Reyes v. Julia Place Condominiums Homeowners Association, Inc. et al
Filing
464
ORDER AND REASONS granting in part and denying in part 351 Motion to Certify Class. FURTHER ORDERED that the parties submit supplemental briefing by 01/21/2015 as set forth in document. Signed by Judge Helen G. Berrigan on 12/18/2014. (kac)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NICOLE REYES, et al.
CIVIL ACTION
VERSUS
NO. 12-2043
JULIA PLACE CONDOMINIUMS
HOMEOWNERS ASSOCIATION, INC., et al
SECTION: “C” (3)
ORDER AND REASONS
Before the Court is a Motion to Certify Class by plaintiffs Julia Reyes ("Reyes") and
Mike Sobel ("Sobel"). Rec. Doc. 351. The motion is before the Court on the briefs without oral
argument. Having reviewed the record, memoranda of counsel, and the law, the Court GRANTS
IN PART and DENIES IN PART the motion for the following reasons.
I. BACKGROUND
Plaintiffs Reyes and Sobel bring this class action lawsuit on behalf of themselves and
other condominium owners. Rec. Doc. 325. They allege that they have been subject to excessive
fines and fees and debt collection practices by the Steeg Law Firm, LLC ("Steeg") and various
Condominium Associations throughout the New Orleans Area that violate the Fair Debt
Collection Practices Act ("FDCPA"), Louisiana's usury law, and the Louisiana Condominium
Act ("LCA"). Id. The factual background of this case has been described in greater detail in this
Court's prior orders on February 5, 2013 and July 3, 2014. Rec. Docs. 153, 380.
1
Plaintiff now seeks to certify three classes. The first class consists of condominium
owners who have been subject to alleged violations of the FDCPA. Rec. Doc. 351-1 at 1.
Plaintiffs claim that Steeg utilizes a standard form collection letter that violates the FDCPA on its
face by demanding payment of unpaid assessments within seven days, rather than thirty days as
the FDCPA requires. Id. at 2. Plaintiffs also claim that Steeg has violated the FDCPA by filing
excessive liens on condominium owners' property and failing to timely cancel these liens. Id.
The second class consists of owners whose condominium associations have charged them rates
and late fees exceeding 12% per annum for delinquent payment of assessments in violation of
Louisiana's usury law. Id. The third class consists of owners whose condominium associations
have charged unreasonable late fees in violation of the Louisiana Condominium Act. Id.
According to plaintiffs, though the fines and fees were leveed by different condominium
associations, these practices arose from Steeg's advice and assistance in drafting and amending
the condominium associations' bylaws and rules. Id. at 4.
II. LAW AND ANALYSIS
a. Law
1. Burden of Proof
The party seeking class certification bears the burden of demonstrating the
appropriateness of certification. Berger v. Compaq Computer Corp. 257 F.3d 475, 479, n. 4 (5th
Cir. 2001). The decision to certify is within the broad discretion of the court. The party seeking
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class certification bears the burden of proof. Castano v. Am. Tobacco Co., 84 F.3d 734, 744 (5th
Cir. 1996). A district court may look beyond the pleadings to understand the claims, defenses,
relevant facts and applicable substantive law and make a meaningful determination of the
certification issues. Id.
2. Rule 23 requirements
In order to certify a class, plaintiffs must demonstrate that they have met the four
prerequisites of Federal Rule of Civil Procedure 23(a). Rule 23(a) requires plaintiffs to show
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.
Plaintiffs must also show that they meet at least one of the requirements of Rule 23(b). These
include that the individual class members would be at risk of receiving "inconsistent or varying
adjudications" if their actions were prosecuted separately; that adjudications with respect to
individual class members would be dispositive of or substantially impair the interests of other
members not parties to the individual adjudications; that final injunctive relief or declaratory
relief would be appropriate for the class as a whole; or that common questions of law or fact
predominate over other questions, rendering class-wide adjudication superior to other available
methods. Plaintiffs claim that each of the three proposed classes meet the requirements of all
three categories of Rule 23(b). Rec. Doc. 351-1 at 14.
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b. Discussion
1. FDCPA Injunctive Relief Class
Before applying Rule 23's requirements to plaintiffs' proposed classes, the Court will first
address the viability of a class seeking injunctive relief under the FDCPA. The defendants argue
that injunctive relief is not available under the FDCPA and that, as a result, a class of those
seeking injunctive relief cannot be certified under Fed. R. Civ. P. 23(b)(2). Rec. Doc. 425 at 4546.
This issue is a matter of first impression for the Court. As defendants have acknowledged,
there is no case law of precedential value that holds that the injunctive relief is unavailable under
the FDCPA. Id. However, two federal circuit courts of appeal and numerous other district courts
have held that such relief is not available under the FDCPA. See, e.g., Weiss v. Regal Collections,
385 F.3d 337 (3d Cir. 2004); Sibley v. Fulton DeKalb Collection Serv., 677 F.2d 830, 834 (11th
Cir. 1982); Bituello v. Mancini, 684 F. Supp. 2d 760, 766 (E.D. Va. 2010); Banny v. Onewest
Bank, FSB, Civ. A. 11-172, 2011 WL 3418195 (S.D. Miss. 8/3/2011); Sibley v. Diversified
Collection Servs., Inc., Civ.A. 396-CV-0816-, 1998 WL 355492 (N.D. Tex. 6/30/1998).
Furthermore, though the Fifth Circuit has not spoken directly to the availability of
equitable relief under the FDCPA, its analysis of a different statute militates towards a finding
that the FDCPA provides for only monetary relief. In Washington v. CSC Credit Servs., Inc., the
Fifth Circuit analyzed the Fair Credit Reporting Act to determine whether it created a private
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cause of action for injunctive relief. It found that the FCRA did not create such a right because of
features of its drafting. Specifically, the FCRA affirmatively granted power to the Federal Trade
Commission to pursue injunctive relief and did not affirmatively grant that right to private
litigants, but did expressly give private litigants the ability to obtain damages and other relief.
These features "persuasively demonstrate[d] that Congress vested the power to obtain injunctive
relief solely with the FTC." 199 F.3d 263, 268 (5th Cir. 2000). Furthermore, the Fifth Circuit
supported its analysis by pointing to other courts' use of this same reasoning to deny injunctive
relief under the FDCPA. Id. at 268 n.4. The Fifth Circuit has also previously noted that "courts
uniformly hold that the FDCPA does not authorize equitable relief," though it declined in that
case to rule directly on the issue. Bolin v. Sears, Roebuck & Co., 231 F.3d 970, 977 n. 39 (5th
Cir. 2000). The Fifth Circuit also noted that "the unavailability of injunctive relief under a statute
would automatically make (b)(2) certification an abuse of discretion. Id.
On the other hand, a small number of courts have extended equitable relief to consumers
suing under the FDCPA. In Irwin v. Mascott, a district court granted declaratory and injunctive
relief to plaintiffs who had brought suit under the FDCPA. 112 F.Supp.2d 237 (N.D. Ca. 2000).
However, the court specified that such equitable relief was available because in California, the
FDCPA violations triggered the California Unfair Business Practices Act, which "adds injunctive
relief to Plaintiffs' remedies." Id. at 963. Thus, as the court's analysis makes clear, injunctive
relief would not have been available under the FDCPA alone. In Loigman v. Kings Landing
Condo. Ass'n., Inc., a New Jersey state court held that equitable relief was available to
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condominium owners suing their condominium association and the association's attorney under
the FDCPA. 324 N.J. Super. 97 (Ch. Div. 1999). However, that case is not controlling in this
jurisdiction and stands in the face of overwhelming case law militating against allowing
injunctive relief.
Thus, given the Fifth Circuit's previous pronouncements on the question of injunctive
relief under the FDCPA and the near-uniform denial of injunctive relief to other private FDCPA
litigants in other jurisdictions, this Court likewise declines to extend injunctive relief in this case.
Thus, plaintiffs' motion to certify an FDCPA class for injunctive relief is DENIED.
2. Rule 23(a): Prerequisites
A. Rule 23(a)(1): Numerosity
Rule 23(a)(1) requires plaintiffs to show that the parties in a proposed class are so
numerous that joinder is impractical. As this Court has previously noted, there is no "magic
number" that must be reached to satisfy numerosity. Kreger v. Gen. Steel Corp., Civ.A. 07-575,
2010 WL 2902773, *4 (E.D. La. July 19, 2010). The Fifth Circuit, considering a request to
certify a class consisting of 33 members, emphasized that "[t]he proper focus is not on numbers
alone, but on whether joinder of all members is practicable in view of the numerosity of the class
and all other relevant factors." Phillips v. Joint Legislative Committee on performance and
Expenditure of the State of Mississippi, 637 F.2d 1014, 1022 (5th Cir. 1981). In considering
practicability, a "common sense approach" is appropriate. 1 W. Rubenstein, A. Conte, & H.
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Newberg, Newberg on Class Actions, § 3.3 (2009). Relevant factors include geographic
dispersion of the proposed class members, the ease with which class members may be identified,
the nature of the action, and the size of each plaintiff's claim. Zeidman v. J. Ray McDermott &
Co., Inc., 651 F.2d 1030, 1038 (5th Cir. 1981).
FDCPA monetary relief class
Plaintiffs contend that there are between 26 to 41 members of this class. Rec. Doc. 351-1
at 21. In their reply brief, they claim to have identified eight additional members based on Steeg's
failure to remove property liens. Rec. Doc. 443 at 10. Plaintiffs argue that the difficulties in
identifying members of this proposed class stem in large part from Steeg's refusal to produce
documents related to its demands for condominium assessments. Id. at 18. Of these 26-41
putative members, plaintiffs estimate that ten are unnamed individuals who plaintiffs claim have
outstanding liens based on the review of records at the Civil District Court in Orleans Parish.
Rec. Doc. 351-2 at 4; Rec. Doc. 351-2. Steeg argues that the class is actually smaller because it
improperly includes seven entities that do not qualify as "consumers", and are thus not entitled to
bring suit under the FDCPA. Rec. Doc. 415 at 13-14. Steeg claims that the named plaintiff Mike
Sobel must be excluded because the Court has already dismissed his claims as time-barred. Id. at
15. Finally, Steeg claims that five (5) other individuals must be excluded because their FDCPA
claims have been settled. Id. at 17.
The FDCPA limits the term "consumer" to mean only natural persons. 15 U.S.C.
§1692a(5). Steeg asserts that based on this language, only a natural person may bring a lawsuit
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under the FDCPA. However, the Court has not found any authority that so narrowly prescribes
who may recover under the FDCPA. Indeed, §1692k of the FDCPA provides that a debt collector
who violates the act "with respect to any person is liable to such person. . ." and does not limit
liability to natural persons only. 15 U.S.C. §1692k(a) (emphasis added). In other sections of the
FDCPA, the term "person" is not limited to natural persons. For instance, a debt collector is
defined as a "person." 15 U.S.C. §1692a(6). See also Manuel H. Newburger and Barbara M.
Barron, Fair Debt Collection Practice ¶ 1.02[2] ("[I]t appears that Congress intended that word
[person] to have its broadest legal meaning and not be limited to 'natural' persons.") Thus, the
Court will count the seven entities that Steeg challenges for the purposes of determining
numerosity.
The Court agrees that Sobel must be excluded from the proposed class, since his FDCPA
claims were indeed dismissed. Rec. Doc. 380.
The Court will now address whether certain purported class members are barred by
previously litigating or settling their claims. Steeg has listed five individuals who it claims have
either settled or previously litigated their claims. In support, Steeg has provided correspondence,
complaints from prior litigation, and a settlement agreement. Rec. Docs. 415-3, 415-6. However,
the Court does not find that these documents show that the individuals are barred from bringing
suit under the FDCPA.
Steeg cites to Oreck Direct, LLC v. Dyson, Inc., 560 F.3d 398 (5th Cir. 2009) to assert
that these individuals are barred from bringing suit. Rec. Doc. 415 at 16. In that case, the Fifth
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Circuit states that one of the four elements which must be met for a claim to be barred by res
judicata is "the same claim or cause of action must be involved in both cases." Oreck, 560 F.3d
at 401. None of the documents that Steeg has attached show that the previous settlements or
litigation concerned violations of the FDCPA. For instance, the petitions against W.S. and L.W.
were brought by their respective condominium associations for unpaid fees. They did not deal
with alleged actions by Steeg that may have violated the FDCPA. Rec. Doc. 415. Aff. of Nicolle
Jene, Ex. 2. Likewise, the settlement between 2434 St. Charles Avenue Condominium
Association and E.P. does not discuss or release any potential claims by E.P. against the
condominium association under the FDCPA. Because none of the documents indicate that a
settlement or judgment has been rendered as to these individuals' FDCPA claims against Steeg,
the Court will not exclude them from consideration for numerosity purposes.
In addition, Steeg argues that purported plaintiffs who were not identified in plaintiffs'
Third Amended Complaint should be excluded for numerosity purposes. Rec. Doc. 415 at 10.
Steeg cites to Fed. R. Civ. P. 10(a), which requires that pleadings must include the names of all
parties. The Court finds this argument unavailing. Proposed class actions are routinely allowed to
move forward without burdening named plaintiffs with discovering the identity of every potential
class member. See, e.g., Phipps v. Sheriff of Cook County, 249 F.R.D. 298, 300 (N.D. Ill. 2008)
(plaintiffs are "not required to allege the exact number or identity of the class members"). Thus,
the Court will not exclude purported class members on this ground.
Having addressed defendants' numerosity arguments, the Court now applies the relevant
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numerosity factors. Plaintiffs claim that potential class members are geographically dispersed,
though they point only to the addresses of owners charged with late fees and interest from Julia
Place. Rec. Doc. 351-1 at 16. Plaintiffs also point to a fear of retaliation amongst some potential
class members. Id. at 17. Most persuasive is plaintiffs' assertion that because the claims at issue
are relatively small, individuals are unlikely to pursue separate actions in the absence of class
certification. Rec. Doc. 351-1 at 15. Other courts have found that an average claim size of
roughly $2,000 weighs in favor of a finding of impracticability. See, e.g., Dirks v. Clayton
Brokerage Co. of St. Louis Inc., 105 F.R.D. 125, 131 (D.C.Minn. 1985). In light of this factor
and a potential fear of retaliation, the Court finds the numerosity requirement is met for the
FDCPA monetary relief class.
Usury class
Plaintiffs claim that approximately 40 putative class members are entitled to monetary
relief and 731 are entitled to injunctive relief due to defendants' violations of Louisiana's usury
laws. Rec. Doc. 351-1 at 17-18. Defendants challenge these numbers, and assert that in order to
have standing to bring a claim under La. R.S. 9:3500, an individual must have actually paid
excessive interest. Rec. Doc. 452 at 29-30.
In order to have Article III standing, a plaintiff must adequately establish (1) an injury in
fact; (2) causation; and (3) redressability. Sprint Communications Co., L.P. v. APCC Services,
Inc., 554 U.S. 269, 273 (2008). Neither party has fully addressed whether the proposed class
members who have not paid the allegedly usurious interest satisfy these requirements.
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Defendants cite Huddleston v. Bossier Bank & Trust Co. as authority for the requirement that
class members must have paid on a contract providing a usurious rate of interest. Rec. Doc. 425
at 29. However, in that case, the court appears to limit its holding to situations in which a note
was usurious on its face due to a "clerical error", and where the holder "neither collected nor
intended to collect usurious interest, nor attempted to collect usurious interest. . ." 463 So.2d
1336, 1340 (La. Ct. App. 1984). Here, defendants took steps to collect unpaid fees, and the fees
and interest rates are not alleged to have been clerical errors. Accordingly, the parties are ordered
to submit supplemental briefing as to the issue of whether the proposed class members from
whom late fees and interest were not collected meet the three requirements to establish Article III
standing. Specifically, the parties should clarify whether attempts at collection of allegedly
usurious rates constitutes an injury in fact for purposes of establishing standing. The Court will
defer ruling on class certification for the usury class until such briefing is submitted for its
consideration.
LCA Class
Plaintiffs claim that the proposed LCA class contains 731 members entitled to injunctive
relief, as well as 80 members entitled to monetary relief. Rec. Doc. 351-1 at 18. Defendants aver
that plaintiffs have overstated the number of members in the proposed class because the LCA
allows condominium associations to charge a greater percentage in fees than would otherwise be
allowed under the usury law. Rec. Doc. 425 at 26. Under the LCA, condominium associations
may charge up to 30% of the amount of the monthly assessment in late fees. La. R.S.
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9:1123.102(11). In contrast, the usury law forbids interest rates exceeding 12% per annum. La.
R.S. §9:3500(C)(1). The Court finds that this issue goes to the substantive merits of the claim
and is thus more appropriately addressed outside the context of class certification. Thus, the
Court declines to consider this issue at present.
Defendants also argue that actions under the LCA are subject to a one-year prescriptive
period, citing to their discussion of this issue in an earlier brief filed with this court. Rec. Doc.
425 at 26. When determining the appropriate prescriptive period under Louisiana law, courts
look to the nature of the duty that has been breached. Copeland v. Wasserstein, Perella & Co.,
Inc., 278 F.3d 472 (5th Cir. 2002). "The classic distinction between damages ex contractu and
damages ex delicto is that the former flow from the breach of a special obligation contractually
assumed by the obligor, whereas the latter flow from the violation of a general duty owed to all
persons." Carriere v. Jackson Hewitt Tax Service Inc., 750 F.Supp.2d 694, 704 (E.D. La. 2010).
Duties imposed by statute are regarded as arising in tort, rather than contract. Id.
Here, plaintiffs allege that the condominium associations have charged excessive fees and
interest in violation of the LCA. Rec. Doc. 351-1 at 1, Ex. B at 1. They do not cite to provisions
within the condominium associations' by-laws or declarations that create a duty to charge
reasonable fees, nor has the Court found any provisions that create such a duty. Rather, the duty
to charge reasonable fees and interests arises out of the LCA. Because the duty that has been
allegedly breached is statutory, not personal, the Court finds that the claims of the purported class
members seeking monetary relief for violations of the LCA dating back more than a year prior to
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the filing of this action have prescribed.
By the Court's estimate, under a one-year prescriptive period, the number of purported
class members whose claims have not proscribed is approximately 25. The Court notes that it has
not taken into account unnamed unit owners that plaintiffs claim have been charged, but for
whom plaintiffs do not provide documentation. While not a large number, the Court is reluctant
to deny certification on numerosity grounds for the same reasons discussed in the FDCPA
monetary relief section. Here, as with the FDCPA class, the small size of the individual claims
presents a significant barrier to individual litigation. Thus, the Court will proceed to the other
Rule 23(a) considerations.
In addition, the question of the appropriate prescriptive period for LCA claims is only
relevant to those seeking monetary relief under the LCA. It does not affect the claims of the 731
members seeking injunctive relief, since per plaintiffs' allegations–which defendants have not
denied–the by-laws and declarations of the condominium associations named in the complaint
are still in effect. Therefore, the Court finds numerosity satisfied for both the injunctive and
monetary relief classes.
B. Rule 23(a)(2): Commonality
Rule 23(a)(2) requires that issues of law or fact are common to the class. The common
issue of law or fact must be one whose resolution will "resolve an issue that is central to the
validity of each one of the [class members'] claims in one stroke." M.D. ex rel Stukenberg v.
13
Perry, 675 F.3d 832, 840 (5th Cir. 2012) (citing Wal-mart Stores, Inc. v. Dukes, 131 S.Ct. 2541,
2551 (2011).1 Plaintiffs must "demonstrate that the class members have suffered the same
injury," not "merely that they have all suffered a violation of the same provision of law." Walmart Stores, Inc., 131 S.Ct. at 2551.
FDCPA monetary relief class
In plaintiffs' initial complaint and subsequent amended complaints, the FDCPA class is
defined as individuals who received letters attached as Exhibits "A" and "D" to the original
complaint (or substantially similar letters) during the year prior to the date of filing the action.
Rec. Doc. 1 at 24. In their motion for class certification, plaintiffs appear to expand the class
definition significantly to encompass a much wider swath of unit owners.2
Plaintiffs put forth the following as common issues as to the FDCPA monetary relief
class: 1) Is Steeg Law Firm a debt collector within the meaning of the FDCPA?; 2) Do the
standard, form letters Steeg sends to condominium owners/occupants to collect assessments
violate the FDCPA? Rec. Doc. 351-1 at 22-23.
Defendants counter that this list ignores the "false name" FDCPA claims relating to the
1
Although plaintiffs claim that the bar is low for commonality, the case they cite to has
been superceded by the U.S. Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes, supra.
Rec. Doc. 251-1 at 22.
2
Plaintiffs re-defined the class as those threatened with excessive fees and interest; those
who have received correspondence or other documents from Steeg seeking collection of usurious
interest and excessive late fees or had their assessments accelerated. Rec. Doc. 351-2 at 1.
14
condominium associations, and should result in the denial of class certification as to the
associations. Rec. Doc. 425 at 34. The Court agrees that plaintiffs have not alleged class-wide
issues relating to any defendants other than Steeg under the FDCPA. Thus, certification of the
FDCPA monetary relief class for claims against the condominium associations is DENIED.
Steeg challenges plaintiffs' expanded FDCPA class definition because it includes unit
owners who allegedly suffered different types of FDCPA violations that are factually distinct.
Rec. Doc. 415 at 18-19. According to Steeg, plaintiffs essentially allege three different FDCPA
injuries: 1) receiving correspondence or other documents, 2) being encumbered by liens or
privileges, and 3) receiving other harassing communications. Id. The Court agrees that the
expanded definition of the FDCPA class does not meet the requirements of Rule 23(a)(2).
Specifically, plaintiffs have not demonstrated that the class members "have suffered the same
injury" and not "merely that they have all suffered a violation of the same provision of law." WalMart Stores, Inc., 131 C.Ct. at 2551.
However, the narrow class definition set forth in plaintiffs' complaints does not suffer this
deficiency. Rather, the Court's review of the letters provided by plaintiffs in the complaint and as
exhibits to this motion reveals that they all contain an identical or near-identical paragraph
threatening legal action and additional fees if outstanding late fees are not paid within seven
days. Rec. Doc. 1-1 at 1; Rec. Doc. 1-4 at 1; Rec. Doc. 351-2. These similarities, coupled with
the fact that all of the letters were drafted by the Steeg Law Firm, persuades the Court that those
who received such letters have suffered the same alleged injury.
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The Court is not swayed by defendants' contention that plaintiffs have not shown that
every member of the proposed class received a document from Steeg Law that is the same "in
form and content." Rec. Doc. 425 at 34. The case cited to by Steeg, Byes v. Telecheck Recovery
Servs., Inc. found that although the letters sent to proposed class members were not the same in
form and content, that commonality was nevertheless satisfied because all the letters contained
common violations of the FDCPA. 173 F.R.D. 421, 424 (E.D. La. 1997). The other cases that
Steeg cites to are also unavailing. In Evon v. Law Offices of Sidney Mickell, the Ninth Circuit
found commonality was satisfied because letters were sent to purported class members' business
addresses without their consent, and did not touch on the form or content of the letters. 688 F.3d
1015, 1030 (9th Cir. 2012). In Henderson v. Eaton the court clarified that only one common
issue needed to be shown to satisfy commonality under the pre-Walmart v. Dukes standard. No.
01-138, 2002 WL 10464 (E.D. La. Jan 2, 2002).
Accordingly, the Court finds that only the narrow class definition – consisting of unit
owners who received letters identical to or substantially similar to those attached as Exhibits "A"
and "D" of the original complaint during the year prior to the filing of the action – satisfies the
commonality requirement.
LCA class
Plaintiffs list several issues of law common to the LCA class concerning the scope and
interpretation of the LCA. Rec. Doc. 351-1 at 23. However, the Court does not find that the
determination of these questions would "resolve an issue that is central to the validity of each one
16
of the [class members'] claims in one stroke." M.D. ex rel Stukenberg, 675 F.3d at 840. The LCA
provides that condominium associations may levy "reasonable" fines. La. R.S. §9:1123.102. The
question of whether charges made by different condominium associations under different
circumstances is one that requires individualized inquiry. Unlike the FDCPA class, which
received communications containing near-identical language from a single source, the proposed
LCA class alleges violations by eleven different condominium associations that charge different
late fees. Rec. Doc. 351-3 at 1-2. The LCA class also differs from the usury class because
Louisiana's usury law creates a bright-line rule for determining usurious interest rates, rather than
a reasonableness standard. Thus, the Court finds that the LCA class does not meet the
requirement of commonality, and DENIES certification.
C. Rule 23(a)(3): Typicality
Having denied certification to the LCA classes and the FDCPA injunctive class, and
withholding consideration of the usury class until further briefing, the Court will now discuss the
remaining class certification requirements as they relate to the narrowed FDCPA monetary relief
class. Rule 23(a)(3) requires a finding that the claims of the class representatives are typical of
the claims of the class. Fed.R.Civ.P. 23(a)(3). The "focus is on the general similarity of the
named plaintiffs' legal and remedial theories and the legal and remedial theories of those whom
they purport to represent." Baricuatro v. Industrial Personnel and Management Services, Inc.,
2013 WL 6072702, *7 (E.D. La. 2013) (quoting In re Ford Motor Co. Bronco II Product
17
Liability Litigation, 177 F.R.D. 360, 366 (E.D. La. 1997)). The typicality requirement is "not
demanding." In re Oil Spill by Oil Rig Deepwater Horizon in Gulf of Mexico, on Apr. 20, 2010,
910 F. Supp. 2d 891, 911 (E.D. La. 2012) aff'd sub nom. In re Deepwater Horizon, 739 F.3d 790
(5th Cir. 2014). "Typicality does not require a complete identity of claims." Rather, if the claims
"arise from a similar course of conduct and share the same legal theory, factual differences will
not defeat typicality." Id.
Having dismissed Sobel's FDCPA claims as time-barred, the Court will focus only on
whether Reyes meets the typicality requirement. Like the other purported class members, Reyes
received a letter from Steeg demanding payment of outstanding late fees within seven days and
threatening the filing of a lien against her unit for unpaid fees, interests, costs and attorney's fees.
Rec. Doc. 1-1 at 1. Because the crux of plaintiffs' class-wide claim against Steeg stems from
letters similar to the one sent to Ms. Reyes and whether the language therein violated the
FDCPA, the Court finds that Ms. Reyes satisfies the typicality requirement.
D. Rule 23(a)(4): Adequacy
Rule 23(a)(4) requires that the representative parties will fairly and adequately protect the
interests of the class. Courts have also applied Rule 23(a)(4) to scrutinize the adequacy of the
proposed class counsel. William B. Rubenstein, Newberg on Class Actions 3:54 (5th ed. 2014).
When evaluating the adequacy of the class representative, the inquiry focuses on conflicts of
interest between named parties and the class they seek to represent. Amchem Products, Inc. v.
18
Windsor, 521 U.S. 591, 625-26 (1997). "A class representative must be part of the class and
possess the same interest and suffer the same injury as the class members." Id. Furthermore, the
adequacy requirement "mandates an inquiry into the zeal and competence of the representative's
counsel. . ." Horton v. Goose Greek Independent School Dist., 690 F.2d 470, 484 (5th Cir. 1982).
Plaintiffs state that John Garner, one of the attorneys for the plaintiff, has experience in
handling class action matters, has previously been a successful litigant in a case brought under
the FDCPA, and has competently litigated the instant case and secured a partial summary
judgment. Rec. Doc. 351-1 at 32. The defendants do not contest counsel's adequacy. Though
plaintiffs do not cite to the previous class actions handled by Garner, the Court is nonetheless
satisfied that Garner can competently and adequately litigate on behalf of the proposed class
members.
Julia Place, in a supplemental brief filed in opposition to the motion for class
certification, argues that Reyes is not an adequate representative of her class because her claims
are atypical. Specifically, Julia Place points out that Ms. Reyes has alleged that Julia Place
refused to provide her with a new building access code, and that unlike other class members, Ms.
Reyes failed to maintain proper insurance for common elements and has claimed property
damage arising from Hurricane Isaac. Rec. Doc. 420 at 6. The Court finds that these factors do
not disqualify Reyes as an adequate representative. Reyes, like other members of the proposed
class, has received a letter containing language that may be in violation of the FDCPA from
Steeg. Reyes' status as a class representative does not bar her from bringing individual claims.
19
The Fifth Circuit has previously stated that "[d]ifferences between named plaintiffs and class
members render the named plaintiffs inadequate representatives only if those differences create
conflicts between the named plaintiffs' interests and the class members' interests." Mullen v.
Treasure Chest Casino, LLC, 186 F.3d 620, 625-26 (5th Cir. 1999). The Court does not find that
the potential differences cited by defendants between Reyes and the proposed class members
create conflicts that would hinder Reyes' ability to protect class interests.
Defendants also posit that the class as a whole should not be certified because of
conflicting interests. Defendants claim that a judgment in favor of the class would result in some
class members obtaining monetary relief while others who may not have paid excessive fees and
interests would receive none. Rec. Doc. 425 at 41. However, the potential for differing damage
awards is not fatal to class certification. See, e.g., Epstein v. Weiss, 50 F.R.D. 387, 391 (E.D. La.
1970) ("It is now well settled that neither the number of representative parties nor their financial
interests is controlling in determining whether the plaintiffs will fairly and adequately protect the
interests of their class.").
Because Sobel's FDCPA claims have already been dismissed as time-barred, the Court
finds that Sobel is not an adequate representative of the proposed FDCPA monetary relief class.
Defendants' remaining objections to a finding of adequacy are not relevant in the context of the
narrowed FDCPA monetary relief class. Thus, the Court finds that Reyes and plaintiffs' counsel
are adequate representatives of the proposed FDCPA monetary relief class.
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3. Rule 23(b)
Rule 23(b) requires that a proposed class fulfills the requirements of one of the four
categories set forth in the rule. Rule 23(b)(1)(A) class may be maintained if prosecuting separate
actions by individual class members would create a risk of inconsistent or varying adjudications.
Fed.R.Civ.P. 23(b)(1)(A). This category is "rarely utilized" and "does not cover situations in
which multiple plaintiffs sue a single defendant for money damages." Newberg on Class Actions
§4:1 (5th ed.). Here, the FDCPA monetary relief class consists of multiple plaintiffs suing a
single defendant for money damages. Thus, the Court does not find that the requirements of this
type of class action are met.
Rule 23(b)(1)(B), frequently referred to as a "limited fund" class action, is satisfied if an
adjudication with respect to an individual class member would be dispositive of the interests of
other members, or would substantially impair or impede their ability to protect their interests.
Fed.R.Civ.P. 23(b)(1)(B). In such actions, "the shared character of rights claimed or relief
awarded entails that any individual adjudication by a class member disposes of, or substantially
affects, the interests of absent class members." Ortiz v. Fibreboard Corp., 527 U.S. 815, 834
(1999). The most common type of Rule 23(b)(1)(B) involve those where numerous persons make
claims against a fund insufficient to satisfy all claims. Id. No allegation has been made that
Steeg, the sole defendant for the FDCPA monetary class claims, has insufficient funds to satisfy
judgment, should it be rendered in favor of plaintiffs. The Court also does not find that the
character or rights claimed or relief awarded would render adjudication by a single class member
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dispositive of the interests of absent class members. Indeed, if a single class member were to
litigate his or her claims against Steeg individually, the outcome of the case would not influence
future lawsuits by other class members any more than would normally be expected between
similarly situated plaintiffs bringing separate actions. Thus, the class does not meet the Rule
23(b)(1)(B) requirements.
Class actions under Rule 23(b)(2) are brought when "final injunctive relief or
corresponding declaratory relief is appropriate with respect to the class as a whole." Fed.R.Civ.P.
23(b)(2). Because the Court now considers certification of only the FDCPA monetary relief class,
Rule 23(b)(2) certification is unsuitable since the class does not seek injunctive or declaratory
relief.
A. Rule 23(b)(3)
Finally, Rule 23(b)(3) certification is appropriate where "questions of law or fact common
to members of the class predominate over any questions affecting only individual members" and
"a class action is superior to other available methods for the fair and efficient adjudication of the
controversy." Fed.R.Civ.P. 23(b)(3).
The predominance requirement under Rule 23(b)(3) is "more demanding" than the
commonality requirement. Bell Atlantic Corp. v. AT&T Corp., 339 F.3d 294, 301 (5th Cir. 2003).
Determining whether predominance exists requires "identifying the substantive issues that will
control the outcome, assessing which issues will predominate, and then determining whether the
issues are common to the class." Id. (quoting O'Sullivan v. Countrywide Home Loans, Inc., 319
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F.3d 732, 738 (5th Cir. 2003)).
Here, the substantive issue that will control the outcome is whether the letters sent by
Steeg violated the FDCPA. Thought the letters are not identical in their entirety, plaintiffs have
shown that they all contain identical paragraphs demanding payment within seven days and
threatening the filing of liens if payment is not made. Thus, the issue of whether the language
shared across these letters violates the FDCPA predominates. Other courts have found the
predominance and superiority requirements were met in FDCPA actions where a single debt
collector mails similar debt collection letters to proposed class members. See, e.g., Hazelwood v.
Bruck Law Offices SC, 244 F.R.D. 523, 525 (E.D. Wis. 2007) ("[T]he predominant issue in the
case is whether defendant's letter violated the FDCPA. . ."); Ayzelman v. Statewide Credit
Services Corp., 238 F.R.D. 358, 364 (E.D.N.Y. 2006) (Finding predominance and superiority in
debt collectors' use of standardized form letters to collect debts and common practice of mailing
letters to class members); Alexander v. JBC Legal Group, P.C., 237 F.R.D. 628, 632 (Finding
predominance and superiority where "[e]ach proposed plaintiff received a collection form letter
from Defendants which allegedly violated the FDCPA.") Thus, the Court finds that the
requirements of Rule 23(b)(3) are satisfied in this case. Accordingly, the Court certifies the
FDCPA monetary relief class.
III. Conclusion
For the foregoing reasons, IT IS HEREBY ORDERED:
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certification of the proposed FDCPA injunctive relief class is DENIED,
certification of the proposed FDCPA monetary relief class, as narrowed by this order, is
GRANTED,
certification of the proposed LCA injunctive and monetary relief classes is DENIED.
IT IS FURTHER ORDERED that the parties shall submit supplemental briefing on the issue of
whether the proposed class members from whom late fees and interest were not collected meet
the three requirements to establish Article III standing by January 21, 2015. The Court will defer
consideration of class certification for the usury class until such briefing is submitted for its
consideration.
New Orleans, Louisiana, this 18th day of December 2014.
____________________________________
HELEN G. BERRIGAN
UNITED STATES DISTRICT JUDGE
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