Hallmark v. Cohen & Slamowitz, LLP
Filing
110
DECISION AND ORDER GRANTING Hallmark's Second 63 Motion to Amend his Complaint; GRANTING in part and DENYING in part C&S's 42 Motion for Judgment on the Pleadings; GRANTING in part and DENYING in part Midland's 48 Motion f or Judgment on the Pleadings; DENYING as moot Hallmark's 83 Motion to Strike; GRANTING Hallmark's 38 Motion to Certify this action as a class action; CERTIFYING the class, as defined in Hallmark's 38 Motion for Class Certifica tion; APPOINTING the Brian Bromberg Law Office, P.C. and the Law Offices of Kenneth Hiller, PLLC as class counsel; DIRECTING Hallmark to file his Second Amended Complaint by September 20, 2013; REFERRING this case back to Magistrate Judge Leslie G. Foschio for the handling and resolution of pending pretrial matters. Signed by William M. Skretny, Chief Judge on 9/14/2013. (MEAL)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
MICHAEL HALLMARK,
on behalf of himself and all others similarly
situated,
Plaintiff,
v.
DECISION AND ORDER
11-CV-842S
COHEN & SLAMOWITZ, LLP and MIDLAND
FUNDING, LLC d/b/a MIDLAND FUNDING OF
DELAWARE LLC,
Defendants.
I. INTRODUCTION
Seeking to represent a class of similarity situated individuals, Plaintiff Michael
Hallmark brings this action against Defendants Cohen & Slamowitz, LLP (“C&S”) and
Midland Funding, LLC (“Midland”). Hallmark alleges that Defendants violated the federal
Fair Debt Collection Practices Act (“FDCPA”) in the course of attempting to collect a debt.
There are currently five motions before this Court, three of which were filed by
Hallmark; he seeks to (1) certify this case as a class action, (2) amend his complaint, and
(3) strike an affirmation submitted by C&S. For their part, each defendant has also moved
for judgment on the pleadings, with Midland simply adopting the reasoning articulated in
C&S’ motion.
As an initial matter, this Court must address Hallmark’s motion to amend his
complaint. Defendants object, arguing, in essence, that the proposed amendments in the
second amended complaint are futile. Nonetheless, Defendants have addressed the
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proposed amended complaint and they are therefore not prejudiced by this Court
considering the amended pleading. Moreover, this Court finds that the proposed
amendments do not materially alter the substantive allegations in this case. Finding no
“undue delay, bad faith or dilatory motive on the part of the movant,” see Dougherty v.
Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 87 (2d Cir. 2002) (quoting
Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962)), this Court will
grant Hallmark’s motion and construe the motions for judgment on the pleadings as against
the second amended complaint. See Fed. R. Civ. P. 15(a)(2) (“The court should freely give
leave when justice so requires.”).
So construed, and for the following reasons, Defendants’ motions for judgment on
the pleadings are denied; Hallmark’s motion to certify this case as a class action is granted,
and his motion to strike is denied as moot.
II. BACKGROUND
A.
Facts1
The allegations in this case are straightforward: According to Hallmark, he incurred
and defaulted on a credit card debt owed to HSBC Bank Nevada, N.A. (Second Am.
Compl. ¶¶ 7, 9; Docket No. 63-1.) At some point, Midland came to own the debt, and it
employed C&S to collect it. (Id., ¶ 10.) In a letter addressed to Hallmark from C&S, dated
August 1, 2011, the balance of the debt was stated as $1,835.31. (Id., ¶ 11.) In a
subsequent letter from C&S to Hallmark, dated August 17, 2011, the balance of the debt
was stated as $1,982.89, or $147.58 more than the balance stated in the first letter. (Id.,
1
Facts alleged in the com plaint – but not labels or legal conclusions – m ust be accepted as true
for the purposes of resolving this m otion. See Ashcroft v. Iqbal, 556 U.S. 662, 668, 129 S. Ct. 1937, 173 L.
Ed. 2d 868 (2009); ATSI Com m c'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007).
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¶ 12.) $140.00 of this increase was added to Hallmark’s debt because C&S wrote and
mailed a check, along with a summons and complaint, to Buffalo City Court to pay the
required filing fee for a newly instituted debt-recovery action against Hallmark. (Id., ¶¶
13–14.)
Hallmark alleges this increase, specifically the attempt to collect the court cost,
violated the FDCPA.
B.
Procedural History
The procedural history of this case far exceeds the factual one. Hallmark filed his
initial complaint on October 6, 2011. After both Defendants answered, Hallmark moved to
amend his complaint in March of 2012. (Docket No. 16.) In June of that year, Magistrate
Judge Leslie G. Foschio granted that motion (Docket No. 27), and Hallmark soon filed his
amended complaint. In December of 2012, Hallmark moved for class certification. (Docket
No. 38.) Shortly after that, C&S moved for judgment on the pleadings (Docket No. 42); and
Midland soon filed its own motion, adopting the reasoning set forth by C&S. (Docket No.
48).
In March of 2013, Hallmark moved to amend the complaint again (Docket No. 63).
Then the floodgates opened. In April of 2013, Hallmark filed:
∙
a motion to compel (Docket No. 71),
∙
a supplemental motion to compel (Docket No. 74),
∙
a motion to strike (Docket No. 83) the declaration of Daniel Ryan
(Docket No. 69), and
∙
a motion to compel further discovery responses (Docket No. 86).
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Also in April, C&S filed motions to:
∙
quash Hallmark’s subpoena duces tecum (Docket No. 82), and
∙
stay discovery (Docket No. 85).
Judge Foschio granted the motion to stay discovery, awaiting resolution of the
current motions before this Court. Accordingly, only the five motions identified in the
introduction are currently before this Court.
III. DISCUSSION
A.
Judgment on the Pleadings – Standard
“After the pleadings are closed – but early enough not to delay trial – a party may
move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “The standard for addressing
a Rule 12(c) motion for judgment on the pleadings is the same as that for a Rule 12(b)(6)
motion . . . .” Cleveland v. Caplaw Enters., 448 F.3d 518, 520 (2d Cir. 2006). Rule 12(b)(6),
in turn, allows dismissal of a complaint for “failure to state a claim upon which relief can be
granted.” Federal pleading standards are generally not stringent: Rule 8 requires only a
short and plain statement of a claim. Fed. R. Civ. P. 8(a)(2). But the plain statement must
“possess enough heft to show that the pleader is entitled to relief.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1966, 167 L. Ed. 2d 929 (2007).
When determining whether a complaint states a claim, the court must construe it
liberally, accept all factual allegations as true, and draw all reasonable inferences in the
plaintiff’s favor. ATSI Commc’ns, 493 F.3d at 98. Legal conclusions, however, are not
afforded the same presumption of truthfulness. See Iqbal, 556 U.S. at 678 (“The tenet that
a court must accept as true all of the allegations contained in a complaint is inapplicable
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to legal conclusions.”).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at
678 (quoting Twombly, 550 U.S. at 570). Labels, conclusions, or a “formulaic recitation of
the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Facial plausibility
exists when the facts alleged allow for a reasonable inference that the defendant is liable
for the misconduct charged. Iqbal, 556 U.S. at 678. The plausibility standard is not,
however, a probability requirement: the pleading must show, not merely allege, that the
pleader is entitled to relief. Id. at 678; Fed. R. Civ. P. 8(a)(2). Well-pleaded allegations must
nudge the claim “across the line from conceivable to plausible.” Twombly, 550 U.S. at 570.
B.
The Fair Debt Collection Practices Act
Congress enacted the FDCPA “to eliminate abusive debt collection practices by
debt collectors, to insure that those debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged, and to promote consistent State
action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e).
To determine whether a FDCPA violation has occurred, this Circuit employs the
“least sophisticated consumer” test. Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir.
1993). The “basic purpose” of this standard is to “ensure that the FDCPA protects all
consumers, the gullible as well as the shrewd.” Id. But “[t]he unsophisticated consumer isn't
a dimwit. She may be uninformed, naïve and trusting but she has rudimentary knowledge
of the financial world and is capable of making basic logical deductions and inferences.”
Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 645 (7th Cir. 2009) (internal citations
and quotation marks omitted).
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C.
Defendants’ Motions for Judgment on the Pleadings
Hallmark alleges that Defendants violated FDCPA Sections1692e,1692f,
1692g,and, as well as several of their subsections – 1692e(2)(A), 1692e(B), 1692e(10),
1692e(5), and 1692f(1). Generally, these provisions make it unlawful for a debt collector
to “use unfair or unconscionable” or “false, deceptive, or misleading representation or
means in connection with the collection of any debt.” 15 U.S.C. §§ 1692e, 1692f. In
particular, Section 1692e(2) prohibits the false representation of “the character, amount,
or legal status of any debt.” And Section 1692f(1) prohibits the “collection of any amount
(including interest, fee, charge, or expense incidental to the principal obligation) unless
such amount is expressly authorized by the agreement creating the debt or permitted by
law.”
Hallmark asserts that the $140.00 charge violates these provisions because, at least
until a judgment is entered against him by the court in which the action was commenced,
Defendants are not entitled to recover court costs.
In response, Defendants argue that the additional $140.00 charge – as represented
in the August 17, 2011 letter – does not violate the FDCPA because C&S actually incurred
the fee. But it is clear that, even if lawfully incurred, a debt collector cannot seek to collect
such a fee unless authorized by law or the underlying agreement. Although Defendants
vigorously assert that they actually incurred the fee by drafting and mailing a check for the
purpose of commencing a suit against Hallmark, they fail to adequately address the second
question: whether they were authorized to pass along that fee to Hallmark. Defendants rely
on Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292 (2d Cir. 2003) for the proposition
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that a debt collector is permitted to include attorneys’ fees and court costs “within the
amount of debt owed when the demanded amount is what the obligation is, not what the
final worst case scenario could be.” (C&S Br. at 21; Docket No. 42-4.) But in Miller, the
“plaintiff [did] not dispute that the credit card agreement [] provided for payment of
attorneys' fees.” 321 F.3d at 307. This, of course, renders the collection of attorneys’ fees
permissible because they were “expressly authorized by the agreement creating the debt.”
§ 1692f(1). Here, Defendants wait until their reply memorandums of law to point to any
such agreement in this case. Indeed, in their joint initial memorandum, they did not submit
any agreement or make any attempt whatsoever to argue that any such agreement (or law)
exists. And, for several reasons, this Court finds the late submission and argument to be
inadequate.2
First, “new arguments may not be made in a reply brief.” Ernst Haas Studio, Inc.
v. Palm Press, Inc., 164 F.3d 110, 112 (2d Cir. 1999) (declining to hear new argument
where, as here, an “attempt [was] made in the Reply Brief to supply what was
conspicuously omitted in the main Brief”).3 This principle is particularly apt here where
Hallmark was unable to respond to the potentially pivotal argument that he is bound by an
agreement – heretofore unmentioned – that permitted Defendants to recover court costs.
Second, Defendants chose to move for judgment on the pleadings, rather than
summary judgment. Yet they have not sufficiently demonstrated that the complaint solely
2
Hallm ark m oves to strike this subm ission and a related affidavit. But because this Court finds –
independent of the m otion to strike – that the subm ission is insufficient, the m otion to strike is rendered
m oot.
3
For this reason, this Court also declines to address Midland’s argum ent, raised for this first tim e
m idway though its reply brief, that Hallm ark insufficiently alleged that it “exercised control” over C&S.
(Midland Reply Br., at 4; Docket No. 70.)
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relies on this proffered agreement, and they have failed to point to any authority suggesting
that a document such as this is integral to the complaint, as is required for this Court to
consider documents outside the pleadings. See Roth v. Jennings, 489 F.3d 499, 509 (2d
Cir. 2007) (emphasis in original). C.f. Shapiro v. Riddle & Associates, P.C., 351 F.3d 63
(2d Cir. 2003) (affirming grant of summary judgment where agreement authorized
defendant to assess collection costs).
Finally, Defendants’ proof is cursory. Defendants provided what appears to be only
a portion (and a partially inverted portion at that) of the “HSBC Select Credit Agreement,”
which purports to grant them the authority to collect court costs. But there is no indication
that this was signed or otherwise executed by Hallmark. And Defendants have supplied no
affidavit from anyone associated with HSBC Bank Nevada, N.A., the entity that originally
issued the credit card and presumably drafted the agreement, to authenticate it. There are,
accordingly, serious questions about its authenticity that have not been addressed by
Defendants.
In sum, since Defendants have not satisfactorily identified an agreement or
provision of law authorizing them to collect the $140.00 fee, Hallmark has stated a claim
that Defendants violated Section 1692f(1) of the FDCPA by adding that fee to his debt.
Further, because the inclusion of this fee, to which Defendants may not have been entitled,
would serve to mislead the “least sophisticated consumer” as to the true amount of the
debt, Hallmark’s Section 1692e(2)(A), 1692e(2)(B), and1692e(10) claims also withstand
Defendants’ motions for judgment on the pleadings. See Shula v. Lawent, 359 F.3d 489,
492 (7th Cir. 2004) (“Because the plaintiff did not owe the defendants $52.73 [in court
costs], the letter demanding that payment as a debt that he did owe them was false and
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misleading and so violated section 1692e.”) Bird v. Pressler & Pressler, L.L.P., No.
12-CV-3007 JS ETB, 2013 WL 2316601, at *3 (E.D.N.Y. May 28, 2013) (impermissible
attempted recovery of fees, if correctly pleaded, states a claim under Section 1692e(2)(B)).
The same cannot be said, however, about Hallmark’s new allegation, found only in
the second amended complaint, that Defendants violated Section 1692g(a) by failing to
provide him with a new validation notice after adding the court filing fee. That provision
provides that “[w]ithin five days after the initial communication with a consumer in
connection with the collection of any debt, a debt collector shall” send the consumer written
notice of certain enumerated background information and rights with respect to the debt.
This provision is inapplicable here because, although the $140 filing fee was a new
charge, it was connected to, and indeed it was added to, the original debt. A new validation
notice was therefore not required. See 15 U.S.C. §§ 1692g(a) (validation notice required
only after initial communication). This fact distinguishes this case from Lawent, on which
Hallmark relies. 359 F.3d 489. There, the original debt was extinguished because the
debtor-plaintiff paid it in full. Significantly, it was not until after the debtor-plaintiff had done
so that the debt collector then sought, exclusively, court costs for an action it had
previously commenced. The attempted collection of court costs was therefore considered
a new debt – albeit one incidental to the original – and it constituted a separate collection
effort, thus requiring an accompanying validation notice within 5 days. But that is not so
here, where Defendants maintained only one, unified collection effort. Accordingly, this
claim is dismissed.
Last, Hallmark’s claim under Section 1692e(5) is also dismissed, as Hallmark has
not alleged sufficient facts to suggest that Defendants “threaten[ed] to take any action that
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cannot legally be taken” or threatened action “that is not intended to be taken.” 15 U.S.C.
§ 1692(e)(5). To the contrary, the allegations establish that Defendants could, and fully
intended to, take legal action against Hallmark.
D.
Hallmark’s Motion for Class Certification4,5
In “an exception to the usual rule that litigation is conducted by and on behalf of the
individual named parties only,” Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432, 185 L.
Ed. 2d 515 (2013) (citation omitted), Rule 23 of the Federal Rules of Civil Procedure
permits individuals to sue as representatives of an aggrieved class. Floyd v. City of New
York, 283 F.R.D. 153, 160 (S.D.N.Y. 2012). The underlying purpose of the class-action
mechanism is to foster judicial economy and efficiency by adjudicating, to the extent
possible, issues that affect many similarly situated persons. Califano v. Yamasaki, 442 U.S.
682, 701, 99 S. Ct. 2545, 61 L. Ed.2d 176 (1979). “The party seeking class certification
bears the burden of establishing by a preponderance of the evidence that each of Rule
23’s requirements has been met.” Myers v. Hertz Corp., 624 F.3d 537, 547 (2d Cir. 2010);
see Levitt v. J.P. Morgan Securities, Inc., 710 F.3d 454, 465 (2d Cir. 2013). Rule 23(a)
provides that a class action is appropriate 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. Civ. P. 23(a); Levitt, 710 F.3d at 464. “[C]ertification is proper only if the trial court
4
Only C&S – not Midland – filed m em oranda in opposition to the m otion for class certification.
5
Although Hallm ark requested in his initial m em orandum that this Court stay further briefing until
Defendants answered basic discovery requests, those issues have been resolved and this m otion is ripe
for decision .
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is satisfied, after rigorous analysis, that the prerequisites of Rule 23(a) have been
satisfied.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551, 180 L. Ed. 2d 374 (2011)
(internal quotation marks omitted). In addition to these prerequisites, a proposed class
action must fall within one of the three “types of class actions” described in Rule 23(b).
Here, Hallmark seeks to represent a class of plaintiffs who he describes as:
All consumers with New York addresses, who: (a) within one
year before March 9, 2012, the date of filing of Plaintiff’s
Motion to Amend in this action; (b) were sent a debt collection
letter by Defendant in a form materially identical or
substantially similar to the letter attached to the Amended
Complaint as Exhibit B sent to the Plaintiff; or (c) were sent a
debt collection letter demanding City Court filing fees that had
not yet been paid, incurred, or reduced to judgment; or (d)
were sent a debt collection letter that failed to disclose that the
balance demanded included filing fees that had not yet been
paid, incurred, or reduced to judgment; and (e) the letter was
not returned by the postal service as undelivered.
(Motion for Class Certification; Docket No. 38.)6 Hallmark further asserts that this class is
appropriate under Rule 23(b)’s third category, where “questions of law or fact common to
class members predominate over any questions affecting only individual members,” and
where a class action “is superior to other available methods.” Fed. R. Civ. P 23(b)(3).
1.
Rule 23(a) Requirements
i.
Numerosity
In the Second Circuit, it is established that “numerosity” and impracticality of joinder
are presumed when the proposed class totals at least 40. Consol. Rail Corp. v. Town of
6
In his m em oranda and second am ended com plaint, Hallm ark also seeks to certify a subclass of
plaintiffs, entitled “Class B.” But that class is not identified in his m otion for certification, as required by
Local Rule 23(d)(2). In addition, the definition of that class varies; it is inconsistent as set forth in the
second am ended com plaint and Hallm ark’s m em oranda of law. Accordingly, this Court will not consider it
at this tim e. But Hallm ark is granted leave under Rule 23(c)(5) to divide the class into a subclass at a later
date if appropriate.
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Hyde Park, 47 F.3d 473, 483 (2d Cir.1995). In its supplemental response to Hallmark’s
discovery requests, C&S indicates that it sent approximately 17,475 letters to consumers,
in a form similar to that which was received by Hallmark, with a filing fee included in the
alleged debt. This figure elevates Hallmark’s claim above mere speculation and serves to
satisfy the numerosity requirement.
ii.
Commonality
Rule 23 requires that there be “questions of law or fact common to the class.” The
crux of this requirement “is to ensure that ‘maintenance of a class action is economical and
[that] the named plaintiff's claim and the class claims are so interrelated that the interests
of the class members will be fairly and adequately protected in their absence.’” Marisol A.
v. Giuliani, 126 F.3d 372, 376 (2d Cir.1997) (quoting Gen. Tel. Co. of Sw. v. Falcon, 457
U.S. 147, 157 n. 13, 102 S. Ct. 2364, 72 L. Ed. 2d 740 (1982)). Commonality requires the
plaintiff to demonstrate that the class members “have suffered the same injury.” Dukes,
131 S. Ct. at 2551 (internal quotations marks and citations omitted). The class claims must
“depend upon a common contention,” which “must be of such a nature that it is capable
of classwide resolution.” Id. This 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.” Id.
This Court finds that standard to be met. The common question – the answer to
which will resolve all the claims – is whether a court filing fee was impermissibly added to
a debt that defendants sought to collect. C&S argues simply that Hallmark has not met this
requirement because he has failed to state a cognizable claim. But this Court has already
ruled differently, and, accordingly, it finds the commonality requirement is satisfied.
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iii.
Typicality
Like commonality, the typicality requirement is meant to ensure both the economical
maintenance and adequate protection of the potential class members’ claims. See Marisol,
126 F. 3d at 376. This requirement, however, focuses on the “claims or defenses of the
representative parties.” Fed. R. Civ. P. 23(a)(3).
C&S argues that Hallmark cannot represent the class because his claim is subject
to a “unique” defense, namely that Defendant has not stated a cause of action because
C&S was permitted to include the filing fee. But once again, this Court has found
differently, rendering this argument ineffective. And although Hallmark may be subject to
a defense, namely an agreement authorizing Defendants to collect the filing fee, that
defense is not a unique defense. The FDCPA statute itself creates this defense, and it has
the potential to apply to the class members and Hallmark alike.
Further, it appears that the claims that the proposed plaintiffs would assert are
nearly identical to those asserted by Hallmark. Where, as here, “it is alleged that the same
unlawful conduct was directed at or affected both the named plaintiff and the class sought
to be represented, the typicality requirement is usually met irrespective of minor variations
in the fact patterns underlying individual claims.” Robidoux v. Celani, 987 F.2d 931, 936–37
(2d Cir.1993); see also In re NYSE Specialists Sec. Litig., 260 F.R.D. 55, 72–73
(S.D.N.Y.2009) (“As long as plaintiffs assert, as they do here, that defendants committed
the same wrongful acts in the same manner, against all members of the class, they
establish [the] necessary typicality.”). Accordingly, this Court finds that Hallmark’s claims
and defenses are “typical of the claims and defenses of the class.” See Fed. R. Civ. P.
23(a)(3).
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iv.
Adequacy of Representation
The final requirement of Rule 23(a) is that the class representative “will fairly and
adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). This requirement
asks “whether plaintiff[‘s] interests are antagonistic to the interest of other members of the
class.” In re Flag Telecom Holdings, Ltd. Sec. Litig., 574 F.3d 29, 35 (2d Cir. 2009)
(internal quotation marks omitted).
“A finding that a proposed class representative satisfies the typicality inquiry
constitutes ‘strong evidence that [his] interests are not antagonistic to those of the class;
the same strategies that will vindicate plaintiff['s] claims will vindicate those of the class.”
Pub. Employees' Ret. Sys. of Mississippi v. Merrill Lynch & Co., Inc., 277 F.R.D. 97, 109
(S.D.N.Y. 2011) (quoting Damassia v. Duane Reade, Inc., 250 F.R.D. 152, 158 (S.D.N.Y.
2008)). That “strong evidence” proves dispositive in this case. Indeed, Hallmark’s allegation
is simple and applies to each of the proposed class members. Moreover, the class
members are tied together by a single legal theory – that inclusion of a court filing fee in
collection letters violated the FDCPA.
2.
Rule 23(b)(3) Requirements
Having found Rule 23(a)’s requirements satisfied, this Court must turn to Rule
23(b)(3), which 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.” In short, two elements must
be met: predominance and superiority.
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i.
Predominance
“Class-wide issues predominate if resolution of some of the legal or factual
questions that qualify each class member's case as a genuine controversy can be
achieved through generalized proof, and if these particular issues are more substantial
than the issues subject only to individualized proof.” UFCW Local 1776 v. Eli Lilly and Co.,
620 F.3d 121, 131 (2d Cir. 2011). Although the standard here is more demanding than that
under Rule 23(a), Moore v. PaineWebber, Inc., 306 F.3d 1247, 1252 (2d Cir. 2002), this
Court finds that the common questions of law and fact identified above serve to satisfy this
element too. As this Court has repeatedly found, the issue at the center of this litigation –
the legality of attempted collection of a court cost – is common to each of the proposed
class members’ claims. See id. (quoting Fed. R. Civ. P. 23(b)(3) advisory committee's note
(1966 amendment)) (“[A] fraud perpetrated on numerous persons by the use of similar
misrepresentations may be an appealing situation for a class action . . . .”). In this sense,
there are no material variations in the plaintiffs’ claims, rendering this case appropriate for
class-action treatment. Indeed, class-action treatment is particularly appropriate here
because the Court will apply the objective “least-sophisticated-consumer” standard to each
Plaintiff’s claims and “this court will not have to make an individual determination of each
potential class member's subjective understanding of the letter in question.” Mailloux v.
Arrow Fin. Servs., LLC, 204 F.R.D. 38, 42 (E.D.N.Y. 2001) (certifying FDCPA class action).
ii.
Superiority
The second element is superiority. Factors to be considered in determining whether
a class action is superior to other methods of adjudication include: “(A) the class members'
interests in individually controlling the prosecution or defense of separate actions; (B) the
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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. R. 23(b)(3).
This Court finds that superiority element has been met. Initially, “[s]uits brought
under the FDCPA such as this case regularly satisfy the superiority requirement of Rule
23.” Petrolito v. Arrow Fin. Servs., LLC, 221 F.R.D. 303, 314 (D. Conn. 2004). Moreover,
multiple lawsuits would be “inefficient and costly,” Lapin v. Goldman Sachs & Co., 254
F.R.D. 168, 187 (S.D.N.Y. 2008), and the prospect of relatively small recovery means that
potential plaintiffs might be dissuaded from bringing a claim such as this on an individual
basis. See Petrolito, 221 F.R.D. at 314. None of the remaining factors appear to detract
from these considerations. In fact, C&S raised no argument with respect to the superiority
element. Accordingly, this Court finds it to be satisfied, and certification to be appropriate.
3.
Rule 23(g) Requirements
Under Rule 23(g), “a court that certifies a class must appoint class counsel.” While
Rule 23(a)(4) “call[s] for scrutiny of the proposed class representative,” subdivision (g)
“guide[s] the court in assessing proposed class counsel as part of the certification
decision.” Fed. R. Civ. P. 23(g) (Advisory Committee Notes to the 2003 Amendments). In
appointing class counsel, the court must consider: “(i) “the work counsel has done in
identifying or investigating potential claims in the action; (ii) counsel's experience in
handling class actions, other complex litigation, and claims of the type asserted in the
action (iii) counsel's knowledge of the applicable law; and (4) the resources counsel will
commit to representing the class.” Fed. R. Civ .P. 23(g)(1)(A)(i)–(iv).
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There is no dispute that attorneys Brian Bromberg and Kenneth Hiller have
significant experience in litigating FDCPA and class action matters. (See Hiller and
Bromberg Decls.; Docket Nos. 38-3, 38-4.) Further, this Court has considered the work that
these attorneys have done in identifying and investigating potential claims in this action.
To that end, it finds that Plaintiff’s attorneys have diligently and ably prosecuted this action
to date. The attorneys further avow that there are committed to the class. Accordingly, this
Court will appoint them class counsel under Rule 23(g).
IV. CONCLUSION
Hallmark has sufficiently alleged that Defendants violated the FDCPA by
misrepresenting the true amount of his debt. He has further demonstrated compliance with
the pertinent requirements of Rule 23, and this Court will therefore grant his motion to
certify the proposed class.
V. ORDERS
IT HEREBY IS ORDERED, that Hallmark’s Second Motion to Amend his Complaint
(Docket No. 63) is GRANTED.
FURTHER, that C&S’s Motion for Judgment on the Pleadings (Docket No. 42) is
GRANTED in part and DENIED in part.
FURTHER, that Midland’s Motion for Judgment on the Pleadings (Docket No. 48)
is GRANTED in part and DENIED in part.
FURTHER, that Hallmark’s Motion to Strike (Docket No. 83) is DENIED as moot.
FURTHER, that Hallmark’s Motion to Certify this action as a class action (Docket
No. 38) is GRANTED. The class, as defined in Hallmark’s Motion for Class Certification,
is CERTIFIED.
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FURTHER, that the Brian Bromberg Law Office, P.C. and the Law Offices of
Kenneth Hiller, PLLC are APPOINTED class counsel.
FURTHER, that Hallmark must file his Second Amended Complaint by September
20, 2013.
FURTHER, this case is referred back to Magistrate Judge Leslie G. Foschio for the
handling and resolution of pending pretrial matters.
SO ORDERED.
Dated:
September 14, 2013
Buffalo, New York
/s/William M. Skretny
William M. Skretny
Chief Judge
United States District Court
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