Beth Lavallee v. Med-1 Solutions, LLC

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17-3244
BETH LAVALLEE,
Plaintiff-Appellee,
v.
MED-1 SOLUTIONS, LLC,
Defendant-Appellant.
____________________
Appeal from the United States District Court for
the Southern District of Indiana, Indianapolis Division.
No. 1:15-cv-01922-DML-WTL
Debra McVicker Lynch, Magistrate Judge.
____________________
ARGUED MAY 30, 2018 — DECIDED AUGUST 8, 2019
____________________
Before WOOD, Chief Judge, and SYKES and HAMILTON,
Circuit Judges.
SYKES, Circuit Judge. Debt collector Med-1 Solutions, LLC,
attempted to recover two unpaid medical bills on behalf of
Beth Lavallee’s healthcare provider. The Fair Debt Collection
Practices Act (“FDCPA” or “the Act”) required Med-1 to
disclose certain information to Lavallee about her debts
within a specific time frame. 15 U.S.C. § 1692g(a). Med-1
2 No. 17-3244
could satisfy its § 1692g(a) disclosure obligations by includ-
ing the required information in its “initial communication”
with Lavallee or by sending “a written notice containing”
the disclosures within five days after that “initial communi-
cation.” Id.
In March and April 2015, Med-1 sent Lavallee two
emails, one for each debt. The emails contained hyperlinks
to a Med-1 vendor’s web server. Once there, a visitor had to
click through multiple screens to access and download a .pdf
document containing the disclosures required by § 1692g(a).
Lavallee never opened these emails. When the hospital
called her in November to discuss a different medical debt,
she learned about the earlier debts and was told that they
had been referred to Med-1 for collection. She then called
Med-1 to inquire about them, but the debt collector didn’t
provide the required disclosures. Nor did it send a written
notice within the next five days.
Lavallee sued Med-1 for violating § 1692g(a). She alleged
that Med-1 never provided the statutory disclosures, either
during the November phone call or within five days as
required. Med-1 responded that its March and April emails
were the “initial communication[s]” and argued that they
contained the mandatory disclosures. A magistrate judge,
presiding by consent, 28 U.S.C. § 636(c), granted Lavallee’s
motion for summary judgment.
We affirm. Med-1 concedes its failure to send Lavallee a
written notice within five days of her phone call. This appeal
rests on Med-1’s contention that its emails were initial
communications that contained the required disclosures. But
the emails do not qualify under the Act’s definition of
“communication” because they did not “convey[] … infor-
No. 17-3244 3
mation regarding a debt.” 15 U.S.C. § 1692a(2). Nor did the
emails “contain” the statutorily mandated disclosures.
§ 1692g(a). At most the emails provided a means to access
the disclosures via a multistep online process. Because
Med-1 violated § 1692g(a), the judge was right to enter
judgment for Lavallee.
I. Background
Lavallee incurred two debts for medical services provid-
ed by a hospital. The hospital referred the debts to Med-1 for
collection. Med-1 emailed Lavallee on March 20 and
April 17, 2015, sending the messages from
“info@med1solutions.com” to the email address Lavallee
had provided to the hospital. The emails stated that “Med-1
Solutions has sent you a secure message” and featured an
embedded hyperlink inviting the recipient to “View Secure-
Package”:
4 No. 17-3244
Neither email was returned to Med-1 as undelivered, but
Lavallee doesn’t recall seeing them in her inbox. If Lavallee
had opened either email and clicked on the hyperlink, she
would have been directed via a web browser to a server
operated by Privacy Data Systems, Med-1’s sister company.
She would have seen a screen asking her to check a box to
sign for the “SecurePackage.” Checking that box would have
activated the “Open SecurePackage” button at the bottom of
the screen, and clicking that button would have revealed a
screen with “SecurePackage Display” written across the top.
Had she selected the “Attachments” tab on that screen, a
.pdf file would have appeared. Had she clicked on that .pdf
file, she would have seen a pop-up window asking her if she
wanted to open the attachment with Adobe Acrobat or save
it to her hard drive. Only then could she have viewed the
document or downloaded the file and then opened it.
The file contained the disclosures required by § 1692g(a),
including the amount of the debt, the consumer’s right to
dispute the debt, and how to obtain more information about
the alleged creditor. This type of notice is commonly called a
“validation notice.” Durkin v. Equifax Check Servs., Inc.,
406 F.3d 410, 412 (7th Cir. 2005).
Med-1 received reports from Privacy Data Systems indi-
cating which email recipients had downloaded validation
notices. Privacy Data Systems’ records show that Lavallee
never clicked the “Open SecurePackage” hyperlink and thus
never accessed the validation notice stored on the server.
On November 12, 2015, Lavallee received a phone call
from the hospital about a different unpaid bill. During that
conversation, Lavallee learned that she owed other debts
that had been referred to Med-1. This was her first time
No. 17-3244 5
hearing about the debt collector. Later that day Lavallee
called Med-1 and discussed her medical debts with a Med-1
representative. Med-1 did not provide any § 1692g(a) disclo-
sures during that phone call, nor did it send a written notice
in the days that followed.
Lavallee filed this action in December 2015 alleging that
Med-1 violated § 1692g(a) by failing to deliver the mandato-
ry disclosures orally during the November telephone con-
versation or in writing thereafter. The case proceeded to
cross-motions for summary judgment. Med-1 introduced its
March and April emails and argued that they satisfied its
§ 1692g(a) obligations because they enabled Lavallee to
obtain validation notices. The magistrate judge disagreed.
She reasoned that the validation notices were never sent
because Lavallee never downloaded them—a fact reflected
in Med-1’s own records. Moreover, Med-1’s delivery meth-
od—embedding a hyperlink in an email from an unknown
sender—made receipt of the notices unlikely. The judge
entered summary judgment in Lavallee’s favor and awarded
statutory damages, costs, and attorney’s fees.
II. Discussion
A. Standing
We begin, as we must, with the question of Lavallee’s
standing. To establish constitutionally adequate standing to
sue, a “plaintiff must allege an injury in fact that is traceable
to the defendant’s conduct and redressable by a favorable
judicial decision.” Casillas v. Madison Ave. Assocs., Inc.,
926 F.3d 329, 333 (7th Cir. 2019) (citing Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560–61 (1992)). To satisfy the injury-in-
fact requirement, Lavallee must establish that she suffered
6 No. 17-3244
an injury that is “both concrete and particularized.” Spokeo,
Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016). And while “Con-
gress has the power to define intangible harms as legal
injuries for which a plaintiff can seek relief”—including
violations of the FDCPA—it “must operate within the
confines of Article III.” Casillas, 926 F.3d at 333. So a plaintiff
must do more than point to a bare procedural violation; he
must show that the violation harmed or “presented an
appreciable risk of harm to the underlying concrete interest
that Congress sought to protect by enacting the statute.”
Groshek v. Time Warner Cable, Inc., 865 F.3d 884, 887 (7th Cir.
2017) (quotation marks omitted).
Med-1 concedes that a debt collector’s failure to provide
a § 1692g(a) disclosure constitutes an injury in fact and
instead focuses on causation. But Med-1 made that conces-
sion before our recent decision in Casillas. There we applied
the injury-in-fact requirement in the § 1692g(a) context.
Paula Casillas received an incomplete § 1692g(a) validation
notice: It “neglected to specify that [a] notification or request
[to dispute or verify the debt] must be in writing.” 926 F.3d at
332 (citing § 1692g(a)(3)–(5)). But Casillas never explained
how this omission “harmed or posed any real risk of harm to
her interests under the Act.” Id. at 334. Because “there was
no prospect that [Casillas] would have tried to exercise” her
statutory rights, the omission of the in-writing requirement
didn’t constitute a concrete harm. Id. Her suit was predicat-
ed on “a bare procedural violation,” id. at 339, and her
complaint never alleged how that violation affected an
“underlying concrete interest,” Groshek, 865 F.3d at 887.
This case differs from Casillas in two ways. First, the al-
leged statutory violation is meaningfully different. Unlike
No. 17-3244 7
Casillas, who received an incomplete validation notice,
Lavallee never received any of the disclosures required by
§ 1692g(a). The debt collector in Casillas disclosed the con-
sumer’s statutory rights to dispute the debt and inquire into
the creditor’s identity; it simply failed to mention the proper
procedure for exercising those rights. In contrast, here Med-1
provided Lavallee with nothing. Her right to contest or
request verification of the debt—rights that Med-1 is bound
by statute to disclose to every debtor—simply never came
up.
Second, and significantly, Lavallee was already a defend-
ant in a collection suit brought by Med-1 when the statutory
disclosure violation occurred. During her November 12
conversation with Med-1, Lavallee learned that it had al-
ready filed a lawsuit against her to collect the relevant debts.
Without the knowledge that a consumer in her position is
statutorily entitled to dispute and require verification of the
debt on which the lawsuit was predicated, Lavallee stood at
a distinct disadvantage. If she had known about her rights,
she could have disputed and sought verification of the
debts—thereby requiring Med-1 to cease the collection
action and obtain verification. See § 1692g(b). Because she
was already a collection-suit defendant, it’s reasonable to
infer that she would have exercised her statutory rights,
thereby halting the collection litigation, if Med-1 had pro-
vided the required disclosures.
In light of Casillas, an FDCPA plaintiff should include an
allegation of concrete harm in his complaint. A bare allega-
tion that the defendant violated one of the Act’s procedural
requirements typically won’t satisfy the injury-in-fact re-
quirement. But in Lavallee’s circumstances, the complete
8 No. 17-3244
deprivation of § 1692g(a) disclosures and the fact that she
was sued without the benefit of mandatory § 1692g(a)
disclosures lends concreteness to her injury.
So this case is distinguishable from Casillas. Med-1 raises
a different standing challenge, but we can make short work
of it. Med-1 maintains that because Lavallee never opened
the disputed emails, she lacks standing to argue that they
were inadequate. But recall that Med-1 brought the emails
into this case in an effort to prove that it had satisfied its
statutory obligations. Indeed, Lavallee didn’t learn about the
emails until this litigation was underway. Lavallee alleged in
her complaint that Med-1 violated § 1692g(a) when it failed
to send her a written validation notice within five days of
the November 12 phone call. That failure inflicted the cog-
nizable harm described above. Med-1 introduced the emails
as evidence of its compliance with § 1692g(a). Med-1 was
free to do so, but once it did, Lavallee was free to argue that
the emails were deficient. Med-1’s standing challenge is
meritless.
B. Section 1692g(a) Violation
We review a summary judgment de novo, construing the
record and drawing all reasonable inferences in Med-1’s
favor as the nonmoving party. Severson v. Heartland Wood-
craft, Inc., 872 F.3d 476, 480 (7th Cir. 2017). The facts here are
undisputed, so our task is to determine whether Lavallee “is
entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a).
The judgment against Med-1 rests on its violation of
§ 1692g(a). Thus far we’ve only summarized the statute. In
full, § 1692g(a) provides:
No. 17-3244 9
Within five days after the initial communica-
tion with a consumer in connection with the
collection of any debt, a debt collector shall,
unless the following information is contained
in the initial communication or the consumer
has paid the debt, send the consumer a written
notice containing—
(1) the amount of the debt;
(2) the name of the creditor to whom the debt
is owed;
(3) a statement that unless the consumer, with-
in thirty days after receipt of the notice, dis-
putes the validity of the debt, or any portion
thereof, the debt will be assumed to be valid by
the debt collector;
(4) a statement that if the consumer notifies the
debt collector in writing within the thirty-day
period that the debt, or any portion thereof, is
disputed, the debt collector will obtain verifica-
tion of the debt or a copy of a judgment against
the consumer and a copy of such verification or
judgment will be mailed to the consumer by
the debt collector; and
(5) a statement that, upon the consumer’s writ-
ten request within the thirty-day period, the
debt collector will provide the consumer with
the name and address of the original creditor,
if different from the current creditor.
The statutory disclosure obligation is triggered by an “in-
itial communication with a consumer in connection with the
10 No. 17-3244
collection of any debt.” The FDCPA defines “communica-
tion” as “the conveying of information regarding a debt
directly or indirectly to any person through any medium.”
§ 1692a(2).
Everyone agrees that the November 12 phone conversa-
tion between Lavallee and a Med-1 employee was a “com-
munication.” And if it was the initial communication, Med-1
was required to send Lavallee a validation notice within five
days. Med-1 concedes that it did not. So to prevail on appeal,
Med-1 must persuade us that its March and April emails
were “communications” under the FDCPA.
As we’ve just explained, to qualify as a “communication”
under the Act, a message must “convey[] … information
regarding a debt.” Id. Med-1’s emails conveyed three pieces
of information: the sender’s name (Med-1 Solutions), its
email address, and the fact that it “has sent … a secure
message.” The emails say nothing at all about a debt.
Med-1 insists that the emails should count as communi-
cations because they contain the name and email address of
the debt collector. We disagree. Though we haven’t yet
addressed the FDCPA’s definition of “communication,” the
Sixth and Tenth Circuits have held that to constitute a
communication under the Act, a message must at least imply
the existence of a debt. In Brown v. Van Ru Credit Corp., the
Sixth Circuit held that a message that didn’t “imply the
existence of a debt” wasn’t a communication because “what-
ever information [was] conveyed [could not] be understood
as ‘regarding a debt.’” 804 F.3d 740, 742 (6th Cir. 2015). In
Marx v. General Revenue Corp., the Tenth Circuit considered a
fax that didn’t “indicate to the recipient that [it] relate[d] to
the collection of a debt” or “expressly reference debt,” and
No. 17-3244 11
that could not “reasonably be construed to imply a debt.”
668 F.3d 1174, 1177 (10th Cir. 2011). The fax was therefore
not a “communication” under the Act. Id.
This understanding of “communication” is firmly rooted
in the statutory text. “To convey is to impart, to make
known.” Id. at 1182; accord Convey, THE AMERICAN HERITAGE
DICTIONARY (2d college ed. 1982) (“[t]o communicate or
make known; impart”). If a message doesn’t inform its
reader that it even pertains to a debt, it simply cannot “con-
vey[] … information regarding a debt.” § 1692a(2). We
therefore hold that a debt collector’s message must at least
imply the existence of a debt to meet the Act’s definition of
“communication.” Med-1’s emails were insufficient.
Med-1 argues that the Eleventh Circuit’s decision in Hart
v. Credit Control, LLC, 871 F.3d 1255 (11th Cir. 2017), sup-
ports its position that a message can qualify as a communi-
cation without mentioning a debt. In Hart the court
considered the following voicemail: “This is Credit Control
calling with a message. This call is from a debt collector.
Please call us at 866–784–1160. Thank you.” Id. at 1256. The
court ruled that the voicemail was a communication under
the Act.
Hart does little to bolster Med-1’s case. The Eleventh Cir-
cuit reasoned that the debt collector’s “voicemail, although
short, conveyed information directly to Hart—by letting her
know that a debt collector sought to speak with her and by
providing her with instructions and contact information to
return the call.” Id. at 1257–58. Moreover, it “indicated that a
debt collector was seeking to speak to her as a part of its
efforts to collect a debt.” Id. at 1258. In sum, Credit Control
implied the existence of a debt when it identified itself as a
12 No. 17-3244
debt collector. Med-1’s emails did nothing of the sort. Unlike
the voicemail in Hart, the emails did not include the words
“debt” or “collector.”
Med-1 argues in the alternative that its emails were
communications because they were intended to aid its
collection efforts. This argument relies on Horkey v. J.V.D.B.
& Associates, Inc., 333 F.3d 769 (7th Cir. 2003), but that case is
inapposite: It contains no analysis of the Act’s definition of
“communication.” We looked to the debt collector’s purpose
solely to determine whether it engaged in harassing “con-
duct … in connection with the collection of a debt” under
§ 1692d. Id. at 773 (emphasis added). Horkey has no bearing
on the question presented here.
There is a second and independent reason why the
emails don’t measure up under § 1692g(a): They did not
themselves contain the enumerated disclosures. To access
the validation notice, Lavallee would have had to (1) click on
the “View SecurePackage” hyperlink in the email; (2) check a
box to sign for the “SecurePackage”; (3) click a link to open
the “SecurePackage”; (4) click on the “Attachments” tab;
(5) click on the attached .pdf file; and (6) view the .pdf with
Adobe Acrobat or save it to her hard drive and then open it.
At best, the emails provided a digital pathway to access
the required information. And we’ve already rejected the
argument that a communication “contains” the mandated
disclosures when it merely provides a means to access them.
See Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, & Clark,
L.L.C., 214 F.3d 872, 875 (7th Cir. 2000) (holding that a debt
collector did not satisfy § 1692g(a) by providing a phone
number that the debtor could call to obtain the required
information).
No. 17-3244 13
Med-1 analogizes the information available through a
hyperlink in an email to the information printed on a letter
inside an envelope. The analogy is inapt. An envelope is
merely a means of transmitting a letter bearing a substantive
message. The letter in Med-1’s analogy clearly “contains” the
information it imparts. Conversely, Med-1’s emails contained
nothing more than hyperlinks—gateways to an extended
process that ends in the relevant message. The proper ana-
logue is a letter that provides nothing more than the address
of a location where the message can be obtained. That
hypothetical letter, like the emails here, doesn’t “contain” the
relevant information.
C. The E-Sign Act
The Bureau of Consumer Financial Protection submitted
an amicus brief urging us to affirm on a different ground—
one that Lavallee did not raise in the district court or on
appeal. The Bureau draws our attention to the E-Sign Act,
15 U.S.C. §§ 7001 et seq. When a statute or regulation “re-
quires that information … be provided or made available to
a consumer in writing,” the E-Sign Act imposes conditions
on the use of an electronic record to satisfy that disclosure
requirement. See id. § 7001(c)(1). The Bureau maintains that
Med-1’s emails weren’t “written notice” under § 1692g(a)
because Med-1 failed to satisfy the conditions of the E-Sign
Act before sending them.
Because we’ve resolved this appeal in Lavallee’s favor on
other grounds, we have no need to address the impact of the
E-Sign Act. Moreover, we don’t usually consider arguments
introduced on appeal by an amicus. See, e.g., Lopez v. Davis,
531 U.S. 230, 244 n.6 (2001); Sanders v. John Nuveen & Co., 554
F.2d 790, 794 (7th Cir. 1977). Appellate courts have the
14 No. 17-3244
discretion to do so where the parties raised the issue but
didn’t develop it, see Toussaint v. McCarthy, 801 F.2d 1080,
1106 n.27 (9th Cir. 1986), or where the issue was of the type
that the court has the power to raise sua sponte, see Teague v.
Lane, 489 U.S. 288, 300 (1989). Neither circumstance is pre-
sent here.
AFFIRMED