Whitfield v. Selene Finance

Whitfield v. Selene Finance

What’s at Stake

Standing is the legal principle that decides who gets to bring a lawsuit. Typically, a person needs to have been injured by the actions of another to have standing to bring a lawsuit. But in recent years, the U.S. Supreme Court has narrowed which injuries “count,” allowing more bad behavior to go unchecked. This case is about the ability to establish Article III standing to sue in federal court through emotional distress harms under the Fair Debt Collection Practices Act.

Summary

Lequita Whitfield was wrongly threatened by her mortgage servicer, Selene Finance, after she got behind on her mortgage. Selene Finance sent her a collection letter stating that,

“If you have not cured the default within 35 days of this notice, [Selene Finance] may accelerate the maturity date of the Notes and declare all outstanding amounts under the Note immediately due and payable, as is permitted by the applicable state and federal law. Your property that is collateral for the Note may then be scheduled for foreclosure sale in accordance with the terms of the Security Deed and applicable laws.” 

This was a false threat, since federal law prevents a debt from being accelerated until it is 120 days due. Hearing that she had just over a month until foreclosure proceedings started caused Ms. Whitfield a great deal of distress. She thought she was going to have a heart attack and she borrowed money from her brother. But companies trying to collect a debt cannot threaten to do things they are not actually permitted to do. Selene’s threat was illegal under the Fair Debt Collection Practices Act.

Ms. Whitfield sued Selene Finance for violating the FDCPA. Unfortunately, the trial court concluded that these emotional harms were insufficient to show that Ms. Whitfield had standing to sue Selene Finance. We are appealing the dismissal of her case to the Eleventh Circuit Court of Appeals.

Core Legal Problem

Federal courts are continually making it harder to hold corporations accountable when they break the law by limiting the types of harms that can be used to establish standing to bring a lawsuit against them in federal court. In TransUnion v. Ramirez, 594 U.S. 413, 440-2 (2021), the Supreme Court held that “bare procedural violations” were not enough to establish standing if unaccompanied by any “downstream consequences.” Injuries such as emotional distress have been found to be concrete enough to establish standing to bring a lawsuit for hundreds of years, and Public Justice is fighting to prevent any broadening of TransUnion’s holding.