Hartley v. Suburban Radiologic Consultants, Ltd. et al

Filing 70

ORDER DENYING 57 MOTION to Certify Interlocutory Appeal filed by CT Inc., Suburban Radiologic Consultants, Ltd. (Written Opinion). Signed by Judge John R. Tunheim on December 12, 2013. (HAZ)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
KEITH HARTLEY, on behalf of himself
and all others similarly situated,

Civil No. 11-2664 (JRT/JJG)

Plaintiff,
ORDER DENYING MOTION FOR
CERTIFICATION OF
INTERLOCUTORY APPEAL

v.
SUBURBAN RADIOLOGIC
CONSULTANTS, LTD. and CT INC., as
assumed name for Colltech, Inc.,
Defendants.

Mark L. Vavreck, MARTINEAU, GONKO & VAVRECK, PLLC, 401
North Third Street, Suite 600, Minneapolis, MN 55401; Thomas J. Lyons,
LYONS LAW FIRM, P.A., 367 Commerce Court, Vadnais Heights, MN
55127; and Thomas J. Lyons, Jr., CONSUMER JUSTICE CENTER
P.A., 367 Commerce Court, Vadnais Heights, MN 55127, for plaintiff.
Matthew R. Doherty and Ryan J. Trucke, BRUTLAG, HARTMANN &
TRUCKE, PA, 3555 Plymouth Boulevard, Suite 117, Plymouth, MN
55447, for defendants.

Keith Hartley brings this action, alleging multiple violations of the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., against Defendants
Suburban Radiologic Consultants (“Suburban”) and CT, Inc. (“Colltech”) based on the
contents of a debt collection letter he received. Hartley’s complaint also includes class
allegations. On September 30, 2013, the Court denied Defendants’ motion for summary
judgment with respect to Hartley’s claim that Defendants violated 15 U.S.C. § 1692j.
(Mem. Op. & Order at 43, Sept. 30, 2013, Docket No. 56.) The Court also granted

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Hartley’s motion for class certification with respect to that claim. (Id.) Defendants now
bring a motion asking the Court to certify the denial of summary judgment for
interlocutory appeal. 1 Because Defendants have not established that an immediate appeal
would materially advance the termination of this litigation, the Court will deny
Defendants’ motion.

BACKGROUND
Hartley’s claims arise out of a debt collection letter sent to him by Colltech
seeking to collect a debt that Hartley allegedly owed to Suburban. Hartley claims that the
letter he received constitutes a flat-rating scheme in violation of 15 U.S.C. § 1692j, which
prohibits designing or furnishing forms with the knowledge that those forms will “be
used to create the false belief in a consumer that a person other than the creditor of such
consumer is participating in the collection of . . . a debt . . . when in fact such person is
not so participating.” (See Compl. ¶ 12, Sept. 14, 2011, Docket No. 1.) In December

1

The Court previously denied Defendants’ request to certify for interlocutory appeal the
Court’s grant of Hartley’s motion for class certification, because Federal Rule of Civil Procedure
23(f) empowers the court of appeals to determine the propriety of an appeal from a district
court’s order granting a motion for class certification, rather than the district court. (Order,
Oct. 8, 2013, Docket No. 59.) On October 15, 2013, Defendants requested permission from the
Eighth Circuit to appeal the Court’s grant of Hartley’s motion for class certification. (Appellate
Case No. 13-8036, Pet. for Permission to Appeal under Fed. R. Civ. P. 23(f), Oct. 15, 2013.)
The Eighth Circuit denied Defendants’ request. (Appellate Case No. 13-8036, J., Dec. 5, 2013.)

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2012, Hartley and Defendants both moved for summary judgment with respect to
Hartley’s flat-rating claim. 2
The Court denied Defendants’ motion for summary judgment, determining that
Suburban, as a creditor, could potentially be liable for flat-rating. Hartley v. Suburban
Radiologic Consultants, Ltd., Civ. No. 11-2664, 2013 WL 5467300, at *10-*12
(D. Minn. Sept. 30, 2013). 3 The Court reasoned that a creditor may be deemed a debt
collector, and therefore fall within the FDCPA’s scheme of liability when the creditor
“‘in the process of collecting his own debts, uses any name other than his own which
would indicate that a third person is collecting or attempting to collect such debts.’” Id.
at *10 (quoting 15 U.S.C. § 1692a(6)). The Court concluded that one circumstance in
which a creditor could be deemed a debt collector within this definition “is when the
creditor engages in a flat-rating arrangement,” with a third party that provides forms
which create the false impression that a third party is involved in the creditor’s debt
collection efforts. Id. In so concluding, the Court noted that some courts have “taken a
narrow approach to creditor liability under the FDCPA, finding creditors to be debt
collectors under § 1692a(6) only where the creditor ‘actually pretends to be someone else
2

Defendants also moved for summary judgment with respect to Hartley’s other FDCPA
claims based on the debt collection letter. The Court granted that aspect of Defendants’ motion,
see Hartley v. Suburban Radiologic Consultants, Ltd., Civ. No. 11-2664, 2013 WL 5467300, at
*20 (D. Minn. Sept. 30, 2013), and those claims are not at issue in the present motion to certify
an interlocutory appeal.
3

The Court declined to consider Hartley’s motion for summary judgment that was filed
simultaneously with his motion for class certification, adhering “to the general rule that courts
postpone determination of the merits until after class members have been given notice.” Hartley,
2013 WL 5467300, at *8.

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or uses a pseudonym or alias.’” Id. at *11 (quoting Villarreal v. Snow, Civ. No. 95-2484,
1996 WL 473386, at *3 (N.D. Ill. Aug. 19, 1996)). But ultimately the Court chose to
adopt “the better-reasoned and more prevalent view” that “liability can be imposed upon
creditors not only where the creditor uses aliases or pseudonyms but also ‘where the
creditor merely implies that a third party is collecting a debt when in fact it is the creditor
that is attempting to do so.’” Id. (quoting Larson v. Evanston Nw. Healthcare Corp., Civ.
No. 98-0005, 1999 WL 518901, at *3 (N.D. Ill. July 19, 1999)). Applying undisputed
case law regarding the scope of Section 1692j, the Court went on to determine that
Colltech could also be liable for flat-rating if it “was not acting as a debt collector, but
was merely providing its name or letterhead for collection purposes.” Id. at *13.

ANALYSIS
Circuit courts of appeals have jurisdiction over “all final decisions of the district
court[].” 28 U.S.C. § 1291. Under certain circumstances, a district court may determine
that an otherwise non-final order may be certified for interlocutory appeal under 28
U.S.C. § 1292(b). Section 1292(b) provides:
When a district judge, in making in a civil action an order not otherwise
appealable under this section, shall be of the opinion that such order
involves a controlling question of law as to which there is substantial
ground for difference of opinion and that an immediate appeal from the
order may materially advance the ultimate termination of the litigation, he
shall so state in writing in such order.
A party seeking an interlocutory appeal therefore bears the burden of establishing that
(1) there is a controlling question of law, (2) there is a substantial ground for difference
of opinion as to that controlling question of law, and (3) an immediate appeal may
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materially advance the ultimate termination of litigation. Shukh v. Seagate Tech., LLC,
872 F. Supp. 2d 851, 860 (D. Minn. 2012).
A motion for certification of interlocutory appeal “must be granted sparingly, and
the movant bears the heavy burden of demonstrating that the case is an exceptional one in
which immediate appeal is warranted.” White v. Nix, 43 F.3d 374, 376 (8th Cir. 1994).
Section 1292 is “‘to be used only in extraordinary cases where decision of an
interlocutory appeal might avoid protracted and expensive litigation’” and “‘was not
intended merely to provide review of difficult rulings in hard cases.’” Union Cnty., Iowa
v. Piper Jaffray & Co., 525 F.3d 643, 646 (8th Cir. 2008) (quoting United States Rubber
Co. v. Wright, 359 F.2d 784, 785 (9th Cir. 1966) (per curiam)). Furthermore it has “‘long
been the policy of the courts to discourage piece-meal appeals because most often such
appeals result in additional burdens on both the court and the litigants.’” White, 43 F.3d
at 376 (quoting Control Data Corp. v. Int’l Bus. Machs. Corp., 421 F.2d 323, 325
(8th Cir. 1970)). The Court finds that, even assuming that its summary judgment order
contained a controlling question of law upon which there were substantial grounds for a
difference of opinion, the Defendants have not established that an interlocutory appeal
will materially advance termination of the litigation. See Burks v. Abbott Labs., Civ.
No. 08-3414, 2013 WL 949890, at *1-*2 (D. Minn. Mar. 11, 2013) (denying certification
for interlocutory appeal on the sole basis that the appeal would “not materially advance
the ultimate termination of the litigation in the exceptional manner contemplated by the
statute” (internal quotation marks omitted)).

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Defendants argue that an immediate appeal will materially advance termination of
the litigation because resolution of the flat-rating issues in their favor will avoid further
discovery, motion practice, the class notification process, and a possible trial. (Defs.’
Mem. in Supp. of Mot. for Certification of Interlocutory Appeal at 7-8, Oct. 4, 2013,
Docket No. 58.) The Court disagrees. Defendants have identified potentially substantial
grounds for a difference of opinion with respect to only the Court’s finding of potential
liability as to Suburban. Defendants have not identified any substantial grounds for a
difference of opinion with respect to the Court’s finding of potential liability as to
Colltech. The Court applied the plain language of Section 1692j and relied upon case law
that has not been subject to substantial disagreement by other courts to determine that if
Colltech was “merely providing its name or letterhead for collection purposes” it could
be liable for flat-rating. Hartley, 2013 WL 5467300, at *13. Therefore, even if the
Eighth Circuit reversed the Court’s determination with respect to Suburban’s potential
liability, the litigation would not terminate, but rather would proceed with Colltech as the
sole defendant. This litigation would involve nearly identical facts, motion practice, class
notification process, and trial. 4 Here, the parties have already engaged in substantial
discovery and motion practice, and are poised to begin the process of notifying the class

4

Notably, the Eighth Circuit has already declined to certify the Court’s grant of class
certification for interlocutory appeal. This suggests that even if the Court were to grant the
present motion, and reach the opposite conclusion of the Court on the open issue of whether a
creditor may be liable for flat-rating, Colltech would still likely seek to challenge the grant of
class certification in a later appeal. See Nw. Airlines, Inc. v. Astraea Aviation Servs., Inc., 930 F.
Supp. 1317, 1326 (D. Minn. 1996) (“The Eighth Circuit strongly disfavors piecemeal appeals.”
(citing cases)).

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members, indicating that the parties have already made substantial progress in the
litigation. An interlocutory appeal will not materially advance the termination of the
litigation more than would continuing proceedings in this Court. See Great Lakes Gas
Transmission Ltd. P’ship v. Essar Steel Minn., LLC, Civ. No. 09-3037, 2013 WL
4028144, at *6 (D. Minn. Aug. 7, 2013) (finding that interlocutory appeal was not
warranted where “[t]he parties have engaged in extensive discovery and motion practice”
indicating that “an interlocutory appeal would not materially advance the ultimate
termination of this litigation”).
Finally, the Court notes that the inquiry with respect to material advancement of
the litigation must also assess the propriety of an interlocutory appeal from the
nonmoving party’s perspective.

In this case, the Court cannot ignore the possible

deleterious impact on the litigation – in terms of both expense and delay – if the Eighth
Circuit were to affirm this Court’s denial of summary judgment. See Ray v. Union Pac.
R.R. Co., Civ. No. 4:11-334, 2013 WL 6039044, at *2 (S.D. Iowa Nov. 14, 2013)
(“Defendant is correct that if this Court certifies the matter, and if the Eighth Circuit
agrees with Defendant’s position . . . this litigation will likely end. The Court cannot,
however, ignore the reasonable likelihood of an alternate outcome, namely that the Court
of Appeals would affirm this Court’s ruling . . . . Indeed, if this latter scenario comes to
fruition, the litigation in this matter will have been dramatically and unnecessarily
prolonged, at significant expense to both parties, by an interlocutory appeal.” (emphasis
in original) (internal quotation marks omitted)). Therefore, the Court concludes that this

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case is not an “extraordinary” in which “interlocutory appeal might avoid protracted and
expensive litigation.” United States Rubber Co., 359 F.2d at 785.

ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Defendants’ Motion for Certification for Interlocutory
Appeal [Docket No. 57] is DENIED.

DATED: December 12, 2013
at Minneapolis, Minnesota.

____________s/John R. Tunheim___________
JOHN R. TUNHEIM
United States District Judge

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