Bassett v. Credit Bureau Services, Inc. et al

Filing 84

MEMORANDUM AND ORDER - The plaintiff's motion for class certification (Filing No. 49 ) is granted. Ordered by Senior Judge Joseph F. Bataillon. (KLF)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA

KELLY M. BASSETT, individually and as
heir of James M. Bassett, on behalf of
herself and all other similarly situated;

8:16CV449

Plaintiff,
MEMORANDUM AND ORDER
vs.
CREDIT BUREAU SERVICES, INC., and
C. J. TIGHE,
Defendants.

This matter is before the Court on the plaintiff’s motion for certification of a class,
Filing No. 49.

This is a putative class action for violations of the Fair Debt Collection

Practices Act (“FDCPA”), 15 U.S.C. §1692 et seq., and the Nebraska Consumer
Practices Act (“NCPA”), Neb. Rev. Stat. § 59-1601, et seq. The plaintiff challenges a
collection letter sent to her by defendants.
I.

BACKGROUND
The plaintiff seeks certification of a class defined as:
(i)
(ii)
(iii)

(iv)

all persons with addresses in Nebraska;
to whom Defendants sent a letter in the form of Exhibit A (Filing No.
1-1);
in an attempt to collect a debt incurred for personal, family or
household purposes as shown by Defendants’ or the creditors’
records;
allegedly due for a medical obligation.

The time period for violations of the Fair Debt Collection Practices Act, 15 U.S.C.
§§ 1692 et seq. (hereinafter “FDCPA”) is one year period prior to the filing of this
litigation, i.e., October 3, 2015, through the date of class certification. The time period

for violations of the Nebraska Consumer Protection Act (“NCPA”), Neb. Rev. Stat. § 591601 et seq. is four years prior to the filing of this litigation, i.e., October 3, 2012,
through the date of certification.
On October 3, 2016, Plaintiff Kelly Bassett, individually and as the heir of James
Bassett, brought an action against the defendants, alleging that the letter at issue is
false or misleading because it: (1) identified an appointment but did not identify the
location of the appointment; (b) identified a Norfolk address, but also listed a P.O. Box
in Fremont; and (c) stated that defendants would proceed with collection efforts if the
appointment was not kept. She alleges the letter was confusing.
The defendants are opposed to class certification. They first argue that a class
should not be certified because the plaintiff lacks Article III standing to pursue her
claims.1 Next, they argue the plaintiff cannot satisfy Rule 23(b)(2) since the FDCPA
does not provide for injunctive relief and injunctive relief is the primary relief that the
plaintiff seeks.2

Finally, they argue that the plaintiff cannot satisfy Rule 23(b)(3)

because a particularized review would be required to determine: (1) if the alleged
violation was material (e.g., if each member actually reviewed the letter at issue); and
(2) whether the debt was commercial or consumer; and (3) whether a class member’s
claim may be barred by a previously litigated class action.3

This argument was rejected in the Court’s ruling on the defendants' motion to dismiss or for summary
judgment. See Filing No. 83, Memorandum and Order.
2 The defendants’ argument is unavailing because the plaintiff seeks class certification under Federal
Rule of Civil Procedure 23(b)(3), rather than 23(b)(2), which is limited to injunctive relief. Fed. R. Civ. P.
23(b).
3 A collection letter similar to Exhibit A here was the subject of Reynolds v. Credit Bureau Servs., Inc., No.
8:15-cv-168, 2016 WL 2859604, at *1 (D. Neb. May 16, 2016). Defendants agreed to stop using the
challenged letter going forward. See id., No. 8:15-cv-168, Filing No. 19-1, Settlement Agreement at 9-10.
1

2

II.

FACTS
Some facts are set forth in the court’s earlier orders and will be repeated only as

necessary to this opinion. See, e.g., Filing No. 11, Memorandum and Order; Filing No.
83, Memorandum and Order. The record shows the defendants sent at least 9,796 of
the challenged standard debt collection letters during the class periods defined in this
case. Filing No. 51-8, Ex. 4B, Deposition of C.J. Tighe (“Tighe 30(b)(6) Dep.”) at 48-52
& Depo. Ex. 22. Over 4,000 of those letters sought collection of an allegedly unpaid
medical account. Id. at 4. Defendant Tighe owns and runs CBS. Id. at 46.
The persons to whom the challenged letter was sent are identified within the
records of defendant Credit Bureau Services. Id. at 41-42. Credit Bureau Services’
records also identify the creditor requesting the letter. Id. Various form letters similar to
that at issue herein (which is identified within Credit Bureau Services’ record system as
B-10) are printed from Credit Bureau Services’ computer system, which inserts names,
addresses and amounts alleged due. Id. at 34-35. Credit Bureau Services’ computer
system documents every consumer who is sent the letter at issue. Filing No. 51-4, Ex.
3A, deposition of C.J. Tighe (“Tighe Dep.”) at 59. When Credit Bureau Services sends
a letter, it is electronically noted and documented in a consumer’s electronic debtor
profile. Id. at 59-60. Credit Bureau Services’ debtor profile and collection notes for the
Bassetts shows that Credit Bureau Services sent the collection letter at issue to the
them. Id. at 51; Filing No. 52-1, Dep. Ex. 19, Collection Notes. The computer inserts
the consumer-specific information into the collection letter. Filing No. 51-4, Ex. 3A,
Tighe Dep. at 53-54; Filing No. 51-5, Dep. Ex. 5.

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CBS routinely identifies the names, addresses, and payment history of the
debtors within its computer system and provides reports with that information to clients
such as General Radiology. Filing No. 51-7, Ex. 4A, Deposition of Darcy Kreikemeier
(“Kreikemeier Dep.”) at 50-51.

The evidence also shows that the medical debt

collection accounts are personal accounts, not business accounts. Id. at 43. They are
turned over for collection by medical services providers only in the names of individuals.
Id. at 43-44. The fact that CBS sent a letter similar or identical to the letter challenged
here to a consumer is noted in CBS’s computer system in connection with the
consumer’s electronic profile. See, e.g., Filing No. 52-1, Ex. 4B, Dep. Ex. 19, Collection
Notes. Credit Bureau Services reports to creditors on a monthly basis. Filing No. 51-7,
Kreikemeier Dep. at 50.
Defendant C.J. Tighe, the president of Credit Bureau Services, was personally
involved in drafting the letter that Credit Bureau Services sent to the Bassetts and other
class members. Filing No. 51-8, Ex. 4B, Tighe 30(b)(6) Dep. at 12-13. Parts of the
letter were rewritten in June of 2015 as a result of a prior lawsuit. Id. at 12-13. Filing
No. 51-8, Ex. 4B, Tighe 30(b)(6) Dep. at 12-13. Defendant Tighe personally rewrote the
letter. Id. at 12-13. The record shows Mrs. Bassett understands her role as class
representative. Filing No. 51-1, Ex. 1, Declaration of Kelly Bassett at 2.
II.

LAW
Under the Federal Rules of Civil Procedure, one or more members of a class

may sue or be sued as representative parties on behalf of all members if (1) the class is
so numerous that joinder of all members is impracticable (“numerosity”); (2) there are
questions of law or fact common to the class (“commonality”); (3) the claims or defenses
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of the representative parties are typical of the claims or defenses of the class
(“typicality”); and (4) the representative parties will fairly and adequately protect the
interests of the class (“adequacy of representation”). Fed. R. Civ. P. 23.
In assessing whether the numerosity component is satisfied, a number of factors
are relevant, including the number of persons in the proposed class, the nature of the
action, the size of the individual claims, and the inconvenience of trying individual suits.
Paxton v. Union Nat’l Bank, 688 F.2d 552, 559 (8th Cir. 1982). “The commonality
requirement is satisfied if the claims of the class depend upon a common contention
whose truth or falsity will resolve an issue that is central to the validity of each class
member’s claims.” Wal-Mart v. Dukes, 131 S. Ct. 2541, 2551 (2011). Commonality is
not required on every question raised in a class action. DeBoer v. Mellon Mortg. Co.,
64 F.3d 1171, 1174 (8th Cir.1995). Rather, Rule 23 is satisfied when the legal question
linking the class members is substantially related to the resolution of the litigation. Id.
(quoting Paxton, 688 F.2d at 561). The typicality requirement is met if there are “other
members of the class who have the same or similar grievances as the plaintiff.” Alpern
v. UtiliCorp United, Inc., 84 F.3d 1525, 1540 (8th Cir. 1996) (quotation omitted). The
burden is fairly easily met so long as other class members have claims similar to the
named plaintiff.

Id. (noting that factual variations in the individual claims will not

normally preclude class certification if the claim arises from the same event or course of
conduct as the class claims and gives rise to the same legal or remedial theory).
The adequacy of representation requirement of Rule 23(a)(4) is of critical
importance in every class action. Hervey v. City of Little Rock, 787 F.2d 1223, 1230
(8th Cir. 1986).

The adequacy of representation inquiry reflects concerns about
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whether the class representatives have common interests with the members of the
class and whether they and their counsel will competently and vigorously pursue the
lawsuit. Id.; Paxton, 688 F.2d at 562–63.
If the requirements of numerosity, commonality, typicality, and adequacy are
satisfied, a plaintiff must satisfy one of the three subsections of Federal Rule of Civil
Procedure 23(b). Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013); In re St. Jude
Medical, Inc., 425 F.3d 1116, 1119 (8th Cir. 2005). Rule 23(b)(3) provides that a class
action may be maintained if “the 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.” Fed. R. Civ. P. 23.
“The ‘predominance inquiry tests whether proposed classes are sufficiently
cohesive to warrant adjudication by representation.’” Tyson Foods, Inc. v. Bouaphakeo,
136 S. Ct. 1036, 1045 (2016) (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591,
623 (1997)). “Rule 23(b)(3) requires a showing that questions common to the class
predominate, not that those questions will be answered, on the merits, in favor of the
class.” Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 459 (2013). The
predominance inquiry asks whether the common, aggregation-enabling, issues in the
case are more prevalent or important than the non-common, aggregation-defeating,
individual issues. Bouaphakeo, 136 S. Ct. at 1045; see Halvorson v. Auto-Owners Ins.
Co., 718 F.3d 773, 778 (8th Cir. 2013). “When ‘one or more of the central issues in the
action are common to the class and can be said to predominate, the action may be
considered proper under Rule 23(b)(3) even though other important matters will have to
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be tried separately, such as damages or some affirmative defenses peculiar to some
individual class members.’” Bouaphakeo, 136 S. Ct. at 1045 (quoting 7AA C. Wright, A.
Miller, & M. Kane, Federal Practice and Procedure § 1778, pp. 123–124 (3d ed. 2005)
(footnotes omitted)); see also McMahon v. LVNV Funding, LLC, 807 F.3d 872, 875–76
(7th Cir. 2015) (stating that “even if issues like causation and damages might require
individual hearings for each claimant, a common issue that is central to each class
member’s claim—like whether the defendant’s product is defective in a products liability
case, or whether a debt-collection letter was misleading in a Fair Debt Collection
Practices Act case—can be certified and resolved in a class-wide proceeding”).
Class ascertainability is “an essential prerequisite of a class action, at least with
respect to actions under Rule 23(b)(3).” Carrera v. Bayer Corp., 727 F.3d 300, 306 (3d
Cir. 2013) (quoting Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 593 (3d Cir. 2012)).
“If class members are impossible to identify without extensive and individualized factfinding or ‘mini-trials,’ then a class action is inappropriate.” Marcus, 687 F.3d at 593.
“Class ascertainability is an essential prerequisite of a class action, at least with respect
to actions under Rule 23(b)(3).” Carrera, 727 F.3d at 306. The method of determining
whether someone is in the class must be “administratively feasible,” meaning that
“identifying class members is a manageable process that does not require much, if any,
individual factual inquiry.”

Id. at 307-08.

In addition to the Rule 23(a) and (b)

requirements, “[a]n order certifying a class action must define the class and the class
claims, issues, or defenses, and must appoint class counsel under Rule 23(g).” Fed. R.
Civ. P. 23(c)(1)(B).

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“‘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, 521 U.S. at 617 (quoting Mace v.
Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)); see also Amgen Inc., 568 U.S.
at 478. The FDCPA caps statutory damages in a class action at the lesser of $500,000
or one per cent of the debt collector's the net worth. 15 U.S.C. § 1692k(a)(2)(B)(ii);
Powers v. Credit Mgmt. Servs., Inc., 776 F.3d 567, 572 (8th Cir. 2015). An individual
plaintiff can recover up to $1,000 in statutory damages, plus attorneys' fees and costs.
15 U.S.C. § § 1692(k)(a)(2)(A) and (a)(3). The NCPA allows statutory damages for
each class member up to $1,000, with no apparent cap for class actions. Neb. Rev.
Stat. § 59–1609.

The FDCPA is a consumer-protection statute authorizing private

lawsuits and weighty fines to deter wayward collection practices. Henson v. Santander
Consumer USA Inc., 137 S. Ct. 1718, 1720 (2017); Coyne, 895 F.3d at 1037.
III.

DISCUSSION
The court finds that the requirements of Rule 23 have been met and the

proposed class should be certified.

The proposed classes consist of over 4,000

individuals who can be readily identified in the defendants’ records. Given that number,
it would be impracticable to try each case separately.

Also, the primary legal and

factual issues surrounding the defendants’ alleged course of conduct is common for all
class members. The class members would have grievances similar to those of the
named plaintiff and the class members’ claims are likely based on the same legal
theories. There has been no showing of any conflict of interest between the plaintiff and
the class members. It appears that the adequacy of representation requirement has
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been met. The plaintiff’s common interests with the members of the class ensure that
the class will be fairly and adequately protected. Further, the Court is familiar with
purported class counsel and finds counsel has considerable experience in class-action
litigation and is competent to represent the class.
The Rule 23(b)(3) requirements are likewise satisfied.

Common questions

predominate over any questions affecting only individual members. Every letter sent
contains the same standard template with the same language. The legality of
standardized documents is generally appropriate for resolution in a class action
because common questions of law or fact predominate. The legal question here is the
same for the plaintiff and each class member—whether the debt collection letters like
that sent to Bassett to collect on an alleged unpaid medical debt is unfair, deceptive, or
misleading under the FDCPA and the NCPA.
The Court finds that certifying the class will achieve economies of time, effort,
and expense, and will promote uniformity as to similarly-situated persons, without
sacrificing procedural fairness. Because individual recoveries in this type of action are
small, a class action is superior to other methods of fairly adjudicating the controversy.
The plaintiff has shown that the information necessary to ascertain the class can
be readily obtained from the defendants’ computerized records and has shown that it is
administratively feasible to identify the class through these records. Defendant Credit
Bureau Services is a highly computerized operation. The defendants are capable of
ascertaining the class members from within its records with a proper query.
Moreover, the defendants’ concerns are addressed in the limitation of the class
to persons who were sent a collection letter regarding a debt for medical services, which
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would qualify as a debt for personal, family or household purposes. Also, the exclusion
of “returned as undeliverable” correspondence will obviate the defendants’ concern that
the class could include persons who had never received the letters. Further, the plaintiff
apparently has no objection to the additional limitation of the class to those persons who
are not members of the class certified in the Reynolds action. Filing No. 65, Plaintiff’s
Reply Brief at 17; see In re Motorola Sec. Litig., 644 F.3d 511, 518 (7th Cir. 2011) (“[A]
district court has the authority to modify a class definition at different stages in
litigation.”). The representative plaintiff will be directed to provide appropriate notice to
class members under Rule 23(c)(2)(B). Accordingly,
IT IS ORDERED that:
1.

The plaintiff’s motion for class certification (Filing No. 49) is granted.

2.

This action is certified as a class action pursuant to Fed. R. Civ. P. 23(a)
and 23(b)(3) on behalf of the following classes:
A.

FDCPA Class:
(i)
(ii)

(iii)

(iv)
(v)
(vi)

B.

all persons with addresses in Nebraska;
to whom the defendants sent a letter in the
form of Exhibit A (Filing No. 1-1) (identified in
the defendants’ records as B-10) from October
3, 2015, through this date;
in an attempt to collect a debt incurred for
personal, family or household purposes as
shown by defendants’ or the creditors’ records;
allegedly due for a medical obligation;
that was not returned as undeliverable;
excluding members of the class certified in
Kenneth M. Reynolds v. Credit Bureau
Services, Inc. and C.J. Tighe, No. 8:15-cv00168.

NCPA Class

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(i)
(ii)

(iii)

(iv)
(v)
(vi)

all persons with addresses in Nebraska;
to whom the defendants sent a letter in the
form of Exhibit A (Filing No. 1-1) (identified in
the defendants’ records as B-10) from October
3, 2012, through this date;
in an attempt to collect a debt incurred for
personal, family or household purposes as
shown by defendants’ or the creditors’ records;
allegedly due for a medical obligation;
that was not returned as undeliverable;
excluding members of the class certified in
Kenneth M. Reynolds v. Credit Bureau
Services, Inc. and C.J. Tighe, No. 8:15-cv00168.

3.

The plaintiff, Kelly M. Bassett, is appointed representative plaintiff.

4.

The Horwitz, Horwitz Law Firm and the Car, Reinbrecht Law Firm are appointed
class counsel.

5.

The parties shall contact Magistrate Judge Susan M. Bazis to set a status

conference on further progression of this case. See Filing No. 41.
DATED this 4th day of January 2019.

BY THE COURT:
s/ Joseph F. Bataillon
Senior United States District Judge

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