Bartl v. Enhanced Recovery Company, LLC
Filing
45
ORDER denying 32 Motion to Certify Class. (Written Opinion) Signed by Judge Joan N. Ericksen on January 5, 2017. (CBC)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Christopher M. Bartl, on behalf of himself
and all others similarly situated,
Plaintiff,
v.
Case No. 16-cv-252 (JNE/KMM)
ORDER
Enhanced Recovery Company, LLC,
Defendant.
This is a putative class action brought by Christopher M. Bartl against Enhanced
Recovery Company, LLC (ERC), under the Fair Debt Collection Practices Act (FDCPA).
Bartl claimed that ERC violated the Act by continuing collection activity without
responding to his written dispute of a debt and by failing to inform a credit reporting
agency that he disputed the debt. The case is before the Court on Bartl’s Motion for
Certification of a Class Action. For the reasons set forth below, the Court denies Bartl’s
motion.
I.
BACKGROUND
Bartl incurred a debt with Sprint Corporation, which engaged ERC to act as its
agent in collecting the debt. ERC contacted Bartl about the debt by letter dated March
18, 2015. ERC told Bartl that its “records indicate that [his] balance with Sprint remains
unpaid” and that his “account has been placed with [ERC] for collection efforts.” ERC
included the names of the creditor and the original creditor, the amount of the debt, and
other disclosures required by the FDCPA.
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Bartl responded to ERC by letter dated March 26, 2015. In his letter, Bartl
“demand[ed] validation of any debt” that ERC claimed he owed ERC. He asked for
proof of the following: (1) ERC purchased or was assigned the debt; (2) the amount ERC
paid for the debt; (3) the “full accounting of the transaction history”; (4) “[t]hat the debt
is not time barred”; (5) the “[o]riginal contract between [him] and the original creditor”;
and (6) the “[c]ontract between [him] and [ERC].” Bartl stated, “I do not believe I owe
your company anything and dispute I owe your company anything.” Bartl directed ERC
“to stop all collection activity pursuant to the FDCPA.”
According to its records, ERC received Bartl’s letter on April 15, 2015. That day,
ERC marked Bartl’s account as disputed. According to the testimony of Jason Davis,
ERC’s senior vice president of compliance, ERC’s policies at the time it received Bartl’s
letter called for ERC to obtain information about the debt from Sprint and mail the
information to Bartl. ERC’s policies did not call for it to terminate credit reporting. ERC
reported an account to credit reporting agencies approximately 45 days after Sprint
placed the account with ERC for collection.
Notwithstanding its policies, ERC did not obtain information from Sprint about
Bartl’s debt and did not respond to his letter. On May 3, 2015, ERC reported Bartl’s debt
to credit reporting agencies.
In July 2015, ERC revised its policies. According to Davis, ERC decided “to
delete any disputed tradeline from credit bureaus.” The revised policy applied to verbal
disputes, written disputes, disputes that were previously reported, and disputes that had
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not been reported. On July 19, 2015, ERC directed the credit reporting agencies to delete
Bartl’s account.
Bartl brought this action in early February 2016. The next month, he filed an
amended complaint. In May, the Court denied ERC’s motion to dismiss. In October,
Bartl moved to certify the following class:
All consumers nationwide who, within the dates between February
3, 2015 until June 1, 2015, on any Sprint account, received a collection
letter from Defendant ERC in a form substantially similar or materially
identical to Exhibit A (attached to Plaintiff’s Amended Complaint), then
subsequently disputed the debt pursuant to 15 U.S.C. § 1692g(b) with
Defendant, then failed to receive any correspondence and/or documentation
from Defendant verifying the disputed alleged debt, and thereafter had their
alleged debt reported to the national credit reporting agencies.
II.
DISCUSSION
“Federal Rule of Civil Procedure 23(a) ‘sets out four threshold requirements that
must be met before a plaintiff may file a lawsuit on behalf of a class of persons. Once
those prerequisites have been met, the plaintiff must also establish that the class fits
within one of three types of class actions listed in Rule 23(b).’” Sandusky Wellness Ctr.,
LLC v. Medtox Sci., Inc., 821 F.3d 992, 998 (8th Cir. 2016) (quoting Avritt v. Reliastar
Life Ins. Co., 615 F.3d 1023, 1029 (8th Cir. 2010)). The four requirements of Rule 23(a)
are:
(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.
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Bartl asserted the proposed class satisfies Rule 23(b)(3), which states in part:
[T]he court finds that the questions of law or fact common to class
members predominate over any questions affecting only individual
members, and that a class action is superior to other available methods for
fairly and efficiently adjudicating the controversy.
“[A] party seeking to maintain a class action ‘must affirmatively demonstrate his
compliance’ with Rule 23.” Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013)
(quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011)); see Day v. Celadon
Trucking Servs., Inc., 827 F.3d 817, 830 (8th Cir. 2016) (“A plaintiff bears the initial
burden of showing that the class should be certified under Rule 23.”). “A district court
must undertake a rigorous analysis to ensure that the requirements of Rule 23 are met.”
Sandusky Wellness Ctr., 821 F.3d at 998; see Comcast, 133 S. Ct. at 1432.
“Within five days after the initial communication with a consumer in connection
with the collection of any debt, a debt collector” shall, unless the information is contained
in the initial communication or the consumer has paid the debt, “send the consumer a
written notice” that contains the following information:
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that 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;
(4) a statement that if the consumer notifies the debt collector in writing
within the thirty-day period that the debt, or any portion thereof, is
disputed, the debt collector will obtain verification of the debt or a copy of
a judgment against the consumer and a copy of such verification or
judgment will be mailed to the consumer by the debt collector; and
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(5) a statement that, upon the consumer’s written request within the thirtyday period, the debt collector will provide the consumer with the name and
address of the original creditor, if different from the current creditor.
15 U.S.C. § 1692g(a) (2012); see Haney v. Portfolio Recovery Assocs., L.L.C., 837 F.3d
918, 925 (8th Cir. 2016). Under certain circumstances, the debt collector must cease
collection of the debt until certain information is obtained and mailed to the consumer:
If the consumer notifies the debt collector in writing within the
thirty-day period described in subsection (a) of this section that the debt, or
any portion thereof, is disputed, or that the consumer requests the name and
address of the original creditor, the debt collector shall cease collection of
the debt, or any disputed portion thereof, until the debt collector obtains
verification of the debt or a copy of a judgment, or the name and address of
the original creditor, and a copy of such verification or judgment, or name
and address of the original creditor, is mailed to the consumer by the debt
collector. 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 unless the consumer has notified the debt
collector in writing that the debt, or any portion of the debt, is disputed or
that the consumer requests the name and address of the original creditor.
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.
Id. § 1692g(b).
The class proposed by Bartl does not conform to § 1692g(b). The proposed class
comprises each consumer who received, at certain times, a collection letter on a Sprint
account from ERC like the one received by Bartl; disputed the debt with ERC under
§ 1692g(b); “failed to receive” from ERC any documentation verifying the debt; and
experienced continued collection activity in the form of a report of the alleged debt to the
national credit reporting agencies. Section 1692g(b) requires a debt collector to cease
collection of a disputed debt “until the debt collector obtains verification of the debt or a
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copy of a judgment . . . and a copy of such verification or judgment . . . is mailed to the
consumer by the debt collector.” Section 1692g(b) does not require a debt collector to
cease collection of a disputed debt until the consumer receives verification of the debt.
Cf. Sandusky Wellness, 821 F.3d at 996 (“Since Ihrke, this court has not addressed
ascertainability as a separate, preliminary requirement. Rather, this court adheres to a
rigorous analysis of the Rule 23 requirements, which includes that a class ‘must be
adequately defined and clearly ascertainable.’”).
Setting aside the proposed class’s divergence from § 1692g(b), the Court
concludes that Bartl has not satisfied his burden of demonstrating that class certification
is appropriate. Bartl asserted that the proposed class comprises “1,141 consumers, easily
satisfying the numerosity requirement for class certification.” To support the assertion,
he cited ERC’s response to one of his interrogatories, which asked for the number of
individuals within the proposed class. Subject to objections, ERC responded:
[F]rom a national class size with Sprint accounts only between February 3,
2015 until June 1, 2015, ERC can determine that 1,141 accounts were
mailed a collection letter from Defendant ERC in a form substantially
similar or materially identical to Exhibit A and then subsequently had their
account noted as disputed in ERC’s records. ERC cannot determine
whether the information ERC received from the individual was legally
sufficient to constitute a “dispute” as defined by 15 U.S.C. [§] 1692g(b).
Furthermore, ERC cannot determine whether the individual “failed to
receive any correspondence and/or documentation from Defendant ERC
verifying the disputed alleged debts.” Each individual account would need
to be analyzed to determine this information. ERC can confirm that after
the account was noted as disputed in ERC’s system, the 1,141 accounts
referenced above subsequently had their account reported to the national
credit reporting agencies by ERC. A manual review of each case would
need to be done to verify the precise number of potential class members.
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Of the 1,141 accounts, the number of individuals who “failed to receive” from
ERC verification of the debt is unknown. ERC’s policies called for ERC to respond to a
dispute by obtaining information about the debt from Sprint and mailing the information
to the individual. If ERC generally complied with its policies, ERC mailed verification to
a substantial number of the individuals associated with the 1,141 accounts. Bartl has not
offered the Court any basis to determine how many accounts were reported without ERC
obtaining information about the debt from Sprint and mailing the information to the
consumer. He has not offered the Court any basis to determine how many accounts were
reported without receipt by the consumer of verification of the debt. On this record, the
Court concludes that Bartl failed to satisfy his burden of demonstrating that the class is so
numerous that joinder of all members is impracticable. See Arnold Chapman & Paldo
Sign & Display Co. v. Wagener Equities Inc., 747 F.3d 489, 492 (7th Cir. 2014) (“[A]
class can be certified without determination of its size, so long as it’s reasonable to
believe it large enough to make joinder impracticable and thus justify a class action
suit.”); Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 356-58 (3d Cir. 2013) (“Speaking
more generally, where a putative class is some subset of a larger pool, the trial court may
not infer numerosity from the number in the larger pool alone.”).
Having concluded that Bartl did not demonstrate that Rule 23(a)’s numerosity
requirement is satisfied, the Court need not consider the remaining requirements of Rule
23. The Court denies Bartl’s Motion for Certification of a Class Action.
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III.
CONCLUSION
Based on the files, records, and proceedings herein, and for the reasons stated
above, IT IS ORDERED THAT:
1.
Bartl’s Motion for Certification of a Class Action [Docket No. 32] is
DENIED.
Dated: January 5, 2017
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
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