that the plaintiff could not establish a claim for the “tort of public disclosure of private facts” because, as pleaded, the defendant had not made a “public” disclosure of the plaintiff’s information in communicating with its vendor who prepared the defendant’s correspondence for mailing.10 Second, Judge Tjoflat emphasized that Congress’ intent with the FDCPA was to stop abusive debt collection practices and not all debt collection.11 Based on the statutory scheme of the FDCPA, Congress envisioned a role for intermediaries, like mail vendors, in the debt collection process.12 Third, Judge Tjoflat concluded that the plaintiff had failed to establish standing to support his claim because he did not allege any additional harm beyond the statutory violation in his complaint.13Judge Tjoflat’s dissent may assist the defendant in petitioning the court for rehearing en banc and in petitioning the Supreme Court for a writ of certiorari. In the meantime, debt-collection businesses may want to examine Hunstein II carefully to understand the potential impact of the decision on their operations.

Hunstein v. Preferred Collection & Mgmt. Servs., Inc. (Hunstein II), No. 19-14434, 2021 WL 4998980, at *1 (11th Cir. Oct. 28, 2021).

Hunstein v. Preferred Collection & Mgmt. Servs., Inc. (Hunstein I), No. 19-14434, 2021 WL 1556069, at *8 (11th Cir. Apr. 21, 2021). For further background, please see the K&L Gates LLP client alert here.

TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 210 L. Ed. 2d 568 (2021). Ramirez addressed the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.

Hunstein II, 2021 WL 4998980, at *12.  

Id. at *3. 7.

Id. at *7, 12.  

Id. at *11-12.

Id. at 14.

Hunstein II, 2021 WL 4998980, at *16-24.

10 Id. at *21.

11 Id. at *22-23.

12 Id.

13 Id. at *24.

Copyright 2023 K & L GatesNational Law Review, Volume XI, Number 321

About this Author

Staff Lawyer

Keith McCarthy is a staff lawyer at the firm’s Boston office and is a member of the Financial Institutions and Services Litigation practice group. He focuses his practice on bankruptcy, real estate litigation, as well as business and consumer financial services litigation.

Andrew Glass, KL Gates Law Firm, Financial Litigation Attorney

Mr. Glass is a partner resident in K&L Gates’ Boston office, and a member of the firm's Consumer Financial Services Litigation and Class Action Litigation Defense groups, with extensive experience in complex commercial litigation. Mr. Glass's practice focuses on the defense of federal and state class action litigation brought against consumer financial services, mortgage lending, and consumer credit institutions. These class actions concern challenges under federal statutes, including the Fair Housing Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Real...

Gregory Blace, KL Gates Law Firm, Class Action Litigation Attorney

Mr. Blase is a partner in the Boston office of K&L Gates where he is a member of the firm's Class Action Litigation Defense group. Mr. Blase has experience in complex commercial litigation, and has represented mortgage lenders, servicers and other financial institutions in class action and individual suits under the Telephone Consumer Protection Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, Truth in Lending Act, Fair Housing Act, Equal Credit Opportunity Act, Real Estate Settlement Procedures Act, and various state unfair and deceptive practices...

David Fialkow, KL Gates Law Firm, Financial Services and Litigation Attorney

David Fialkow is a partner in the firm’s Boston office. He focuses his practice in commercial litigation, consumer finance litigation, class actions, and appellate advocacy.

Mr. Fialkow represents consumer financial services providers in litigation, class actions, arbitrations, and administrative proceedings involving state and federal laws governing lending, mortgage origination, loan servicing, auto loans, debt collection, credit reporting, unfair and deceptive practices, and other consumer financial laws. He also regularly handles state and...

Sean Higgins, KL Gates Law Firm, Financial Litigation Attorney

Sean Higgins is a partner in the firm’s Boston office focusing his practice on consumer financial services litigation where he regularly represents financial institutions, mortgage lenders, and mortgage loan servicers. In addition, Mr. Higgins handles complex commercial litigation, class actions, and appeals in both state and federal court. He also has experience with bankruptcy matters representing creditors in bankruptcy court and with bankruptcy appeals before the U.S. District Court and U.S. Court of Appeals.