Ronald Sayles v. Advanced Recovery Systems, Inc
2017 U.S. App. LEXIS 12080
| 5th Cir. | 2017Background
- ARS, a debt-collection agency, sent notices in 2013 to credit reporting agencies about two alleged debts owed by Sayles to St. Dominic’s Hospital; Sayles says he first learned of the entries from a February 2014 credit report.
- On March 5, 2014, Sayles faxed ARS a letter disputing the debts and requesting validation; ARS did not respond.
- Sayles’s April 16, 2014 credit report showed ARS had updated the debts but did not mark them as “disputed.”
- Sayles sued under FDCPA § 1692e(8) (prohibiting reporting credit info known or which should be known to be false, including failing to report that a debt is disputed).
- Parties agreed no material factual disputes remained; the district court limited briefing to whether § 1692e(8) incorporates § 1692g’s validation/dispute requirements, then granted judgment for Sayles.
- ARS appealed, arguing procedural error under Rule 56(f), that § 1692e(8) incorporates § 1692g, and that Sayles lacked Article III standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court violated Rule 56(f) by effectively granting summary judgment sua sponte | Sayles: court gave notice and limited the case to a pure legal question; parties had opportunity to brief | ARS: court granted judgment without following Rule 56(f) procedures | Held: No Rule 56(f) violation; even if error, harmless because ARS admitted no factual disputes |
| Whether FDCPA § 1692e(8) incorporates the validation/dispute timing requirements of § 1692g | Sayles: § 1692e(8) independently requires reporting a debt’s disputed status when collector knows or should know | ARS: § 1692e(8) should be read to require compliance with § 1692g’s notice-within-30-days rule before a debt is “disputed” for reporting purposes | Held: § 1692e(8) does not incorporate § 1692g; its “knows or should know” standard stands alone, so ARS violated § 1692e(8) by failing to report the dispute |
| Whether Sayles suffered a concrete injury for Article III standing after Spokeo | Sayles: the failure to mark a debt as disputed creates a real risk of financial harm from an inaccurate credit rating, satisfying Spokeo | ARS: absence of tangible harm means no concrete injury | Held: Injury is concrete — statutory violation created a real risk of harm (inaccurate credit rating); standing satisfied |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (district courts may enter summary judgment sua sponte if parties have notice and opportunity to respond)
- Brady v. Credit Recovery Co., Inc., 160 F.3d 64 (1st Cir. 1998) (§ 1692e(8) requires disclosure of disputed status when collector knows or should know; § 1692g timing rules do not carry over)
- Leatherman v. Tarrant Cty. Narcotics Intelligence & Coordination Unit, 28 F.3d 1388 (5th Cir. 1994) (lack of Rule 56(f) notice can be harmless when nonmoving party admits it has no additional evidence)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (concrete injury requirement; statutory procedural violations can constitute concrete injury when they create a risk of real harm)