Berryhill v. Enhanced Recovery Company, LLC
Filing
51
MEMORANDUM Opinion and Order. For the reasons stated herein, Defendant's motion to strike 47 is granted and Plaintiff's motion for class certification 31 is denied. Status hearing set for 6/19/2019 at 9:00 AM. Signed by the Honorable Harry D. Leinenweber on 5/31/2019:Mailed notice(maf )
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 1 of 11 PageID #:491
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CHRISTINA BERRYHILL,
individually and on behalf
of a putative class,
Plaintiff,
Case No. 17 C 8059
v.
Judge Harry D. Leinenweber
ENHANCED RECOVERY COMPANY
LLC, doing business as ERC
or Enhanced Resource Centers,
Defendant.
MEMORANDUM OPINION AND ORDER
For the reasons stated herein, Defendant’s Motion to Strike
Reply (Dkt. No. 47) is granted and Plaintiff’s Motion to Certify
Class (Dkt. No. 31) is denied.
I.
BACKGROUND
Plaintiff Christiana Berryhill (“Berryhill”) is an Illinois
resident. Berryhill incurred a debt through her personal T-Mobile
consumer cell phone account. Due to her financial circumstances,
Berryhill could not pay off the debt, which went into default.
Defendant
Enhanced
Recovery
Company,
LLC
(“ERC”)
is
a
debt
collection agency. T-Mobile assigned Berryhill’s debt to ERC for
collection.
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 2 of 11 PageID #:492
On or about December 25, 2016, ERC communicated information
regarding Berryhill’s debt to the TransUnion credit reporting
agency. ERC reported that the debt had a $347.00 balance, which
included a $69.33 collection fee. In response to ERC’s collection
attempts, Berryhill’s attorneys sent a letter to ERC indicating
that she disputed the debt. On April 20, 2017, ERC sent a letter
back to Berryhill’s attorneys, explaining the history of the debt
and how it had been calculated (“the Letter”). (See Letter, Ex. D.
to Pl.’s Am. Compl., Dkt. No. 36-1.) In the Letter, ERC wrote:
Pursuant to our Terms and Conditions, when an account is
transferred to a third-party collection agency, a
collection fee based on the outstanding balance
transferred may be assessed. The fee on this account is
$69.33.
(Letter at 2.)
Berryhill filed suit in November of 2017, asserting that the
$69.33 collection fee is unlawful under Illinois law and therefore
in violation of the Federal Debt Collection Practices Act (FDCPA),
15 U.S.C. § 1692, et seq. She claims that the fee represents a
fixed 25% of the debt’s outstanding balance, in violation of the
terms of her agreement with T-Mobile, in which she only agreed to
pay the actual costs of debt collection in case of default. She
brings two counts: (1) misrepresenting the character, amount, or
legal status of a debt, by inflating the amount of the alleged
debt with an unlawful collection fee, in violation of 15 U.S.C.
- 2 -
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 3 of 11 PageID #:493
§§ 1692e and 1692e(2)(A); and (2) threatening to take an action
not
permitted
by
law,
by
threatening
to
collect
an
unlawful
collection fee, in violation of 15 U.S.C. § 1692e(5).
Berryhill brings her case on behalf of herself and a putative
class of others similarly situated. She defines the class as
follows:
(1) [A]ll persons similarly situated in the State of
Illinois (2) from whom Defendant attempted to collect on
a defaulted T-Mobile consumer account (3) which includes
the assessment of a collection fee on the consumer’s
account.
(Pl.’s Mot. for Class Cert. at 1, Dkt. No. 31.) Berryhill now moves
for class certification. ERC opposes class certification and, in
addition, moves to strike large portions of her reply brief. The
Court will first address ERC’s Motion to Strike before turning to
the merits of class certification.
II.
A.
DISCUSSION
Motion to Strike
ERC moves to strike all the exhibits attached to Berryhill’s
Reply Brief in Support of her Motion for Class Certification, and
all references to those exhibits in the Reply, on the basis that
parties cannot raise new arguments or facts in a reply brief.
Berryhill filed her Motion for Class Certification on December 21,
2018. In support of her Motion, she filed a single exhibit: a
declaration from her attorneys attesting to their adequacy to
- 3 -
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 4 of 11 PageID #:494
represent the class. (See Decl. of Celetha Chatman, Pl.’s Mem. for
Class Cert., Dkt. No. 32-1.) On January 16, 2019, ERC filed its
Memorandum in Opposition to the Motion for Class Certification,
arguing that Berryhill failed to meet her evidentiary burden to
demonstrate that the proposed class meets the requirements under
Federal Rule of Civil Procedure 23. Then, on February 8, 2019,
Berryhill filed her Reply, attaching three exhibits that she claims
satisfy her evidentiary burden on certain Rule 23 requirements.
It is “well-settled” that litigants cannot make new arguments
or present new facts in a reply brief. Gold v. Wolpert, 876 F.2d
1327, 1331 n.6 (7th Cir. 1989). The purpose of this rule is to
prevent one-sided presentation of arguments or facts, which is
contrary to the nature of an adversarial court system. See Autotech
Techs. Ltd. P’ship v. Automationdirect.com, Inc., 235 F.R.D. 435,
437 (N.D. Ill. 2006) (collecting cases). Arguments raised only in
the reply brief are waived, Wilson v. Giesen, 956 F.2d 738, 741
(7th Cir. 1992), as are undeveloped arguments, and arguments
unsupported by pertinent authority. United States v. Holm, 326
F.3d 872, 877 (7th Cir. 2003). Therefore, Berryhill has waived the
evidence she set forth for the first time in her reply brief, and
the Court will not consider the exhibits to her Reply nor the
references thereto. ERC’s Motion to Strike is granted.
- 4 -
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 5 of 11 PageID #:495
B.
Arbitration
There is another matter the Court must address before turning
to the merits of Berryhill’s class certification. ERC argues that
Berryhill
cannot
act
as
a
class
representative
because
she
expressly agreed to pursue any claims related to her T-Mobile
Account in arbitration. Though the parties dispute whether the
2010 or 2014 T-Mobile Terms & Conditions apply to Berryhill’s TMobile account, ERC asserts that both the 2010 and 2014 terms
include the arbitration provisions and class action waivers. The
2010 terms state in relevant part:
Dispute Resolution and Arbitration. WE EACH AGREE THAT,
EXCEPT AS PROVIDED BELOW… ANY AND ALL CLAIMS OR DISPUTES
IN ANY WAY RELATED TO OR CONCERNING THE AGREEMENT, OUR
SERVICES, DEVICES OR PRODUCTS, INCLUDING ANY BILLING
DISPUTES, WILL BE RESOLVED BY BINDING ARBITRATION,
RATHER THAN IN COURT. …
CLASS ACTION WAIVER. WE EACH AGREE THAT ANY DISPUTE
RESOLUTION PROCEEDINGS, WHETHER IN ARBITRATION OR COURT,
WILL BE CONDUCTED ONLY ON AN INDIVIDUAL BASIS AND NOT IN
A CLASS OR REPRESENTATIVE ACTION OR AS A MEMBER IN A
CLASS, CONSOLIDATED OR REPRESENTATIVE ACTION.
(2010 T-Mobile Terms & Conditions at 2-3, Ex. A to Def.’s Opp. to
Class Cert., Dkt. No. 37-1 (emphasis in original).) The 2010 terms
are essentially identical to the 2014 terms, with the exception
that
the
2014
arbitration
provision
explicitly
covers
claims
related to T-Mobile’s privacy policy and allows consumers to bring
claims in small claims court in addition to arbitration. (See 2014
T-Mobile Terms & Conditions at 4, 6, Ex. B to Def.’s Opp. to Class
- 5 -
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 6 of 11 PageID #:496
Cert., Dkt. No. 37-2.) ERC argues that the arbitration provision
and class waiver clearly apply to the claims Berryhill now asserts
in this putative class action. Berryhill counters that: (1) ERC
has waived its right to enforce the arbitration clause by failing
to file a motion to compel arbitration in this case, and (2) the
instant suit falls outside the scope of the arbitration provision.
Berryhill’s first argument is dispositive on this issue.
Arbitration provisions, like any other contract right, can be
waived. St. Mary’s Med. Ctr. of Evansville, Inc. v. Disco Aluminum
Prod. Co., 969 F.2d 585, 590 (7th Cir. 1992). Waiver can be either
explicit or implied by a party’s actions; ERC has not explicitly
waived its arbitration clause, so the Court must determine whether
it can infer waiver from ERC’s actions. Id. at 587. Furthermore,
when a party “chooses to proceed in a judicial forum, there is a
rebuttable presumption that the party has waived its right to
arbitrate.” Kawasaki Heavy Indus., Ltd. v. Bombardier Recreational
Prod., Inc., 660 F.3d 988, 995 (7th Cir. 2011).
Berryhill filed this suit on November 7, 2017. In its Answer
and Amended Answer, ERC included the arbitration provision as one
of twelve affirmative defenses it asserts in this case. However,
ERC also participated fully in this litigation since its inception.
ERC engaged in a six-month discovery period, participated in four
status
hearings
before
the
Court,
- 6 -
and
still
to
this
date,
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 7 of 11 PageID #:497
approximately 18 months since the case was filed, has not filed a
motion to compel arbitration of Berryhill’s claims. ERC thus acted
inconsistently
regarding
its
intent
to
assert
its
right
to
arbitrate. See St. Mary’s, 969 F.2d at 589 (finding that defendant
impliedly waived right to arbitrate by participating in litigation
for
ten
months);
Cabinetree
of
Wisconsin,
Inc.
v.
Kraftmaid
Cabinetry, Inc., 50 F.3d 388, 389 (7th Cir. 1995) (“A plaintiff
who wants arbitration moves for an order to arbitrate. 9 U.S.C.
§ 4.”). Put simply, ERC has not overcome the presumption of waiver
that it created when it chose to proceed in this forum. Id. at 391
(“Parties know how important it is to settle on a forum at the
earliest possible opportunity, and the failure of either of them
to move promptly for arbitration is powerful evidence that they
made their election—against arbitration. Except in extraordinary
circumstances… they should be bound by their election.”).
Additionally,
the
Court
notes
that
by
asserting
its
arbitration rights in a response brief to Plaintiff’s Motion for
Class
Certification,
ERC
is
doing
precisely
what
it
accuses
Berryhill of doing—presenting a legal argument in a way that
prevents
full
adversarial
briefing.
Because
ERC
raised
the
arbitration issue in the context of Berryhill’s adequacy to serve
as a class representative, rather than filing a motion to compel
arbitration, Berryhill could only respond to this argument in her
- 7 -
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 8 of 11 PageID #:498
Reply in support of class certification—which is not, as ERC notes,
a place for parties to initiate legal arguments. Regardless, ERC
has to date failed to file a motion to compel arbitration. As such,
it has waived any right it may have had to enforce T-Mobile’s
arbitration and class waiver provisions in this lawsuit.
C.
Class Certification
Class certification is
governed
by
Federal
Rule
of
Civil
Procedure 23. Under Rule 23(a), the party seeking certification
must demonstrate that:
(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). Additionally, the proposed class must satisfy
at least one of the three requirements listed in Rule 23(b). WalMart Stores, Inc. v. Dukes, 564 U.S. 338, 345 (2011). The Court
need only complete the commonality inquiry, which “tend[s] to
merge” with the typicality inquiry, id. at 349 n.5, because it is
dispositive here.
The commonality rule requires a plaintiff to show that “there
are questions of law or fact common to the class.” FED. R. CIV. P.
23(a)(2). Berryhill asserts that the following common issues exist
- 8 -
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 9 of 11 PageID #:499
with respect to each class member: (1) whether ERC’s flat rate
collection fee is unlawful; (2) whether ERC’s collection fee is
unauthorized by contract and usurious, and therefore invalid under
Illinois law; (3) whether ERC misstated the character, amount, or
legal status of the debt by including a collection fee; and (4)
whether ERC threatened to take action not permitted by law when it
threatened to collect a fee not authorized by law or contract.
However, these issues fail the commonality standard that the
Supreme Court set forth in Wal-Mart Stores, Inc. v. Dukes, 564
U.S. 338 (2011).
Commonality requires a plaintiff to demonstrate that the
class members “have suffered the same injury.” Dukes, 564 U.S. at
350 (emphasis in original). This does not mean merely that they
have all “suffered a violation of the same provision of law.” Id.
Rather, the claim(s) must depend upon a common contention, which
must
be
of
“such
a
nature
that
it
is
capable
of
classwide
resolution” because “determination of its truth or falsity will
resolve an issue that is central to the validity of each one of
the claims in one stroke.” Id. Accordingly, the Supreme Court noted
in Dukes, a Title VII sex discrimination action, that a common
question of “Is that an unlawful employment practice?” would be
insufficient to support class certification. Id. at 349. And all
of the “common issues” Berryhill lists essentially boil down to
- 9 -
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 10 of 11 PageID #:500
the same question: is what ERC did unlawful? While the Supreme
Court noted that, for the purpose of the Rule 23(a)(2) commonality
inquiry “even a single common question will do,” id. at 359
(internal brackets omitted), Berryhill has failed to set forth a
single sufficient common question as to the putative class.
Moreover, Berryhill did not provide any evidence that anyone
else received the same or substantially similar Letter that she
did.
Berryhill
asserts
throughout
her
Motion
for
Class
Certification that the Letter was a “form collection letter,” and
“[a]ll letters contain precisely the same alleged violations of
the FDCPA.” (Pl.’s Mem. at 10.) However, Berryhill has submitted
no evidence to show that ERC sent the Letter she received to any
other putative class members. ERC has submitted a declaration to
emphasize that such a showing would be impossible, as the Letter
was ERC’s individualized, direct response to the letter it received
from Berryhill’s attorneys. (See Davis Decl. at 14-18.) Thus, ERC
claims, the Letter cannot support a class claim.
To overcome the “wide gap” between an individual claim and
the existence of a class of persons who have suffered the same
injury as that individual, a plaintiff “must prove much more than
the validity of his own claim.” Gen. Tel. Co. of Sw. v. Falcon,
457 U.S. 147, 157–58 (1982); see also Dukes, 564 U.S. at 350 (“Rule
23 does not set forth a mere pleading standard. A party seeking
- 10 -
Case: 1:17-cv-08059 Document #: 51 Filed: 05/31/19 Page 11 of 11 PageID #:501
class certification must affirmatively demonstrate his compliance
with the Rule — that is, he must be prepared to prove that there
are in fact sufficiently numerous parties, common questions of law
or fact, etc.”); Szabo v. Bridgeport Machines, Inc., 249 F.3d 672,
675 (7th Cir. 2001) (noting that “[t]he proposition that a district
judge must accept all of the complaint’s allegations when deciding
whether to certify a class cannot be found in Rule 23 and has
nothing to recommend it.”) Here, because Berryhill provides no
proof that anyone else received the same Letter she did, she has
not established the existence of any common question. See Dukes,
564 U.S. at 359. Therefore, the Court denies Berryhill’s Motion
for Class Certification.
III.
CONCLUSION
For the reasons stated herein, Defendant’s Motion to Strike
Reply (Dkt. No. 47) is granted and Plaintiff’s Motion to Certify
Class (Dkt. No. 31) is denied.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Dated: 5/31/2019
- 11 -
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?