Maryland Legal Alert for Financial Services

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Eleventh Circuit Orders En Banc Rehearing for Controversial Debt Collection Ruling

The U.S. Court of Appeals for the Eleventh Circuit’s position on the transmission of consumer data for debt collection purposes that had earlier sent shockwaves through the debt collection industry is being reevaluated.

In April 2021, the 11th Circuit ruled that a debt collector’s electronic transmission of data concerning a consumer’s debt to a third-party mailing vendor violated Section 1692c(b) of the Fair Debt Collection Practices Act (FDCPA), which prohibits communicating a consumer’s personal information to a third party “in connection with the collection of any debt.”

That debt collector sought a rehearing from which the 11th Circuit issued a substitute opinion in October 2021 which addressed the intervening U.S. Supreme Court’s decision in TransUnion LLC v. Ramirez.

However, a few short weeks later, the 11th Circuit issued an order sua sponte vacating the substitute opinion and directing that the case be reheard this time before the full panel.

In the vacated substitute opinion, the 11th Circuit addressed an intervening ruling in TransUnion, which clarified that if a plaintiff has not suffered real harm and the risk of future harm has not materialized into actual harm, the plaintiff lacks standing to pursue a claim in federal court. The panel ruled by a 2-1 majority that, notwithstanding the TransUnion holding, the consumer had federal standing to pursue his FDCPA claim against the debt collector, because he had suffered an injury, albeit an intangible one, resulting from an FDCPA violation. The majority ruled that the alleged harm was akin to an invasion of privacy, a recognized tort claim and one of the stated harms that Congress sought to address with the FDCPA. The dissenting judge argued that the majority’s interpretation of standing was overly broad considering the TransUnion ruling

After the Court vacated the substitute opinion, the Court directed the parties to submit en banc briefs focused on the question of the consumer’s standing to bring this suit in federal court.

Practice Point: The decision to order an en banc hearing was determined based upon a majority vote of the active judges in the 11th Circuit. We will continue to monitor this case for further developments.

Please contact Bryan M. Mull with questions concerning this topic.


Bryan M. Mull
410-576-4227 •