Richard Hunstein v. Preferred Collection and Management Services, Inc.
17 F.4th 1016
11th Cir.2021Background
- Hunstein incurred a medical debt for his minor son, which Johns Hopkins All Children’s Hospital assigned to Preferred Collections & Management Services, Inc. (Preferred).
- Preferred electronically transmitted Hunstein’s sensitive debt information (debtor status, exact balance, creditor, his son’s name, and that the debt arose from the son’s medical treatment) to CompuMail, a commercial mail vendor; CompuMail printed and mailed a dunning letter to Hunstein.
- Hunstein sued under the FDCPA, principally 15 U.S.C. § 1692c(b), alleging Preferred unlawfully communicated his personal information to an unauthorized third party; the district court dismissed for failure to state a claim and questioned standing.
- On appeal the Eleventh Circuit (considering Spokeo and TransUnion) treated the complaint as true, asked whether Hunstein alleged a concrete Article III injury, and whether the transmission was a communication "in connection with the collection of any debt."
- The panel noted Preferred conceded the transmission was a "communication" under the FDCPA; the court held Hunstein had Article III standing (statutory violation analogized to public disclosure of private facts) and that the transmission to CompuMail was "in connection with" debt collection.
- Court reversed the dismissal and remanded; the opinion also addresses industry implications and rejects importing a §1692e demand-for-payment gloss or a Seven‑factor balancing test for §1692c(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing — is the alleged statutory violation a concrete injury? | Hunstein: transmission of sensitive medical/debt info to vendor is an intangible but concrete privacy injury analogous to public disclosure of private facts; Congress intended to protect privacy under the FDCPA. | Preferred: mere statutory violation without dissemination to the public at large is not a concrete Article III injury; TransUnion requires a close match to common-law harm. | Court: Yes. Under Spokeo/TransUnion, intangible harms need be similar in kind (not degree) to a traditional tort; disclosure to vendor’s employees suffices at pleading stage to be close to public-disclosure-of-private-facts and Congress’s judgment supports concreteness. |
| Statutory scope — was transmitting consumer info to CompuMail "in connection with the collection of any debt" under §1692c(b)? | Hunstein: ordinary meaning of "in connection with" covers communications to vendors that relate to debt collection; transmission of debt details to a mail vendor is connected to collection. | Preferred: §1692c(b) should be read like §1692e cases to require a demand-for-payment or adopt multifactor balancing (Goodson); or CompuMail is a mere "medium," not a person, so no prohibited communication. | Court: Yes. The plain meaning of "in connection with" is broad; adding a demand-for-payment requirement would render §1692c(b)’s exceptions superfluous. CompuMail qualifies as a "person" and the transmission was "in connection with" collection. |
| Proper interpretive approach — adopt demand-for-payment or multifactor test? | Hunstein: plain-text/common-sense reading controls; no need to graft §1692e demand test or Goodson factors onto §1692c(b). | Preferred: courts should require a demand-for-payment or apply Goodson’s multifactor test to avoid expansive liability and respect industry practice. | Court: Rejects demand-for-payment gloss and Goodson balancing for §1692c(b); such imports would make statutory exceptions redundant and obscure clear textual limits. |
| Industry practice and intermediaries — do intermediaries (mail vendors) fall within §1692c(b) concerns? | Hunstein: even if industry practice exists, FDCPA protects privacy; transmission to vendor employees can be actionable. | Preferred: Congress contemplated intermediaries (e.g., telegrams); vendor use is common and not the abuse FDCPA targets; CompuMail is a "medium," not a prohibited "person." | Court: Treats vendor as a "person" for §1692c(b) and declines to exempt ordinary vendor use; recognizes economic consequences but leaves policy changes to Congress. |
Key Cases Cited
- TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021) (clarifies Spokeo’s "close relationship" test and distinguishes harms based on dissemination)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (statutory violations can supply concrete injury if closely related to traditional harms; consider history and Congress’s judgment)
- Muransky v. Godiva Chocolatier, Inc., 979 F.3d 917 (11th Cir. en banc 2020) (discusses concreteness, types of harms, and analogy to common-law causes)
- Trichell v. Midland Credit Mgmt., Inc., 964 F.3d 990 (11th Cir. 2020) (FDCPA standing analysis; role of actual damages in statute’s remedial scheme)
- Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211 (11th Cir. 2012) (interpreting “in connection with” in §1692e by reference to letters that demand payment)
- Caceres v. McCalla Raymer, LLC, 755 F.3d 1299 (11th Cir. 2014) (similar §1692e analysis focusing on collection-language in communications)
- Salcedo v. Hanna, 936 F.3d 1162 (11th Cir. 2019) (TCPA standing; cautions about degree vs kind but emphasizes qualitative inquiry)
- Gadelhak v. AT&T Servs., Inc., 950 F.3d 458 (7th Cir. 2020) (text-message TCPA injury analogous in kind to intrusion upon seclusion; kind-not-degree framing)
- Lupia v. Medicredit, Inc., 8 F.4th 1184 (10th Cir. 2021) (post-TransUnion: single unwanted call can be analogous in kind to intrusion upon seclusion)
- In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625 (3d Cir. 2017) (FCRA dissemination violations bear a close relationship to privacy torts)