New Jersey Federal Court Holds Bank Levy Provides Basis for Standing in FDCPA Case

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On September 15, the U.S. District Court for the District of New Jersey denied the defendant’s summary judgment motion holding instead that a bank levy against the plaintiff served as a basis for standing to assert a claim under the Fair Debt Collections Practices Act (FDCPA).

In Tomaine v. Selip & Stylianou, LLP, the plaintiff failed to make the required payments due on his credit card account. The bank retained the defendant law firm to file a collections suit against the plaintiff. One month later, the state court entered a default judgment against the plaintiff in the amount of $11,951.32.

The defendant law firm then sought to execute the judgment against the plaintiff, submitting a proposed writ for $14,645.36 and obtaining a $278.75 bank levy. The defendant also filed a motion to turn over the funds in the levied bank account and, in support of the motion, submitted a certificate that showed an outstanding balance of $14,857.26. Shortly thereafter, the defendant sent a collection letter to the plaintiff requesting the outstanding balance.

The plaintiff filed a lawsuit against the defendant for alleged violations of the FDCPA, 15 U.S.C. §§ 1692e and 1692f. Specifically, the plaintiff alleged that the defendant sought to collect amounts in excess of what it was entitled to collect. The defendant filed a motion for summary judgment arguing that the plaintiff lacked standing to bring the suit as his alleged injury was not concrete.

The court agreed that the plaintiff did not suffer a concrete injury as a direct result of the proposed writ, the certificate, or the collection letter. The plaintiff alleged that he was negatively impacted in his “responsive capacity and decision-making process” because of the misleading information, but the court found no indication that the plaintiff relied on the proposed writ, certificate, or collection letter in any way. The plaintiff also argued that he suffered reputational harm since the overstated amounts were a matter of public record, but the court found no indication that the plaintiff suffered any financial or reputational harm that was directly attributable.

However, notwithstanding the above, the court ultimately held that the plaintiff had standing to maintain his suit based on the bank levy. Since the bank levy was issued in an amount greater than the judgment, it constituted the type of monetary harm traditionally recognized by the judicial system. “This improper hold on funds may have been a corrected or correctable mistake, but the lack of access to assets amounts to a monetary harm, however slight.”

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