FREID v. NATIONAL ACTION FINANCIAL SERVICES, INC.

Filing 34

OPINION fld. Signed by Judge Stanley R. Chesler on 4/20/11. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
JUSTIN FREID, on behalf of himself and
all others similarly situated,

:
:
:
Plaintiff, :
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v.
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:
NATIONAL ACTION FINANCIAL
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SERVICES, INC.,
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Defendant. :
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Civil Action No. 10-2870 (SRC)
OPINION

CHESLER, District Judge
This matter comes before the Court on the motion for class certification filed by Plaintiff
Justin Freid. Plaintiff seeks certification pursuant to Federal Rule of Civil Procedure 23(b)(3).
The Court has considered the papers filed by the parties and has opted to rule on the motion
without oral argument, pursuant to Federal Rule of Civil Procedure 78. For the reasons
discussed below, the Court will deny the motion.
I.

BACKGROUND
Plaintiffs filed this putative class action suit on or about June 4, 2010. The Complaint

alleges claims for violation of the Fair Debt Collection Practices Act (“FDCPA.”) The
Complaint alleges that Plaintiff is a consumer and that Defendant National Action Financial
Services, Inc. (“NAFS”) is a debt collecting company. The Complaint asserts five claims
regarding FDCPA violations: 1) Defendant’s employees failed to adequately disclose their
identity when placing telephone calls to Plaintiff; 2) Defendant’s employees used deceptive
means by conveying a false sense of urgency in voicemail messages; 3) Defendant’s employees

failed to adequately disclose their identity in voicemail messages left for Plaintiff; 4) Defendant’s
employees used unfair or unconscionable means in leaving ominous voicemail messages; and 5)
Defendant’s employees engaged in written and oral communication with third parties without
prior consent of the consumer. Plaintiff now moves for class certification, pursuant to Federal
Rule of Civil Procedure 23(b)(3), and appointment of class counsel.
II.

STANDARD FOR CERTIFICATION UNDER RULE 23(B)(3)
To obtain certification, Plaintiffs must demonstrate that each of the putative subclasses

meets the threshold requirements of Rule 23(a) as well as one of the three Rule 23(b) categories
under which they wish to proceed as a class. In re Prudential Ins. Co. of Am. Sales Practices
Litig. Agent Actions, 148 F.3d 283, 308-09 (3d Cir. 1998). In moving for class certification, a
movant has the burden of proving that all requirements of Rule 23 are met. General Telephone
Co. of the Sw. v. Falcon, 457 U.S. 147, 161 (1982). In this case, Plaintiffs have sought
certification of three subclasses under Rule 23(b)(3), which permits certification when “questions
of law or fact common to class members predominate over any questions affecting only
individual members” and when “a class action is superior to other available methods for fairly
and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). The Third Circuit recently
reiterated the well-established standard for certification, holding as follows:
Every putative class must satisfy the four requirements of Rule 23(a): (1) the class
must be “so numerous that joinder of all members is impracticable” (numerosity);
(2) there must be “questions of law or fact common to the class” (commonality);
(3) “the claims or defenses of the representative parties” must be “typical of the
claims or defenses of the class” (typicality); and (4) the named plaintiffs must
“fairly and adequately protect the interests of the class” (adequacy of
representation, or simply adequacy). Fed.R.Civ.P. 23(a)(1)-(4). If those
requirements are met, a district court must then find that the class fits within one
of the three categories of class actions in Rule 23(b).
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Drennan v. PNC Bank, NA (In re Comty. Bank of N. Va. & Guaranty Nat'l Bank of Tallahassee
Second Mortg. Loan Litig.), 622 F.3d 275 (3d Cir. Pa. 2010).
In Drennan, the Third Circuit proceeded to specify that when certification under Rule
23(b)(3) was sought, the district court could not certify a class unless two additional requirements
had been met: “(i) common questions of law or fact predominate (predominance), and (ii) the
class action is the superior method for adjudication (superiority).” Id. Predominance is similar
to Rule 23(a)(2)’s requirement of commonality in that both are concerned with ensuring that the
putative class presents common questions of law of fact. Indeed, where Rule 23(b)(3)
certification is sought, the commonality inquiry is subsumed into the predominance analysis.
Danvers Motor Co. v. Ford Motor Co., 543 F.3d 141, 148 (3d Cir. 2008). Predominance,
however, imposes a “far more demanding standard,” as it “tests whether proposed classes are
sufficiently cohesive to warrant adjudication by representation.” In re Ins. Brokerage Antitrust
Litig., 579 F.3d 241, 266 (3d Cir. 2009) (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591,
623-24 (1997)). The Third Circuit has emphasized the stringent nature of the predominance
requirement, explaining that it may be satisfied only when “common issues predominate over
issues affecting only individual class members.” Id. (quoting In re Warfarin Sodium Antitrust
Litig., 391 F.3d 516, 527-28 (3d Cir. 2004)). Rule 23(b)(3)’s superiority requirement focuses the
Court on manageability concerns. It must consider whether a trial of the claims by representation
would pose difficulties such that some other method of adjudication would be superior to class
certification. In re Cmty. Bank of N. Va., 418 F.3d 277, 309 (3d Cir. 2005). The rule lists four
factors relevant to a court’s evaluation of predominance and superiority. They are:

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(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 members;
(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.
Fed.R.Civ.P. 23(b)(3). This list is not exhaustive, and courts may consider other pertinent factors
in deciding whether a case is suited to class certification. Amchem, 521 U.S. at 615-16.
A court cannot satisfy itself that a class meets Rule 23’s standard in some abstract,
theoretical way; instead, it must conduct a rigorous analysis based on the elements of the claim or
claims a named plaintiff seeks to pursue in a representative capacity on behalf of the putative
class. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 311 (3d Cir. 2009). “A class
certification decision requires a thorough examination of the factual and legal allegations.” Id.
(quoting Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 166 (3d Cir.
2001)). The Rule 23 analysis indeed “may include a preliminary inquiry into the merits” insofar
as the merits of the claim may be relevant to the class certification analysis. Hohider v. United
Parcel Svc., Inc., 574 F.3d 169, 176 (3d Cir. 2009); Hydrogen Peroxide, 552 F.3d at 307. If the
Court finds that the action, or any portion thereof, warrants class certification, its order must
“define the class and the class claims, issues, or defenses . . .” Fed.R.Civ.P. 23(c)(1)(B); see
also Wachtel v. Guardian Life Ins. Co. of Am., 453 F.3d 179, 184 (3d Cir. 2006) (holding that
the rule “requires district courts to include in class certification orders a clear and complete
summary of those claims, issues, or defenses subject to class treatment.”)

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III.

THE CLASS CERTIFICATION MOTION
Plaintiff seeks certification of three subclasses: 1) recipients of voicemail messages

conveying a false sense of urgency; 2) persons who were the subject of written communications
sent to third parties without the alleged debtor’s consent (“the unauthorized written
communication class”); and 3) persons who were the subject of voicemail messages left for third
parties without the alleged debtor’s consent (“the unauthorized oral communication class.”)
A.

The false sense of urgency subclass

Plaintiff moves for certification of the subclass of recipients of voicemail messages
conveying a false sense of urgency. This relates to Count II of the Complaint, which asserts a
claim for violation of 15 U.S.C. § 1692e(10), which bars “[t]he use of any false representation or
deceptive means to collect or attempt to collect any debt or to obtain information concerning a
consumer.” Plaintiff contends that class treatment is appropriate for this claim because NAFS
directs its collectors to use scripts when leaving voicemail messages. Plaintiff points to the
scripts contained in a document titled “Talk-Off 1 Script.” (Bennecoff Aff. Ex. E.) The
document contains six scripts for leaving telephone messages. (Id. at 9, 10.) Three of the scripts
contain the phrase, “I need you to return my call today. . .” (Id. at 9.) The other scripts contain
these phrases: “Since I cannot make any decisions without you, I need to speak to you by the end
of business today;” “I need to review the details with you today;” and “Please call me today for
further information.” (Id. at 10.)
In deciding the motion to certify this class, this Court must consider how these issues
would be tried. The Third Circuit has held:
Because the decision whether to certify a class requires a thorough examination of
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the factual and legal allegations, the court’s rigorous analysis may include a
preliminary inquiry into the merits, and the court may consider the substantive
elements of the plaintiffs’ case in order to envision the form that a trial on those
issues would take.
Hydrogen Peroxide, 552 F.3d at 317.
In order to envision the form that a trial on the false sense of urgency claim would take,
this Court looks to the cases cited by Plaintiff.1 The most helpful case is Leyse v. Corporate
Collection Servs., 2006 U.S. Dist. LEXIS 67719 (S.D.N.Y. Sept. 18, 2006). Leyse concerned a
putative class action suit by a consumer against a debt collector, and one claim alleged that the
debt collector’s voicemail messages violated § 1692e(10) because they deceptively conveyed a
false sense of urgency. Id. at *1, *19. The Court examined the claim under the Second Circuit’s
“least sophisticated consumer” test for violation of § 1692e(10). Id. at *19. The Third Circuit
applies this test as well. Brown v. Card Serv. Ctr., 464 F.3d 450, 453 (3d Cir. 2006).
The Leyse Court began by citing the Federal Trade Commission staff commentary on §
1692e(10). 2006 U.S. Dist. LEXIS 67719 at *19. The FTC staff opined:
A debt collector may not communicate by a format or envelope that misrepresents
the nature, purpose, or urgency of the message. It is a violation to send any
communication that conveys to the consumer a false sense of urgency.
53 F.R. 50097. Plaintiff alleged that three pre-recorded messages violated 1692e(10) by
communicating a false sense of urgency. On cross-motions for summary judgment, the Leyse
Court inquired into the deceptiveness of the pre-recorded messages, and ruled as a matter of law.
2006 U.S. Dist. LEXIS 67719 at *19-*21. The Court found that one message was not deceptive

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Plaintiff’s moving brief cites no false sense of urgency cases. The Complaint, however,
cites two: Leyse, and Romine v. Diversified Collection Servs., 155 F.3d 1142, 1149 (9th Cir.
1998). Romine involved the use of telegrams to convey a sense of urgency and is inapposite. Id.
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and two were deceptive. Id. at *20-*21.
Significantly, Leyse concerned pre-recorded messages. The evidence submitted enabled
the Court to have a high degree of certainty as to the exact actual communication to the
consumer. This is not the case here. In the instant case, the Complaint provides a transcription
of three messages alleged to have been left by NAFS employees on Plaintiff’s answering
machine.2 (Compl. ¶¶ 14, 15, 19.) Plaintiff has not asserted that other potential plaintiffs have
transcriptions of telephone messages available, nor does Plaintiff rely in this motion on the
evidence provided by the transcriptions.
Instead, in arguing that this subclass shares common factual issues, Plaintiff points to the
six alternative scripts for telephone messages that NAFS is alleged to have provided to its
employees to use – not the actual messages. At trial, Plaintiff will need to prove that an actual
communication violated the FDCPA. The six scripts may serve as circumstantial evidence of the
actual communication, but there are significant problems that are likely to accompany the use of
this evidence.
First, there are six different scripts, and the differences among them precludes treating the
group of them as a single, unitary practice. While three of the scripts contain the phrase, “I need
you to return my call today,” and so might conceivably be grouped together, the other scripts

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This Court observes that, while Plaintiff emphasizes the importance of the six telephone
message scripts that NAFS employees are alleged to have been given, not one of the three
transcribed messages fits any one of those scripts. This supports the conclusion that, as will be
discussed at length infra, the scripts themselves are very weak evidence of the actual
communications made.
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contain very different phrases.3 Thus, from the outset, even if it is proven that all employees
were given the set of six scripts, different employees using different scripts are quite likely to
generate messages that differ in the words used to generate a sense of urgency.
The use of the scripts at trial is likely to be problematic. The finder of fact will be tasked
with deciding whether the actual communication received by the consumer was deceptive.
Presented with a group of scripts which use the phrases, “I need you to return my call today,”
“Since I cannot make any decisions without you, I need to speak to you by the end of business
today” or “I need to review the details with you today,” the finder of fact is likely to be uncertain
about what message was actually left.4 Ascertaining the characteristics of the actual
communication would appear to be a very individualized inquiry. Even if a plaintiff could
establish which script was used, this is still weak circumstantial evidence of what was actually
said in the message, and how it was said.
Additionally, the scripts are problematic because the words of the scripts in and of
themselves do not appear to be deceptive. Were a debt collector to state in a message, “I need
you to return my call today,” this appears quite possibly to be truthful. Many employees need to
produce results while working, and it seems entirely possible that the employees of a large debt

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One of the scripts uses the phrase, “Please call me today for further information.” As a
matter of law, it appears unlikely that “Please call me today for further information” qualifies as a
deceptive communication under § 1692e(10).
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Plaintiff himself demonstrates this problem: as already noted, the transcribed messages
included in the Complaint do not fit any of the six scripts. At trial, were Defendant to point to
this fact, it might persuade the finder of fact to doubt the evidentiary value of the scripts.
Furthermore, even if there does exist a class of plaintiffs who received messages that fit the
scripts, this Plaintiff does not appear to be typical of that class – another problem under Rule
23(a)(3).
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collector do, in fact, need to have debtors return messages in order to demonstrate to their
employer that they are working effectively. Thus, the scripts alone do very little to prove the
false sense of urgency claim.
The matter at issue here is the “sense of urgency.” The assessment of whether a
communication conveys a sense of urgency is likely to involve judgments of subtleties such as
nuances of tone and phrasing. In Leyse, the Court could directly observe the actual tone and
phrasing of each pre-recorded message.5 Not so in the instant case. Here, the evidence as to the
message actually received by a particular consumer is likely to be quite varied. Some consumers
may have preserved the actual messages received, and this Court will be able to assess the
deceptiveness of such messages with far greater ease. Other consumers may not have preserved a
recording of the message, and then the Court will need to hear testimony to establish the nature
of the communication.
The common issue of fact shared by the proposed plaintiff subclass is that NAFS gives its
employees six scripts to use when leaving messages. This common fact appears to be of very
limited usefulness to a putative class member trying to prove his or her case. The question of
what was actually communicated appears to be a highly individualized matter. Plaintiff’s false
sense of urgency claim is poorly suited to class treatment. There are key factual matters which,
on this record, do not appear to be common to a large number of plaintiffs.
The instant case is less akin to Leyse and is much more like Reese v. Arrow Fin. Servs.,

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Furthermore, the Leyse Court relied on the evidence of how the words were delivered,
noting that “the caller’s voice stutters briefly, as if he is pressed and attending to an especially
troubling matter.” Id. at *21. In the instant case, there is no common evidence as to the vocal
characteristics of the messages as delivered.
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LLC, 202 F.R.D. 83, 93 (D. Conn. 2001), which concerned a motion for certification of a class of
plaintiffs who had received communications from a debt collector in violation of the FDCPA.
The Reese Court denied the motion for class certification for lack of commonality:
[L]iability necessarily turns on particularized issues as to what representations
were made by defendant to each class member. . . [P]laintiff’s allegations are
insufficiently specific to permit the conclusion that defendant acted with a single,
unitary course of conduct to meet the commonality requirement. Although
plaintiff alleges that defendant had a “policy and practice” of purchasing
charged-off debts and intentionally deceiving consumers into making payment on
such debts by not disclosing information about the effects of making payment on a
time-barred debt, plaintiff does not describe the means by which such a practice
was carried out. If plaintiff can show that a common or similar letter was sent to
each class member, or another similar single course of conduct, then commonality
might be established. If, in contrast, the various proposed class members received
different communications from defendant regarding their time-barred debt, the
individualized assessment required to determine liability under the FDCPA would
counsel against certifying either class one or three.
Id. Such is the situation in the instant case. Liability in this case will turn on particularized
issues as to the communication made by Defendant to each class member.
Plaintiff has not persuaded this Court that NAFS acted with a single, unitary course of
conduct. The message scripts offered suggest at best that there may be some similarity among all
messages left for class members, but not enough similarity to support concluding that Defendant
engaged in a single course of conduct. Rather, it appears that, as in Reese, Plaintiff has failed to
demonstrate that Defendant engaged in a course of conduct common to the proposed class
members. As in Reese, determining the deceptiveness of the actual communications will require
an individualized assessment to determine liability under the FDCPA that counsels against
certifying the proposed class.
To certify a class under Federal Rule of Civil Procedure 23(b)(3), the Court must find

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“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.” As to these matters, generally termed the
predominance requirement, the Third Circuit has stated:
Predominance tests whether proposed classes are sufficiently cohesive to warrant
adjudication by representation, a standard far more demanding than the
commonality requirement of Rule 23(a), requiring more than a common claim.
Issues common to the class must predominate over individual issues. Because the
nature of the evidence that will suffice to resolve a question determines whether
the question is common or individual, a district court must formulate some
prediction as to how specific issues will play out in order to determine whether
common or individual issues predominate in a given case. If proof of the essential
elements of the cause of action requires individual treatment, then class
certification is unsuitable.
Hydrogen Peroxide, 552 F.3d at 310-311 (citations omitted). This Court has performed the
required analysis and formulated a prediction as to how the specific issue of deception by
conveying a false sense of urgency will play out at trial. This Court predicts that proof of an
essential element of that cause of action will require individual treatment. Pursuant to Hydrogen
Peroxide, class certification is unsuitable.
B.

The communications to third parties subclasses

Two of the proposed subclasses involve persons who did not consent to communications
made to third parties. Defendant challenges the motion for certification of these subclasses on
typicality and numerosity grounds.
Rule 23(a)(3) requires that “the claims or defenses of the representative parties are typical
of the claims or defenses of the class.” The Complaint alleges that Defendant made unauthorized
communications to Plaintiff’s father (a fax of a document) and grandmother (a voicemail

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message.) Defendant contends that Plaintiff lacks one of the defining characteristics of the
written communication subclass and thus is not typical: he consented to the challenged
communication to his father. Plaintiff’s reply does not dispute this contention, but merely
attempts to minimize its significance. Plaintiff cites the correct Third Circuit standard: “A
proposed class representative is neither typical nor adequate if the representative is subject to a
unique defense that is likely to become a major focus of the litigation.” Beck v. Maximus, Inc.,
457 F.3d 291, 301 (3d Cir. 2006). The defense that Plaintiff consented to the written
communication with his father seems likely to be a major focus of the litigation over his claim of
unauthorized written communication. Because Plaintiff has defined the subclass in such a way
that the defense of consent cannot be typical of the class, it must be unique. Pursuant to Beck,
this Court agrees with Defendant that the issue of Plaintiff’s consent to the written
communication with his father precludes him from being typical of the class of people who did
not consent to written communications. As to the unauthorized written communication subclass,
the typicality requirement has not been met.
Rule 23(a)(1) requires that the proposed class be so numerous that joinder is
impracticable. Fed.R.Civ.P. 23(a)(1). Though the rules of civil procedure set no bright line
denoting sufficient numerosity, the Third Circuit has held that “if the named plaintiff
demonstrates that the potential number of plaintiffs exceeds 40, the first prong of Rule 23(a) has
been met.” Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001).
Plaintiff has failed to make a sufficient demonstration that the numerosity requirement is
met for the two unauthorized communication subclasses. As to the unauthorized written
communication class, Plaintiff offers nothing from which this Court could infer that Defendant
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ever contacted a third party in writing during a collection process without consent. As discussed,
Plaintiff does not dispute Defendant’s contention that he consented to the written communication
with his father. Plaintiff has not shown the Court anything from which it could infer that there is
even one member of this subclass. The numerosity requirement has not been met and, as to this
subclass, the motion for class certification will be denied.
As to the unauthorized oral communication subclass, Plaintiff’s numerosity argument
appears to be: 1) Defendant admits it has made millions of telephone calls to locate debtors; 2)
company policy requires that voicemail messages must include the statement that the call is from
a debt collector; and 3) therefore, Defendant must have left unauthorized voicemail messages in
some significant number of cases. This argument suffers from an obvious flaw: it does not even
address one key aspect of the subclass definition, that the telephone calls to the third parties are
unauthorized by the alleged debtor. Plaintiff has made no demonstration that, aside from
Plaintiff, Defendant has ever left an unauthorized voicemail message for any third party in a
collection process. The numerosity requirement has not been met and, as to this subclass, the
motion for class certification will be denied.
IV.

CONCLUSION
For the reasons set forth above, this Court finds that Plaintiff has failed to demonstrate

that the three proposed subclasses meet the requirements for class certification under Rule 23.
The motion for class certification is denied.
s/Stanley R. Chesler
STANLEY R. CHESLER
United States District Judge
DATED: April 20, 2011

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