Judge Paul Maloney dismissed all claims against a Lipson Neilson client in a putative class action lawsuit pending in the Western District of Michigan.
In this lawsuit, plaintiffs had claimed that various creditors and law firms violated the federal Fair Debt Collection Practices Act by allegedly applying too high an interest rate to judgments entered against these plaintiffs. The total damages being requested exceeded $1,000,000.
While this case was pending, the United States Supreme Court issued its decision in TransUnion v. Ramirez, 114 S. Ct. 2190 (2021), which clarified when a plaintiff had a sufficient legal injury to pursue a lawsuit in federal court. Lipson Neilson then moved to dismiss the claims against its client, explaining how the plaintiff had not suffered any monetary damages or any other concrete injury even assuming that plaintiff’s allegations were true. In a 12-page opinion, Judge Maloney agreed with Lipson Neilson and dismissed the claims against its client.
“The law is always changing,” said Tom Ludden, lead counsel for Lipson Neilson, “New court decisions, statutes, or court rules may create an additional opportunity to protect your client’s rights during the course of a lawsuit so it’s critical to stay on top of these developments.”
Class action lawsuits pose significant monetary risks for clients because even if each class member’s damages are small, these small sums can add up to a large potential judgment. Many federal statutes, such as the Fair Debt Collection Practices Act, impose statutory penalties for highly technical and debatable violations. “TransUnion requires that plaintiffs prove that they have actual, concrete, damages before they can seek these statutory penalties,” explained Tom Ludden. “As a result,” he continued, “this decision levels the playing field and eliminates the risk of being held liable when the plaintiff has not suffered any actual harm.”