District Court Takes Perplexing View on FDCPA Standing

An Illinois district court has taken a broad view of standing under section 1692e of the FDCPA.  In Koval v. Harris & Harris, Ltd., 2017 U.S. Dist. LEXIS 53124 (N.D. Ill. Apr. 5, 2017), a demand letter addressed to Michael Koval was opened and read by his daughter, Kate Koval, who serves as his legal guardian and allegedly had authority to open and read her father’s mail and make decisions on his behalf concerning the mail.  Kate Koval took issue with certain statements contained in the demand letter and filed suit against the debt collector in her individual capacity alleging violations of 15 U.S.C. §1692e. 

The debt collector moved to dismiss the complaint.  In doing so, the debt collector maintained that Kate Koval did not have standing in her individual capacity to make claims under section 1692e as she was not an obligor on the debt and had not brought the suit in her representative capacity. 

Section 1692e prohibits false, deceptive, or misleading representations in connection with the collection of any debt.  Generally, the FDCPA’s purpose is to protect against abusive debt practices.  While several of the FDCPA’s sections are specific as to their intended scope (see, for instance 1692d) and whether they include persons other than the consumer, section 1692e is silent.

In addressing the debt collector’s argument that Kate Koval did not have standing to sue in her individual capacity, the court looked at other provisions of the FDCPA and concluded that while certain provisions are expressly limited to communications with the consumer (for instance, 1692g), section 1692e contains no such limitation.   The court therefore looked to whether the plaintiff was within the statutory provision’s zone of interest.  Relying on Seventh Circuit case law which instructed that “[t]he protections of the FDCPA generally do not extend to third parties, unless that person ‘can be said to stand in the consumer’s shoes,’” the court concluded that as her father’s legal guardian plaintiff was in the zone of protection.  “Protecting close associations…is consistent with the statute’s own definition of “consumer”.  Koval at *4.

Moreover, the court was influenced by two other factors.  First, the FDCPA’s definition of “consumer” includes the consumer’s legal guardian.  The plaintiff, therefore, could have sued in her representative capacity and avoided the standing issue altogether.  Secondly, the FDCPA provision at issue (1692e) did not explicitly limit itself to consumers. 

The court’s decision is troublesome.  While it is apparent from its face that the court is attempting to take an equitable and practical view under the facts, it does not prevent the conclusion that the court has allowed a third party to sue personally and potentially recover personally damages for a collection letter sent to someone else.