McMahon v. LVNV Funding, LLC et al
Filing
158
MEMORANDUM Opinion and Order. The Court denies plaintiff's motion for class certification 131 . Plaintiff is ordered to amend its complaint to allege the class definition set forth in its motion for class certification within seven days of the date of this Memorandum Opinion and Order. Signed by the Honorable Jorge L. Alonso on 6/15/2015. Notice mailed by judge's staff (ntf, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SCOTT MCMAHON, on behalf of
plaintiff and the classes defined herein,
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Plaintiff,
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v.
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LVNV FUNDING, LLC, RESURGENT )
CAPITAL SERVICES, L.P., ALEGIS
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GROUP, LLC, and TATE & KIRLIN
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ASSOCIATES, INC.,
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Defendants.
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No. 12 C 1410
Judge Jorge Alonso
MEMORANDUM OPINION AND ORDER
Plaintiff sues defendants for their alleged violations of the Fair Debt Collection Practices
Act. The case is before the Court on plaintiff’s second amended motion for class certification. For
the reasons set forth below, the Court denies the motion.
Discussion
Plaintiff asks the Court to certify three classes for its FDCPA claims, defined as:
Class A:
(a) all individuals in Illinois (b) to whom LVNV, Resurgent or any debt collector
employed by LVNV or Resurgent (c) sent a letter seeking to collect a debt that
referred to a “settlement” (d) which debt was (i) a credit card debt on which the last
payment had been made more than five years prior to the letter, or (ii) a debt arising
out of the sale of goods (including gas) on which the last payment had been made
more than four years prior to the letter (e) which letter was sent on or after February
28, 2011 and on or before March 19, 2012, (f) where the individual after receipt of
the letter, (i) made a payment, (ii) filed suit, or (iii) responded by requesting
verification or contesting the debt.
Subclass 1 (alleged in the first amended complaint as Class C):
[T]hose members of Class A who were sent a “Validation of Debt” notice similar to
one attached as Exhibit C to Plaintiff’s Amended Complaint. The “Validation of
Debt” notice contained the date on which LVNV or Resurgent purchased the debt
and not the date of default.
Subclass 2 (alleged in the first amended complaint as Class B):
[A]ll persons in Class A who were sent a collection letter by Tate & Kirlin
Associates, Inc.
(Pl.’s Reply Mem. Supp. 2d Am. Mot. Class Cert. at 3-4.) This definition of Class A, however, is
different from the one plaintiff alleges in the first amended complaint. (See 1st Am. Compl. ¶ 55.)
Defendants argue that the change in definition precludes class certification.
The parties do not cite, and the Court has not found, a Seventh Circuit case that states
whether a court can evaluate a certification motion based on a class definition that differs from the
one alleged in the complaint. Moreover, as Judge St. Eve noted in Savanna Group, Inc. v. Trynex,
Inc., No. 10 C 7995, 2013 WL 66181, at *2-3 (N.D. Ill. Jan. 4, 2013) (collecting cases), a number
of district courts have refused to do so.
Here, however, it is difficult to see any practical advantage to requiring plaintiff to amend
his complaint before the Court considers the propriety of certifying Class A as it is now defined.
Defendants would raise the same arguments in opposition to a motion for leave to amend the class
allegations that they raise now in opposition to certification. Moreover, having disavowed the
alleged definition of Class A, plaintiff will have to amend the class allegations, regardless of how
the certification issue is decided. Thus, though plaintiff should have asked to amend the class
definition before moving for certification, requiring him to do so now would only delay the
proceedings. Accordingly, the Court will evaluate the propriety of certifying the classes as
amended.
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Certification is proper only if each of the classes meets all of the requirements of Rule 23(a)
and one of the requirements of Rule 23(b). See Fed. R. Civ. P. 23; Rosario v. Livaditis, 963 F.2d
1013, 1017 (7th Cir. 1992). Rule 23(a) is satisfied 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.
Fed. R. Civ. P. 23(a)(1)-(4). Rule 23(b) is satisfied if, as relevant here, common questions of law
or fact predominate over any questions that affect only individual class members and a class action
is superior to other available methods of adjudicating the dispute. Fed. R. Civ. P. 23(b)(3).
Defendants do not “challenge numerosity.” (Resp. Opp’n Pl.’s 2d Am. Mot. Class Cert. at
5 n.1.) Therefore, the Court starts with commonality, which “generally exists when the defendant
has engaged in standardized conduct towards the members of the proposed class.” Parkis v. Arrow
Fin. Servs., LLS, No. 07 C 410, 2008 WL 94798, at *4 (N.D. Ill. Jan. 8, 2008) (quotation omitted).
Plaintiff alleges that defendants violated the FDCPA by sending a letter and/or validation of debt
notice to putative class members offering to settle a debt without disclosing the fact that the statute
of limitations on the debt had expired. (1st Am. Compl. ¶ 49.) Whether defendants, in fact, sent
such letters and whether the letters were unfair or deceptive in violation of the FDCPA are questions
common to the classes. Thus, the commonality requirement of Rule 23(a) is satisfied.
“The question of typicality in Rule 23(a)(3) is closely related to the . . . question of
commonality.” Rosario, 963 F.2d at 1018. “A ‘plaintiff’s claim is typical if it arises from the same
event or practice or course of conduct that gives rise to the claims of other class members and his
or her claims are based on the same legal theory.’” Id. (quoting De La Fuente v. Stokely-Van Camp,
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Inc., 713 F.2d 225, 232 (7th Cir. 1983)). Such is the case here. Therefore, the typicality element
is also met.
The issue of adequacy depends on “the adequacy of the named plaintiff’s counsel, and the
adequacy of representation provided in protecting the different, separate, and distinct interest of the
absentee members.” Sec’y of Labor v. Fitzsimmons, 805 F.2d 682, 697 (7th Cir. 1986) (en banc).
Plaintiff’s counsel is experienced in class action litigation and, though plaintiff does not have a claim
for actual damages like the other putative class members, his claims are not “antagonistic [to]” or
in “conflict[] [with]” the other members’ claims. Rosario, 963 F.2d at 1018 (stating that “[a] class
is not fairly and adequately represented if class members have antagonistic or conflicting claims”).
Accordingly, the adequacy requirement is met.
That is only the half the battle, however, as the classes must also satisfy Rule 23(b), which
requires that common questions predominate over individual ones and that a class action be a
superior method of adjudicating the dispute. Because these classes include consumers seeking
actual damages, i.e., those who paid some part of the debt after receiving a letter or notice of
validation, there will be individual issues of causation and damages. Even if, as plaintiff asserts, the
amount of damages due each class member is “capable of ministerial determination” (Mem. Supp.
Pl.’s 2d Mot. Class Cert. at 11), causation, i.e., determining whether class members paid the debt
because of the letter, out of moral compulsion, or for some other reason, is not. See 15 U.S.C. §
1692k(a)(1) (“[A]ny debt collector who fails to comply with any provision of [the FDCPA] with
respect to any person is liable to such person in an amount equal to the sum of . . . any actual damage
sustained by such person as a result of such failure) (emphasis added); Crabill v. Trans Union,
L.L.C., 259 F.3d 662, 664 (7th Cir. 2001) (“Without a causal relation between the violation of the
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statute and the loss of credit, or some other harm, a plaintiff cannot obtain an award of ‘actual
damages.’”) (quotation omitted). Moreover, given that Class A is estimated to have 3,000 members
(see Mem. Supp. Pl.’s 2d Mot. Class Cert. at 10), the individual issues will dwarf the issues common
to the class, making this case unsuitable for class certification.
Conclusion
For the reasons set forth above, the Court denies plaintiff’s motion for class certification
[131]. Plaintiff is ordered to amend its complaint to allege the class definition set forth in its motion
for class certification within seven days of the date of this Memorandum Opinion and Order.
SO ORDERED.
ENTERED:
June 15, 2015
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HON. JORGE ALONSO
United States District Judge
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