Federal courts in the Seventh Circuit, like the Fifth, require a real harm from a misleading letter about an old debt, which is why paying or promising to pay matters.
A consumer who received a letter offering to settle a time-barred debt, but who did not pay, promise to pay, or otherwise act to her detriment, lacked Article III standing to seek damages; confusion, worry, calling the collector, and consulting a lawyer are not concrete injuries.
- Case
- Pierre v. Midland Credit Management, Inc.
- Citation
- Nos. 19-2993 & 19-3109 (7th Cir. Apr. 1, 2022)
- Court or agency
- U.S. Court of Appeals for the Seventh Circuit
- Date
- April 1, 2022
- Precedential
- Yes (published)
- Law
- FDCPA
Summary
Midland Credit sent an Illinois consumer a 'discount program' offer on a time-barred Target credit card debt. A district court granted the class summary judgment and a jury awarded about $350,000. A divided Seventh Circuit vacated because the named plaintiff suffered no concrete injury, over a strong dissent by Judge Hamilton.
Background
Renetrice Pierre defaulted on a Target National Bank credit card. Midland Funding bought the debt and sued her in 2010, then dismissed that suit. In 2015, Midland Credit Management sent her a letter saying she had been “pre-approved for a discount program designed to save [her] money,” with payment plans offering up to 40% savings. The statute of limitations had run. The letter said that because of the debt’s age, Midland would not sue her or report it to a credit agency.
Pierre was confused and worried about being sued again. She called Midland to contest the debt, then hired a lawyer and filed a class action under the FDCPA. The district court certified an Illinois class and granted summary judgment on liability under the Seventh Circuit’s earlier Pantoja decision. A jury awarded statutory damages of just over $350,000.
What the court held
The panel (Chief Judge Sykes and Judges Hamilton and Brennan; opinion by Chief Judge Sykes) vacated the judgment and remanded with instructions to dismiss for lack of subject-matter jurisdiction.
Applying TransUnion v. Ramirez, the court explained that the letter “might have created a risk that Pierre would suffer a harm, such as paying the time-barred debt. But a risk, at most, is all it was.” Pierre “didn’t make a payment, promise to do so, or otherwise act to her detriment.” Calling the collector and seeking legal advice are not legally cognizable harms; otherwise “the concreteness requirement would be an empty one if all it took was contacting a lawyer and filing suit.” Confusion and worry, the court said, are likewise insufficient “in this context.”
Judge Hamilton dissented at length, arguing that the court’s recent standing decisions leave “at least the FDCPA largely neutered in the three states of the Seventh Circuit” and that emotional distress caused by deceptive collection practices is a real injury Congress can make actionable.
Our take
Pierre is out of circuit, but the Fifth Circuit’s Perez v. McCreary, Veselka, Bragg & Allen decision a few months later followed the same reasoning and cited the same Seventh Circuit cases. Together they mean that a time-barred debt letter that misleads, but does not lead to a payment or other concrete harm, is hard to challenge in federal court.
There is a difference worth noting. The Seventh Circuit has said worry is not enough “in this context,” while the Fifth Circuit in Calogero (2024) accepted fear, anxiety, and emotional distress as a concrete injury, which binds federal courts in Texas, Louisiana, and Mississippi.
What it means if you’re sued in Texas
If you are sued on an old debt in Texas, limitations is a defense you raise in your answer, and standing doctrine does not limit your right to defend yourself. If a collector’s letter led you to make a payment, sign a promise, or caused real distress, write it down and keep the records. A free case review is available if you want to talk about an old debt.
Takeaway
The Fifth Circuit's Perez decision cites the same line of cases. If you made a payment or promise on an old debt because of a collector's letter, that fact can be decisive.
Sources
Primary authority
Secondary sources
- Commentary: Pierre v. Midland Credit Management (California Lawyers Association, Business Law Section)
- Case page: Pierre v. Midland Credit Management (Public Citizen)
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.