Balthazor v. Central Credit Services, Inc. et al
Filing
145
ORDER denying 62 Plaintiff's Motion for Class Certification. Signed by Judge James I. Cohn on 12/27/2012. (npd)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 10-62435-CIV-COHN/SELTZER
LYNNE M. BALTHAZOR, on behalf of herself
and others similarly situated,
Plaintiff,
vs.
CENTRAL CREDIT SERVICES, INC.,
SECURITY CREDIT SERVICES, LLC, and
JOHN DOES 1-3,
Defendants.
__________________________________/
ORDER DENYING PLAINTIFF’S MOTION FOR CLASS CERTIFICATION
THIS CAUSE is before the Court upon Plaintiff Lynne Balthazor’s Motion for
Class Certification [DE 62] (“Motion”). The Court has carefully considered the Motion,
the Memorandum of Law in Support of Plaintiff’s Motion for Class Certification [DE 63]
(“Mem.”), Defendants’ Memorandum in Opposition to Plaintiff’s Motion for Class
Certification [DE 70] (“Response”), Plaintiff’s Reply [DE 102] (“Reply”), the record in the
case, and is otherwise fully advised in the premises.
I. BACKGROUND
Plaintiff Lynne M. Balthazor (“Plaintiff”) filed suit against Defendants Central
Credit Services (“CCS”) and Security Credit Services, LLC (“SCS”) (collectively
“Defendants”) alleging that debt collection voice mails Defendant CCS left for Plaintiff
on behalf of Defendant SCS violate the Fair Debt Collection Practices Act (“FDCPA”),
15 U.S.C. §§ 1692-1692p, and the Telephone Consumer Protection Act (“TCPA”), 47
U.S.C. § 227. See Complaint [DE 1]. Plaintiff contended that Defendant SCS was
vicariously liable to Plaintiff for CCS’s violations of the FDCPA and TCPA. Id. ¶¶ 1516. According to Plaintiff, consumer debt she originally owed to Wells Fargo Financial
was sold or transferred to Defendant SCS. Complaint ¶ 18. SCS in turn authorized
CCS to telephone Plaintiff to collect this debt. Id. ¶ 12. Defendant CCS left prerecorded messages for Plaintiff on her cellular and residential telephone to collect this
debt. Id. ¶ 19. Plaintiff contended that in these messages CCS failed to inform her that
it was a debt collector, failed to disclose its name, and failed to disclose that the
purpose of the message was to collect a debt in violation of the FDCPA, 15 U.S.C. §
1692(d)(6). Id. ¶¶ 22, 33. Additionally, Plaintiff alleged that CCS used an automatic
telephone dialing system or a pre-recorded or artificial voice to place telephone calls to
Plaintiff’s cellular telephone in violation of the TCPA, 47 U.S.C. § 227(b)(1)(A)(iii). Id.
¶¶ 24, 35. Plaintiff purported to bring both claims on behalf of various classes. Id. ¶¶
37-40.
On October 18, 2011, the Court entered an order denying Plaintiff’s motion for
partial summary judgment, granting Defendants’ motion for summary judgment as to
Plaintiff’s FDCPA claim, dismissing Plaintiff’s TCPA claim as to SCS, declining to
exercise supplemental jurisdiction as to Plaintiff’s TCPA claim as to CCS, and denying
as moot Plaintiff’s motion for class certification. See DE 116 (“October 18, 2011
Order”). On November 18, 2011, Plaintiff appealed only the Court’s dismissal of her
TCPA claim against CCS for lack of subject matter jurisdiction. Notice of Appeal [DE
118]. On May 31, 2012, the Eleventh Circuit Court of Appeals issued its mandate
which remanded Plaintiff’s TCPA claim against CCS to this Court based on the
Supreme Court’s decision in Mims v. Arrow Fin. Servs., LLC, – U.S. – , 132 S. Ct. 740
2
(2012). Mandate [DE 137].1 Based on the Mandate, the sole claim remaining before
this Court is Plaintiff’s TCPA claim against CCS. Also pending before the Court is
Plaintiff’s motion for class certification as to the Security Credit TCPA class. Motion at
2. The Court will address the motion for class certification below and the cross motions
for summary judgment in a separate order.
II. DISCUSSION
A. Legal Standard For Class Certification
Plaintiff seeks class certification pursuant to Rule 23 of the Federal Rules of Civil
Procedure. Rule 23 provides in pertinent part:
(a) Prerequisites. One or more members of a class may sue or be sued as
representative parties on behalf of all only if:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims
or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the
class.
(b) Types of Class Actions. A class action may be maintained if Rule 23(a) is
satisfied and if:
...
(2) the party opposing the class has acted or refused to act on grounds that
apply generally to the class, so that final injunctive relief or corresponding
declaratory relief is appropriate respecting the class as a whole; or
(3) the court finds that the questions of law or fact common to class
members predominate over any questions affecting only individual
members, and that a class action is superior to other available methods
for fairly and efficiently adjudicating the controversy.
Fed. R. Civ. P. 23. An action may be maintained as a class action only if all four
1
Mims was decided on January 18, 2012, well after the Court’s October 18,
2011 Order.
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prerequisites of Rule 23(a) are satisfied and, in addition, the requirements of one of the
three subsections of Rule 23(b) are also met. Heaven v. Trust Co. Bank, 118 F.3d 735,
737 (11th Cir. 1997); see also Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997).
In deciding whether to certify a class, a district court has broad discretion.
Washington v. Brown & Williamson Tobacco Corp., 959 F.2d 1566, 1569 (11th Cir.
1992). Although a district court is not to determine the merits of a case at the
certification stage, sometimes “it may be necessary for the court to probe behind the
pleadings before coming to rest on the certification question.” Id. at 1570 n.11. A class
action may be certified only if the court is satisfied, after a rigorous analysis, that the
prerequisites of Rule 23 have been met. Gilchrist v. Bolger, 733 F.2d 1551, 1555 (11th
Cir. 1984). The burden of establishing these requirements is on the plaintiff who seeks
to certify the suit as a class action. Heaven, 118 F.3d at 737 (citing Gilchrist, 733 F.2d
at 1556; Zeidman v. J. Ray McDermott & Co., Inc., 651 F.2d 1030, 1038 (5th Cir.
1981)).
B. Whether Plaintiff is Entitled to Class Certification of Her TCPA Claim.
Plaintiff moves the Court to certify a TCPA class comprised of: (i) all United
States residents who received any telephone call from Defendant CCS to their cellular
telephone through the use of any automatic telephone dialing system or an artificial or
prerecorded voice; (ii) on behalf of SCS; (iii) for which Defendants cannot produce any
evidence of the class members’ consent to the placement of the calls; (iv) during the
four year period prior to the filing of the Complaint through the date of class certification.
Mem. at 2. Plaintiff contends that CCS violated the TCPA by placing telephone calls to
the cellular telephone of Plaintiff and class members via an automatic telephone dialing
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system in violation of 47 U.S.C. § 227(b)(1)(A)(iii). Id. at 4. Plaintiff argues that the
proposed class meets Rule 23(a)(1)’s numerosity requirement because the proposed
TCPA class includes 27,583 persons. Id. at 6. Plaintiff also contends that she has
satisfied the commonality requirement of Rule 23(a)(2) because each member of the
class received a telephone call to his or her cellular telephone from CCS through an
automatic dialing system or artificial or prerecorded voice and CCS has no evidence of
prior express consent from the Plaintiff or the class members. Id. at 8-9. Typicality
under Rule 23(a)(3) has also been satisfied, according to Plaintiff, because each of the
class members was subjected to the same TCPA violation as Plaintiff. Id. at 10.
Plaintiff also argues that the adequacy of representation requirements of Rule 23(a)(4)
has been satisfied because Plaintiff understands her responsibility as class
representative, her counsel has handled several hundred TCPA cases, and the
Plaintiff’s claims are identical to those of the class members. Id. at 10-11. Finally,
Plaintiff argues that she has satisfied Rule 23(b)(3) which requires that questions of law
or fact common to all class members predominate because “all questions of law or fact
are common.” Id. at 12.
CCS does not dispute that Plaintiff would be able to satisfy the numerosity
requirement. Response at 5. However, CCS contends that Plaintiff “cannot satisfy the
commonality and typicality requirements because the fundamental legal and factual
issues surrounding her claims do not share the same factual situations of claims of the
putative nationwide . . . class members that Plaintiff purports to represent.” Id.
Specifically, CCS argues that Plaintiff’s claims are not typical or common with
consumers who did not consent for their cell phones to be called. Id. at 6. CCS also
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argues that Plaintiff is not an adequate class representative because she has a faulty
memory and has “effectively turned over full responsibility for the creation and
management of her new status as a perennial plaintiff to her counsel.” Id. at 7.
Additionally, CCS contends that Plaintiff’s counsel is inadequate class counsel because
he is a solo practitioner with more than 300 active cases in the Southern District of
Florida alone. Id. at 8. CCS also argues that Plaintiff cannot meet Rule 23(b)(3)’s
predominance requirement because the issue of prior express consent is a “highly
individualized fact,” id. at 13, and the superiority requirement is likewise not satisfied
because “[t]he Court would have to engage in a case-by-case determination of the
amount of damages to be awarded to each individual class member.” Id. at 15. Finally,
CCS contends that it would be inappropriate to certify a class under Rule 23(b)(2)
because “monetary relief predominates.” Id. at 18. For the reasons discussed below,
the Court concludes that Plaintiff has failed to establish that class certification is
appropriate for her TCPA claim.
Because the parties do not dispute that Plaintiff satisfies Rule 23(a)(1)’s
numerosity requirement, the Court does not address this issue. Instead, the Court first
turns to whether Plaintiff has established Rule 23(a)(2)’s commonality requirement and
Rule 23(b)(3)’s predominance requirement. In Hicks v. Client Services, Inc., Judge
Dimitrouleas considered whether a plaintiff was entitled to certification of a TCPA class.
No. 07-61822-CIV, 2008 WL 5479111, at *7 (S.D. Fla. Dec. 11, 2008). The Court held
that certification of the TCPA class would be improper under Rule 23(a)(2) and 23(b)(3)
because “consent is an issue that would have to be determined on an individual basis
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at trial.” Id. at *8.2 Similarly, in Gene & Gene, LLC v. BioPay, LLC, the Fifth Circuit
reversed a district court’s certification of a TCPA class action because the plaintiff had
failed to establish that the issue of consent could be established via class wide proof.
541 F.3d 318, 329 (5th Cir. 2008). The court held that the plaintiff had failed to meet its
burden of demonstrating facts or argument which indicated that the issue of consent
would not dissolve into a series of mini trials. Id.; see also Conrad v. Gen. Motors
Acceptance Corp., 283 F.R.D. 326, 330 (N.D. Tex. 2012) (denying motion to certify
TCPA class because “the consent issue would necessitate individual inquiries regarding
each putative classmember's account and the circumstances surrounding each call or
contact. Additionally, because this individual issue has the potential to separate
classmembers from each other, the class lacks the cohesiveness necessary for the
Court to certify a class under Rule 23(b)(2).”).
The Court finds the reasoning of Hicks and Gene & Gene, LLC persuasive.
Resolution of each putative class member’s TCPA claim would necessarily involve an
individual assessment of whether each class member consented to receive telephone
calls on their cellular telephone.3 The Court rejects Plaintiff’s argument that consent is
2
The Court stated that it was irrelevant whether the defendant or the
plaintiff had the burden of demonstrating consent (or lack thereof). Hicks, 2008 WL
547911, at *8. Interestingly, Plaintiff cited Hicks in her memorandum for the proposition
that class certification was appropriate for her now dismissed FDCPA claim, describing
it as “an almost identical case,” but was silent as to the fact that the Court rejected
certification of the TCPA class. See Mem. at 10.
3
Indeed, Plaintiff’s rambling explanation, without citation to any record
authority, in her Reply of why she did not provide express consent for the calls she
received to her cellular telephone, is a prime example of why consent is such an
individualized issue. See Reply at 2-3; 5-6.
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not an obstacle to class certification. See Mem. at 14. Plaintiff argues that consent is
not an obstacle to class certification because a 2008 Federal Communications
Commission (“FCC”) Declaratory Ruling 07-232 (2008 FCC Order”)4 which provides that
if a customer provides his cellular telephone number to an original creditor, he has
consented to calls from the original creditor’s debt collector is invalid under Chevron,
U.S.A., Inc. V. National Resources Defense Council, 467 U.S. 837, 844 (1984),
because it “impermissibly amends the TCPA to provide an exception for ‘prior express
or implied consent’ and flies in the face of Congress’ intent.” Id. Plaintiff also argues
that even if the 2008 FCC Order applies, it is not an “individualized issue” which
precludes class certification because “Defendant has not produced any evidence of
consent for the Security Credit TCPA class.” Id. The Court declines to reach the merits
of Plaintiff’s bare bones argument that the 2008 FCC Order “impermissibly amends the
TCPA” and is unreasonable under Chevron. See id. 5 Plaintiff fails to cite any authority
4
The 2008 FCC Order, adopted on January 4, 2008, provides that
“autodialed and prerecorded message calls to wireless numbers that are provided by
the called party to a creditor in connection with an existing debt are permissible as calls
made with the ‘prior express consent’ of the called party.” In re Rules and Regulations
Implementing the Tel. Consumer Prot. Act of 1991, 23 FCC Rcd. 559, 564 (F.C.C. Jan.
4, 2008). The Order also states that “[c]alls placed by a third party collector on behalf
of that creditor are treated as if the creditor itself placed the call.” Id. at 565.
5
Although the Eleventh Circuit has not addressed whether the 2008 FCC
Order is entitled to deference, the Court notes that courts in other circuits have found
that it is. See Moore v. Firstsource Advantage, LLC, No. 07–CV–770, 2011 WL
4345703, at *10 n.10 (W.D.N.Y. Sept. 15, 2011) (“The FCC's declaratory ruling is a
‘final order’ entitled to precedential effect in this Court.”); see also Leckler v. Cashcall,
Inc., No. C 07-04002 SI, 2008 WL 5000528, at *2-3 (N.D. Cal. Nov.21, 2008) (under 28
U.S.C. § 2342, the federal courts of appeal have exclusive jurisdiction over appeals of
final orders by the FCC, including Declaratory Ruling 07–232).
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for her argument that Congress did not intend to allow provision of a telephone number
to an original creditor to act as express consent to call from a debt collector. See Reply
at 3-5. Indeed, the only case that Plaintiff cites for the proposition that the 2008 FCC
Order is overbroad, Leckler v. Cashcall, Inc., 554 F. Supp. 2d 1025, 1033 (N.D. Cal.
2008), was later vacated.
Moreover, Courts within this district have routinely cited to and relied upon the
2008 FCC Order. See, e.g., Osorio v. State Farm Bank, F.S.B., 859 F. Supp. 2d 1326,
1329 (S.D. Fla. 2012); Breslow v. Wells Fargo Bank, N.A., 857 F. Supp. 2d 1316, 1318
(S.D. Fla. 2012); Cavero v. Franklin Collection Serv. Inc., No. 11–22630–CIV, 2012 WL
279448, at *3 (S.D. Fla. Jan. 31, 2012); Hicks, 2008 Wl 5479111, at *5. Plaintiff’s
citation of Miller v. F.C.C., 66 F.3d 1140 (11th Cir. 1995), for the proposition that the
2008 FCC order is non-binding in the Eleventh Circuit is highly misleading. In Miller, the
Eleventh Circuit merely held that it could not review an FCC declaratory ruling because
the plaintiffs had failed to present an actual case or controversy. 66 F.3d at 1146. The
court’s statement that “it is axiomatic that Congress has not delegated, and could not
delegate, the power to any agency to oust state courts and federal district courts of
subject matter jurisdiction” is purely dicta and did not impact the court’s resolution of the
matter. Id. at 1144. Accordingly, the Court declines to construe this case to hold that
the 2008 FCC order is “nonbinding in the Eleventh Circuit,” as Plaintiff requests. See
Mem. at 14; Reply at 5. Turning to Plaintiff’s argument that consent is not an issue
because “Defendant has not produced any evidence of consent,” while it is true that
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CCS will ultimately bear the burden of establishing prior express consent, at the class
certification stage, the burden is on the Plaintiff to establish the Rule 23 factors. See
Gene & Gene, LLC , 541 F.3d at 329 (“To be sure, the burden is on [the plaintiff] Gene
to show that the requirements for class certification are satisfied.”). The Court finds that
at trial, the consent of each purported class member would be at issue. Plaintiff has
failed to articulate why consent would not be an individualized issue.
Finally, in a notice of supplemental authority filed on October 15, 2012 [DE 143],
Plaintiff directed the Court to Meyer v. Portfolio Recovery Associates, LLC, 696 F.3d
943 (9th Cir. 2012), a recent Ninth Circuit Court of Appeals decision, where the
appellate court found that a district court did not abuse its discretion in certifying a
TCPA class. 696 F.3d at 948. In Meyer, the defendant argued that class certification
was inappropriate because “some debtors might have agreed to be contacted at any
telephone number, even telephone numbers obtained after the original transaction.”
696 F.3d at 948. The Ninth Circuit held that this was a non-issue pursuant to an FCC
ruling which provides that “consumers who provided their cellular telephone numbers to
creditors after the time of the original transaction are not deemed to have consented to
be contacted at those numbers for purposes of the TCPA.” Id. Thus, because the
Ninth Circuit did not address the broader issue of whether individualized issues of
consent generally preclude class certification, this case does not persuade the Court
that Plaintiff is entitled to class certification.
Because the Court concludes that Plaintiff has failed to establish commonality
under Rule 23(a)(2) and predominance under Rule 23(b)(3), the Court declines to reach
the remaining Rule 23 factors and will deny the Motion. The Court will also deny
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Plaintiff’s motion to certify a class under Rule 23(b)(2) for failure to establish
commonality because consent is an individualized issue.
III. CONCLUSION
In light of the foregoing, it is ORDERED AND ADJUDGED that Plaintiff Lynne
Balthazor’s Motion for Class Certification [DE 62] is DENIED.
DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County,
Florida, this 27th day of December, 2012.
Copies provided to counsel of record via CM/ECF.
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