Babenchuk v. Transworld Systems: What a New York Judge Wrote About Federal Standing Rules in an FDCPA Letter Case

Status as of Wednesday, Oct 28, 2026, CT: This is a trial-court decision on a motion to dismiss, and the case continues. The related Gregg appeal is pending at the New York Court of Appeals as far as we could confirm; we found no argument date or decision. We'll update this line if that changes.

The short version. A New York trial judge was asked to dismiss a debt collection letter suit for lack of standing, using the U.S. Supreme Court's TransUnion v. Ramirez decision. She declined as to the FDCPA and General Business Law claims, writing that federal Article III standing rules "are not directly applicable to the standing analysis for New York Courts." She also wrote that a Second Department decision on the same subject, Gregg, "is not binding on this Court." The Court of Appeals granted leave to appeal in Gregg.

Who this is for

This post reports one New York trial judge's decision in a debt collection letter case, for readers who follow FDCPA litigation.

What the case is about

The ruling is a Decision and Order in Mikhail Babenchuk v. Transworld Systems Inc., Index No. EF2025-280207 (NYSCEF Doc. No. 43), Supreme Court of the State of New York, County of Rensselaer. In New York the Supreme Court is a trial-level court and the Court of Appeals is the state's highest court (Library of Congress guide, linked below). Justice Laura M. Jordan signed it Oct 14, 2026.

According to the ruling, the plaintiff began the suit on July 1, 2025, over statements in a debt collection letter he alleges he received on or about June 21, 2024 (the "June 21 Letter"). As the ruling summarizes the Amended Complaint:

• The letter listed two account numbers with "no explanation as to why these numbers are different."

• It used the phrases "[b]etween June 21, 2024, and today" and "[t]otal amount of the debt now," next to a figure of "$225.77," with no date given for "today" or "now."

• It said the "creditor is Central Hudson" while directing payment to the defendant.

The plaintiff alleged lost time searching his records, being "aggravated, frustrated, worried, fearful, and distressed," and "fees." The defendant moved under CPLR 3211(a)(3), lack of standing, and 3211(a)(7), failure to state a cause of action. In a footnote the judge wrote that the court "will not be considering or relying on the contents of the letter submitted by Defendant; only on the allegations made in the Amended Complaint." So the letter's wording and the $225.77 figure are allegations as the ruling reports them; the court made no findings about the letter.

What the judge decided

The ruling says "Defendant's motion is granted in part and denied in part." The order dismisses the negligence, negligent misrepresentation, and negligence per se claims under CPLR 3211(a)(7) and states the motion "is otherwise DENIED."

By the ruling's account, the standing challenge was denied as to every claim, including negligence and negligent misrepresentation, where the judge wrote standing "as argued on this motion, is inapplicable to these two claims." The failure-to-state-a-claim challenge was denied for GBL 349 and the FDCPA and granted for the other three.

On the negligence claims, she found that the Amended Complaint "failed to allege any injury sufficient to support Plaintiff's negligence claims," citing New York's general rule on nonpecuniary damages and attorneys' fees.

What the judge wrote about standing

The defendant argued that the plaintiff had not alleged "any tangible injury or harm with a close common law analogue," and, per the ruling, "centers its view of standing on" TransUnion LLC v Ramirez and the Second Department's decision in Gregg. The judge's answer:

"This Court is not persuaded that TransUnion LLC has altered New York's well-established statutory standing test. Critically, federal constitutional standing rules based on Article III of the United States Constitution-like the rules set forth in TransUnion LLC-are not directly applicable to the standing analysis for New York Courts."

(The ruling sets off "like the rules set forth in TransUnion LLC" with dashes; they are shown as hyphens here.)

She quoted the Court of Appeals' 1991 decision in Society of Plastics Industries v County of Suffolk (77 NY2d 761, 772): "standing requirement in Federal actions has been grounded in the Federal constitutional requirement of a case or controversy . . . a requirement that has no analogue in the [New York] State Constitution."

On Gregg, she wrote that "the Second Department's decision is not binding on this Court," and that "the Court of Appeals appears to have reaffirmed the existence of separate statutory standing after the Supreme Court issued TransUnion LLC," citing Matter of Harkenrider v Hochul (38 NY3d 494, 508).

She then turned to the statutes. She cited GBL 349(h) ("actual damages or fifty dollars, whichever is greater") and 15 U.S.C. 1692k(a)(1) ("any actual damage sustained by such person as a result of such failure"). She found that "both statutes have clearly identified a class of persons who are entitled to seek review," and concluded that the Amended Complaint "has adequately alleged statutory standing under the FDCPA, the General Business Law, and the negligence per se claim."

On the FDCPA claim, the defendant argued that "a simple review" of the letter would not confuse the least sophisticated consumer. The judge wrote that the court cannot consider that evidence on this motion "and, in any event, whether the statements made in Defendant's letter would confuse the least sophisticated consumer is a question of fact that cannot be resolved on a motion to dismiss."

The federal rule in one paragraph

TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), was a Fair Credit Reporting Act case. Justice Kavanaugh wrote for the Court: "To have Article III standing to sue in federal court, plaintiffs must demonstrate, among other things, that they suffered a concrete harm. No concrete harm, no standing."

Two New York decisions, side by side

The Gregg quote is from the Second Department's opinion on nycourts.gov. We aren't characterizing how the two decisions relate beyond what they say.

What is pending at the Court of Appeals

The Babenchuk ruling cites Gregg as "lv to appeal granted 45 NY3d 906 [2026]." The Court of Appeals' June 2026 Notice to the Bar (dated July 10, 2026) lists "APL-2026-00079 Gregg v SN Servicing Corp.," described as "Fair Debt Collection Practices Act--Standing--Failure to Allege Injury-In-Fact," among civil appeals taken by leave grant, with briefing schedules issued in June 2026. Public Justice, which represents the appellant, says on its site that the case "is now pending before New York's highest court." That is a party's own description.

Dated correctness note. As of Oct 28, 2026, those sources show a pending appeal. We did not find an argument date, a calendar listing, or a decision for Gregg in the places we looked. We aren't predicting what the Court will do.

Questions about the record of a communication

The allegations here turned on what words and dates appeared on a page. Letters, texts, emails, and automated voice or chat messages are all communications, and some come from templates or software. Open questions, with no view on which answers matter legally:

• For each outbound communication, is there a stored copy of the exact wording the consumer received, not just the template it came from?

• If a message states an amount, where does the record show the date that amount was current?

• If a template changes, can a team tell which version went out on a given date?

• If an AI agent or other automation drafts or sends a message, what record shows which inputs it used?