Little attention has been paid to the financial policy opinions of recently confirmed Supreme Court Justice Amy Coney Barrett, but her decision in a recent debt collection case has sparked the interest of some banking law experts .
As a federal appeals judge, Barrett authored an opinion in 2019 suggesting that consumers must show concrete harm in order to sue debt collectors.
“The bottom line of our opinion can be stated succinctly: no harm, no fault,” Barrett wrote in Casillas v. Madison Ave. Associates Inc.
Barrett, who was sworn in as a Supreme Court justice on Monday night, had ruled that Paula Casillas lacked standing to claim a violation of the Fair Debt Collection Practices Act because she failed to was injured when third-party collector Madison Ave. Associates had not provided written notice of a debt.
“The only harm Casillas claimed to have suffered … was the receipt of an incomplete letter – and that is insufficient to establish federal jurisdiction,” Barrett wrote in the ruling.
His ruling cited the 2016 Supreme Court decision in Spokeo, Inc. v. Robins, in which the High Court took a restrictive view of when Congress can impose penalties for procedural violations of the statutes.
But observers said Barrett’s view of the legal bar for plaintiffs bringing debt collection suits could be important if the matter returns to the High Court. Other jurists have argued that the standard set by Barrett and in Spokeo is too restrictive.
“What’s at stake is how wide the door to the courthouse should be when it comes to bringing these consumer protection claims,” said Chris Odinet, a law professor at the University of Iowa. “Judge Barrett essentially followed this narrow view of Spokeo’s consumer harm requirements, which other judges have found actually ignores the broader harms that lie at the heart of these violations.”
In written questions from lawmakers ahead of her confirmation, Barrett was asked whether her decision in the Casillas case reflected a standard of deference to business.
“My decision for a unanimous panel in Casillas did not ‘apply a more deferential standard to business than to pro se litigants,'” she wrote in response to the congressional inquiry. “The defendant in this case sent the plaintiff a debt collection letter outlining the process of verifying a debt but did not specify that the plaintiff had to communicate in writing to trigger the legal protections.”
“The Supreme Court emphasized that ‘a mere breach of process, separate from any concrete harm’ does ‘not satisfy the factual harm requirement of Article III,'” it continued.
Yet a different court, the United States Court of Appeals for the 6th Circuit, had come to a different conclusion in a case similar to Barrett’s in the 7th Circuit decision, meaning the matter could be revisited by the High Court.
Some legal observers say Barrett has taken a more nuanced approach, sometimes siding with business and sometimes with consumers, depending on the facts.
“Judge Barrett did not say that companies are immune from liability for violations of the FDCPA, merely that this particular plaintiff in this particular case was not the consumer to be sued for that violation” said David Cohen, attorney at Orrick Herrington & Sutcliffe. The issue in the Casillas case was not whether the company violated the law, but whether this particular consumer was the right person to enforce that alleged violation. Judge Barrett’s opinion left open the ability of another consumer who had suffered concrete damage to sue.”
But some consumer advocates say Barrett’s ruling indicates that error or even fault can be excused if a consumer cannot prove harm.
“Rulings like Judge Barrett’s in Casillas raise obstacles to the enforcement of key consumer protection laws, threatening to render them a dead letter,” said Carolyn Carter, deputy director of the National Consumer Law Center.
The question of what constitutes “concrete” harm is still the subject of much debate. Although the court established a standard in the Spokeo case, these standards can be interpreted in several ways.
After Barrett’s panel decision, the entire 7th Circuit declined to hear an appeal of the case, but three full circuit judges disagreed with that opinion.
Barrett’s opinion “will make it significantly more difficult for consumers to enforce the protections against abusive debt collection practices that Congress has conferred into law,” the three justices wrote in their dissent. “That alone is embarrassing.”