Audrey Wadsworth v. Kross, Lieberman & Stone, Inc
12 F.4th 665
| 7th Cir. | 2021Background
- Audrey Wadsworth was hired by Pharmaceutical Research Associates, Inc. (PRA) with a two‑installment signing bonus subject to an 18‑month clawback if she left or was fired for cause.
- Wadsworth received both payments but was fired after one year; PRA engaged Kross, Lieberman & Stone to recover the bonus.
- Kross sent a collection letter and its employee called Wadsworth four times; Wadsworth sued under the FDCPA alleging: (1) failure to provide the §1692g written notice within five days, and (2) caller failed to identify herself as a debt collector (§§1692d(6), 1692e(11)).
- The district court granted summary judgment for Wadsworth; Kross appealed. The parties litigated applicability of the FDCPA (whether the bonus was a “debt” and whether Kross was a “debt collector”), but did not adequately address Article III standing.
- At deposition Wadsworth admitted she paid no money to PRA or Kross and offered only testimony of stress, anxiety, embarrassment, and sleep loss as harms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing / injury‑in‑fact for FDCPA claims | Wadsworth: anxiety, stress, humiliation from Kross’s communications suffices as injury | Kross: no concrete harm; only procedural violations; plaintiff paid nothing and suffered no actionable harm | No standing — emotional/distress/annoyance found insufficient; reverse and dismiss for lack of jurisdiction |
| Whether failure to provide §1692g notice caused harm | Wadsworth: lack of notice impaired her statutory rights and could cause substantive harm | Kross: no evidence notice omission caused any concrete injury or risk of harm | Court: plaintiff did not show harm or appreciable risk to the concrete interest Congress protected; procedural violation alone insufficient |
| Whether caller identified as a debt collector (§1692d(6), §1692e(11)) | Wadsworth: caller never identified herself as a debt collector or stated collection purpose | Kross: disputed applicability (also argued collector/debt issues) | Not reached on merits due to lack of Article III standing; dismissal required |
| Whether signing bonus is a “debt” and Kross a “debt collector” | Wadsworth: bonus obligation is a debt subject to FDCPA; Kross acted as debt collector | Kross: bonus not a debt or not in default, so FDCPA inapplicable | Not resolved — court declined to reach these questions because of jurisdictional defect |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (procedural statutory violations require a concrete injury to establish Article III standing)
- TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021) (intangible injuries can be concrete but must cause real harm or actual risk to an interest protected by statute)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires concrete and particularized injury; pleading‑stage standards)
- Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) (standing is a threshold jurisdictional requirement)
- Casillas v. Madison Ave. Assocs., 926 F.3d 329 (7th Cir. 2019) (Congress can elevate intangible harms but Article III limits remain)
- Bazile v. Financial Systems of Green Bay, Inc., 983 F.3d 274 (7th Cir. 2020) (FDCPA notice violations produce concrete injury only if they impair use of rights for a substantive purpose)
- Smith v. GC Services Ltd. Partnership, 986 F.3d 708 (7th Cir. 2021) (concrete harms under FDCPA include paying money one did not owe)
- Brunett v. Convergent Outsourcing, Inc., 982 F.3d 1067 (7th Cir. 2020) (confusion or lack of information alone, without detriment, is not a concrete injury)
- Pennell v. Global Trust Mgmt., 990 F.3d 1041 (7th Cir. 2021) (stress alone does not constitute concrete injury in FDCPA cases)
- Nettles v. Midland Funding LLC, 983 F.3d 896 (7th Cir. 2020) (standing is jurisdictional and cannot be waived)