James Hagy v. Demers & Adams
882 F.3d 616
6th Cir.2018Background
- In 2010 James and Patricia Hagy executed a Warranty Deed in Lieu of Foreclosure after communications from Green Tree and its counsel (Demers & Adams). Demers sent letters on June 8 and June 30 confirming Green Tree would waive any deficiency balance.
- Green Tree later made collection calls for the deficiency; the Hagys sued Green Tree (arbitrated) and sued Demers and his firm in federal court under the FDCPA and Ohio consumer statutes for failing to include FDCPA disclosures.
- The district court granted summary judgment for the Hagys, finding Demers’ June 30 letter violated 15 U.S.C. § 1692e(11) and awarding statutory damages, costs, and substantial attorneys’ fees.
- Demers appealed, arguing lack of Article III standing, that the June 30 letter was not a “communication with the consumer,” Ohio law did not incorporate the FDCPA, and the fee award was excessive.
- The Sixth Circuit held the Hagys lacked Article III standing for both the federal FDCPA claim and the related state-law claims because the June 30 letter caused no concrete injury beyond a bare procedural statutory violation; the court reversed and dismissed for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for FDCPA claim | Hagy: statutory violation of §1692e(11) alone suffices as injury | Demers: no concrete injury — letter gave good news and caused no harm; Congress cannot create Article III injury out of thin air | Held: No Article III standing; bare procedural violation insufficient after Spokeo |
| Whether June 30 letter was a "communication with the consumer" under §1692e(11) | Hagy: letter to counsel still targets consumer and triggers disclosure requirement | Demers: letter to attorney is not a consumer communication subject to §1692e(11) | Not reached on merits — dismissed for lack of jurisdiction |
| Incorporation/application of Ohio consumer statutes | Hagy: Ohio law incorporates FDCPA requirements | Demers: Ohio law does not apply or requires consumer transaction/supplier nexus | Not reached on merits — supplemental jurisdiction unavailable without federal claim |
| Award of attorneys' fees | Hagy: fees appropriate under statute and for successful claim | Demers: fee award disproportionate/abusive | Not reached on merits due to dismissal for lack of jurisdiction |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (statutory violations require concrete injury to satisfy Article III)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (irreducible Article III standing requirement: concrete, particularized, and traceable injury)
- DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006) (plaintiff must demonstrate standing for each claim)
- Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) (federal courts cannot decide abstract legal questions; case-or-controversy requirement)
- Lyshe v. Levy, 854 F.3d 855 (6th Cir. 2017) (statutory creation of duty alone does not automatically satisfy Article III)
- United States v. Lopez, 514 U.S. 549 (1995) (limits on congressional power to define scope of federal judicial/legislative authority)
- City of Boerne v. Flores, 521 U.S. 507 (1997) (congressional enforcement powers cannot redefine constitutional limits)