The Fourth Circuit and Eastern District of Virginia Apply Spokeo to the FCRA and FDCPA

On May 16, 2016 the Supreme Court of the United States handed down the opinion for Spokeo, Inc. v. Robins, No. 13-1339, a case addressing the constitutional requirement of “standing” – the floor requirement for a plaintiff to file a claim in federal court.  The Court held that plaintiffs cannot rely merely on a statutory violation to establish standing; there must be some injury in fact.  Unfortunately, the Court did not address whether the facts of the case satisfied the injury in fact requirement to meet the standing threshold but it did provide guidelines to future litigants on what constitutes injury in fact.  Since the Supreme Court ruled on Spokeo, the United States District Court for the Eastern District of Virginia (EDVA) and the United States Court of Appeals for the Fourth Circuit (Fourth Circuit) have applied the holding in Spokeo, providing litigants with a clearer picture of what constitutes standing.

Overview of Spokeo

The question in Spokeo was whether a plaintiff who suffers no concrete harm, but who instead alleges only a bare statutory violation, has standing under Article III of the United States Constitution to file a lawsuit in federal court.  Article III of the U.S. Constitution specifically limits the jurisdiction of the federal courts to actual “cases and controversies.”  For there to be an actual case or controversy, courts demand a plaintiff to show he has “standing” to sue.  If the plaintiff cannot show an injury in fact, he has no standing to sue and the federal courts have no jurisdiction to hear the case.  

The Supreme Court of the United States decided that “injury-in-fact” requires a plaintiff to show an injury that is both “concrete and particularized,” and the Ninth Circuit neglected to address whether Robins’ injury was concrete.  The Court remanded the case to the Ninth Circuit to determine if the plaintiff’s injury was concrete and particularized despite the fact he could plead a statutory violation.

Because the Supreme Court did not squarely address the issue on the merits, statutory standing has still been somewhat uncertain around the nation.  Fortunately, the EDVA and the Fourth Circuit have addressed standing issues since the Spokeo decision, shedding light on the extent Spokeo limits a plaintiff’s right to sue when alleging a statutory violation.

For a greater in-depth discussion of the Spokeo decision, see my earlier blog post on Spokeo v. Robins.

Coleman v. Charlottesville Bureau of Credits, Inc. (EDVA 2017)

On April 17, 2017, the Richmond Division of the Eastern District of Virginia addressed whether the Plaintiff in her Fair Debt Collection Practices Act (FDCPA) claim adequately pled a particularized and concrete injury sufficient to confer Article III standing to sue.  The court decided in favor of the defendant, finding the court lacked subject-matter jurisdiction to hear the matter as plaintiff did not suffer an injury in fact.

The debt in this matter was a consumer debt with Commonwealth Lab Consultants – the original creditor.  The defendant, Charlottesville Bureau of Credits, Inc., had reported this debt on the plaintiff’s credit report.

After the debt was reported, the plaintiff sent a letter to the defendant disputing the debt. About two and half months later, the plaintiff discovered the defendant had re-reported the debt and had not listed it as being “disputed by consumer.”  As a result, the plaintiff sued the defendant under the FDCPA alleging “she ha[d] been damaged” and was “entitled to damages in accordance with the FDCPA,” but at no point did she plead with any degree of specificity how she had allegedly been damaged.


In finding for the Defendant, the court applied the Supreme Court’s decision in Spokeo.  The court stated: “When a plaintiff alleges a statutory violation, she usually must plead an additional injury in order to satisfy the concreteness requirement . . . . The Supreme Court has noted that in some circumstances, however, merely pleading the violation of a procedural right granted by statute may be sufficient to satisfy concreteness.  This occurs in situations where the legislature has codified causes of action with intangible harms where recovery was long permitted at common law [such as slander].  A plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.  However, absent this narrow exception where Congress has codified a common law intangible injury, standing only exists for a statutory violation where the plaintiff has also alleged an additional concrete harm.”

Such as in Spokeo, where the consumer reporting agency fails to provide the proper notice or displays benign inaccurate information, “while both of these situations constitute statutory violations, the ‘victim’ has no standing because the conduct does not cause harm or present any material risk of harm.”  The court determined that the entirety of plaintiff’s complaint amounted to an allegation that the Defendant violated various provisions of the FDCPA by failing to list her account as “disputed by consumer” when it reported the debt on her credit report, lacking any reference to the plaintiff suffering any actual harm as a result of these violations.  The court thus concluded that the plaintiff had failed to allege a “concrete and particularized” harm.

Despite the inadequacies in the complaint, the court addressed whether the plaintiff alleged a “risk of real harm” likely to occur in the future, as stated Spokeo.  Plaintiff argued in her brief that the failure to communicate that a disputed debt is disputed presents a risk of harm to the consumer sufficient to create Article III standing.”  In response, the court opined that although it “recognizes both the importance of this requirement under the FDCPA and the possible effect that a violation could have on a consumer’s credit score, such a violation does not mean ispo facto that the debtor is likely to suffer a future risk of harm.”  The court determined that such an argument was far too speculative to confer standing.

Finally, the court considered whether the statutory provisions alleged to have been violated were causes of action of the type the legislature had codified that were long permitted at common law, as permitted by Spokeo.  In concluding, the Court issued this helpful holding in regards to FDCPA violations: “The Court finds that alleging a statutory violation evolving from Defendant’s failure to list an account as disputed, without more, is not the type of common law invasion of a right that is sufficient to create the type of concrete injury envisioned by Spokeo.” The plaintiff must plead a concrete harm in order to satisfy the injury-in-fact requirement of Article III.

Dreher v. Experian Information Solutions, Inc. (4th Cir. 2017)

On May 11, 2017, the Fourth Circuit issued the opinion in Dreher.  The court in Dreher addressed whether the decision of Experian to list a defunct credit card company, rather than the name of its servicer, as a “source of information” on an individual’s credit report, without more, created sufficient injury in fact under the FCRA to confer Article III standing.  The Fourth Circuit held that where “an individual fails to allege a concrete injury stemming from allegedly incomplete or incorrect information listed on a credit report, he or she cannot satisfy the threshold requirements of constitutional standing.”

In Dreher, the plaintiff had an outstanding credit card balance on his credit report.  Because the plaintiff was seeking a security clearance, the plaintiff contacted the credit issuing bank to delete inaccurate information regarding this debt, but the bank never addressed the issue because it was defunct.  Experian unfortunately did not note this information on the credit report.  Regardless of the error, the plaintiff was issued his security clearance within eight days.  After the security clearance was issued, the account was deleted from the credit report.

The plaintiff sued Experian under the FCRA because it failed to include the name of the new servicer of the debt on its credit reports. Experian moved to dismiss the claim at trial court on October 31, 2014, due to a lack of standing but the trial court denied the motion.

After the district court eventually awarded judgment in favor of the plaintiff, Experian noted an appeal, which was held in abeyance pending the Spokeo decision in May 2016.   

In its opinion post-Spokeo, the Fourth Circuit empathized the Spokeo court’s requirement that a concrete injury is de facto, meaning it must actually exist.  It may not be abstract.

The plaintiff argued he suffered concrete injury through an informational injury because he was denied specific information to which he was entitled under the FCRA. The court determined that “an informational injury is a type of tangible injury that can constitute an Article III injury in fact . . . however a statutory violation alone does not create a concrete informational injury sufficient to support standing.”  A constitutionally cognizable informational injury requires that a person lack access to information to which he is legally entitled and that the denial of that information creates a real harm with an adverse effect.

The court agreed with the District of Columbia Circuit Court of Appeals’ decision in Friends of Animals that “a plaintiff suffers a concrete informational injury where he is denied access to information required to be disclosed by statute, and he ‘suffers, by being denied access to that information, the type of harm Congress sought to prevent by requiring disclosure.”  To show informational injury, you need both.

In this case, the plaintiff failed to show that his situation would have been any different had Experian reported the correct information.


Because the Supreme Court in Spokeo did not address whether the facts of the case satisfied the injury in fact requirement to meet the standing threshold and only provided guidelines to future litigants on what constitutes injury in fact, these recent cases in the Fourth Circuit and Eastern District of Virginia help provide guidance to collections and reporting agencies responding to demand letters and defending themselves in litigation. Thankfully, these courts have issued opinions bolstering the Spokeo decision and preventing plaintiffs from alleging frivolous claims where they have not suffered any injury in fact. These cases will save companies thousands in legal fees defending claims resulting from bona fide errors where no real harm was suffered.  

As more cases expand on Spokeo in the Fourth, Third, and D.C. Circuits we will keep you updated.