GARCIA v. PORTFOLIO RECOVERY ASSOCIATES, LLC
OPINION FILED. Signed by Judge Noel L. Hillman on 8/9/17. (js)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
RUFINO D. GARCIA, on behalf of
himself and those similarly
Civil No. 15-3685 (NLH/JS)
PORTFOLIO RECOVERY ASSOCIATES, LLC,
WILLIAMS CUKER BEREZOFSKY, LLC
By: Christopher Markos, Esq.
Michael J. Quirk, Esq.
Woodland Falls Corporate Center
210 Lake Drive East, Suite 101
Cherry Hill, New Jersey 08002
Counsel for Plaintiff
TROUTMAN SANDERS LLP
By: David N. Anthony, Esq.
Amanda L. Genovese, Esq.
1001 Haxall Point
Richmond, Virgina 23219
Counsel for Defendant
HILLMAN, District Judge:
This putative class action suit is brought pursuant to the Fair
Debt Collections Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. 1
Plaintiff Rufino Garcia alleges that Defendant Portfolio Recovery
Associates, LLC (“PRA”), has a policy, pattern or practice of filing
The Court has federal question subject matter jurisdiction
pursuant to 28 U.S.C. § 1331.
collections lawsuits without intent to prove its claims, in
violation of §§ 1692e(5), (10), and 1692f.
Before the Court is Garcia’s Motion for Class Certification.
For the reasons stated herein, the Motion will be denied.
It appears undisputed that Plaintiff Garcia had an unpaid
balance of $6,139.75 on his Citibank Sears credit card.
subsequently acquired ownership of the account, and filed suit in
New Jersey state court attempting to recover the balance. (Markos
Decl. Ex. A)
Garcia retained counsel and filed an Answer. (Id. Ex.
The case proceeded.
Garcia’s lawyer served discovery demands, which included a
demand for Garcia’s credit card application. (Markos Decl. Ex. C)
PRA’s lawyer, Mr. Murtha, timely produced seven monthly statements,
but the cover letter accompanying the documents stated, “I do not
have the application.” (Id. Ex. D)
The cover letter further stated,
“[i]f after reviewing the documents you would like to discuss a
reasonable settlement please call me.” (Id.)
Mr. Murtha was asked
during his deposition, “Did you do anything to try to acquire the
credit agreement between Citibank and Mr. Garcia?”; Murtha answered,
“No.” (Murtha Dep. p. 25)
PRA admits that on the day set for trial of the case, no one
appeared on behalf of PRA, and New Jersey Superior Court Judge
Laskin dismissed PRA’s suit.
Garcia and his lawyer did appear.
According to Garcia, “when the case was called up in court, the
judge himself said that Portfolio never shows up, something like
that, similar words, that they’re just after settlement or
something.” (Garcia Dep. p. 35)
This lawsuit followed.
Garcia asserts that PRA’s actions in
the state collections suit violated § 1692e(5) which prohibits debt
collectors from “threatening to take action that is not intended to
According to Garcia, PRA never intended to prove its
claim against him, or even acquire the evidence necessary to prove
Rather, the filing of the collections action was merely
an attempt to obtain a default judgment or an early settlement of
Garcia further contends that these same actions violate
the FDCPA’s prohibitions on “using false representations or
deceptive means to collect or attempt to collect alleged debts,” §
1692e(10), and “using unfair or unconscionable means in connection
with the collection of alleged debts,” § 1692f.
Moreover, Garcia asserts that PRA took the actions in the
underlying suit pursuant to PRA’s “Legal Recovery Standard Operating
Procedures,” (Markos Decl. Ex. O), which he asserts, is a general
policy “directing [PRA’s] lawyers to explore settlement or
abandonment [of the suit] whenever a case is contested and requires
a witness.” (Reply Brief, p. 4)
The Standard Operating Procedures provides, in relevant part,
PRA expects Law Firms to make appropriate determination
of suit eligibility based on individual account
characteristics and state/county level processes and
challenges. . . .
PRA also expects that all Law Firms will be mindful of
cost expenses incurred in the litigation process. Law
firm is expected to advance and PRA will reimburse all
reasonable costs . . . which include but are not limited
to, court filing fees, garnishment and lien fees, and
process server fees. Expenses for data source vendors,
contract attorney appearances and travel expenses are
not reimbursable costs and will be borne by Law Firm.
PRA will audit for and question cost charges such
Multiple filing fees
Multiple service attempts . . .
Multiple garnishment attempts . . .
“Administrative fees” related to the
handling of lien/judgment release at any point
. . .
. . . .
Please incorporate the following guidelines into any
existing process of initiating and completing litigation
proceedings on behalf of PRA:
Portfolio Recovery Associates, LLC must
appear as plaintiff name on all pleadings,
notice, motions, etc.
. . .
communication attempts demonstrating efforts
to allow debtor to make payments voluntarily
. . .
File for default judgment within a
reasonable time frame as allowable by state
. . . .
Law Firm can close back accounts where scrubs indicate
recent counterclaim activity has occurred on other cases
by using code  – Litigation Risk by Consumer
Currently any account that is coded in PRA’s LP (Legal
Placement) Process . . . as dismissed with or without
prejudice is subject to immediate recall by PRA. PRA
will then purge the account from their systems thus
allowing no further collections on said account.
Law Firm needs to be extremely careful when dismissing
accounts. If the Law Firm dismisses the suit in court
but plans to continue working the file, it is imperative
to utilize code  (claim withdrawn from court). The
reasons for dismissal may be but are not limited to:
claim filed in wrong court, debtor has decided on payment
plan, wrong debtor sued, etc. . . .
Prior to litigation, all accounts must be approved for
suit by an attorney. . . .
. . .
Section 2.c of the Attorney Engagement Agreement
requires that notification is given PRA within twentyfour (24) hours of Service Provider’s receipt or other
actual notice of any claim, counterclaim or special
defense affecting PRA’s interests – and every matter in
which PRA may be required to provide evidence,
documentation or a witness.
If the Law Firm receives an answer and/or counterclaim
to a collection account (regardless of status the status
of the account), the answer must immediately be
forwarded to PRA without exception.
If the answer
involves legal issues regarding the collection of the
account, PRA will communicate with the firm as to the
course of action and strategy involved with the account.
If the case results in a trial, the law firm is expected
to utilize an attorney employee by the firm to prepare
and try the case. . . .
. . .
If the answer goes beyond the scope of the general debt
collection account, if the issue will potentially
establish case law, or if the issue is in any way outside
the scope of the collection of the debt, the firm is
prohibited to represent PRA without prior consent . . .
. . .
In the course of litigation, it
require a witness from PRA for a
PRA is prepared
witnesses either telephonically or
. . .
is not uncommon to
deposition or trial
to provide trained
Law firm is required to contact the witness/custodian of
records no later than 14 days prior to the trial date to
set up pre-trial meeting/discussion, and any subsequent
meetings where necessary prior to the event.
. . .
As soon as request is received, PRA’s counterclaims
Counterclaims and Trials Team will complete the
Thoroughly review the request for Witness. .
Contact the Law Firm to discuss [settled in
full] opportunities or alternate resolutions, where
(Marcos Cert. Ex. O)
The proposed class is:
All natural persons against whom Defendant filed a debtcollection lawsuit in a court in the State of New Jersey
seeking to collect a consumer debt allegedly owed to
Citibank, N.A. from June 2, 2014 through and including
June 2, 2015. Excluded from the Class are all such
persons other than Plaintiff herein who commenced an
action in any court against Defendant alleging a
violation of the Fair Debt Collection Practices Act, 15
U.S.C. §§ 1692 et seq., from June 2, 2014 through and
including June 2, 2015, or who have signed a general
release of claims against Defendant after the collection
lawsuit against him or her referenced above was filed.
The proposed subclass is:
All members of the Class as defined above who incurred
an out-of-pocket expenditure of money to defend against,
respond to, or otherwise resolve the covered collection
lawsuit filed against him or her by Defendant.
Federal Rule of Civil Procedure 23 provides in relevant part,
(a) Prerequisites. One or more members of a class may
sue or be sued as representative parties on behalf of
all members 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
(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.
(b) Types of Class Actions. A class action
maintained if Rule 23(a) is satisfied and if:
. . .
(3) 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. The matters pertinent to these
(A) the class members’ interests in
individually controlling the prosecution
or defense of separate actions;
(B) the extent and nature of any
litigation concerning the controversy
already begun by or against class
(C) the desirability or undesirability of
concentrating the litigation of the
claims in the particular forum; and
(D) the likely difficulties in managing
a class action.
“Rule 23 does not set forth a mere pleading standard.
seeking class certification must affirmatively demonstrate his
compliance with the Rule-- that is, he must be prepared to prove
that there are in fact sufficiently numerous parties, common
questions of law or fact, etc.” Wal-Mart Stores, Inc. v. Dukes, 564
U.S. 338, 350 (2011).
“[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.” Id.
The central, dispositive issues raised by the parties’ briefs
is whether Garcia’s evidence sufficiently establishes the
commonality prerequisite to class certification, Fed. R. Civ. P.
23(a)(2), and the predominance prerequisite of 23(b)(3).
holds that it does not.
For a proposed class to meet the commonality requirement, class
claims must depend upon a common contention. . . . That
common contention, moreover, must be of such a nature
that it is capable of classwide resolution-- which means
that determination of its truth or falsity will resolve
an issue that is central to the validity of each one of
the claims in one stroke.
Dukes, 564 U.S. at 350.
In this case, the parties agree that the class members’ claims
depend on a common contention: Garcia contends that PRA did not
“inten[d] to prove its debt-collection cases against class members.”
(Reply Brief, p. 2)
The parties disagree, however, as to whether
this factual issue is capable of classwide resolution.
Garcia argues that it is capable of classwide resolution
because PRA allegedly makes decisions, not based on any evaluation
of any given case, but rather pursuant to a blanket policy.
as set forth above, PRA does have Standard Operating Procedures
governing legal recovery of debts.
However, the policy does not
support the conclusion that PRA does not intend to prove any of the
thousands of cases it files in New Jersey state court each year.
the contrary, the policy expressly provides that “PRA expects Law
Firms to make appropriate determination [sic] of suit eligibility
based on individual account characteristics and state/county level
processes and challenges.” (Markos Cert. Ex. O, p. 9)(See also id.
at p. 16, “Prior to litigation, all accounts must be approved for
suit by an attorney.”).
The policy itself suggests that individual
account characteristics which could bear on whether PRA files suit,
or continues pursuing a suit that has been filed, include: the cost
to litigate a particular case, whether precedent-setting issues are
involved, and previous litigation with a given debtor. (Markos Cert.
Contrary to Garcia’s argument, the other evidence he submits
does not support an inference that, in practice, PRA does not
actually comply with its written policy.
First, the undisputed fact
that PRA has agreed to pay Citibank if a Citibank officer or
employee must testify does not support an inference that PRA will
never provide a witness to testify in its collections suits.
Second, Garcia points to the following evidence concerning
PRA’s collection suits in New Jersey state court on behalf of
Citibank during the proposed class period: of the 2,041 cases “for
which dispositions are determinable,” (Quirk Decl. ¶ 9), 1,376 of
resulted in default judgments, 592 ended in dismissal orders, 72 are
identified by the courts as having been settled, and one was decided
on a summary judgment motion by Portfolio that was unopposed. (Id.
at ¶ 10)
Zero of cases went to trial. (Id. at ¶ 11)
proffered dispositions are only marginally probative of any intent
on PRA’s part, and do not support Garcia’s contention that PRA had a
uniform intent not to prove all 2,041 cases.
Indeed, the cases resulting in default judgment, which make up
approximately 67% percent of the cases in the proposed class, say
nothing about PRA’s intent to prove, or not prove, those cases.
Similarly, the fact that 592 cases “ended in dismissals” means close
to nothing when the record does not indicate: (a) whether the
dismissals were with or without prejudice; and (b) the reason for
Lastly, the undisputed fact that PRA encourages its lawyers to
explore and pursue settlement throughout all stages of a suit-even, perhaps, every suit-- is not at all inconsistent with a
simultaneous intent to litigate cases worth litigating based on
PRA’s individualized assessment.
Thus, the record evidence only supports a conclusion that PRA
makes individualized determinations on whether, and how much, to
litigate any given case.
In this way, this case is analogous to
Wal-Mart Stores, Inc. v. Dukes, where the Supreme Court held that
the proposed class failed for lack of commonality.
564 U.S. 338
In Dukes, the proposed nationwide class of female Wal-Mart
employees “allege[d] that the discretion exercised by their local
supervisors over pay and promotion matters violate[d] Title VII by
discriminating against women.” 564 U.S. at 342.
In that case,
“proof of commonality” was dependent on the plaintiffs’ “contention
that Wal-Mart engages in a pattern or practice of discrimination,”
which required an inquiry into “the reason for a particular
employment decision.” Id. at 352 (italics in original).
The Court held that the plaintiffs failed to establish
commonality because they had “not identified a common mode of
exercising discretion that pervades the entire company.” Id. at 356.
Indeed, the Court observed, “[t]he only corporate policy that the
plaintiffs’ evidence convincingly establishes is Wal-Mart’s ‘policy’
of allowing discretion by local supervisors over employment
matters.” Id. at 355 (italics in original).
The litigation decisions in this case are analogous to the
employment decisions in Dukes.
Both are individualized and
dependent on different people making decisions based on various
Thus, as in Dukes, the proposed class in this case fails
for lack of commonality.
Further, a holding that a proposed class lacks sufficient
commonality under Rule 23(a)(2) precludes a holding of predominance
under Rule 23(b)(3). Sullivan v. DB Investments, Inc., 667 F.3d 273,
297 (3d Cir. 2011)(“Parallel with Rule 23(a)(2)’s commonality
element, which provides that a proposed class must share a common
question of law or fact, Rule 23(b)(3)’s predominance requirement
imposes a more rigorous obligation upon a reviewing court to ensure
that issues common to the class predominate over those affecting
only individual class members.
Hence, we consider the Rule 23(a)
commonality requirement to be incorporated into the more stringent
Rule 23(b)(3) predominance requirement.”).
Accordingly, Plaintiff’s Motion for Class Certification will be
For the reasons stated above, Plaintiff’s Motion for Class
Certification will be denied.
An appropriate Order accompanies this
Dated: August 9, 2017
At Camden, New Jersey
__s/ Noel L. Hillman___
NOEL L. HILLMAN, U.S.D.J.
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