Recently, the U.S. Court of Appeals for the Third Circuit vacated District Court orders compelling arbitration of an FDCPA class action on the basis that the plaintiff’s allegations of harm were insufficient to establish standing. In this case, plaintiff sought to represent a class and obtain damages from defendant debt collector and its officers, alleging violations of the FDCPA. The plaintiff claimed that a collection letter she received was misleading because it failed to correctly identify the creditor “to whom the debt was owed” and, rather, identified the collection arm of the credit card company. The District Court granted defendant’s motion to stay and compel individual arbitration.

On appeal, the 3rd Circuit concluded that the plaintiff lacked Article III standing, as she did not sufficiently allege a concrete injury. Accordingly, the court vacated the lower court’s orders and remanded with instructions to dismiss the case. The 3rd Circuit, however, declined to address the validity and enforceability of the arbitration award itself, noting that “that question lies with a court of competent jurisdiction — presumably a New Jersey state court or an AAA tribunal.”