Darlene Brunett v. Convergent Outsourcing, Inc.

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 19-3256
DARLENE BRUNETT,
Plaintiff-Appellant,
v.
CONVERGENT O UTSOURCING, INC.,
Defendant-Appellee.
____________________
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 18-C-0168 — Lynn Adelman, Judge.
____________________
ARGUED SEPTEMBER 16, 2020 — DECIDED DECEMBER 15, 2020
____________________
Before EASTERBROOK, MANION, and S CUDDER, Circuit
Judges.
EASTERBROOK, Circuit Judge. Convergent Outsourcing sent
Darlene BruneT a leTer demanding repayment of a debt that
slightly exceeded $1,000. The leTer also offered to accept
50% of the balance in satisfaction of the debt, and it added
that, if BruneT could not afford this much, she could contact
Convergent to discuss other options. The leTer told BruneT
that, if the creditor ended up forgiving more than $600, it

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2 No. 19-3256
would be required to report the release of indebtedness to
the Internal Revenue Service on Schedule 1099-C, because
federal law treats as taxable income a loan that is not repaid.
BruneT contends in this suit that the statement about re-
porting to the IRS violates the Fair Debt Collection Practices
Act (FDCPA), 15 U.S.C. §1692e(5), (10), because it threatens
action that cannot legally be taken and amounts to a false
representation. We have held that such a statement indeed
violates the Act if the creditor could not be required to notify
the IRS—if, for example, the total debt is below $600. See
Heredia v. Capital Management Services, L.P., 942 F.3d 811 (7th
Cir. 2019). But BruneT’s debt of $1,012 exceeds $600, so a re-
port would be required if Convergent accepted as full pay-
ment $412 or less. BruneT offered to pay Convergent $5 a
month, and as that is less than the interest on the debt it
amounted to a request that the whole debt be forgiven. Be-
cause reporting a forgiven debt to the IRS was a distinct pos-
sibility, and BruneT did not proffer evidence showing that
she had been misled to her detriment, the district judge held
on summary judgment that the Act had not been violated.
2019 U.S. Dist. LEXIS 187090 (E.D. Wis. Oct. 29, 2019).
The first question in this case, as in every other federal
suit, is whether there is a case or controversy within the
meaning of Article III. During her deposition BruneT con-
ceded that the leTer had not injured her. She did not pay
something she does not owe (or, indeed, anything at all). The
statement about the possibility of a report to the IRS did not
affect her credit rating or discourage anyone from doing
business with her. Cf. Northeastern Florida Chapter, Associated
General Contractors of America v. Jacksonville, 508 U.S. 656
(1993). Although BruneT asserted that she was confused by

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No. 19-3256 3
the leTer’s language, she did not tie that confusion to an in-
jury. This led us to direct the parties to file supplemental
memoranda addressing subject-maTer jurisdiction.
Several decisions hold that a plaintiff who lacks a con-
crete injury cannot sue under the Fair Debt Collection Prac-
tices Act or a similar statute just because a statement in a
leTer is incorrect or misleading. See, e.g., Spokeo, Inc. v. Rob-
ins, 136 S. Ct. 1540 (2016); Casillas v. Madison Avenue Associ-
ates, Inc., 926 F.3d 329 (7th Cir. 2019). BruneT contends that
these decisions are not controlling because they concern
“procedural” rights rather than “substantive” rights—which
is how she characterizes §1692e. Yet the need for injury in
fact is a constitutional rule that does not depend on how one
characterizes the statute involved. It is therefore unsurpris-
ing that Thole v. U.S. Bank N.A., 140 S. Ct. 1615 (2020), a case
in which the plaintiff asserted the violation of a substantive
right, found no standing using the approach of Spokeo. And
this court has recently held that the asserted violation of a
substantive right conferred by the Fair Debt Collection Prac-
tices Act does not guarantee the plaintiff’s standing. There
must still be a concrete injury. See Larkin v. Finance System of
Green Bay, Inc., No. 18-3582 (7th Cir. Dec. 14, 2020).
This returns us to the question whether BruneT has al-
leged injury. A debtor confused by a dunning leTer may be
injured if she acts, to her detriment, on that confusion—if,
for example, the confusion leads her to pay something she
does not owe, or to pay a debt with interest running at a low
rate when the money could have been used to pay a debt
with interest running at a higher rate. But the state of confu-
sion is not itself an injury. See, e.g., Trichell v. Midland Credit
Management, Inc., 964 F.3d 990 (11th Cir. 2020). If it were,

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4 No. 19-3256
then everyone would have standing to litigate about every-
thing. Imagine a plaintiff who asserted that the lack of a full
public budget about secret projects left her confused about
how taxes were being spent. The Supreme Court held in
United States v. Richardson, 418 U.S. 166 (1974), that members
of the public lack standing to litigate about how federal ex-
penditures are reported. An allegation of confusion would
not avoid that holding. Nor could a person claiming to be
confused about how public money is allocated by the Execu-
tive Branch avoid the holding of Hein v. Freedom from Religion
Foundation, Inc., 551 U.S. 587 (2007), that some concrete inju-
ry is essential to make a claim under the Establishment
Clause of the First Amendment.
That BruneT’s confusion led her to hire a lawyer does not
change the evaluation. Even innocuous statements about tax
law may lead people to consult counsel. The proposition that
forgiving debt is a form of income is not intuitive to non-
lawyers (or even to some lawyers). A desire to obtain legal
advice is not a reason for universal standing. The plaintiffs in
Thole, Spokeo, Hein, and Richardson all had counsel. They had
been concerned, confused, disturbed, or upset enough to ask
lawyers for help. But the Supreme Court held that only peo-
ple who can show personal, concrete injuries may litigate.
Many people think that an advisory opinion will set their
minds at ease, but hiring a lawyer in quest of a judicial an-
swer does not permit a federal court, operating under Article
III, to give that answer.
BruneT tells us that the leTer was “intimidating” as well
as “confusing.” Our analysis is the same. ATaching an epi-
thet such as “intimidation” to a leTer does not show that in-
jury occurred. Talk is cheap, but where’s the concrete harm?

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No. 19-3256 5
That’s what the Constitution requires, and BruneT does not
allege any.
According to BruneT, all of this is unimportant because
she wants to represent a class of all persons who received
similar leTers, and some of those persons may have owed
less than $600 to begin with or taken a detrimental step after
receiving the leTers. But someone who is not injured cannot
represent those who are. The district court properly denied
the motion to certify a class under Fed. R. Civ. P. 23.
The judgment is vacated, and the case is remanded with
instructions to dismiss for lack of subject-maTer jurisdiction.

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