Atwood v. Johnson, Rodenburg & Lauinger, PLLP
Filing
32
ORDER denying 14 Motion to Certify Class (Written Opinion). Signed by Senior Judge David S. Doty on 8/1/2011. (PJM)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 10-3837(DSD/JJK)
Joseph Atwood, on behalf of
himself and all others
similarly situated,
Plaintiffs,
ORDER
v.
Johnson, Rodenburg & Lauinger,
PLLP, a foreign professional
limited liability partnership,
Defendant.
Patrick L. Hayes, Esq., William
Marso & Michelson, P.A., 3101
Minneapolis, MN 55408 and Mark
Martineau, Gonko & Vavreck, PLLC,
Suite 600, Minneapolis, MN 55401,
C. Michelson, Esq. and
Irving Avenue South,
L. Vavreck, Esq. and
401 North Third Street,
counsel for plaintiffs.
Paulette S. Sarp, Esq., Thomas P. Kane, Esq. and Hinshaw
& Culbertson, LLP, 333 South Seventh Street, Suite 2000,
Minneapolis, MN 55402, counsel for defendant.
This matter is before the court upon the motion for class
certification by plaintiff Joseph Atwood on behalf of himself and
all others similarly situated.
Based on a review of the file,
record and proceedings herein, and for the following reasons, the
court denies the motion.
BACKGROUND
This putative class action arises out of attempts to collect
consumer debt by defendant Johnson, Rodenburg & Lauinger, PLLP
(JRL).
Atwood received an initial letter dated October 13, 2009,
from JRL seeking to collect a debt to Discover Bank.
The letter
stated that “[a]s of the date of this letter, you owe $7,660.32.”
Compl. Ex. 1.
The letter also stated that Atwood “must notify
[JRL] within 30 days of receipt of this notice” if he disputed the
validity of the debt.
dated October 29, 2009.
Atwood received a second letter from JRL
The second letter stated: “The balance of
$7,676.71 is due immediately.
return mail.
I will expect your remittance by
Should you fail to comply with this demand, I will
expect a call stating your reason for noncompliance and giving
acceptable arrangements for payment of this debt.”
Compl. Ex. 2.
Based on JRL’s discovery response that it had sent similar
combinations of letters to approximately 900 to 1000 residents of
Minnesota, Atwood moves to certify a class of:
[a]ll consumers, as that term is defined by 15
U.S.C. § 1692a(3), with an address in the
state of Minnesota who received the letter in
the same form or substantially similar form as
Exhibit 1 to Plaintiff’s Complaint, and then
received a second letter within thirty days in
the same form or substantially similar form as
Exhibit 2 to Plaintiff’s Complaint in an
attempt to collect a debt incurred for
primarily personal, family, or household
purposes which were not returned undelivered
by the U.S. Post Office during the one year
period prior to the filing of Complaint in
this action.
Pl.’s
Mem.
23(b)(3).
Supp.
3.
Atwood
seeks
certification
The court now considers the motion.
2
under
Rule
DISCUSSION
“A district court has broad discretion in determining whether
to certify a class, and its determination will not be overturned
absent a showing that it abused its discretion.”
of Little Rock, Ark.
Gilbert v. City
722 F.2d 1390, 1399 (8th Cir. 1983).
The
plaintiff bears the burden to show that the class should be
certified.
Coleman v. Watt, 40 F.3d 255 (8th Cir. 1994).
The
plaintiff must first show that: (1) joinder of all members is
impractical because the class is too numerous, (2) questions of
fact or law are common to the class, (3) the claims or defenses
raised by the representative parties are typical of those of the
class,
and
(4)
the
representative
parties
interests of the class fairly and adequately.
will
protect
the
See Donaldson v.
Pillsbury Co., 554 F.2d 825, 829 (8th Cir. 1977).
If a plaintiff
meets all four elements of Rule 23(a), he must also show that the
class fulfills one of the three subdivisions of Rule 23(b).
Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 163 (1974).
should certify
the
proposed
class
only
if satisfied
rigorous analysis that all the prerequisites are met.
See
The court
after
a
Avritt v.
Reliastar Life Ins. Co., 615 F.3d 1023, 1029 (8th Cir. 2010).
I.
Rule 23(a)
Even if Atwood could meet the commonality and typicality
requirements of Rule 23(a), the motion fails under the “far more
demanding” requirements of Rule 23(b)(3).
3
See Amchem Prods., Inc.
v. Windsor, 521 U.S. 591, 624 (1997).
As a result, the court
assumes that Atwood satisfies Rule 23(a), and proceeds to the Rule
23(b)(3) analysis.
II.
See Arvitt, 615 F.3d at 1029.
Rule 23(b)(3)
A court may certify a class if “questions of law or fact
common to the 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).
Courts are to take “a close look at the case before it is accepted
as a class action” under Rule 23(b)(3). Amchem Prods., 521 U.S. at
615.
A.
Predominance
Predominance “tests whether proposed classes are sufficiently
cohesive to warrant adjudication by representation.” Blades v.
Monsanto Co., 400 F.3d 562, 566 (8th Cir. 2005) (quoting Amchem
Prods., 521 U.S. at 623.). When class-wide proof is dispositive of
an
element
of
the
cause
of
action,
there
is
no
need
for
individualized inquiry into the position of each class member on
that issue.
566).
Avritt, 615 F.3d at 1029 (citing Blades, 400 F.3d at
However, if “the members of a proposed class will need to
present evidence that varies from member to member, then it is an
individual
23(b)(3).
question”
and
unsuited
Id.
4
for
resolution
under
Rule
To state a claim under § 1692g(b), the plaintiff must show
(1) that he received a second letter within 30 days and (2) the
language of that letter overshadowed his right to challenge the
validity of the debt.
The FDCPA prohibits:
Collection activities and communications that
do not otherwise violate this subchapter may
continue during the 30-day period referred to
in subsection (a) of this section .... Any
collection activities and communication during
the 30-day period may not overshadow or be
inconsistent with the disclosure of the
consumer’s right to dispute the debt or
request the name and address of the original
creditor.
15 U.S.C. § 1692g(b). The “30-day period referred to in subsection
(a)” is defined by consumer receipt: “unless the consumer, within
thirty days after receipt of the notice, disputes the validity of
the debt, or any portion thereof, the debt will be assumed to be
valid by the debt collector.” Id. § 1692g(a)(3) (emphasis added).
Collection activities, including demands for immediate payment, may
continue during the 30-day period.
Accord Ellis v. Solomon and
Solomon, P.C., 591 F.3d 130, 135 (2d Cir. 2010).
In the present case, even if the language of the second letter
violated
the
overshadowing
prohibition
of
§
1692(b),1
an
affirmative answer to that question does not end the inquiry. Each
1
For purposes of this motion, the court does not address
whether the least-sophisticated consumer would view the language
stating that he could call to explain the reason for nonpayment
instead of paying the debt as inconsistent with his validation
right.
5
putative class member must also show that the letter violated the
30-day bar on overshadowing communications.
Atwood argues that the court should read the mailbox rule into
§ 1692g(b), and interpret the statute to prevent a debt collector
from
sending
information
to
a
consumer
for
30
days.
This
interpretation ignores the plain language of the statute, which
prohibits
“communication” and
period in terms of receipt.
consumer until receipt.
specifically
defines
the
30-day
A letter sent cannot confuse a
As a result, a question of receipt date
exists as to each putative class member.
Moreover, even if the court read the mailbox rule into the
statute, the rule only creates a presumption of receipt a few days
thereafter.
See, e.g., Mahon v. Credit Bureau, 171 F.3d. 1197,
1201–02 (9th Cir. 1999). Under that analysis, letters sent shortly
before the 30-day limit do not necessarily violate the statute.
Further, undelivered letters do not violate the statute.
As a
result, a fact-bound question about the dates of receipt of the
first and second letters exists for every putative class member.
The court cannot say that common questions predominate, and denial
of the motion is warranted.
B.
Superiority
Denial is also warranted because Atwood fails to show that a
class action is the superior means of litigation.
A class action
under Rule 23(b)(3) may only be certified if it is superior to
6
other available methods.
class
members
concerning
in
the
concentrating
The court must consider the interests of
controlling
controversy
the
litigation
prosecution,
has
begun,
in
the
difficulties in managing the action.
whether
the
forum
litigation
desirability
and
the
of
likely
Fed. R. Civ. P. 23(b)(3).
“The policy at the very core of the class action mechanism is to
overcome the problem that small recoveries do not provide the
incentive for any individual to bring a solo action prosecuting his
or her rights.”
Amchem Prods., 521 U.S. at 617 (1997) (quoting
Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997).
The FDCPA creates incentives to bring individual actions. See
15 U.S.C. § 1692k(a) (statutory damages of $1,000 for individual
plaintiffs in addition to actual damages).
Moreover, this is not
a case where small recoveries in individual actions diminish the
chance that an attorney would litigate a case.
The costs and
attorneys’ fees provisions of the FDCPA create incentives for
attorneys to litigate, and even a cursory review of the court’s
docket shows
that
FDCPA
actions
are
common.
Indeed,
Atwood
admitted as much at oral argument when he suggested that he would
flood the court with individual cases.
In contrast the FDCPA
limits total recovery for class members other than the named
plaintiff to “the lesser of $500,000 or 1 per centum of the net
worth of the debt collector.” Id. § 1692k(a)(2)(B)(ii). JRL’s net
worth is $743,189.
Sarp. Aff. Ex. 1.
7
As a result, the total award
to the putative class recovery could not exceed $7,432. The record
indicates that the parties believe that the class consists of 900
to 1000 members.2
receive $7.43.3
If the class has 1000 members, each could
Such minimal recovery in no way favors the
interests of putative class members. Indeed, certifying this class
would turn valuable claims into de minimis claims.
As a result,
the present action presents a perverse version of the policy
articulated in Amchem Products: invoking the class action here
creates “paltry” recoveries.
Cf. id.
It is markedly against the
interests of the putative class members.
Atwood argues that judicial efficiencies favor the class
mechanism. The court disagrees. Individual fact-finding as to the
30-day limit is necessary whether the cases proceed as a class
action or individual actions.
Moreover, if the claims are as
meritorious and as similar as Atwood argues, then non-mutual
collateral estoppel might achieve similar efficiency as to the
overshadowing question.
See Parklane Hosiery Co., Inc. v. Shore,
439 U.S. 322, 331 (1979); Setter v. A.H. Robins Co., 748 F.2d 1328,
1330–31 (8th Cir. 1984).
2
At oral argument, Atwood raised a new argument that the size
of the class is unknown, because some letters may have been sent to
the same person. This speculation is not sufficient to seriously
question the size of the putative class.
It does, however,
underscore the extent of individual questions at issue.
3
Even if the class contained only 100 members, the recovery
would still be limited to $74 a person, far less than a putative
class member could receive in successful individual litigation.
8
In short, individual consumers would be harmed by proceeding
as
a
class.
Therefore,
for
this
additional
reason,
class
certification is not warranted.
CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that the
motion for class certification [ECF No. 14] is denied.
Dated:
August 1, 2011
s/David S. Doty
David S. Doty, Judge
United States District Court
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