The April 21, 2021 Hunstein v. Preferred Collection and Management Services Inc. 3-judge ruling issued from the federal 11th Circuit Court of Appeals started a tidal wave of litigation. The court first found that transmitting a data file to a letter vendor could violate the FDCPA with the improper the disclosure of information about the debt to a third-party (the printer). After a 3-judge rehearing and then a very special appeal to the full 12-judge 11th Circuit during February 2022, on September 8, the court released its long-awaited decision. The Sessions Firm represented several clients in the appeal.

Weighing in at 83 pages, including separate majority, concurring and dissenting opinions, the decision has good news and bad news.

The good news: the majority opinion (meaning the ruling) concludes that the sending of a data file to a printer about a consumer’s debt does not cause any type of injury to allow a federal court to hear the case. The majority decision says that the alleged disclosure of information about the debt is incapable of causing any “concrete” type of harm. 

The bad news: Mr. Hunstein, or any plaintiff could file a case and attempt to argue with substantive allegations that there was a disclosure that did cause a “concrete” harm. 

The 11th Circuit provided helpful guidance for future cases. While Mr. Hunstein argued that the disclosure in this case did create an injury akin to the tort of public disclosure of private facts, a type of invasion of privacy, the Court disagreed. The majority opinion described plaintiff’s theory that the disclosure of his information to the printer as an attempt “to shove a nonpublic transfer of information into a tort targeting public disclosure, but it just does not fit.”

Importantly, the Court concluded that the alleged disclosure of information about the debt did not involve the disclosure of any information to the public, and therefore was not capable of causing any injury. 

The language of the majority opinion (and concurring opinion) stating that there is no real disclosure to the public will help with the continued battle that will be fought on Hunstein claims – most likely in state courts, not federal courts. Some highlights and quotes include:

  • “a bare procedural violation” is not enough to cause a concrete harm sufficient to create federal court jurisdiction.
  • “without publicity, there can be no public disclosure.”
  • “transmitting information that no one reads or perceives is not publicity.”
  • “Nor is it clear, even likely, that even a single person at the mail vendor knew about the debt or had any reason - good, bad, or otherwise – to disclose it to the public if they did.”

The end result: the case gets dismissed without prejudice, meaning Mr. Hunstein can attempt to re-file his lawsuit with substantive allegations proving that he suffered some type of concrete harm in federal court, or just bring his case in state court. 

Two judges wrote a concurring opinion, largely directed at rejecting the arguments of the dissent, but adding helpful nuggets. For example: a) reiterating that the sharing of information with the printer is “at best, [a] kind of non-actionable publication”; b) the printer theory failed under the FDCPA because the plaintiff did not allege that any third party had actually read his private information; and c) that the disclosure here, even if it occurred, is “not one that the law traditionally recognized as highly offensive.” These points will be helpful in defending the merits of a Hunstein case because it highlights that the consumer will need to prove that a person at the printer actually read the letter about that consumer.

In a 38-page opinion, the dissent, joined by 4 of the court’s 12 judges, disagreed with the majority opinion that the degree of publicity was insufficient and concluded that plaintiff had suffered a concrete injury when the debt information was viewed by the printer’s employees. 

The end result – Hunstein cases in the 11th Circuit (Georgia, Florida and Alabama) will not likely be filed in federal court. But just as we have seen elsewhere, we expect continuing state court suits. 

The Hunstein Battles will continue in state courts across the country. And to be defended, debt collectors will need evidence that, as described by the majority opinion, not “even a single person at the mail vendor knew about the debt” for that plaintiff.

Still have concerns with your mail vendor process: We are here to help! 

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