Submitted: March 8, 2017
from United States District Court for the District of
Minnesota - Minneapolis
BENTON, BEAM, and MURPHY, Circuit Judges.
BENTON, Circuit Judge.
Demarais alleges Gurstel Chargo, P.A., violated the Fair Debt
Collection Practices Act (FDCPA) while collecting a consumer
debt owned by RAzOR Capital, LLC. The district court
dismissed Demarais's complaint. Having jurisdiction under
28 U.S.C. § 1291, this court reverses and remands.
court considers the facts alleged by Demarais. He incurred
debt to Citibank, N.A. No later than 2010, Citibank charged
off the debt. Following the charge off, no one sent him
statements showing the accumulation of interest.
2014, RAzOR-represented by law firm Gurstel Chargo-sued
Demarais in a Minnesota state court. RAzOR, claiming to be
the successor in interest to Citibank, said Demarais owed it
$20, 591.11 plus $5, 030.21 in interest. According to
Demarais, RAzOR sought post-charge-off interest that it had
no right to collect.
did not timely answer RAzOR's state-court complaint.
Gurstel Chargo did not move for default judgment. It instead
allowed the court to set the case for an October 5, 2015,
trial. When alleged debtors do not file answers, Gurstel
Chargo often allows the cases to be set for trial rather than
moving for default judgments. On the trial date, Gurstel
Chargo appears without any client representatives, witnesses,
or other evidence. Gurstel Chargo does this, Demarais says,
to avoid a Minnesota statute about default judgments on
consumer debts, Minn. Stat. § 548.101. Rather than
seeking default judgments, Gurstel Chargo seeks judgments
based on non-appearance at trial. If a consumer appears for
trial, Gurstel Chargo either requests a continuance or
dismisses the suit.
October 5, Gurstel Chargo appeared for Demarais's
scheduled trial and about 17 other consumer-debt trials.
Gurstel Chargo had no client representative, witnesses, or
other evidence. Demarais claims Gurstel Chargo assumed he
would not appear for trial, and its appearance for trial was
an attempt to collect the post-charge-off interest. But
Demarais did appear, with an attorney, prepared for trial.
Gurstel Chargo asked for a continuance. The court reset the
trial for January 4, 2016.
then served discovery requests on RAzOR. RAzOR did not timely
respond. Demarais's attorney asked Gurstel Chargo about
the responses. It asked for an extension, and Demarais's
attorney agreed. Gurstel Chargo never responded to the
January 4, Demarais appeared with his attorney, prepared for
trial. Gurstel Chargo appeared, but was not prepared-again,
no client representatives, no witnesses, and no evidence.
Gurstel Chargo dismissed RAzOR's case against Demarais
with prejudice. Gurstel Chargo also appeared for plaintiffs
in two other trials that day. In one, it sought a judgment
against the consumer-defendant based upon non-appearance at
provides case numbers for six other cases where he alleges
Gurstel Chargo obtained or is obtaining judgments despite
appearing without the ability to introduce evidence. He also
provides case numbers for seven cases where he alleges
Gurstel Chargo appeared without supporting documentation and,
when the court asked for it, requested a continuance and then
ignored the case.
January 22, 2016-eighteen days after dismissal-Gurstel Chargo
served Demarais with interrogatories and
document-and-admission requests bearing the caption and
number of the dismissed case. The letter said it was a
communication "from a debt collector and is an attempt
to collect a debt." It said he was required to provide
responses within 30 days. This was false, Demarais says,
because the claim had been dismissed.
February 5, 2016, Demarais sued Gurstel Chargo and RAzOR in
federal district court, claiming they violated the FDCPA.
(This court refers to the parties collectively as
"Gurstel Chargo.") He alleged they violated 15
U.S.C. §§ 1692e and 1692f by falsely representing
the amount of debt, falsely threatening to take action, using
unfair means to attempt to collect debt, and attempting to
collect debts not owed. Gurstel Chargo moved to dismiss. The
district court dismissed, concluding any violation at the
October 5 hearing was barred by the statute of limitations,
Gurstel Chargo's statements in court were
"permissible litigation tactics and not actionable false
assertions, " and the January 22 letter was not likely
to deceive anyone. Demarais appeals.
Chargo argues, for the first time on appeal, that Demarais
lacks standing because he has not alleged he suffered a
concrete injury in fact. To have standing, a "plaintiff
must have . . . suffered an injury in fact." Spokeo,
Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016). "To
establish injury in fact, a plaintiff must show that he or
she suffered an invasion of a legally protected interest that
is concrete and particularized and actual or imminent, not
conjectural or hypothetical." Id. at 1548
(internal quotation marks omitted). "A
'concrete' injury must be 'de
facto'; that is, it must actually exist."
Id. Both tangible and intangible injuries can be
concrete. Id. at 1549. At the motion to dismiss
stage, "the standing inquiry must . . . be done in light
of the factual allegations of the pleadings." City
of Clarkson Valley v. Mineta, 495 F.3d 567, 570 (8th
Cir. 2007), citing Lujan v. Defs. of Wildlife, 504
U.S. 555, 561 (1992).
says Gurstel Chargo's actions caused concrete injuries:
(A) its January 22 letter-an attempt to collect a debt not
owed in violation of § 1692f(1); and (B) its October 5
appearance and continuance request-an attempt to collect debt
not owed in violation of §§ 1692f(1) and 1692e(2),
and an improper ...