Seventh Circuit Declines to Address Arbitration, Dismisses for Lack of Standing

The United States Court of Appeals for the Seventh Circuit recently declined to address whether a FDCPA action should have been sent to arbitration, instead finding that plaintiff lacked standing and dismissing the case entirely.  See Nettles v. Midland Funding LLC, 983 F.3d 896 (7th Cir. 2020).  In the case, plaintiff defaulted on her debt and, after defendant brought a lawsuit, reached a settlement with reduced monthly payments.  After plaintiff defaulted again, defendant sent another letter, which overstated the amount due.  Plaintiff then filed this class action, claiming the letter was false, misleading, or otherwise unfair or unconscionable in violation of the FDCPA.  Defendant moved to compel arbitration based on an arbitration provision in the parties’ credit card agreement.  The District Court denied the motion and the defendant appealed.

On appeal, the Court reversed without even analyzing the arbitration issue.  Instead, the Court found that plaintiff lacked the standing to bring this claim.  Specifically, plaintiff had not pled a concrete harm traceable to the collection letter.  The Court held that the “complaint does not allege that the statutory violations harmed her in any way or created any appreciable risk of harm to her. Indeed, on appeal she admits that the letter didn't affect her at all and that her only injury is receipt of a noncompliant collection letter.”  Although no one raised this standing issue before the District Court, the Court found that standing is jurisdictional and cannot be waived.  Accordingly, it vacated the District Court’s prior order and remanded the action to the District Court to dismiss. 

For a copy of the decision, please contact Michael O’Donnell at, Michael Crowley at, or Andrew Raimondi at