Philadelphia Team Obtains Dismissal of Fair Debt Collection Practices Act Case Based on Lack of Standing Under New York State Law

July 2023

Gordon Rees Scully Mansukhani Partner Lori J. Quinn and Senior Counsel Matthew B. Johnson prevailed on a motion to dismiss on behalf of a collection agency facing claims asserted under the federal Fair Debt Collection Practices Act ("FDCPA") in the Supreme Court of the State of New York, County of Kings.

The plaintiff incurred a debt to a medical testing laboratory but refused to make the payment, arguing that she had insurance coverage such that she could not be charged for medical services. The laboratory placed the plaintiff’s account with the defendant for collection, and the defendant sent the plaintiff a collection letter. The plaintiff filed suit, alleging that the defendant had misrepresented the existence of the debt in violation of the FDCPA.

The Gordon & Rees team moved to dismiss, arguing that the plaintiff had failed to allege that she had suffered an injury-in-fact as required to confer standing under New York law. Following oral argument, the court granted the defendant’s motion, finding that the plaintiff’s status as an insured person who received a collection letter did not cause any legally cognizable harm. As the plaintiff lacked standing, the court dismissed the action with prejudice and awarded costs to Gordon & Rees’ client.