SPIEGEL v. ASHWOOD FINANCIAL, INC.

Filing 71

ORDER - the Court GRANTS in part and DENIES in part Spiegel's 59 Motion to Approve, and DENIES Ashwood's 60 Motion to Stay, The parties shall confer regarding a proposed Amended Notice of Class Action, which shall provide greater sp ecificity as to the subsections serving as the basis for the Class's claims. After the parties have conferred about the Amended Notice of Class Action, Spiegel shall either submit a Notice of an Agreed Amended Notice of Class Action or a Noti ce of Continued Dispute within fourteen days from the date of this Order. If the filing is only a Notice of Continued Dispute, Spiegel shall file his Motion to Approve Class Notice within fourteen days thereafter. Ashwood must also provide Spiegel with the names and addresses of all Class members with fourteen days from the date of this Order. (See Order.) Signed by Judge Larry J. McKinney on 3/23/2017. (LDH)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

MIKE SPIEGEL individually and on behalf
of all others similarly situated,
Plaintiff,
vs.
ASHWOOD FINANCIAL, INC. an Indiana
corporation,
Defendant.

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No. 1:16-cv-01998-LJM-DML

ORDER
This matter comes before the Court on Plaintiff’s, Mike Spiegel, individually and on
behalf of all others similarly situated (“Spiegel’s”), Motion to Approve Class Notice and for
the Turn-Over of Class Data (“Motion to Approve”), Dkt. No. 59; and Defendant Ashwood
Financial, Inc.’s (“Ashwood’s”) Motion to Stay Ruling on Plaintiff’s Motion to Approve
Class Notice and For the Turn-Over of Class Data (“Motion to Stay”). Dkt. No. 60. In the
Motion to Approve, Spiegel seeks the Court’s approval of its proposed Notice of Class
Action, Dkt. No. 62, and requests that the Court compel Ashwood to turn over the names
and addresses of all of the members of the class. See generally, Dkt. No. 59. Ashwood’s
Motion to Stay, however, requests that the Court stay its determination regarding the
approval of the proposed Notice of Class Action and the turn-over of class information
until the Court rules on the parties’ pending cross-motions for Judgment on the Pleadings.
See generally, Dkt. No. 60. For the foregoing reasons, the Court GRANTS in part and
DENIES in part Spiegel’s Motion to Approve and DENIES Ashwood’s Motion to Stay.

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I. BACKGROUND
On March 16, 2016, Spiegel received an initial form letter from Ashwood,
demanding payment of a delinquent consumer debt (the “Letter”). Dkt. No. 1, ¶ 7. The
Letter stated, in part,
Unless within (30) days after receipt of the first communication from this
office you dispute the validity of the debt or any portion thereof, it will be
assumed to be valid. If you notify this office information [sic] within the thirty
(30) day period after receipt of the first communication from this office that
you dispute the debt or any portion thereof, this office will obtain verification
of the debt and a copy of such verification, along with the creditor’s name
and address, will be mailed to you by this office. If you request information,
within the thirty (30) day period, the name and address of the original
creditor, if different from the current creditor, this office will provide you with
the requested information. This is required under the Fair Debt Collection
Practices Act.
Id.
Spiegel filed his Complaint on July 26, 2016, alleging that the Letter violated the
Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692g(a)(4) & (5), by failing
to state that any dispute of the debt or any request for the name and address of the
original creditor must be made in writing for a debtor to obtain a verification of the debt or
the name and address of the original creditor, if different than the current creditor. Id. at
¶¶ 12-13. Spiegel further argues that Ashwood’s failure to notify debtors that such
disputes or requests must be in writing constituted unfair and unconscionable collection
actions in violation of the FDCPA because whether a dispute could be made orally or in
writing could determine whether a consumer wishes to dispute the debt. Id. at ¶¶ 8, 17.
On February 2, 2017, the Court certified Spiegel’s proposed class, which was defined as
All persons similarly situated in the State of Indiana from whom Ashwood
attempted to collect a delinquent consumer debt, via the same form
collection letter that Ashwood sent to Spiegel from one year before the date
of the Complaint to the present.

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Dkt. No. 52 at 8.
Spiegel filed his Motion to Approve on February 22, 2017, requesting that the Court
approve his proposed Notice of Class Action and order Ashwood to provide the names
and addresses of all of the class members so that Spiegel could notify the class members
about this action. Dkt. No. 59. Spiegel’s proposed Notice of Class Action stated that the
Letter “allegedly failed to advise consumers that disputes and requests for the name of
the original creditor had to be in writing for them to be effective, in violation of §1692g and
f of the FDCPA.” Dkt. No. 62 at 1. Ashwood, however, objects to Spiegel’s proposed
Notice of Class Action, arguing that this description of the Letter constitutes an “incorrect
statement of the law set forth in [Spiegel’s] Complaint” because disputes are not required
to be in writing to be effective under 15 U.S.C. § 1692g. Dkt. No. 64 at 1-2. Ashwood
also claims that it should not be required to provide the names and addresses of the class
members to Spiegel until the Court rules upon the parties’ pending cross-motions for
Judgment on the Pleadings, to protect the interest of judicial economy and to prevent
possible violations of the Health Insurance Portability and Accountability Act (“HIPAA”).
Dkt. No. 60 at 2.
II. DISCUSSION
When the Court certifies a class pursuant to Federal Rule of Civil Procedure
23(b)(3), “the court must direct to class members the best notice that is practicable under
the circumstances, including individual notice to all members who can be identified
through reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B). Such a notice “must clearly and
concisely state in plain, easily understood language” the following items: (1) the nature of
the litigation; (2) the definition of the certified class; (3) the claims, issues, or defenses

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raised in the litigation; (4) that a class member can have his or her own attorney enter an
appearance in the action; (5) that the Court will exclude any class member that wishes to
be excluded; (6) the time and manner to request an exclusion; and (7) the binding effect
of a class judgment on class members. Id.
A. MOTION TO APPROVE
The Court cannot approve Spiegel’s proposed Notice of Class Action as it is
currently written. As stated above, a notice of a class action under Federal Rule of Civil
Procedure 23(c) must “clearly and concisely” state the class’s claims and the central
issues of the litigation. Fed. R. Civ. P. 23(c)(2)(B)(iii). The proposed Notice of Class
Action indicates that Ashwood “allegedly failed to advise consumers that disputes and
requests for the name of the original creditor had to be in writing for them to be effective,
in violation of §1692g and f of the FDCPA.” Dkt. No. 62 at 1. However, this statement
does not clearly communicate the class’s claim that Ashwood specifically violated 15
U.S.C. § 1692g(a)(4) & (5) because the Letter did not notify debtors that a dispute of a
debt must be in writing if the debtor wishes to obtain a verification of the debt or the name
and address of the original creditor. See Dkt. No. 1, ¶¶ 12-13. Such an explanation
regarding the nature of class claims is critical in this instance because, as Spiegel
acknowledges, oral disputes of a debt are generally effective under 15 U.S.C. §
1692g(a)(3). Dkt. No. 67 at 3. Therefore, the Court cannot approve the proposed Notice
of Class Action as it is currently written, and Spiegel must revise the Notice of Class
Action to more clearly state the specific claims set forth by the class and the issues
involved in this action.

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B. MOTION TO STAY
Even though the Court cannot approve the proposed Notice of Class Action at this
time, there is no need for Ashwood to delay in providing the names and address of the
class members to Spiegel. Ashwood argues that it should not provide this information to
Spiegel in light of the parties’ pending cross-motions for Judgment on the Pleadings. Dkt.
No. 60 at 2-3. The presence of these motions, however, does not eliminate Federal Rule
of Civil Procedure 23(c)’s mandate to provide notice of the class action to all class
members.
Ashwood also argues that it should not be required to provide the names and
addresses of the class members because disclosure of such information could violate
HIPAA. Dkt. No. 60 at 2. However, the disclosure of the class members’ names and
addresses in no way threatens HIPAA’s protections of individual identifiable health
information. Under 42 U.S.C. § 1320d-6, a person may be subject to criminal penalties if
he or she knowingly uses, obtains, or discloses individual identifiable health information.
“Individually identifiable health information” is defined as any information, including
demographic information, that is “created or received by a health care provider, health
plan, employer, or health care clearinghouse”; relates to a past, present or future physical
or mental health condition or the provision of health care to an individual; and actually
identifies the individual or for which there is a reasonable basis to believe the information
could be used to identify the individual.

42 U.S.C. §1320d(6).

While names and

addresses could identify an individual, this information alone does not directly relate to a
physical or mental health condition or the provision of health care to the individual being
identified. Therefore, because the disclosure of the names and addresses of the class

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members would not violate HIPAA, Ashwood cannot prevent or delay disclosure of this
information by claiming that such a disclosure would risk a HIPAA violation.
III. CONCLUSION
For the reasons stated herein, the Court GRANTS in part and DENIES in part
Spiegel’s Motion to Approve, Dkt. No. 59, and DENIES Ashwood’s Motion to Stay, Dkt.
No. 60. The parties shall confer regarding a proposed Amended Notice of Class Action,
which shall provide greater specificity as to the subsections serving as the basis for the
Class’s claims. After the parties have conferred about the Amended Notice of Class
Action, Spiegel shall either submit a Notice of an Agreed Amended Notice of Class Action
or a Notice of Continued Dispute within fourteen days from the date of this Order. If the
filing is only a Notice of Continued Dispute, Spiegel shall file his Motion to Approve Class
Notice within fourteen days thereafter. Ashwood must also provide Spiegel with the
names and addresses of all Class members with fourteen days from the date of this
Order.
IT IS SO ORDERED this 23rd day of March, 2017.

________________________________
LARRY J. McKINNEY, JUDGE
United States District Court
Southern District of Indiana

Distribution attached.

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Distribution:
Steven James Halbert
[e-mail]
Karen B. Neiswinger
ATTORNEY AT LAW
[e-mail]
Angie K. Robertson
PHILIPPS AND PHILIPPS, LTD.
[e-mail]
David J. Philipps
PHILIPPS AND PHILIPPS, LTD.
[e-mail]
Mary E. Philipps
PHILIPPS AND PHILIPPS, LTD.
[e-mail]

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