FOLEY v. MEDICREDIT, INC.
3:21-cv-19764
| D.N.J. | Jul 29, 2022Background
- Plaintiff Edith Foley incurred a medical debt to St. Mary Medical Center that was referred to debt collector Medicredit.
- Medicredit transmitted Foley’s account information to a third‑party mailing vendor, which sent a collection letter stating an urgent notice, a $20 returned‑check fee, and requesting updated personal information.
- Foley brought a putative class action in New Jersey state court alleging violations of the FDCPA (15 U.S.C. §§ 1692c(b), 1692e) for improper third‑party communications and misleading representations.
- Medicredit removed the action to federal court and moved to dismiss the amended complaint.
- The district court analyzed Article III standing (injury‑in‑fact), focusing on (1) the alleged privacy injury from sharing information with a mail vendor and (2) alleged informational harm from misleading statements in the letter.
- The court concluded Foley lacked a concrete, particularized injury and therefore remanded the case to state court, denying Medicredit’s motion as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sharing plaintiff's information with a third‑party mail vendor gives Article III injury (privacy/publication) | Foley: disclosure to the vendor invaded privacy and is a concrete harm akin to public disclosure of private facts | Medicredit: transmission to a vendor is at most internal processing, not public dissemination, so no concrete injury | Held: No. Allegations do not show publication to the public at large; disclosure to a small group (vendor employees) is insufficient for a traditional privacy harm and thus not a concrete Article III injury |
| Whether misleading or deceptive statements in the collection letter caused a concrete informational injury | Foley: the letter was false/misleading and could affect recipients’ decision‑making about the debt | Medicredit: misleading language alone—without consequential action or tangible harm—does not create a concrete injury | Held: No. Mere receipt of a confusing/misleading letter without alleged consequential action or other concrete harm is only a statutory injury, not an Article III injury |
| Whether TransUnion/Spokeo framework permits standing for statutory FDCPA violations absent traditional harms | Foley: statutory violation of FDCPA suffices as injury | Medicredit: TransUnion/Spokeo require a concrete harm closely related to traditional harms; statutory violation alone is insufficient | Held: Court applies TransUnion/Spokeo—statutory violation alone insufficient; plaintiffs must allege concrete, traditional or closely related harm |
| Proper disposition when federal subject‑matter jurisdiction is lacking after removal | Foley: (implicit) case should remain in state court | Medicredit: removal was proper, seeks dismissal on merits | Held: Remand to state court under 28 U.S.C. § 1447(c); denial of Medicredit’s motion as moot because court lacks Article III jurisdiction |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts are courts of limited jurisdiction)
- Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, 454 U.S. 464 (1982) (Article III case or controversy requirement)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (standing requires concrete and particularized injury)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (elements of standing and injury‑in‑fact must be concrete and particularized)
- TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021) (statutory violations do not automatically confer Article III standing; injury must be closely related to traditional harms)
- Romaine v. Kallinger, 537 A.2d 284 (N.J. 1988) (definition of public disclosure of private facts under New Jersey law)
- McNemar v. Disney Store, Inc., 91 F.3d 610 (3d Cir. 1996) (publication requires communication to the public at large)