O'Connor v. Diversified Consultants, Inc.

Filing 56

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Plaintiff Johnny O'Connor's motion for class certification # 45 is DENIED. A Rule 16 Conference will be set in this matter in an separate order. Signed by District Judge Rodney W. Sippel on 5/28/13. (ARL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
JOHNNY O’CONNOR,
Plaintiff,
vs.
DIVERSIFIED CONSULTANTS, INC.,
Defendant.

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Case No. 4:11CV1722 RWS

MEMORANDUM AND ORDER
Plaintiff Johnny O’Connor brought suit against Defendant Diversified Consultants, Inc.
on his own behalf and on behalf of other similarly situated individuals. The basis of this action is
Diversified’s alleged violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §
1692, et seq. and the Telephone Consumer Protection Act of 1991 (TCPA), 47 U.S.C. § 227, et
seq. A class certification hearing was held in this matter and the parties filed supplemental briefs
after the hearing. Because I find that there are unique evidentiary issues that will need to be
resolved on an individual case basis, I will deny O’Connor’s motion to certify a class.
Background
Plaintiff O’Connor’s complaint claims that Diversified violated the FDCPA and the
TCPA when its representatives called O’Connor several times on his cell phone in an attempt to
collect a debt O’Connor owed to U.S. Cellular. O’Connor asserts that Diversified acquired the
debt for collection on July 23, 2011.1 He alleges that Diversified representatives called him two
1

I note that the complaint gives conflicting dates as to when Diversified acquired the
debt. Paragraph 15 of the complaint states that it was on July, 23, 2011 while paragraph 7 states
that it was acquired on July 24, 2013. For purposes of deciding the present class action
certification motion, it makes no difference whether it was the 23rd or the 24th.

times on July 25, 2011. In the first call the representative allegedly yelled at O’Connor,
demanded payment of the debt, and refused to send “anything” regarding the debt in writing. A
second representative allegedly called later that day and demanded immediate payment of the
debt but did agree to send paperwork. On July 26, 2011, another Diversified representative
called O’Connor and allegedly demanded immediate payment of the debt and told O’Connor he
had no right to dispute the debt. O’Connor alleges that he received another call from Diversified
on July 27, 2013 in which the representative allegedly yelled at him and refused to send
“anything in writing whatsoever.”
O’Connor alleges that during these calls Diversified’s representatives “never told Plaintiff
that the payment demand was subject to Plaintiff’s rights to dispute the debt, request validation,
or to receive verification of the debt.” (Doc. # 42, Pl.’s Second Amend Compl. at ¶ 43)
O’Connor asserts that Diversified’s demands for immediate payment within the thirty day dispute
period provided for by § 1692g “overshadowed” his “dispute/ verification/ validation rights”
thereby violating the FDCPA.
O’Connor’s claim under the TCPA is based on Diversified’s alleged use of an automatic
telephone dialing system to place calls to O’Connor’s cell phone without his permission.
In his second amended complaint, O’Connor seeks to establish two classes. One
asserting a claim under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et
seq. and a second class asserting a claim under the Telephone Consumer Protection Act of 1991
(TCPA), 47 U.S.C. § 227, et seq.2 A class certification was held in which O’Connor presented
2

The definitions of the classes were altered in O’Connor’s motion and memorandum in
support of class certification. Although this is not the proper procedure to modify a class
definition, I will use the modified definitions in ruling upon the motion.
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his argument in support of the certification of these two classes. Diversified argued that class
certification is unwarranted because of the need to conduct individual discovery in each
plaintiff’s case.
Legal Standard
A class action may be brought only if: “(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.”
Fed. R. of Civ. P. 23. “[C]ertification is proper only if the trial court is satisfied, after a rigorous
analysis, that the prerequisites of Rule 23(a) have been satisfied.” Wal-Mart Stores, Inc. v.
Dukes, 131 S. Ct. 2541, 2551 (2011). “Frequently that rigorous analysis will entail some overlap
with the merits of the plaintiff's underlying claim. That cannot be helped. The class
determination generally involves considerations that are enmeshed in the factual and legal issues
comprising the plaintiff's cause of action.” Id. (internal quotations and citations omitted). If a
plaintiff establishes these prerequisites, a class action must also qualify under one of the three
subdivisions of Rule 23(b).
O’Connor seeks to certify his classes under Rule 23(b)(3). That section provides for class
certification if I find that “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.” Fed. R. Civ. P.
23(b)(3).
The requirement of Rule 23(b)(3) that common questions predominate over
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individual questions tests whether proposed classes are sufficiently cohesive to
warrant adjudication by representation. The nature of the evidence that will
suffice to resolve a question determines whether the question is common or
individual. If, to make a prima facie showing on a given question, the members of
a proposed class will need to present evidence that varies from member to
member, then it is an individual question. If the same evidence will suffice for
each member to make a prima facie showing, then it becomes a common question.
Blades v. Monsanto Co., 400 F.3d 562, 566 (8th Cir. 2005)(internal quotations and citation
omitted). “In making its determination, the district court must undertake a rigorous analysis that
includes examination of what the parties would be required to prove at trial.” Avritt v. Reliastar
Life Ins. Co., 615 F.3d 1023, 1029 (8th Cir. 2010)(internal quotation omitted).
“The class action is an exception to the usual rule that litigation is conducted by and on
behalf of the individual named parties only.” Wal-Mart Stores, Inc., 131 S. Ct. at 2550. (internal
quotation and citation omitted). The “plaintiff has the burden of showing that the class should be
certified and that the requirements of Rule 23 are met.” Coleman v. Watt, 40 F.3d 255, 258 -259
(8th Cir. 1994).
Analysis
In his motion and memorandum in support of class certification, O’Connor asserts that
Diversified has been retained by U.S. Cellular to collect debt on at least 25,000 U.S. Cellular
accounts. O’Connor seeks to certify two classes, one under the FDCPA and the other under the
TCPA, limiting the classes to the collection of these U.S. Cellular debts.3

3

As noted above, O’Connor has changed the definitions of the two classes from his
second amended complaint. His complaint did not limit the classes to U.S. Cellular debt
collection actions. In ruling on the present motion, I will use the definitions of classes that
O’Connor presents in his motion and memorandum in support of class certification.
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FDCPA Class
The FDCPA is a consumer protection statute that prohibits certain abusive, deceptive, and
unfair debt collection practices. See 15 U.S.C. § 1692
O’Connor defines this proposed class as:
All residents of the United States who, within one year prior to the filing
of this Complaint, (1) received a telephone call from Defendant regarding a U.S.
Cellular consumer debt (2) where such a call occurred within thirty days of the
Defendant’s acquisition of that debt from U.S. Cellular (3) where Defendant made
a payment demand without explaining that the demand was subject to the
consumer’s right to dispute the debt, to request validation of the debt.

(Doc. # 45, Pl’s Mem. in Support of Class Cert. at 7)
Assuming, without deciding, that O’Connor has established the prerequisites of Rule
23(a), he must also establish that his proposed classes qualify under one of the three subdivisions
of Rule 23(b).
O’Connor seeks to certify his classes under Rule 23(b)(3). That section requires
O’Connor to establish that questions of law or fact common to class members predominate over
any questions affecting only individual members. If “the members of a proposed class will need
to present evidence that varies from member to member, then” the claims are not appropriate for
a class action. Blades, 400 F.3d at 566.
The FDCPA requires collectors give debtors a written “validation notice” of their rights
within 5 days of the initial communication with the debtor. If debtors make a written request
within 30 days of receiving the validation notice, the debt collection must cease collection efforts
until the debt collector places verification information in the mail to the debtor. 15 U.S.C. §
1692g. “[T]he validation period is not a grace period; in the absence of a dispute notice, the debt
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collector is allowed to demand immediate payment and to continue collection activity.”
Ellis v. Solomon and Solomon, P.C., 591 F.3d 130, 135 (2nd Cir. 2010)(internal quotation and
citation omitted). However “[a]ny 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...” § 1692g(b).
O’Connor’s proposed class is for debtors who were contacted within thirty days of
Diversified’s acquisition of the debt where a demand for an immediate payment of the debt was
made without informing the debtor of his right to dispute the debt. O’Connor’s proposed class
convolutes the notice requirements of the FDCPA. Nothing in the Act prevents a debt collector
from calling a debtor within thirty days of the collector’s acquisition of the debt.4 Nor is a debt
collector barred from calling a debtor, letting him know his debt has been assigned for collection,
and requesting that the debtor pay the debt. The Act does not require the collector in its initial
contact with the debtor to notify him of his right to dispute the debt. The Act requires a debt
collector to send a notice of rights to the debtor within five days of the initial contact. See §
1692g. In its opposition brief and at the class certification hearing Diversified represented that it
complied with the written notice requirement in O’Connor’s case and provided the required
written notice as the normal course of business in all of it collections efforts for U.S. Cellular.
However, a debt collector cannot use collection tactics that lead a debtor to believe he
4

O’Connor alternatively identifies Diversified’s methods as “quick calling.” O’Connor
asserts that these calls are made within the thirty day dispute period provided by 15 U.S.C. §
1692g. However, as stated above, the thirty day dispute period does not run from the date the
debt collector acquires the debt for collection. The thirty days referred to in section 1692g
provides that if a debtor makes a written request within thirty days of being notified of their
rights, the debt collector must cease collection efforts until the debt collector places verification
information in the mail to the debtor.
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does not have any right to challenge the debt. Such a course of action has been labeled
“overshadowing” in the FDCPA. § 1692g(b). O’Connor’s proposed class is for debtors who
were subjected to phone calls by Diversified which amounted to overshadowing. The inquiry of
which debtors were subjected to such alleged tactics is an individual inquiry. This is not a case
where each debtor was sent the same written communication which violated the FDCPA. To
determine whether Diversified’s phone calls to each plaintiff establishes an overshadowing claim
will demand an individual inquiry into the communications made to each plaintiff. As a result, a
certification of a class action claim under the FDCPA is not appropriate.
TCPA Class
The TCPA was enacted by Congress in response to a growing number of consumer
complaints regarding intrusive nuisance telemarketing practices. Mims v. Arrow Financial
Services, LLC, 132 S. Ct. 740, 744 (2012). The TCPA, as it relates to the present lawsuit,
prohibits making a call to a cellular telephone using an automatic telephone dialing system
(ATDS) without the prior express consent of the called party. 47 U.S.C. § 227(b).
O’Connor defines this proposed class as:
All resident s of the United States who received on their cellular phone, within
one year prior to the date of the Complaint: (i) Any telephone call from
Defendant pertaining to a U.S. Cellular bill; (ii) Where defendant used its ATDS,
and (iii) Where the call was placed in a non-emergency situation, and (iv) Where
the consumer failed to provide prior express consent to Defendant to be contacted
on his or her cellular telephone with an ATDS.5
(Doc. # 45, Pl’s Mem. in Support of Class Cert. at 11)
Stated more simply, the proposed TCPA class is for any debtor of U.S. Cellular who was
5

As with his FDCPA claim, the proposed TCPA class differs from the class asserted in
O’Connor second amended complaint.
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called on their cell phone by Diversified using an ATDS without the debtor’s consent.6 Whether
the debtor’s consented to be called on their cell phone is a pivotal issue in determining whether
to certify this class. The debt forming the basis of this class is for cellular service provided by
U.S. Cellular. The evidence at the class certification hearing is that Diversified obtained the
proposed class cell phone numbers from U.S. Cellular. These cell phone numbers were either
assigned to the to the debtors by U.S. Cellular when they obtained cellular service or they were
cell phone numbers provided by the debtor to U.S. Cellular during the application process.
(O’Connor’s counsel stated at the class certification hearing that he did not know how U.S.
Cellular obtained the cell number on which Diversified called O’Connor.)
The Federal Communications Commission has issued two relevant orders regarding
consent to call a cell phone. On October 16, 1992, the FCC issued an order which stated that
cellular carriers do not need consent from “their cellular subscribers prior to initiating autodialer
... calls for which the cellular subscriber is not charged.” In the Matter of Rules and Regulations
Implementing the Telephone Consumer Protection Act of 1991, 7 FCC Rcd. 8752, 8775. On
January 4, 2008, the FCC issued an order stating that if a party provides a cell phone number to a
creditor, for example, as part of a credit application, they are deemed to have provided express
consent to be autodialed by the creditor at that cell phone number. In the matter of Rules and
Regulations Implementing the Telephone Consumer Protection Ast of 1991, 23 F.C.C.R. 559,

6

I note that there is compelling evidence presented by Diversified that it did not use an
ATDS when calling the U.S. Cellular debtors. Although Diversified has not moved for summary
judgment on this basis, this fact is gives additional weight to my decision not to certify a TCPA
class.
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564.7 The FFC order also states that calls “placed by a third party collector on behalf of that
creditor are treated as if the creditor itself placed the call.” Id. at 565.
The FCC has established that cellular carriers need not get permission to autodial their
subscribers where no charge is incurred and that calls by a debt collector are treated as if the
creditor itself placed the call. Diversified argues that in collecting the debt from these cellular
customers, it stands in the shoes of U.S. Cellular and is entitled to the shelter that the FCC has
provided to cellular companies. I agree with Diversified’s position. I find that a debt collector
for a cellular company may invoke the shelter given to the cellular company for calls to its
subscribers. Because the shelter only applies where the cellular subscriber has not incurred a
charge for the call, an individual inquiry will be necessary to determine if a charge was incurred.
Such an individual inquiry makes the certification of a TCPA class inappropriate.
Alternatively, if a debtor provided a cell number to U.S. Cellular to contact (separate
from the one issued by U.S. Cellular) then they consented to be called on that number.8 As noted
earlier, when asked at the certification hearing, O’Connor’s counsel did not know if the cell
number Diversified used to contact O’Connor was assigned to him by U.S. Cellular. An
individual case by case inquiry will be necessary to determine whether the debtors in the

7

“Because we find that autodialed and prerecorded message calls to wireless numbers
provided by the called party in connection with an existing debt are made with the ‘prior express
consent’ of the called party, we clarify that such calls are permissible. We conclude that the
provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably
evidences prior express consent by the cell phone subscriber to be contacted at that number
regarding the debt.”
8

O’Connor concedes this point in his reply brief in which he states “The 2008 FCC
ruling liberalized the statute and allowed a debt collector such as Defendant to piggy-back on
appropriate consent consent given to an original creditor like U.S. Cellular.” (Doc. # 49, Reply
Br. at 2, n. 1)
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proposed class consented to be contacted on their cell phones regarding their debt to U.S.
Cellular by providing their cell number to U.S. Cellular. Discovery into the debtor’s agreements
with U.S. Cellular will involve an individual inquiry into each plaintiff’s agreement. Such an
individualized inquiry weighs against class certification. See Versteeg v. Bennett, Deloney, &
Noyes, P.C., 271 F.R.D. 668, 674 (D. Wyo. 2011)(discovery issue of whether individual
proposed class members provided their cell number to creditors which were called by a debt
collector precluded the certification of a class for a TCPA claim); Forman v. Data Transfer, Inc.,
164 F.R.D. 400, 404 (E.D. Pa. 1995)(denial of class certification where an individual inquiry
would be undertaken regarding a consent to receive facsimiles). As a result, a certification of a
class action claim under the TCPA is not appropriate.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff Johnny O’Connor’s motion for class
certification [#45] is DENIED.
A Rule 16 Conference will be set in this matter in an separate order.

_________________________________
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 28th day of May, 2013.

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