Reyes v. Julia Place Condominiums Homeowners Association, Inc. et al
Filing
640
ORDER & REASONS. It is ORDERED that Plaintiffs' Motion to Approve Class Certification Notice and Either Confirm or Modify the Scheduling Order (Rec. Doc. 602 ) is GRANTED IN PART and DENIED IN PART. The Court denies approval of Plaintiffs 039; proposed notice for the reasons set forth above. The Court grants Plaintiffs' motion to the extent that it seeks confirmation of the September 11, 2015 Scheduling Order. It is FURTHER ORDERED that Steeg Law's Motion to Approve Not ice to the FDCPA Monetary Relief Class (Rec. Doc. 603 ) and the Condo Associations' Cross-Motion to Approve Proposed Class Notice to the Usury Class (Rec. Doc. 608 ) are GRANTED IN PART and DENIED IN PART. The Court approves the content of S teeg Law's and the Condo Associations' proposed notices; however, the Court denies Defendants' motions to the extent they seek approval of two separate notices. It is FURTHER ORDERED that the parties shall meet, confer, and thereafte r submit to the Court a joint proposal of notice as set forth above no later than fourteen (14) days from the entry of this Order and Reasons. Once the proposed notice is approved, Plaintiffs' counsel shall transmit the notice to all individual members of the class via U.S. mail. Plaintiffs' counsel may also post the notice on an Internet site. It is FURTHER ORDERED that Plaintiffs' Motion for Leave to File Supplemental Opposition to Cross Motions Seeking Separate Class Notices (Rec. Doc. 629 ) is DENIED. Signed by Judge Carl Barbier. (Reference: 12-2043)(gec)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
REYES
CIVIL ACTION
VERSUS
NO: 12-2043
JULIA PLACE CONDOMINIUMS
HOMEOWNERS ASSOCIATION,
INC. ET AL
SECTION: “J”
ORDER & REASONS
Before the Court are three motions seeking approval of class
notice. First is a Motion to Approve Class Certification Notice
and Either Confirm or Modify the Scheduling Order (Rec. Doc. 602)
filed by Plaintiffs; an opposition thereto (Rec. Doc. 607) filed
by Defendants Julia Place Condominiums Association Inc., Mills Row
Condominium Homeowners Association Inc., Gallery Row Condominiums
Association Inc., The Rotunda Condominiums Homeowners Association
Inc., Lofts Condominiums Homeowners Association Inc., Parkview
Condominiums
Homeowners
Association,
1750
Saint
Charles
Condominium Homeowners Association Inc., The Henderson Condominium
Association Inc., and FQRV Resort Condominium Association Inc.
(collectively “Condo Associations”); and an opposition thereto
(Rec. Doc. 609) filed by Defendants Steeg Law LLC and Margaret V.
Glass (collectively “Steeg Law”). Having considered the motion and
legal memoranda, the record, and the applicable law, the Court
finds that the motion should be GRANTED IN PART and DENIED IN PART.
Second is a Motion to Approve Notice to the FDCPA Monetary Relief
Class (Rec. Doc. 603) filed by Steeg Law and an opposition thereto
(Rec. Doc. 611) filed by Plaintiffs. Having considered the motion
and legal memoranda, the record, and the applicable law, the Court
finds that the motion should be GRANTED IN PART and DENIED IN PART.
Third is a Cross-Motion to Approve Proposed Class Notice to the
Usury Class (Rec. Doc. 608) filed by the Condo Associations and
Plaintiffs’ opposition thereto (Rec. Doc. 611). Having considered
the motion and legal memoranda, the record, and the applicable
law, the Court finds that the motion should be GRANTED IN PART and
DENIED IN PART.
FACTS AND PROCEDURAL BACKGROUND
The facts of this case are set forth in detail in previously
issued Orders and Reasons (see, e.g., Rec. Doc. 464); therefore,
the Court will only briefly recount them here. This is a class
action lawsuit brought by Plaintiffs Nicole Reyes and Mike Sobel
on behalf of themselves and other condominium owners at various
properties
throughout
New
Orleans
against
their
respective
condominium associations as well as Steeg Law LLC and Margaret
Glass. Plaintiffs allege that the Defendants have engaged in debt
collection practices that violate state and federal law.
On May 23, 2014, Plaintiffs filed a motion to certify three
classes of condominium owners. (Rec. Doc. 351.) The first class
2
consists of condominium owners who had been subject to alleged
violations of the Fair Debt Collection Practices Act (“FDCPA”).
Plaintiffs
allege
that
Steeg
Law
utilizes
a
standard
form
collection letter that violates the FDCPA on its face by demanding
payment of unpaid assessments within seven days, and that Steeg
Law violated the FDCPA by filing excessive liens on condominium
owners’
properties.
The
second
class
consists
of
condominium
owners who have been charged excessive late fees and interest rates
for delinquent payment of assessments that allegedly violated
Louisiana’s usury laws. The third class consists of those who were
charged
late
fees
allegedly
in
violation
of
the
Louisiana
Condominium Act (“LCA”).
On December 18, 2014, the Court certified an FDCPA class
limited to claims for monetary relief against Steeg. The Court
defined the FDCPA monetary relief class narrowly as “consisting of
unit
owners
who
received
letters
identical
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.”1
(Rec. Doc. 464, at 16.) The Court denied certification of an FDCPA
class for injunction relief and denied certification of an FDCPA
monetary relief class for claims against the various condominium
As the Court previously explained, the letters provided by Plaintiffs in the
original complaint 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. 464, at 15.)
1
3
associations. Id. at 6, 15. The Court also denied certification of
the LCA class and deferred ruling on whether certification was
appropriate for the proposed usury class because a portion of the
proposed class had not actually paid the late fees that had been
charged to them.
On August 20, 2015, the Court certified a narrowed version of
the usury class, divided into two subclasses. Specifically, the
Court certified “a class of past and present condominium owners
who have paid allegedly usurious late fees. The class shall be
divided into two subclasses, one seeking monetary relief and
another seeking injunctive relief for purported violations of the
usury law.” (Rec. Doc. 529, at 16.) The Court did not reach whether
members who had not actually paid late fees possess standing
because the Court held that the usury class “must exclude those
who did not actually make payments on late fees because they lack
commonality with the other members of the proposed class.” Id. at
6, 9-10.
Furthermore, the Court held that both Sobel and Reyes were
adequate
representatives
of
the
usury
class
seeking
monetary
relief. Id. at 10-14. The Court also found Reyes to be an adequate
representative of the class seeking injunctive relief, because
Reyes is a current condominium owner. Id. However, because Sobel
is not a current condominium owner, the Court found that Sobel is
not an adequate representative of the class seeking injunctive
4
relief. Id. Plaintiffs subsequently filed their Fourth Amended
Complaint
(Rec.
Doc.
553),
which
adds
Patrick
Anders
as
an
additional named plaintiff and a purported class representative
for the usury class.
On January 8, 2016, this case was temporarily realloted and
randomly assigned to this section of the court for all purposes.
Since that time, the parties have filed several motions. Plaintiffs
filed the instant Motion to Approve Class Certification Notice and
Either Confirm or Modify the Scheduling Order (Rec. Doc. 602) on
May
6,
2016.
The
Condo
Associations
and
Steeg
Law
opposed
Plaintiffs’ motion on May 24, 2016. Steeg Law filed the instant
Motion to Approve Notice to the FDCPA Monetary Relief Class (Rec.
Doc. 603) on May 12, 2016. The Condo Associations then filed their
Cross-Motion to Approve Proposed Class Notice to the Usury Class
(Rec. Doc. 608) on May 24, 2016. Later that day, Plaintiffs opposed
both motions. The motions are now before the Court on the briefs.
PARTIES’ ARGUMENTS
Plaintiffs move for an order approving their proposed class
notice, which is a single notice pertaining to both the FDCPA class
and the usury class. In addition, because the trial schedule was
set by a different section of the Court, Plaintiffs seek either
confirmation or modification of the scheduling order. Plaintiffs
seek approval to send individual notices using a mailing list of
past and former residents, which Plaintiffs have already compiled
5
from the public records. In addition, Plaintiffs seek approval to
provide information on an Internet website as a supplement to
individual notice.
In
opposition,
the
Condo
Associations
contend
that
Plaintiffs’ proposed notice is confusing, fails to meet the minimum
requirements of Rule 23(c)(2), and omits critical information
necessary for potential class members to consider the options and
risks associated with this class action. The Condo Associations
argue that Plaintiffs’ notice fails to state the usury class
definition ordered by the Court and required by Rule 23(c)(2). The
Condo Associations next argue that the Court should order separate
class notices for the FDCPA class and the usury class in order to
avoid confusion to the respective class members. Further, the Condo
Associations
argue
that
Plaintiffs’
proposed
notice
fails
to
explain the consequences of the relief sought, namely that the
cost of paying any money judgment against the Condo Associations
could be borne by the unit owners, including the usury class
members themselves.
Steeg Law opposes Plaintiffs’ motion for similar reasons.
Steeg Law contends that Plaintiffs’ proposed notice includes class
definitions that are broader than those which were certified by
the Court. Next, Steeg Law argues that notice should be separate
for the two classes because the classes are factually and legally
6
distinct;
the
FDCPA
class
relates
solely
to
individuals
who
received the specified letters within a one-year period prior to
this lawsuit, whereas the usury class relates to payments of late
fees and interest. Further, Steeg Law argues that publication is
unnecessary because direct mail can be sent to each individual
class member.
In
response
to
Plaintiffs’
proposed
notice,
the
Condo
Associations and Steeg Law each filed motions to approve their
respective proposed notices. Steeg Law submitted a proposed notice
for the FDCPA monetary relief class, and the Condo Associations
submitted a proposed notice for the usury class. Plaintiffs oppose
any changes to their proposed notice. In particular, Plaintiffs
contend that the Court should approve a single notice. Plaintiffs
argue that the two classes are inherently related and a separate
notice for each class will only confuse prospective class members.
LEGAL STANDARD
For any class certified under Rule 23(b)(3) of the Federal
Rules of Civil Procedure, 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). Class
notice for classes certified under Rule 23(b)(3) “must clearly and
concisely
state
in
plain,
easily
following:
7
understood
language”
the
(i) the nature of the action;
(ii) the definition of the class certified;
(iii) the class claims, issues, or defenses;
(iv) that a class member may enter an appearance through an
attorney if the member so desires;
(v) that the court will exclude from the class any member who
requests exclusion;
(vi) the time and manner for requesting exclusion; and
(vii) the binding effect of a class judgment on members under
Rule 23(c)(3).
Id. The notice must comply with the detailed requirements of Rule
23(c)(2) and must be the “best notice practicable” for due process
purposes. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173
(1974).
Sufficient information about the case should be provided in
the notice to enable class members to make an informed decision
about their participation. Manual for Complex Litigation (Fourth)
§ 21.311 (2004). The Manual for Complex Litigation provides that
the notice should describe succinctly the positions of the parties;
identify the opposing parties, class representatives, and counsel;
describe the relief sought; and explain any risks and benefits of
retaining class membership and opting out, while emphasizing that
the court has not ruled on the merits of any claims or defenses.
Id. However, the notice need not make class members “cognizant of
every material fact that has taken place prior to the mailing of
their individual notice.” In re Nissan Motor Corp. Antitrust
Litig., 552 F.2d 1088, 1104 (5th Cir. 1977).
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In addition, for any class certified under Rule 23(b)(1) or
(b)(2), the court may direct “appropriate” notice to the class.
Fed. R. Civ. P. 23(c)(2)(A).
Unlike notice in Rule 23(b)(3)
actions, notice in (b)(1) and (b)(2) actions is within the court’s
discretion.
DISCUSSION
In this case, the Court certified the FDCPA monetary relief
class and the usury monetary relief subclass under Rule 23(b)(3);
therefore, class notice is mandatory. The Court also has discretion
to direct appropriate notice to the members of the usury injunctive
relief
subclass,
which
was
certified
under
Rule
23(b)(2).
Accordingly, the issue before the Court is whether Defendants’
separate proposed notices or Plaintiffs’ single proposed notice is
“the best notice that is practicable under the circumstances.” See
Fed. R. Civ. P. 23(c)(2)(B).
Because Plaintiffs’ proposed notice fails to accurately state
the definition of the classes certified, as required by Rule
23(c)(2)(B), the Court cannot approve Plaintiffs’ proposed notice.
The Court defined the FDCPA class as “consisting of unit owners
who received letters identical 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.” (Rec. Doc. 464, at
16.) Accordingly, the FDCPA class is limited to unit owners who
received letters from Steeg Law, during the one-year period prior
9
to
this
suit
being
filed,
containing
near-identical
language
threatening legal action and additional fees if outstanding late
fees were not paid within seven days. The Court defined the usury
class as consisting of “past and present condominium owners who
have paid allegedly usurious late fees.” (Rec. Doc. 529, at 16.)
Accordingly, the usury class is limited to past or present unit
owners who have actually made payments on late fees and interest.
Id. at 9-10. Plaintiffs’ proposed notice improperly refers to
broader definitions of the FDCPA and usury classes that have not
been certified by this Court. Therefore, the Court concludes that
Plaintiffs’ proposed notice fails to meet the requirements of Rule
23(c)(2)(B).
The parties disagree regarding whether a single notice or a
separate notice for each class is the best notice practicable.
Plaintiffs
argue
that
separate
notices
would
confuse
class
members; Defendants argue that a single notice would confuse class
members.
“Absentee
class
members
will
generally
have
had
no
knowledge of the suit until they receive the initial class notice.
This will be their primary, if not exclusive, source of information
for deciding how to exercise their rights under rule 23.” In re
Nissan Motor Corp., 552 F.2d at 1104. Given the relatively small
number of potential class members2 and the likelihood of overlap
Plaintiffs contend that there are between 26 and 41 members of the FDCPA
monetary relief class, approximately 40 members of the usury class entitled to
monetary relief, and approximately 731 members of the usury class entitled to
2
10
between the two classes, the Court finds that a single notice is
the best notice practicable under the circumstances.
Combining the separate notices proposed by Steeg Law and the
Condo Associations into a single notice will produce the best
notice practicable in this case. Combining the two notices will
substantially reduce the costs of the litigation, which is a
legitimate factor that a court may consider when determining the
best notice practicable under the circumstances. See id. at 1106
(citing Gold Strike Stamp Co. v. Christensen, 436 F.2d 791, 799
(10th Cir. 1970)). Furthermore, a single notice will adequately
describe
the
nature
of
this
action
and
provide
sufficient
information for class members to make an informed decision about
their participation in one or both of the classes certified in
this action. It is difficult to understand how receiving notice of
the FDCPA class and the usury class at separate times would be any
less confusing than receiving notice of both classes at once.
Although it will require careful drafting, explaining the lawsuit
as it has developed to date in objective, neutral terms is far
from impossible. Accordingly, the parties shall meet and confer in
order to draft a single notice based on the content of the separate
notices proposed by Steeg Law and the Condo Associations.
injunctive relief. (Rec. Doc. 351-1, at 17-18, 21.) Because the Court limited
the FDCPA class to those who received similar collection letters and limited
the usury class, including both the monetary relief and injunctive relief
subclasses, to those who have actually made payments on late fees and interest,
it is likely that neither class exceeds 40 members.
11
The Court must direct individual notice to all members who
can be identified through reasonable effort. See Fed. R. Civ. P.
23(c)(2)(B). Generally speaking, where there is a relatively small
number of parties in the class, delivering notice “via first class
mail to the last known address in defendant’s records . . . [is]
the most efficient and effective means for reaching individual
members of the class.” Am. Sales Co. v. SmithKline Beecham Corp.,
274 F.R.D. 127, 137 (E.D. Pa. 2010); see also Manual for Complex
Litigation (Fourth) § 21.311 (2004) (“When the names and addresses
of
most
class
members
are
known,
notice
by
mail
is
usually
preferred.” (footnote omitted)). Accordingly, notice by mail is an
appropriate means for reaching the individual class members in
this case.
In addition, the Court can find no legal justification to
deny Plaintiffs’ request to post notice on an Internet website as
a supplement to individual notice efforts. The Manual for Complex
Litigation provides that posting notices on Internet sites is a
useful supplement to individual notice. See Manual for Complex
Litigation
(Fourth)
§
21.311
(“Posting
notices
on
dedicated
Internet sites, likely to be visited by class members and linked
to more detailed certification information, is a useful supplement
to individual notice, might be provided at a relatively low cost,
and will become increasingly useful as the percentage of the
population that regularly relies on the Internet for information
12
increases.”).
Thus,
once
the
proposed
notice
is
approved,
Plaintiffs may post the notice on an Internet site as a supplement
to individual notice.
Lastly, due to the reassignment of this case, all parties
seek either modification or confirmation of the scheduling order
issued on September 11, 2015. Because there is no opposition to
the current schedule, the Court confirms the September 11, 2015
Scheduling Order (Rec. Doc. 531).
In sum, the Court rejects Plaintiffs’ proposed notice. While
the
Court
preliminarily
approves
the
content
of
Steeg
Law’s
proposed notice for the FDCPA class and the Condo Associations’
proposed notice for the usury class, the Court finds that a single
notice for both classes is the best notice practicable under the
circumstances. Accordingly, the parties shall meet and confer in
order to draft a single notice in accordance with this Order and
Reasons. The parties shall file a joint proposed notice within
fourteen (14) days of the entry of this Order and Reasons. Further,
the parties shall confer and use reasonable effort to identify
each class member entitled to individual notice. Once approved,
notice shall be mailed to the individuals identified. In addition,
Plaintiffs may post the notice on an Internet site.
13
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ Motion to Approve Class
Certification Notice and Either Confirm or Modify the Scheduling
Order (Rec. Doc. 602) is GRANTED IN PART and DENIED IN PART. The
Court denies approval of Plaintiffs’ proposed notice for the
reasons set forth above. The Court grants Plaintiffs’ motion to
the extent that it seeks confirmation of the September 11, 2015
Scheduling Order.
IT IS FURTHER ORDERED that Steeg Law’s Motion to Approve
Notice to the FDCPA Monetary Relief Class (Rec. Doc. 603) and the
Condo Associations’ Cross-Motion to Approve Proposed Class Notice
to the Usury Class (Rec. Doc. 608) are GRANTED IN PART and DENIED
IN PART. The Court approves the content of Steeg Law’s and the
Condo Associations’ proposed notices; however, the Court denies
Defendants’ motions to the extent they seek
approval of two
separate notices.
IT IS FURTHER ORDERED that the parties shall meet, confer,
and thereafter submit to the Court a joint proposal of notice as
set forth above no later than fourteen (14) days from the entry of
this Order and Reasons. Once the proposed notice is approved,
Plaintiffs’ counsel shall transmit the notice to all individual
14
members of the class via U.S. mail. Plaintiffs’ counsel may also
post the notice on an Internet site.
IT IS FURTHER ORDERED that Plaintiffs’ Motion for Leave to
File Supplemental Opposition to Cross Motions Seeking Separate
Class Notices (Rec. Doc. 629) is DENIED.
June
New Orleans, Louisiana, this 17th day of _______, 2016.
___
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
15
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