Friedman v. Cavalry Portfolio Services, LLC
1:23-cv-00304-BMC
E.D.N.YMay 30, 2023Background
- Two FDCPA actions (Friedman and Deutsch) were consolidated; both involve allegedly noncompliant collection letters received by different plaintiffs.
- Plaintiffs sued in New York state court; defendants removed to federal court under federal-question jurisdiction.
- The Court sua sponte questioned whether the complaints alleged an Article III injury-in-fact and ordered show-cause; plaintiffs declined to assert Article III standing.
- Complaints used nearly identical boilerplate allegations: confusion about the letters, time and money spent evaluating options, lost opportunity to settle at a discount, and emotional/physical harms (fear, anxiety, sleep disturbance, increased heart rate).
- Defendants argued those allegations were sufficient to confer standing; the Court found them conclusory, vague, and typical of mass-produced FDCPA complaints.
- Because plaintiffs failed to plead a concrete, particularized injury-in-fact, the Court concluded it lacked Article III jurisdiction and remanded the cases to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing — injury-in-fact required by Spokeo/TransUnion | Plaintiffs alleged concrete harms (time, money, confusion, emotional/physical distress) caused by the letters. | Complaints’ factual allegations suffice to establish an injury-in-fact and federal jurisdiction. | Court: Allegations are conclusory/boilerplate and do not plausibly allege a concrete, particularized injury; no Article III standing. |
| Reliance/mitigation theory (time/money spent responding or mitigating risk) | Time/money spent assessing or mitigating the debt risk establishes concrete harm. | Same — that reliance and diversion of funds show injury. | Court: Bare, unspecified expenditures from ‘‘concern and confusion’’ are not concrete absent a non-speculative risk or factual enhancement showing real mitigation costs or reliance to plaintiff’s detriment. |
| Emotional/physical distress alleged (fear, anxiety, sleep problems, increased heart rate) | Such emotional harms constitute concrete injuries supporting standing. | Same — emotional distress is an injury-in-fact here. | Court: Conclusory assertions of emotional/physical harm, without factual detail or corroboration, are insufficient to plausibly plead injury-in-fact. |
| Removal/Remand — whether federal court may retain case | Plaintiffs did not press Article III standing; defendants sought federal forum. | Defendants argued the complaints confer Article III jurisdiction. | Court: Because plaintiffs failed to allege a concrete injury-in-fact, federal jurisdiction lacking; remanded to state court. |
Key Cases Cited
- Hendrickson v. United States, 791 F.3d 354 (2d Cir. 2015) (federal courts are courts of limited jurisdiction).
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (Article III requires a concrete and particularized injury-in-fact).
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (three-part standing test; injury must be actual or imminent).
- TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021) (Congress cannot convert a statutory violation into an Article III injury absent concrete harm).
- FW/PBS, Inc. v. Dallas, 493 U.S. 215 (1990) (standing is a fundamental jurisdictional doctrine).
- Financial Guaranty Insurance Co. v. Putnam Advisory Co., LLC, 783 F.3d 395 (2d Cir. 2015) (plaintiffs need not prove injury at pleading stage but must plausibly allege standing).
- Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140 (2d Cir. 2011) (plaintiff must allege facts that affirmatively and plausibly suggest standing).
- Maddox v. Bank of New York Mellon Tr. Co., N.A., 19 F.4th 58 (2d Cir. 2021) (conclusory emotional-distress allegations insufficient to plead standing).
- Calcano v. Swarovski North America Ltd., 36 F.4th 68 (2d Cir. 2022) (cookie-cutter, mass-produced complaints can render standing allegations implausible).
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleadings must contain factual enhancement to cross the line from possible to plausible).
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard requires more than speculative or conclusory allegations).