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Nettles v. Midland Funding LLC

Nettles v. Midland Funding LLC

United States Court of Appeals for the Seventh Circuit

June 4, 2020, Argued; December 21, 2020, Decided

No. 19-3327

Opinion

 [*897]  Sykes, Chief Judge. After Ashley Nettles defaulted on her credit-card account, Midland Funding LLC acquired the debt. Midland sued Nettles in state court, and the parties entered a consent judgment requiring a monthly repayment plan with modest automatic draws from her bank account. The automatic draws ceased after three months when Midland's law firm went out of business. A Midland affiliate then sent Nettles a collection letter that overstated her remaining balance by about $100. That prompted this suit under the Fair Debt Collection Practices Act ("FDCPA" or "the Act"), 15 U.S.C. §§ 1692 et seq.

The complaint alleges that the letter is false, misleading, or otherwise unfair or unconscionable in violation of 15 U.S.C. §§ 1692e and 1692f. Nettles [**2]  proposes to represent a class of consumers who received similar letters. The credit-card agreement, however, contains an arbitration provision giving either party the right to require arbitration of any dispute relating to the account, including collection matters. Midland moved to compel arbitration. The district judge denied the motion, concluding that the arbitration clause does  [*898]  not cover this claim. As permitted by the Federal Arbitration Act, Midland appealed, asking us to reverse and remand with instructions to grant the motion to compel arbitration.

A jurisdictional defect prevents us from reaching the arbitration question. Nettles sued for violation of §§ 1692e and 1692f, but she has not alleged any injury from the alleged statutory violations. Applying our recent decisions in Larkin v. Finance System of Green Bay, Inc., Nos. 18-3582 & 19-1537, 982 F.3d 1060, 2020 U.S. App. LEXIS 39058, 2020 WL 7332483 (7th Cir. Dec. 14, 2020), and Casillas v. Madison Avenue Associates, Inc., 926 F.3d 329 (7th Cir. 2019), we vacate and remand with instructions to dismiss the case for lack of standing.

I. Background

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983 F.3d 896 *; 2020 U.S. App. LEXIS 40012 **; 2020 WL 7488610

ASHLEY NETTLES, Plaintiff-Appellee, v. MIDLAND FUNDING LLC, and MIDLAND CREDIT MANAGEMENT, INC., Defendants-Appellants.

Subsequent History: US Supreme Court certiorari denied by Nettles v. Midland Funding Llc, 2021 U.S. LEXIS 3825 (U.S., Oct. 4, 2021)

Prior History:  [**1] Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 18-cv-7766 — Edmond E. Chang, Judge.

Nettles v. Blatt, 2019 U.S. Dist. LEXIS 169042, 2019 WL 4750297 (N.D. Ill., Sept. 30, 2019)

CORE TERMS

arbitration, collection, statutory violation, compel arbitration, concrete, alleges, card

Business & Corporate Compliance, Pretrial Matters, Alternative Dispute Resolution, Judicial Review, Arbitration, Federal Arbitration Act, Orders to Compel Arbitration, Constitutional Law, Case or Controversy, Standing, Elements, Civil Procedure, Justiciability, Injury in Fact, Banking Law, Consumer Protection, Fair Debt Collection, Liability for Violations