In Texas federal courts, you generally need a real harm from a collector's misleading letter, such as a payment, a financial loss, or genuine distress, before you can sue over it.
A consumer who received a collection letter on a time-barred debt that did not disclose the debt was time-barred lacked Article III standing to seek damages or a declaration, because a bare statutory violation, an unrealized risk of paying, confusion, and time spent consulting a lawyer are not concrete injuries.
- Case
- Perez v. McCreary, Veselka, Bragg & Allen, P.C.
- Citation
- 45 F.4th 816 (5th Cir. 2022), No. 21-50958
- Court or agency
- U.S. Court of Appeals for the Fifth Circuit
- Date
- August 15, 2022
- Precedential
- Yes (published)
- Law
- FDCPA, Texas law
Summary
A law firm collecting for the City of College Station sent Mariela Perez a form letter on utility debt that was past Texas's four-year limitations period without saying so. The district court certified a class of Texans, but the Fifth Circuit raised standing on its own, applied TransUnion v. Ramirez, and ordered the case dismissed for lack of jurisdiction.
Background
McCreary, Veselka, Bragg & Allen (MVBA) collects debts owed to Texas local governments. In 2019 it sent Mariela Perez a form letter demanding several hundred dollars in unpaid utility charges owed to the City of College Station. The debt had become delinquent four years and one day before the letter, so under Texas’s four-year statute of limitations (Tex. Civ. Prac. & Rem. Code § 16.004(a)) it could no longer be enforced in court. The letter did not mention that.
Perez sued under 15 U.S.C. § 1692e, the FDCPA’s ban on false or misleading representations, and asked to represent a class of Texans who got the same letter. She said the letter created a risk she would pay a time-barred debt, confused her, and made her consult a lawyer. The Western District of Texas certified the class, and MVBA appealed under Rule 23(f).
What the court held
The panel (Judges Davis, Smith, and Engelhardt; opinion by Judge Jerry E. Smith) raised standing itself, even though MVBA did not contest it on appeal, and vacated the class certification with instructions to dismiss for lack of jurisdiction.
Applying TransUnion LLC v. Ramirez, the court rejected each theory of injury:
- Statutory violation alone. TransUnion “forecloses” the idea that violating FDCPA rights is itself a concrete injury, whether the right is called substantive or procedural.
- Risk of paying a time-barred debt. A risk that never materializes cannot support a damages claim. The court said its earlier decision in Sayles v. Advanced Recovery Systems (2017), which accepted risk-based standing, “can’t be squared with TransUnion.”
- Confusion. The court joined other circuits in holding that “the state of confusion, absent more, is not a concrete injury under Article III.”
- Time spent consulting a lawyer. Perez did not allege she paid for the consultation and offered no common-law analog for lost time. The court left that question open for future cases.
- Intrusion upon seclusion. A single unwanted letter, sued on under § 1692e rather than the harassment provision in § 1692d, did not supply standing.
Her request for a declaratory judgment failed too, because she did not allege an ongoing or imminent risk of receiving another misleading letter.
The court also noted that a plaintiff can sue for damages when a risk causes a separate injury, “such as emotional distress.” The Fifth Circuit later relied on that point in Calogero v. Shows, Cali & Walsh (2024), citing Perez at 45 F.4th 824.
Our take
Perez did not decide that the letter was lawful. The district court had found a violation, and the Fifth Circuit never reached the merits. What Perez changed is who can get into federal court. A Texan who simply receives a misleading letter, reads it, and does nothing may have no federal claim, even if the letter broke the law.
That is a real narrowing of consumer protection, and it falls hardest on class actions over form letters. But the opinion leaves room for people who were actually hurt: those who paid on a dead debt, signed a payment plan, lost money, or suffered genuine distress.
What it means if you’re sued in Texas
If a collector is pursuing a debt older than four years, do not assume you have to pay it, and be careful about making a partial payment or signing anything before you get advice. If you are already being sued, limitations is a defense you must raise in your answer. If a collector’s letter or lawsuit caused you a concrete loss or real distress, write down what happened and keep every letter and payment record, because those facts may decide whether you have a claim. A free case review is available if you want us to look at your situation.
Takeaway
Federal FDCPA claims in the Fifth Circuit now rise or fall on proof of a concrete injury. Keep records of any payment, out-of-pocket cost, or distress a collector's conduct caused you.
Sources
Primary authority
Secondary sources
This summary and analysis are general information, not legal advice. Later decisions, amendments or agency actions may change the law; check the current status before relying on it.