Hunstein Case Dismissed – Major Win for All

After a lengthy wait, the 11^th Circuit Court of Appeals has issued their decision in Hunstein v. Preferred Collection and Management Services Inc.

The court found that Hunstein did not have Article III standing for his case, and due to that, the district court lacked jurisdiction to consider the claim. The opinion put forth by the court states, “We therefore vacate the district court’s order and remand with instructions to dismiss the case without prejudice.”

A copy of the ruling can be found here.

This ruling, which was not unanimous, was issued by eight of the 12 judges sitting on the 11^th Circuit. The decision brings closure to a case that had the potential to completely change how your collections partners worked to recover revenue for you if they were unable to utilize third-party print vendors to manage costs.

Hunstein Case Background

Back on April 21, 2021, the 11^th Circuit Court of Appeals issued their opinion on Hunstein v. Preferred, stating that an alleged violation of the third-party disclosure provision under the Fair Debt Collection Practices Act (FDCPA) resulted in an alleged concrete injury under Article III of the U.S. Constitution. The court came to this decision on the case even though there was no actual or tangible harm.

Preferred filed its petition to ask the 11^th Circuit to grant a “panel rehearing or rehearing en banc of the panel’s decision issued on April 21, 2021.” In October 2021, a panel of judges from the 11^th Circuit, which issued the original opinion in Hunstein v. Preferred, issued a new panel opinion in response to Preferred’s petition. This opinion affirmed the panel’s first opinion.

After the revised opinion was given, the full court voted to take the case en banc, setting the matter for rehearing in February of 2022, leading to today.

The Outcome

The decision in Hunstein v. Preferred comes down to one important point – actual or tangible harm. In fact, the case was dismissed due to a lack of standing. The Appeals Court wrote, “Because Hunstein has alleged only a legal infraction – a ‘bare procedural violation’ – and not a concrete harm, we lack jurisdiction to consider this claim.”

Overall, thousands of lawsuits have been filed using similar allegations as the ones in Hunstein v. Preferred have been filed across the country in anticipation of this case, waiting to see how the 11^th Circuit would rule. This decision, along with others such as Miller v. Americollect, Inc. and Nabozny v. Optio Solutions, LLC, affirms the belief that utilizing third-party vendors such as print shops does not violate the FDCPA.

While this is a major win, it remains to be seen what will happen from here. The plaintiff could appeal the ruling to the Supreme Court, or he could choose to refile in the state of Florida, which has a different threshold for standing.