Johnson v. Midland Credit Management, Inc. et al

Filing 188

Order For the reasons stated in the Order, Plaintiff's Second Renewed and Amended Class Certification Motion (ECF No. 155 ) is granted, and Defendant's Motion to Exclude the Opinions and Testimony of Ruoming Jin (ECF No. 159 ) is denied. As a result of the hearing held by the court, Plaintiff's Motion for Hearing on Defendants' Motion to Exclude the Opinions and Testimony of Ruoming Jin and Plaintiff's Motion for Conference/Hearing (ECF Nos. 164 , 167 ) are granted. Plaintiff's Motion for Extension of Time and Plaintiff's Motion for Appointment of Special Master are denied (ECF Nos. 172 , 177 ) as moot. Signed by Judge Solomon Oliver, Jr on 11/29/2012.(K,K)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

ZLORO JOHNSON, et al.,
Plaintiffs
v.
MIDLAND CREDIT MANAGEMENT
INCORPORATED, et al.,
Defendants

)
)
)
)
)
)
)
)
)
)

Case No.: 1:05 CV 1094

JUDGE SOLOMON OLIVER, JR.

ORDER

On April 29, 2005, Plaintiff Zloro Johnson (“Plaintiff” or “Johnson”)1 filed the abovecaptioned case, on behalf of himself and all those similarly situated, against Defendants Midland
Credit Management, Incorporated (“Midland” or “MCM”) and Encore Capital Group, Inc.
(“Encore”) (together, “Defendants”). Plaintiff demonstrated, and the court found, that Defendants
violated Johnson’s rights under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §
1692g, by failing to resend a required debt validation letter (“DVL”) to Johnson after the original
letter was returned as undeliverable. (Summ. J. Order, ECF No. 81). Plaintiff, however, now seeks
to certify the suit as a class action. This court has twice denied Plaintiff’s Motions for Class
Certification (August 24, 2006 Order, ECF No. 81; June 24, 2008 Order, ECF No. 108.) In its most
recent Order, the court denied Plaintiff’s Second Renewed and Amended Class Certification Motion
because Plaintiff failed to demonstrate a feasible method to identify class members. (June 24, 2008
Order, ECF No. 108.) Following that ruling, the court allowed Plaintiff additional limited discovery

1

The court previously granted summary judgment for Defendants against a second
named Plaintiff, Rod L. Feyedelem. (Order, ECF No. 81, 32-33.)

in an effort to determine if MCM’s computers contained the information needed to identify class
members. (July 22, 2008 Order, ECF No. 113.) Currently pending before the court are the
following motions: Plaintiff’s Second Renewed and Amended Class Certification Motion (ECF No.
155), Plaintiff’s Motion for Hearing on Defendants' Motion to Exclude the Opinions and Testimony
of Ruoming Jin (“Jin”) (ECF No. 164), Plaintiff’s Motion for Conference/Hearing (ECF No. 167),
Defendants’ Motion to Exclude the Opinions and Testimony of Ruoming Jin (ECF No. 159),
Plaintiff’s Motion for Extension of Time (ECF No. 172), and Plaintiff’s Motion for Appointment
of Special Master (ECF No. 177). To resolve the complicated issues in these motions, the court held
a hearing on September 17, 2012, in which both parties presented expert testimony on the feasibility
of determining the class.
For the reasons stated herein, Plaintiff’s Second Renewed and Amended Class Certification
Motion is granted, and Defendant’s Motion to Exclude the Opinions and Testimony of Ruoming Jin
is denied. As a result of the court’s hearing on these matters, Plaintiff’s Motion for Hearing on
Defendants' Motion to Exclude the Opinions and Testimony of Ruoming Jin and Plaintiff’s Motion
for Conference/Hearing are granted. Plaintiff’s Motion for Extension of Time and Plaintiff’s Motion
for Appointment of Special Master are denied as moot.
I. FACTS AND PROCEDURAL HISTORY2
A. Debt Validation Letter Requirement

2

A more detailed discussion of the facts and procedural history can be found in the
court’s Order of August 24, 2006, ECF No. 81.
-2-

Midland is a consumer debt collection agency. It is undisputed that, with exceptions not
relevant here, the FDCPA requires that the initial communication between a debt collection agency
and a consumer be a debt validation letter (“DVL”) containing specific information.
15 U.S.C. § 1692g(a). Midland admits that, during the relevant time period, it employed a computer
system that identified the following two distinct categories of mail as “undeliverable” and tracked
them both as “RTM” (returned mail): (1) notices that were physically returned to Midland and never
delivered; and (2) notices that were forwarded by the United States Postal Service (“USPS”). When
debt validation letters were forwarded to new addresses, no FDCPA violation occurred. However,
when debt validation letters were returned to Midland and it found a new address for the consumer,
Midland did not always resend a debt validation letter to the new address. Instead, Midland sent a
second type of notice. By communicating with consumers without sending the required debt
validation notice, Midland violated the FDCPA.
B. Plaintiff Granted Partial Summary Judgment
By Order dated August 24, 2006 (ECF No.81), the court granted partial summary judgment
for Plaintiff against Midland, finding that Midland violated the FDCPA, 15 U.S.C. § 1692g(a), by
failing to send a debt validation letter to Johnson’s correct address. (Id. at 18-25.) In so doing, the
court stated:
The court [in Mahon v. Credit Bureau of Placer County, 171 F.3d 1197
(9th Cir. 1999),] noted that under the common law Mailbox Rule,
“proper and timely mailing of a document raises a rebuttable
presumption that it is received by the addressee.” Id. (internal
quotations omitted). . . . [T]he [Mahon] court indicated the Mailbox
Rule presumption was rebuttable . . . . In the instant case, Midland’s
computer records indicate the validation notice it sent to Johnson was
returned as undeliverable. However, based on the design of Midland’s
computer system, this could mean the mail was actually physically
-3-

returned, or it could mean the mail was forwarded and the Post Office
notified Midland of an address change. In this case, Johnson testified
he had not lived at the Harrison Street address to which Midland sent
the notice for more than five years. Therefore, according to the Post
Office guidelines, the mail could not have been forwarded. While
Midland has shown evidence that it did send a validation notice,
Johnson has rebutted the presumption of delivery. Thus, the burden
shifts to Midland to show that its notice to Johnson was not returned
in the mail, since Midland receives returned mail from the Post Office
in the regular course of business. The mere fact that Midland’s
computer system was not designed to properly record the difference
between returned mail and mail forwarding postcards is not sufficient
to defeat summary judgment. Midland has put forth no evidence to
suggest it actually sent Johnson a validation notice at a valid address.
Midland’s violation in this case resulted when it obtained a new
address for Johnson, and instead of sending out a new validation
notice, it proceeded with its debt collection activities as if its first
correspondence was sent to a correct address. Accordingly, since
Midland failed to send Johnson a validation notice within five days of
the first correspondence it actually sent to a valid address, the January
13, 2005 NY50 letter, Midland violated the FDCPA, 15 U.S.C. §
1692g(a).
(Id. at 20, 23-24.) The court also found that Midland was not entitled to the bona fide error defense,
which would have precluded FDCPA liability. By the same Order, the court denied summary
judgment for each party regarding Defendant Encore’s liability as an indirect debt collector. (Id.
at 25-32.)
C. Plaintiff’s First Expert, Yuri Breitbart
Plaintiff’s class allegations assert that Midland failed to send debt validation letters to all
persons similarly situated to Johnson until in or about November 2006 when Midland updated its
computer system to distinguish between the two types of undeliverable mail. In a previous Order,
the court allowed Plaintiff to amend his Class A definition and denied his request to amend his Class
B definition (Id. at 18-25), and denied Plaintiff’s Motion for Class Certification without prejudice

-4-

(Id. at 36). Plaintiff subsequently filed a Renewed and Amended Motion for Class Certification,
which was denied. (ECF No. 108.) Defendants filed a Motion to Exclude the Opinions and
Testimony of Yuri Breitbart, which was denied in part and granted in part. (Id.) The court found
Breitbart’s algorithm to be unworkable because it relied on a non-existent forwarding fees database
within the Midland database. Breitbart thought that these forwarding fees identified which
addresses incurred forwarding fees and which did not, allowing him to identify the putative class.
The court denied class certification at the class definition stage because the class was not properly
defined, and therefore did not consider the other arguments advanced by the Defendants as to why
Plaintiff’s expert’s testimony and report should be stricken regarding numerosity.
D. Additional Discovery
Following the denial of class certification, the court held a telephonic status conference,
during which Plaintiff’s counsel indicated he wanted another opportunity to conduct discovery by
having an expert directly examine the capability of Midland’s computer systems to determine
whether the system could generate a list of persons who would be members of the putative class.
After both parties submitted letters detailing their positions on this issue, the court entered an Order
on July 22, 2008, allowing “Plaintiff a limited time to conduct additional discovery.” (Order, ECF
No. 113.) This additional discovery was “limited to examining Midland’s computer databases to
determine whether they contain a way to identify potential class members whose undeliverable debt
validation letter was returned to Midland rather than forwarded by the United States Postal Service.”
(Id.) Midland submitted a Motion for Reconsideration, wanting to prevent further discovery by
Plaintiff, which was denied. (ECF No. 117.) Midland proceeded to file a Writ of Mandamus with
the Sixth Circuit, requesting its intervention, which was also denied. (ECF No. 133.) Thereafter,
-5-

Plaintiff filed a Motion for the Appointment of an Independent Expert to Undertake the Inspection
of Defendants’ Computer Data. (ECF No. 127.) The court denied this request and in the same
Order, set forth a protocol, schedule for inspection, and instructed on the submission of expert
reports. (Order, ECF No. 130.) This Order was later modified by the court several times pursuant
to conferences conducted by Magistrate Perelman, the Special Master appointed by the court to
handle the inspection. (ECF Nos. 138, 141, 143.)
Plaintiff’s expert, Dr. Ruoming Jin (“Jin”), conducted his computer inspection over a threeday period, from September 30 to October 2, 2009. Defendants’ expert, R.E. Kurt Stirewalt
(“Stirewalt”), also attended the inspection.
On September 17, 2012, the court held a hearing to further clarify the experts’ positions on
the feasibility of identifying the putative class members.
E. Experts’ Findings
The parties disagree about whether Defendants’ computer system contains an
administratively feasible way to identify potential class members.

Jin opines that he can

“determine, absolutely that he can generate the information to print a list of Midland class members
that meet the class definition.” (Pl.’s Second Renewed and Am. Mot. Class Certification at 9, ECF
No. 155.) Plaintiff contends that Midland’s database contains sufficient information to identify
class members. Defendants disagree and seek to strike Jin’s opinions and testimony, primarily on
the ground that his methodology is unreliable because his theory is based on unreliable data and
therefore not valid.
1. Jin’s Findings
In his report, Jin concludes:
-6-

to a high degree of professional certainty that [the] MCM database
system contains sufficient information for identifying absent class
members, such as Johnson. Specifically, there are database tables and
fields maintained in MCM database system which can directly resolve
subproblem (a): identifying consumers whose undeliverable debt
validation letter was physically returned to MCM (rather than
forwarded by USPS). There are also adequate database tables and data
fields to demonstrate that for those for whom MCM has obtained a new
address, and subsequently sent a second letter demanding the payment
of alleged debts without information required by the FDCPA
(subproblem (b)). In addition, there is also adequate information to
eliminate certain unique cases, such as death or bankruptcy of the class
member. To sum, it is my expert opinion that MCM database system
will generate the names and addresses of absent class members.
(Jin Report at 2, ECF No. 145.) During the inspection, Jin looked at “several key source code files
which handle the returned mail (RTM), address change services (ACS) from USPS, and the sending
of more than one DVL [debt validation letters].” (Id. at 7.) Jin also inspected “several database
tables which contain the key information for class member identification.” (Id. at 8.) He looked
at the Return Mail History File, which records whether the mail was forwarded, and the Letter
History File, which records every piece of mail which was sent by MCM. (Id. at 8.) He also looked
at the Commentary File, which contains a field which states whether the returned mail had a new
address (RTM1) or had no address (RTM2).3 (Id. at 9.) Jin’s final step was to develop and refine

3

MCM receives information regarding new addresses several ways. If the
forwarding service by the USPS has stopped, but a new address is known, the
original letter will be returned to MCM with a yellow sticker containing the new
address. (Jin Report at 10-11, ECF No. 145.) If the post office has forwarded the
mail, MCM is notified through a postcard from the USPS with the new address,
photocopy of the envelope, or through electronic notice via CD or Tape. (Id.;
Stirewalt Report at 7, ECF No. 148.) If the mail has been forwarded, the vast
number of those notifications appear on the CD or Tape. Jin found the number of
postcards was very small (2,525) as compared to the number of returned physical
mail (3,521,038). (Jin Report at 11, ECF No. 145.) In addition, Jin states that his
searches found that the vast majority (98%) of the returned mail did not come in
-7-

a list of search queries in order to identify the class and “validated these queries through the
inspection of individual consumer accounts.” (Id. at 8.)
From examining Midland’s database, Jin concludes that the Commentary File and the Return
Mail History File can enable him to determine which returned mail pieces had new addresses, and
if the mail was forwarded. (Id. at 8-12.) This information would allow him to identify people
whose undeliverable debt validation letter (“DVL”) was physically returned to Midland, rather than
forwarded by the USPS. (Id.) Jin opines that he can find those people to whom Midland sent at
least one other letter besides the DVL, since the second letter would have been sent to another
address, different from the DVL, and this letter is not recorded as returned within Midland’s
database. (Id. at 14.) Jin contends that he can use the letter history database, which is used by
Midland to record every piece of mail it sends to alleged debtors, to see if a non-DVL was sent to
the alleged debtor and if its address is different from the one used in the DVL. (Id.) Additionally,
Jin states that the letter history file was annotated with an “R” or “U” (returned or undeliverable)
when mail was returned, and if this field does not contain an “R” or a “U,” then the mail was
successfully delivered by the USPS. Therefore, he concludes, the potential class members are
identified from this second step, following the determination as to whether a non-DVL was sent to
the alleged debtor. (Id.) Based on his inspection, Jin contends that he has identified a total of
568,076 potential class members. (Id.) He states that this list can be further refined by eliminating
“special cases, like death or bankruptcy, for satisfying a more refined legal criteria of class member
identification.” (Id.) During the inspection, Jin contends he sampled a list of consumer accounts

the form of a postcard, or contain a forwarding address. (Id. at 12).
-8-

for validation purposes. He provides four of these accounts for illustration. Jin points out that one
of the four cases, is one of the “special” cases that does not belong in the class because a bankruptcy
was filed, but states that those cases can be “easily recognize[d]” by browsing the consumer
accounts information, which is the “information necessary to identify those special cases.” (Id. at
14-15.) Such “special” cases have their own codes, and thus “the information for determining those
special cases is available and...can be utilized in the class member refinement.” (Id. at 18.).
2. Stirewalt’s Findings
Defendants’ expert, Stirewalt, firmly disagrees with Jin’s conclusions. Stirewalt was
previously unable to conclude whether the MCM database could identify individuals who are
similarly situated to Plaintiff. However, having reviewed all of the information currently available,
he concludes with his “strongest of professional conviction that the MCM database CANNOT be
used to reliably identify those debt validation letters that were returned to Midland rather than
forwarded by the USPS and that, consequently, the database cannot be used to identify those
individuals similarly situated to the Plaintiff.” (Stirewalt Rep. at 2, ECF No. 148.) Stirewalt takes
issue with several of Jin’s conclusions, including his “implicit assumption” that the codes in the
MCM database “reliably encode information about the presence or absence of forwarding address
on mail pieces.” (Id.) Stirewalt opines that the correct conclusion to be reached from the codes
regarding the returned mail and new addresses should include the qualifier that “if the human
operator enters a new address,” then the database encodes the particular code relating to whether
a new address has been provided. (Id. at 2-3.) Stirewalt contends that Jin’s interpretation of the
codes leaves no room for any operator error, “which is known to be a major problem with manual
mail handling processes.” (Id. at 3.)
-9-

Stirewalt also finds there is “no source of reliable data that tracks the delivery status of
physical mail sent out by MCM.” (Id. at 6.) If this data was located and was reliable, Stirewalt
contends that this would have been akin to a “smoking gun,” demonstrating that the MCM database
can distinguish returned from forwarded letters. (Id.) Since there is not a direct way to make this
identification, an inference is necessary, which Jin uses. Stirewalt contends that there are three
criteria that must be met in order to properly validate an inference: “(1) establishing the reliability
of the subject data upon which the inference is based, (2) establishing the internal consistency, or
logical soundness of the inference, and (3) testing the external consistency of the inference, i.e.
empirically checking the consistency of an inference’s predictions against some objective set of
expected results.” (Id.) Stirewalt states there is no way to meet the third criteria, since there is no
objective means for judging whether a letter was actually returned to MCM, or forwarded to its
intended recipient. (Id.) Any returned letters, photocopies of forwarded letters, or postcards from
the USPS with the new address, have long since been discarded. (Id.) Therefore, the inference must
be evaluated according to the first two criteria. Stirewalt states that a “[d]eficiency in either of these
two criteria completely undermines any scientific basis for accepting the inference as a reliable
predictor of the data it purports to infer.” (Id. at 7.) He contends that Jin’s inference fails the first
criteria because the codes in the commentary and databases are “unlikely to accurately predict the
delivery status of actual, physical letters.” Jin asserts that any new address entered in the system
will classify the DVL as forwarded. (Jin Report at 10-11, ECF No. 145.) However, some of the
new addresses provided to MCM are from the actual returned letters, which have a yellow sticker
with the new address on it, and have not been forwarded. (Id.) Therefore, the codes Jin relies on
will predict the letter was forwarded when it was actually returned as undeliverable, and will
- 10 -

underestimate the number of returned letters. (Stirewalt Report at 7, ECF No. 148.) Additionally,
Stirewalt contends this inference is likely to overestimate the number of returned letters, since some
letters that were actually forwarded will be classified as undeliverable, due to operator error or bugs
in the software process. (Id.) Stirewalt notes that the “effects of bugs in the software on the
integrity of the subject data codes are unknown and were not explored during inspection.” (Id. at
n.8.) Stirewalt concludes that although the relationship Jin infers may be an identification
relationship, it is not the one he is claiming, since he reverses the mandatory role in the relationship.
(Id. at 8.) This means that “the relationship defined using his inference does not use information
in the Midland database to identify letters returned to Midland as undeliverable. Rather, it uses
letters returned to Midland as undeliverable to identify information in the Midland database.” (Id.)
Therefore, Jin uses the absence of information to infer a result, and not the presence of particular
data to make an inference.
Stirewalt also takes issue with how the inspection was conducted, noting that Jin spent a
majority of the time “writing and debugging queries and comparably very little time testing and
looking at actual data.” (Id.) He contends that over the course of 3 days, they looked at fewer than
10 customer accounts, most of which turned out to be the “exception cases” Jin references. (Id.)
Though Jin asserts that an individual verification could easily rule out the exception cases, Stirewalt
states that he finds it troubling that “the small number of data points that he considered yielded such
a high percentage of exceptions.” (Id.) Stirewalt maintains that these exceptions completely
undermine any strength of Jin’s conviction that potentially 568,076 class members exist. (Id.)
Stirewalt concludes that this number has to be both under and over inclusive. (Id.) Jin does not
know how many people within his set of potential class members should not be a part of the
- 11 -

proposed class, what the characteristics are of these misidentified accounts, nor whether the MCM
database contains the information needed to refine his queries. (Stirewalt Supplemental Report at
3, ECF No. 153.) Based on Jin’s deposition testimony, Stirewalt understands Jin to be claiming that
the legal experts would determine what additional criteria could be used to refine the queries after
examining each of the accounts, and that the database must contain the details a legal expert would
need to determine if a member is a part of a proposed class. (Id. at 4.) However, Stirewalt states
that these legal experts would have no way of knowing that a forwarded DVL was mistakenly
classified as undeliverable. (Id.) Stirewalt interprets Jin’s conclusion that the database must contain
the necessary information as a “statement of faith,” rather than a reasoned conclusion. (Id.)
In addition, Stirewalt criticizes Jin’s deposition testimony that indicates that he did a random
sampling of the outputs of his queries in order to affirm his results. (Id. at 5; Jin Dep. at 107-08,
ECF No. 157-1.) Stirewalt contends that Jin has to know that he did not conduct a proper random
sampling. (Stirewalt Supplemental Report at 5, ECF No. 153.) Stirewalt states that “[r]andom
sampling does not mean just picking a few points from a very large population and then assuming
any property that holds over the small sample will hold over the population.” (Id.) Stirewalt
explains that how accurately a statistic represents an attribute of a population depends on the size
of the population, the size of the random sample, and the variance of the attribute in the population,
with small sample sizes and high variability adversely impacting the degree to which the statistic
accurately represents the attribute of interest in the population. (Id.)
Lastly, Stirewalt takes issue with the accounts used by Jin for illustrative purposes in his
expert report. (Id. at 4.) All of the accounts predate Plaintiff’s class period by several years.
Therefore, not even Jin’s examples are a part of the putative class.
- 12 -

3. Plaintiff’s Rebuttal to Defendants’ Conclusions
Plaintiff argues that Stirewalt’s opinion that the Midland database cannot “reliably identify”
the putative class is his only contention with Jin’s report, and that he largely agrees with Jin
otherwise. (Reply at 13, ECF No. 158.) Plaintiff contends that Stirewalt’s emphasis on reliability
is misplaced because the error affecting the reliability of Jin’s algorithm is human error, which is
present in any recording system in which persons are involved. (Id. at 15). Plaintiff then notes that
Stirewalt agreed, in his deposition, that without human error, Jin’s inference would be true. (Id.)
Plaintiff next contends that Stirewalt’s definition of “identify” is also misplaced, because it assumes
that 100% accuracy is needed to properly define the class. (Id. at 16) Plaintiff notes that Stirewalt
would, if tasked with finding as many class members as he could, have ended up with something
very similar to Jin’s algorithm. (Id.)
Jin states that it was not his responsibility to define or to develop a complete or final product
of the algorithm. However, from his investigation and development of his report, he states that he
has a “rather complete algorithm.” (Jin Dep. at 6, ECF No. 157-1.) Jin states that his algorithm
would still be good as it stands, even if there were 10,000, 50,000, or 500,000 “exception cases” as
he calls them, since he did not believe that there was a point at which the number of exceptions
would make the algorithm unreliable. (Id. at 65-67.) However, he does state that he does not
believe there would be that many exceptions. (Id.)
Plaintiff contends that these exception cases are people who meet the class definition, but
simply for some reason Midland would not have liability for, such as for the reasons indicated by
Jin: death or bankruptcy. (Resp. at 16, ECF No. 161.) Plaintiff also asserts that the exceptions are
cases where the second letters are not attempts to collect debts, which would mean they would need
- 13 -

to be excluded from the potential class Jin generated, but that Midland has all the letter history
information to exclude the individuals. (Reply at 18, ECF No. 158.) In addition to Defendants’
challenges regarding exception cases, Plaintiff also disputes the characterization by Defendants that
Jin thought that all of the accounts identified by his algorithm must be individually verified. (Resp.
at 17, ECF No. 161.) However, Defendants argue that it was Jin who brought up these “special
cases” that would need to be reconciled before he could fully identify class members, and that this
list was non-exhaustive, and would therefore require individualized inquiry. (Jin Report at 23-24,
ECF No. 145.)
Plaintiff disputes Defendants’ contention that based on Jin’s admissions, and Stirewalt’s
conclusions, Jin’s methodology for identifying class members results in both an over and under
inclusive result. Plaintiff argues that this “purported dilemma is small in scope,” like any other
class action where files are reviewed to determine which individuals meet the class definition. (Pl.’s
Reply at 17, ECF No. 158.) Plaintiff also maintains that because “Midland was deficient by not
specifically tracking the returned mail, it is possible to find some, but not all of the class members.”
(Id.)
Plaintiff concedes that Defendants are partially correct in regard to their claim that all of the
accounts provided for illustrative purposes predate the class period, noting that “Dr. Jin did not
specify that the results generated from the search queries be limited to the specific class period
stated.” (Resp. at 8.) Plaintiff contends this could be corrected though, since as Jin indicated, there
is “enough data in the Midland database that this list can be ‘filtered’ to limit it to a certain time
period, or to list only those accounts that were sent a specific form letter.” (Reply at 20, ECF No.
158.) Plaintiff indicates that some of the information needed for the accounts was not available to
- 14 -

Jin. (Id. at 22.) Midland routinely purges this information and it can only be recovered from
backup tapes. (Id.) Plaintiff states that “[a]dditional testing or refinement of the search queries and
the recovery of purged data from backup tapes was contemplated by Dr. Jin.” (Id.) Plaintiff further
states that Jin agrees the exact queries run during the inspection are not the final product. (Id. at 23.)
However, Plaintiff maintains that Jin has identified the information in the database which would
allow him to create the final algorithm.
4. The Court’s Hearing on Class Identification
On June 19, 2012, this court determined that a hearing would be needed to further clarify
some of the issues presented by parties’ briefs on class identification. The hearing was held on
September 17, 2012, and both parties’ experts presented testimony on the examination of MCM’s
databases and Jin’s algorithm.
At the hearing, Jin explained the methods detailed in his report, and further clarified that
MCM kept a variety of different codes for DVLs that could be used to narrow the class members
down to only those who had received a debt collection letter without first receiving a DVL. He
confirmed that his method, which uses the RTM1 and RTM2 codes to identify which DVLs were
returned to Midland, could be used to narrow which potential class members had subsequently been
sent a non-DVL letter in violation of the FDCPA. He confirmed that while his task was only to
determine whether such an identification procedure was possible, he was certain his methodology
could identify the class members as defined by Plaintiff. Jin testified that his method could be
adjusted to account for a narrower time period, different DVL codes created by Midland, letters not
violating the FDCPA, and exception cases like death and bankruptcy. He based this opinion on the
fact that Midland had codes for all of these potential exceptions to the class membership in their
- 15 -

databases or on tapes. Jin also confirmed that the vast majority (98%) of undeliverable letters were
coded as RTM2, that is, they posed no identification problems because they were not accompanied
by a new address. Jin further confirmed that he had based all of his prognosis about his methods
on what he had discovered in the databases. Finally, Jin estimated that it would take a few days to
perfect and calibrate the algorithm to extract the putative class from Midland’s databases. This
would include time to extract information contained on Midland’s tapes, as well as testing the
algorithm and debugging it.
Stirewalt testified that Jin’s algorithm had not yet been properly tested. He pointed to the
fact that the algorithm currently did not account for all the exception cases mentioned above. He
also testified that it had not been properly debugged. Stirewalt estimated that to properly test and
debug the algorithm would take about a month. Stirewalt then pointed to two main sources of error
which could undermine the class definition. First, he reiterated that there was no way to account
for mail handler error. However, he also acknowledged that if there was no operator error, Jin’s
inference would be true. Second, he pointed to the fact that both the postcards, as well as the
returned mail with a forwarding address, could not be differentiated using Jin’s algorithm.
Stirewalt acknowledged that the number of returned mail without any forwarding addresses was
overwhelmingly larger than any of the returned mail with forwarding addresses and postcards.
The court then asked the parties to address the issues related to the inability to differentiate
within the database between those who had not received a DVL (i.e., where the DVL was returned
to Midland with a forwarding address) and those who had been forwarded the DVL (i.e., where
Midland only received a postcard, or the information was contained within the CD/Tape given to
them by the USPS). Plaintiff acknowledged that it would be impossible to differentiate between
- 16 -

the two due to Midland’s record keeping procedures, but argued that this represented such a small
number of potential class members that it should have no effect on class certification. Defendant
agreed that due to this problem, the entire class could not be identified.
The court also asked the parties if there was any value or figure that could be used to
calibrate the algorithm to account for the operator errors. Stirewalt stated that he knew of a study
saying that where the error rate for enterprise databases is unknown, an error rate of 5% could be
expected. Jin stated that he thought a 5% error rate would be too high in this case because of the
simplicity of the mail sorting process at Midland. Jin felt an error rate of 1% would be more realistic
in this case. Jin also stated that a 5% error rate would not change his opinion about the reliability
of his algorithm.

II. LAW AND ANALYSIS
A. Legal Standards for Class Certification and Class Definition
Plaintiff seeks certification of the proposed class under Federal Rules of Civil Procedure
23(a) and 23(b)(3). A court must engage in a “rigorous analysis” of the plaintiff’s ability to meet
the requirements of Federal Rule of Civil Procedure 23(a) before certifying a class. Gen. Tel. Co.
v. Falcon, 457 U.S. 147, 161 (1982). To obtain class certification, Plaintiff bears the burden of
satisfying the requirements of Rule 23(a), commonly known as numerosity, commonality, typicality,
and adequacy of representation, and must demonstrate that the class fits under one of the three
subdivisions of Rule 23(b). Coleman v. GMAC, 296 F.3d 443, 446 (6th Cir. 2002). A district court
has broad discretion in determining whether to certify a class, within the dictates of Rule 23. Gulf

- 17 -

Oil Co. v. Bernard, 452 U.S. 89, 100 (1981); In re Am. Med. Sys., 75 F.3d 1069, 1079 (6th Cir. 1996).
Plaintiff seeks to certify the following class:
All persons and entities who were sent a notice from defendants,
between March 18, 2004, and November 30, 2006, alleging a debt
owed to a third party and seeking to collect that debt which notice
advised them of their right to dispute the validity of the debt within 30
days and/or request in writing that Defendants obtain verification of
the validity of the debt before continuing collection activities, which
same notice was returned in the mail to Defendants, which afterwards
the same persons and entities were subsequently mailed another notice
seeking to collect that debt and which subsequent notice did not advise
them of their right to dispute the validity of the debt within 30 days
and/or request that Defendants obtain verification of the validity of the
debt, which subsequent notice was not returned in the mail to
Defendants. Excluded from this Class are employees, officers,
directors, legal representatives, heirs, successors, and assignees of
Defendants.
(Pl.’s Second Renewed and Am. Mot. Class Certification at 7, ECF No. 155.)
Defendants contend that the threshold issue in light of the limited discovery previously
granted, is whether the computer databases contain a way to identify potential class members whose
undeliverable DVL was returned to Midland, rather than forwarded by the USPS. Defendants
maintain that whether Jin met this burden must be decided before consideration of Plaintiff’s
Second Renewed and Amended Class Certification Motion.
Although the Sixth Circuit has not expressly addressed the extent to which the individual
class members must be ascertainable prior to class certification, many other courts have this issue.
See, e.g., Crosby v. Soc. Sec. Admin., 796 F.2d 576, 580 (1st Cir. 1986); Bentley v. Honeywell Int’l,
Inc., 223 F.R.D. 471, 477 (S.D. Ohio 2004); Garrish v. United Auto., 149 F. Supp. 2d 326 (E.D.

- 18 -

Mich. 2001); see 7A Wright & Miller, Federal Practice and Procedure § 1760 at 134 (collecting
cases).4 As Wright and Miller explained,
Although not specifically mentioned in the rule, an essential
prerequisite of an action under Rule 23 is that there must be a
“class.”. . . .
In keeping with the liberal construction to be given the rule, it
has been held that the class does not have to be so ascertainable that
every potential member can be identified at the commencement of the
action. . . . If the general outlines of the membership of the class are
determinable at the outset of the litigation, a class will be deemed to
exist.
Nor is the fact that specific members may be added or dropped
during the course of the action important. However, the requirement
that there be a class will not be deemed satisfied unless the class
description is sufficiently definite so that it is administratively feasible
for the court to determine whether a particular individual is a member.
. . . Further, the class must not be defined so broadly that it
encompasses individuals who have little connection with the claim
being litigated; rather, it must be restricted to individuals who are
raising the same claims or defenses as the representative. The class
definition also cannot be too amorphous.
Id. at 134-47 (footnotes omitted) (emphasis added). Thus, the court finds that proper definition of
an ascertainable class is a prerequisite to class certification.
B. Ability to Identify the Class Members
At the outset, the court notes that, on class certification, only the ability to identify class
members is necessary; the actual names and addresses of class members are not necessary at this
time. “A class is properly identified so long as it is defined by objective criteria.” Saltzman v. Pella
Corp., 257 F.R.D. 471, 475 (N.D. Ill. 2009). “This criteria must make it administratively feasible
for the court to determine whether a particular individual is a class member.” Id. Defendants argue

4

The parties do not dispute that Plaintiff is a member of the proposed class.
- 19 -

that the proposed class is not sufficiently ascertainable because, due to the method by which
Midland maintained addresses and mail attempts, Midland’s computer system does not contain a
way to identify class members. Consequently, determining the eligibility of each potential class
member would require the court to address the central issue of liability and to conduct individual
factual inquiries at the class certification stage. Defendants further argue that Jin’s method for
identifying potential class members cannot exclude those persons whose DVLs were forwarded to
them by the USPS as they would be classified under the code RTM1. Defendants also argue that
the class is overinclusive because of those “exceptions” to the class that may appear in Jin’s current
algorithm, such as debtors who have died or become bankrupt.
Plaintiff argues that the class definition does not require the court to “undertake a factintensive inquiry to determine whether each potential class member had rebutted the presumption
of delivery of these validation letters by Midland. The evidence of non-delivery is already
documented in the Midland computer.” (Pl.’s Second Renewed and Am. Mot. Class Certification
at 24, ECF No. 155.) Plaintiff contends that the computer inspection demonstrates that the
information needed to rebut this presumption is available in Midland’s databases. (Pl.’s Reply at
27, ECF No. 158.) In addition, Plaintiff maintains that he does not need to prove that the second
letter, the non-DVL was received by the class member. The Mailbox Rule states that “proper and
timely mailing of a document raises a rebuttable presumption that it is received by the addressee.”
(Id.) (citing Mahon v. Credit Bureau of Placer Cnty., 171 F.3d 1197 (9th Cir. 1999)). Plaintiff
contends that if Midland has not marked a letter as being returned or having a new address, each
class member presumably received the letter. (Id.) Therefore, Plaintiff concludes an individualized
inquiry is unnecessary.
- 20 -

The court finds Plaintiff’s arguments to be well-taken. First, the court notes that the
Mailbox Rule would not pose a concern here because the algorithm could account for those DVLs
that were sent on or about the same time as other communications. Though Jin’s algorithm is not
complete at this point, he has persuasively testified that Midland’s record keeping of letters sent
would allow him to exclude those persons who had their first DVL returned but subsequently
received a DVL in the statutorily prescribed time frame. Jin explains that Midland’s letter-coding
system would be available to narrow the category of undeliverable mail returned to Midland
without a forwarding address. Those persons who had received a DVL by the statutorily prescribed
time could be identified using Midland’s codes for its various DVLs (e.g. LT1A). Stirewalt does
not dispute this. Therefore, the court finds that Defendant’s concern would not require an
individual inquiry as Jin’s algorithm could exclude from the class those persons who had still
received a DVL within the statutorily prescribed period.
Second, the class as proposed by Plaintiff is limited to those persons whose DVLs were
returned to Midland, and who subsequently received non-DVL letters in violation of the FDCPA.
Defendants argue that Jin’s methodology is questionable, citing as examples his lack of
consideration of exceptions and his small sampling size. Jin maintains that with further
development, his algorithm could take account of all the exceptions named by defendants. Debtors
who were dead or bankrupt at the time the letters were mailed have their own code in the Midland
databases, and could be excluded using those codes. Similarly, those potential class members who
were in fact sent DVL to the correct address could be excluded by using Midland’s own letter
codes, which distinguish DVL from non-DVL communications. The court finds Jin’s explanations
persuasive, and that he could further develop his algorithm to ensure these “exception” cases could
- 21 -

be eliminated from the putative class. While Jin did state that his algorithm could yield around
500,000 exceptions and still be correct, this was a theoretical argument. There is no reason to
believe that the actual class would contain anything close to this number of exceptions.
Finally, the court finds that the potential errors pointed to by Defendants are not enough to
disqualify Jin’s algorithm as a valid method of determining the members of the class. Defendants’
expert first argues that the algorithm cannot properly identify all members of the putative class
because of potential operator error during the scanning of the returned mail. However, the court
does not find this argument to be well-taken. The class does not need to be perfectly identified,
otherwise no class which involved potential human error could ever be created. Further, as
Defendant’s expert stated at the hearing on these motions that an industry standard might is
typically 5% where no rate of error has been measured. The court finds that this rate of error is not
enough to disqualify the entire class. Further, as Jin noted during the same hearing, the operator’s
task was so simple that the rate of error would likely have been closer to 1%. The only error that
could make the class overinclusive would be where the operator incorrectly marked a forwarded
letter as returned. As Jin details in his report, not only is this mistake very unlikely to occur due
to the mail sorting process at Midland, but the number of forwarded letters (represented by the
postcards) that could be misclassified is extremely small in comparison with the total number of
returned DVLs. Most forwarded mail would be present on the CDs/Tapes provided by the USPS,
allowing Jin’s algorithm to exclude such forwarded mail. Therefore, the court finds that the class
could still be definite enough, even accounting for human error, and that plaintiff has shown an
administratively feasible way to identify putative class members.

- 22 -

As for the postcards, which remain the most difficult point of contention between the
parties, the court agrees with the Plaintiffs that they represent such a small proportion of Jin’s
identification method that this should not disqualify the entire class of persons. Plaintiffs concede
that there is currently no way to separate the postcards from the returned mail with yellow stickers,
as those were both coded RTM1. Plaintiffs point out that the number of DVLs that yielded
postcards comprises only a tiny fraction of all of the RTM1 codes. Defendants argue that this
would still make the class overinclusive, and therefore should make Plaintiff’s class definition
invalid. The court does not find Defendant’s argument to be well-taken. A class does not need to
be defined to such a precise degree that any error in definition would make the class invalid.
Further, the court notes that Plaintiffs may choose to use Jin’s algorithm to find class members
based solely on the RTM2 codes (the DVLs returned without any forwarding address), while
finding the rest of the putative class members coded as RTM1 via notice. See Saltzman at 476
(citing In re Warfarin Sodium Antitrust Litig., 391 F.3d 516, 536-37 (3d Cir. 2004) (Where class
members were consumers of a prescription drug, and names and addresses of these consumers were
confidential and not available to parties, notice by publication combined with call center and
website was sufficient notice to identify class members; Macarz v. Transworld Sys., Inc., 201
F.R.D. 54, 59 (D.Conn. 2001) (notice by publication used where circumstances “make it
impracticable to gain the names and addresses of class members and notify them individually of
the action’s pendency”); Mirfaishi v. Fleet Mortg. Corp., 356 F.3d 781, 786 (7th Cir. 2004)
(Internet notice of settlement was acceptable substitute for individual notice where Defendant had
no record of part of a class of customers)). In either case, the court finds that Plaintiff has shown

- 23 -

his ability to define the class, and that the additional work required to perfect Jin’s algorithm should
not preclude class definition.
C. Rule 23 Requirements
1. Rule 23(a) Requirements
Plaintiff argues that “once identification of the class is shown to be feasible, the Rule 23
requirements for class certification are easily met.” (Pl.’s Second Renewed and Am. Mot. Class
Certification at 22, ECF No. 155.) Plaintiffs state that the numerosity requirement is met because
Jin’s report has identified over 500,000 potential class members. (Id. at 24). Further, because the
class definition is based on initial DVLs returned to Midland, there is “no need...for this Court to
undertake a fact-intensive inquiry to determine whether each potential class member has rebutted
the presumption of delivery” of the DVLs. (Id.) Plaintiffs argue that this also applies to the
commonality requirement, because “the claims of all potential class members are based upon the
identical conduct of Defendants.” (Id.) Plaintiffs further states that the typicality requirement is met
because all of the putative class members’ claims arise from Defendants’ failure to send a DVL
prior to attempting to collect a debt. (Id. at 27). Finally, Plaintiffs argue that Johnson is a more than
adequate representative for the class as he has no adverse interests to the class and is willing to
appear at depositions and assist counsel in the prosecution of the action.
Defendants contend that the Mailbox Rule would require several mini-trials to allow
Midland to rebut the presumption of the receipt of a non-DVL. (Def. Mot. in Opp. at 30, ECF No.
157.) Defendants argue that as a result, Plaintiff cannot meet its burden as to the commonality
requirement of Rule 23(a). Plaintiffs contend that Midland cannot rebut the presumption of

- 24 -

delivery of non-DVLs, and has not offered any method by which they might be able to do so. (Resp.
at 28, ECF No. 158)
The court finds Plaintiff’s arguments to be well-taken. The court notes that the legal
question in this case, whether class members received DVLs before receiving attempts to collect
debt in violation of the FDCPA, is a simple one. Defendants’ argument that the common law
Mailbox Rule would require individual inquiry is not well-taken because Plaintiffs do not dispute
presumption of delivery of non-DVL letters. In addition, Defendants have not shown how they
could rebut the presumption of delivery of their own letters. This would in effect amount to having
to prove a negative. Therefore, the court finds that Plaintiffs have shown that the commonality,
numerosity, and typicality requirements have been met as they all involve the relatively simple
question of whether class members received an attempt at debt collection before receiving a DVL.
The court also finds that Plaintiff Johnson is an adequate representative for the class, as the facts
in his case mirror the class definition.
2. Rule 23(b)(3) Requirements
Plaintiffs argue that the requirements of Rule 23(b)(3) are met because the common
questions of law and fact will predominate over any questions affecting only individual class
members, and because the class action is a superior vehicle in this case. (Pl.’s Second Renewed and
Am. Mot. Class Certification at 29, ECF No. 155.) Plaintiffs state that the issue of liability in this
case is narrow, and limited only to whether Midland violated its obligation to issue a DVL before
attempting to collect a debt. (Id. At 30). Plaintiffs then argue that the class action is the superior
vehicle in this case, as the amounts in controversy for each plaintiff would be small, and many
plaintiffs would be unaware of their rights under the FDCPA. (Id. at 32). Defendants again argue
- 25 -

that there are individual factual or legal issues that pertain to each putative class member’s receipt
of a second validation letter. (Def. Mot. in Opp. at 32, ECF No. 157.) Defendants argue that Jin’s
algorithm will have errors that will force the court to have to make individual determinations as to
the putative class members’ claims, making the class action an inferior vehicle. (Id. at 34).
The court finds Plaintiff’s arguments to be well-taken. The court has already determined
that Plaintiff has met his burden of showing that Jin’s algorithm can properly identify the class. The
issue of liability therefore remains quite simple, and does not demand individual inquiry. Rather,
the court find that the class action vehicle was exactly designed for this type of case, where there
is a large number of plaintiffs who present almost identical legal and factual issues.
Therefore, the court finds that Plaintiff has satisfied the requirements of Rules 23(a) and
23(b)(3). Accordingly, Plaintiff’s Second Renewed and Amended Class Certification Motion is
granted.
D. Jin’s Report
The parties disagree about whether Defendants’ computer system contains an
administratively feasible way to identify potential class members. The party offering expert
testimony bears the burden of proving its admissibility by a preponderance of the evidence.
Daubert v. Merrell Dow Pharms. Inc., 509 U.S. 579, 592 & n.10 (1993). Federal Rule of Evidence
702 outlines the basic standard for the admissibility of expert testimony:
[a] witness who is qualified as an expert by knowledge, skill,
experience, training, or education may testify in the form of an
opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge
will help the trier of fact to understand the evidence or to determine
a fact in issue;
- 26 -

(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods;
and
(d) the expert has reliably applied the principles and methods to the
facts of the case.
The Sixth Circuit has elaborated on this requirement by stating that, “[t]he relevance requirement
ensures that there is a ‘fit’ between the testimony and the issue to be resolved by the trial. The
reliability requirement is designed to focus on the methodology and principles underlying the
testimony.” Greenwell v. Boatwright, 184 F.3d 492, 496-97 (6th Cir. 1999) (internal citations
omitted). In analyzing any expert’s proposed testimony under this rule, the district judge performs
a gatekeeping function by considering the relevance and reliability of the expert testimony. See
Kumho Tire v. Carmichael, 526 U.S. 137, 147-48 (1999). A district court has “considerable
leeway” in how to determine the reliability of expert evidence in a particular case. Id. at 152, 158.
Under Daubert and Federal Rule of Evidence 702, “[a]n expert must offer good reason to
think that his approach produces an accurate estimate using professional methods, and that estimate
must be testable.” Durkin v. Equifax Check Services, Inc., 406 F.3d 410, 421 (7th Cir. 2005)
(internal citation omitted). Plaintiff asserts that the differences in Stirewalt’s and Jin’s opinions go
only to the weight of the evidence and should be resolved by the fact finder. Plaintiff relies on
Ruiz-Troche v. Pepsi Cola of P.R. Bottling Co.,161 F.3d 77, 85 (1st Cir. P.R. 1998), to support this
contention. The Ruiz-Troche court stated that “Daubert neither requires nor empowers trial courts
to determine which of several competing scientific theories has the best provenance. It demands
only that the proponent of the evidence show that the expert’s conclusion has been arrived at in a
scientifically sound and methodologically reliable fashion.” Id.

- 27 -

Plaintiff has demonstrated that Jin’s opinions and methodology are reliable. As Plaintiff
points out in his briefs, Jin was not asked to develop a complete algorithm. Instead, he was tasked
with examining Midland’s databases to see if a method for selecting the putative class existed based
on the databases. Defendants make much of the alleged deficiencies in Jin’s methodology.
However, aside from human error, defendants point to no other factors that would make Jin’s
algorithm unsuitable to identify to putative class. Plaintiffs have shown that Jin’s method can be
adapted to exclude “exceptions,” and that his algorithm can be further refined to properly identify
the class as explained in part E above and as discussed herein. While the parties disagree on how
long it would take to refine it, they agree that the algorithm could be refined to exclude the nonDVL recipients and other exceptions. Jin has also shown that the complete algorithm could be
developed in a reasonable period of time. Even if Defendant’s expert is correct in saying that it
would take a month to develop the algorithm, the court finds that this is a reasonable period of time.
Plaintiff also contends that Daubert does not require an expert to come in and actually
perform any test, and therefore any argument that Jin did not do enough testing should not be proof
that he is not a proper expert in this case. (Pl. Resp. at 21, ECF No. 161) (citing Kamp v. FMC
Corp., 241 F. Supp.2d 760, 768 (E.D. Mich 2002)). On these points, Plaintiff is correct. Plaintiff
has shown that Jin’s conclusion was arrived at in a scientifically sound and methodologically
reliable fashion based on the testing he conducted. As the proponent of expert testimony, it is
Plaintiff’s burden to prove that he has met the requirements of Federal Rule of Evidence 702 and
Daubert. Plaintiff has met his burden. Jin has provided the court with good reason to think his
approach is accurate. He has clarified that the potential exceptions to the class could easily be
removed from the defined class using Midland’s own codes. Though Jin’s algorithm is not
- 28 -

complete at this point, he has explained all of the steps required to properly test the algorithm,
including testing for bugs in the code, excluding potential exceptions by using Midland’s other
database codes, and narrowing the category to only those members how received a debt collection
letter without first receiving a DVL. Therefore, Jin has shown his method to be both testable, and
to produce an accurate estimate of the putative class members. Durkin at 421. While Jin
acknowledges that there may be some operator error affecting the final class determination, this is
not enough to exclude Jin’s testimony as unreliable, as some operator error would be inevitable in
any such recording system. The court finds that, because Jin’s methodology is reliable, his
testimony should not be excluded. Accordingly, Defendants’ Motion to Exclude the Opinions and
Testimony of Ruoming Jin (ECF No. 159) is denied.
D. Plaintiff’s Other Motions
In addition to the motions decided above, Plaintiff also filed Motion for Hearing on
Defendants' Motion to Exclude the Opinions and Testimony of Ruoming Jin (ECF No. 164),
Motion for Conference/Hearing (ECF No. 167). In light of the court’s hearing on these matters,
Plaintiff’s motions are granted. Plaintiff also filed an Motion for Extension of Time to Reply to
Defendant’s Response (ECF No. 172), and a Motion for Appointment of Special Master (ECF No.
177) which are denied as moot.
III. CONCLUSION
For the foregoing reasons, Plaintiff’s Second Renewed and Amended Class Certification
Motion (ECF No. 155) is granted, and Defendant’s Motion to Exclude the Opinions and Testimony
of Ruoming Jin (ECF No. 159) is denied. As a result of the hearing held by the court, Plaintiff’s
Motion for Hearing on Defendants' Motion to Exclude the Opinions and Testimony of Ruoming
- 29 -

Jin and Plaintiff’s Motion for Conference/Hearing (ECF Nos. 164, 167) are granted. Plaintiff’s
Motion for Extension of Time and Plaintiff’s Motion for Appointment of Special Master are denied
(ECF Nos. 172, 177) as moot.
IT IS SO ORDERED.

/s/ SOLOMON OLIVER, JR.
CHIEF JUDGE
UNITED STATES DISTRICT COURT

November 29, 2012

- 30 -