McCurdy v. Professional Credit Service

Filing 37

OPINION and ORDER: Granting Motion to Certify the Class 28 . See formal order for class certified. Plaintiff Jennifer McCurdy is appointed as Class Representative; Greenwald Davidson is appointed as Class Counsel. Signed on 10/3/2016 by Judge Ann L. Aiken. (cw) (Main Document 37 replaced on 10/4/2016) (cw). Modified on 10/5/2016, to add opinion to docket text (cw).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
EUGENE DIVISION
JENNIFER MCCURDY, on behalf of
herself and others similarly situated,
Plaintiff,
vs.
PROFESSIONAL CREDIT SERVICE,
Defendant.

James L. Davidson
Greenwald Davidson Rabdil PLLC
5550 Glades Road, Suite 500
Boca Raton, FL 33431
Kenneth P. Dobson
Attorney at Law
324 S.W. Abernethy Street
Portland, OR 97239
Attorneys for plaintiff
Timothy J. Fransen
Robert E. Sabido
Cosgrave Vergeer Kester, LLP
500 Pioneer Tower
888 S.W. Fifth Avenue
Portland, OR 97204

No. 6:15-cv-01498-AA
OPINION AND ORDER

Wade C. Isbell
Ray Klein, Inc. dba Professional Credit Service
P.O. Box 7637
Springfield, OR 97475
Attorneys for defendant
AIKEN, Judge:
Plaintiff Jennifer McCurdy ("McCurdy") received a debt collection letter from defendant
Professional Credit Service. The letter contained a section describing the statutory right to dispute
the debt within thirty days.

That section concluded with the following sentence (hereafter,

"additional language"):
If you dispute any account referenced in this letter, please send all information
regarding the dispute to P.O. Box 70127, Springfield, OR 97475.

Compl.

~

18 & Ex. A.

Under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq., there
is no requirement to submit documentation to dispute a debt- indeed, the "plain language" of the
law permits consumers to dispute debts orally. Camacho v. Bridgeport Fin. Inc., 430 F.3d 1078,
1082 (9th Cir. 2005). In October 2015, this Court held the additional language violated two
provisions of the FDCPA because it would lead the least sophisticated consumer to believe she could
not dispute a debt unless she submitted written documentation regarding the dispute. 1 See McCurdy
1

The Court reached this conclusion in an opinion and order denying defendant's motion
to dismiss for failure to state a claim. The Ninth Circuit uses the "least sophisticated consumer"
standard when analyzing purported violations of § 1692e and § 1692g(b). Guerrero v. RJM
Acquisitions LLC, 499 F.3d 926, 934 (9th Cir. 2007). This is an objective standard applied as a
matter oflaw. Terran v. Kaplan, 109 F.3d 1428, 1432 (9th Cir. 1997); Anderson v. Credit
Collection Serv., Inc., 322 F. Supp. 2d 1094, 1096 (S.D. Cal. 2004) ("In the 9th Circuit, the court
- and not the jury - determines whether a particular collection letter violates the FDCPA.").
Because this case is exclusively about the contents of a single letter, there are no relevant
disputed facts. Accordingly, the denial of defendant's motion to dismiss established defendant's
liability.
2 - OPINION AND ORDER

v. Prof Credit Serv., 2015 WL 6744269 at *3-*4 (D. Or. Oct. 30, 2015) (additional language

violated FDCPA because it "overshadow[ed] or [was] inconsistent with the consumer's right to
dispute the debt," in violation of 15 U.S.C. § 1692g(b), and was a "false, deceptive, or misleading"
representation made in an attempt to collect a debt, in violation of 15 U.S.C. § 1692e(10)).
Before the Court now is plaintiffs Motion for Class Certification and Appointment of Class
Counsel. For the reasons set forth below, plaintiffs motion is granted.
STANDARDS
"The class action is an exception to the usual rule that litigation is conducted by and on
behalf of the individual named parties only." Wal-Mart Stores, Inc. v. Dukes, 569 U.S. 338, 348
(2011) (citation and quotation marks omitted). "In order to justify a departure from that rule, a class
representative must be part of the class and possess the same interest and suffer the same injury as
the class members." Id. (citation and quotation marks omitted).
"Class certification is proper if plaintiffs show that they meet the requirements of Fed. R.
Civ. P. 23(a) and also come within one of the provisions of 23(b)." Wilcox Dev. Co. v. First
Interstate Bank of Or., NA., 97 F.R.D. 440, 443 (D. Or. 1983). The plaintiff bears the burden of

establishing the requirements of Rule 23 are met. Zinser v. Accufix Research Inst., Inc., 253 F.3d
1180, 1186 (9th Cir. 2001). "A class may only be certified if [the court] is satisfied, after a rigorous
analysis, that the prerequisites of Rule 23(a) have been satisfied." Hanon v. Dataproducts Corp.,
976 F .2d 497, 509 (9th Cir. 1992) (citations and quotation marks omitted). As such, "district courts
[have] broad discretion to determine whether a class should be certified, and to revisit that
certification throughout the legal proceedings." Armstrong v. Davis, 275 F.3d 849, 871 n.28 (9th
Cir. 2001), abrogated on other grounds, Johnson v. California, 543 U.S. 499, 504-05 (2005).
3 - OPINION AND ORDER

Under Rule 23(a), the plaintiff must demonstrate:
(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). Under Rule 23(b), the plaintiff must also prove, in relevant part, that
"questions of law or fact common to class members predominate over any questions affecting only
individual members, and that a class action is superior to other available methods for fairly and
efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3).
DISCUSSION
Plaintiff seeks to certify the following class:
(a) All persons with an address within the United States, (b) to whom Professional
Credit Service sent an initial written communication between April 1, 2015 and April
30, 2015, (c) that stated: "If you dispute any account referenced in this letter, please
send all information regarding the dispute to P.O. Box 70127, Springfield, OR
97475," (d) in connection with the collection of a consumer debt.
Pl.' s Mot. Class Cert. 2.
Defendant opposes certification on two grounds. First, defendant challenges plaintiffs
fitness to serve as a class representative under Federal Rule of Civil Procedure 23(a)(4). Second,
defendant argues the proposed class does not meet the "superiority" requirement of Federal Rule of
Civil Procedure 23(b)(3) because the limitation to individuals who received letters in April 2015
creates an arbitrary sub-class and opens the door to serial class actions. I first address defendant's
arguments, and then assess whether the proposed class meets the remaining requirements of Rule
23. 2
For the purpos~s of the motion for class certification, defendant concedes numerosity,
commonality, and typicality, and does not contest the adequacy of class counsel. Def.'s Opp.
2

4 - OPINION AND ORDER

I.

Adequacy of McCurdy as Class Representative
Under Fed. R. Civ. P. 23(a), "the representative parties [must] fairly and adequately protect

the interests of the class." Fed. R. Civ. P. 23(a)(4). A plaintiff is an adequate class representative
if (1) neither she nor her counsel has any conflicts of interest with other class members and (2) she
and her counsel will prosecute the action vigorously on behalf of the class. Evon v. Law Offices of

Sidney Mickell, 688 F.3d 1015, 1031 (9th Cir. 2012). Defendant argues McCurdy is not an adequate
class representative because never disputed the debt or intended to dispute the debt. Relatedly, they
characterize this lawsuit as a bad-faith attempt to avoid paying a debt she owes.
Whether McCurdy owed the debt defendant was attempting to collect has no bearing on this
lawsuit or on her fitness to serve as a class representative. First, validity of the underlying debt does
not affect a debt collector's liability for violations of the FDCPA. See McGuire v. Credit Coll. Serv.

Commercial, 2016 WL 3676108, *2 (D. Hawaii Jul. 7, 2016) (elements ofa claim under the FDCPA
are: (1) the plaintiff is a "consumer" within the meaning of the statute, (2) the debt arises out of a
transaction entered into for personal purposes; (3) the defendant is a "debt collector" within the
meaning of the statute, and (4) the defendant violated a provision of the FDCPA). Nor is the validity
ofthe underlying debt a factor in determining statutory damages, which are the primary form of relief
requested in this case. In setting statutory damages in a class action, the FDCPA directs the court

Mot. Class Cert. 4 n.1. Nonetheless, I must address each certification factor because federal
courts have an independent obligation to determine whether a class action is may be maintained.
See Fed. R. Civ. P. 23(a) (class action may be maintained "only if' numerosity, commonality,
typicality, and adequacy are satisfied); Fed. R. Civ. P. 23(c) ("At an early practicable time after a
person sues or is sued as a class representative, the court must determine by order whether to
certify the action as a class action."); cf Gibson v. Local 40, Supercargoes & Checkers ofInt'!
Longshoremen's & Warehousemen's Union, 543 F.2d 1259, 1263 (9th Cir. 1976) (when the
complaint makes clear plaintiffs seek to maintain a suit as a class action, court is obliged to rule
on class certification even when plaintiffs make no request for such a ruling).
5 - OPINION AND ORDER

to consider "the frequency and persistence of noncompliance by the debt collector, the nature of such
noncompliance, the resources of the debt collector, the number of persons adversely affected, and
the extent to which the debt collector's noncompliance was intentional." 15 U.S.C. § 1692k(b)(2).
The validity of the underlying debt is simply not relevant except to the extent it shows bad faith on
the part of the debt collector- for example, if the debt collector has a history of sending collection
letters on accounts it knows are stale. See Daile Jimenez, Dirty Debts Sold Dirt Cheap, 52 Harv. J.
on Legis. 41, 76-78 (2015) (describing the interplay between state statutes of limitations, debt
collection activity, and the FDCPA).
IfMcCurdy had filed this lawsuit in a bad-faith attempt to evade paying her debt, that might
influence the adequacy analysis. But defendants have put forth no evidence of bad faith. I decline
to question McCurdy' s motives and adequacy as a class representative on the basis of an unsupported
accusation.
In a declaration accompanying her Motion for Class Certification and Appointment of Class
Counsel, McCurdy states it is "important to [her] that debt collectors like Professional Credit Service
operate in a fair and legal manner when trying to collect debts and provide correct information to
consumers when collecting debts." McCurdy Deel.~ 4 (Pl.' s Mot. Class Cert. Ex. B). She avers she
has been "actively involved" in the case since it was filed and is "committed to protecting the
interests of the class members." Id. Finally, McCurdy has obtained the representation of counsel
with experience litigating both similar FDCPA class actions and consumer protection class actions
generally. I conclude McCurdy's interests are aligned with the other class members', neither
McCurdy nor her counsel has any apparent conflict of interest with other class members, and
McCurdy and her counsel will prosecute this action vigorously on behalf of the class. I further
6 - OPINION AND ORDER

conclude Greenwald Davidson Radbil PLLC's work in this case and experience litigating similar
cases qualify it to be appointed as class counsel pursuant to Federal Rule of Civil Procedure 23(g)( 1).

IL

Superiority of Class Action
Rule 23 (b)(3) requires a district court to determine whether "a class action is superior to other

available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3 ).
"[T]he purpose of the superiority requirement is to assure that the class action is the most efficient
and effective means of resol[ution]." Wolin v. Jaguar Land Rover N Am., LLC, 617 F.3d 1168,
1175 (9th Cir. 2010) (citation and internal quotation marks omitted). "The superiority inquiry under
Rule 23(b)(3) requires determination of whether the objectives of the particular class action
procedure will be achieved in the particular case," which "necessarily involves a comparative
evaluation of alternative mechanisms of dispute resolution." Hanlon v. Chrysler Corp., 150 F .3d
1011, 1023 (9th Cir. 1998) (citation omitted).
Plaintiff originally pleaded a broader class than the one she now seeks to certify: rather than
seeking to represent individuals who received a letter containing the additional language in April
2015, she sought to represent individuals who received such a letter in the year preceding the filing
of the complaint. Compl. ii 27. That broader class corresponded with the FDCPA's one-year statute
of limitations. See 15 U.S.C. § 1692k(d). In discovery, plaintiff learned defendant sent letters with
the additional language to approximately 234,000 individuals during the relevant one-year period.
Pl.' s Mot. Class Cert. Ex. A at 4. In April 2015, defendant send the letters to 17 ,446 individuals.

Id
Plaintiff decided to narrow the class because of the FDCPA's provision on statutory damages
in class actions. The law caps statutory damages at the lesser of one percent of a debt collector's net

7 - OPINION AND ORDER

worth or $500,000. 15 U.S.C. § 1692k(a)(2)(B). The larger the class, therefore, the smaller each
individual class member's potential recovery. See id § 1692k(a)(2)(A) (permitting statutory
damages of up to $1,000 in an individual action).

Plaintiff also points to the increased

administrative, notice, and other costs associated with a larger class.
Defendant's challenge to plaintiffs proposed class also arises from the statutory damages
provision. Defendant argues certification of a smaller sub-class will open the door to a series of class
actions, thereby undermining one of the purposes of Rule 23 - avoiding "needless multiplicity of
actions." Crown, Cork & Seal Co., Inc. v. Parker, 462 U.S. 345, 351 (1983). Moreover, defendant
contends certification ofnumerous sub-classes would permit an end-run around Congress's statutory
damages cap.
Neither the Ninth Circuit nor this Court has considered the interplay of Rule 23(b)(3)'s
superiority requirement and the FDCPA's statutory damages cap. In Mace v. Van Ru Credit Corp.,
109 F.3d 338, 341 (7th Cir. 1997), however, the Seventh Circuit had to decide "whether the FDCPA
authorizes state-wide (in contrast to nation-wide) class actions." The district court had declined to
certify a statewide class, reasoning that "allowing state-by-state suits to proceed would nullify the
damage cap." Id at 342. The Seventh Circuit rejected that argument. It noted that other statutes,
including the Truth in Lending Act ("TILA"), expressly apply the statutory damages cap to "any
class action or series ofclass actions arising out of the same failure to comply by the same creditor."
Id (citing 15 U.S.C. § 1640(a)(2)(B)) (emphasis added). The court noted TILA's "reference to a
'series of class actions' is conspicuously absent from the FDCPA." Id The court also explained the
different purposes ofTILA and the FDCPA, positing that those differences might explain Congress's
inclusion of the "series of class actions" limitation in TILA but not in the FDCPA. Id at 343.
8 - OPINION AND ORDER

I

Because the plain text of the FDCPA does not preclude multiple class actions, the court concluded
statewide classes were permissible. Id at 344.
In dicta, the Seventh Circuit addressed precisely the argument advanced by defendants here:
The defendants, however, advance a policy argument, from which the district
court constructed a requirement for a nation-wide class. The district court reasoned
that, ifthe damage cap of$500,000 can be applied anew to a series of state-wide (or
otherwise limited) class actions, the damage limitation would become meaningless.
This contention may be correct as far as it goes, although there is, of course, no way
of telling whether such repeated class actions are possible or likely, here or generally.
The other side of the coin is that to require a nation-wide class as the district court
did here brings with it other problems that will be discussed later. There are other
possible problems with the district court's reasoning. The FDCPA has a short, oneyear statute oflimitations making multiple lawsuits more difficult. Further, if a debt
collector is sued in one state, but continues to violate the statute in another, it ought
to be possible to challenge such continuing violations. Given the uncertainty of those
policy considerations, there is no compelling reason to ignore the plain words of the
statute. In any event, the case before us does not now present multiple or serial class
actions to recover for the same misconduct. Hence, it would be premature to require
a nation-wide class at this juncture. If and when multiple serial class actions are
presented, it will be time enough to rule on such a pattern. At this point, there is no
persuasive reason to require a nation-wide class.

Mace v. Van Ru Credit Corp., 109 F.3d 338, 343-44 (7th Cir. 1997).
Debt collectors have made the same policy argument in a handful of district court cases, with
mixed results. Compare Guevarra v. Progressive Fin. Servs., Inc., 2006 WL 3613 742, *3 (N .D. Cal.
Nov. 30, 2006) (denying certification of a creditor-specific class due to concerns about multiple
lawsuits, fairness, efficiency, and collusion among attorneys to "divide up the class between IKEA
and non-IKEA creditors") and Campos v. W Dental Servs., Inc., 404 F. Supp. 2d 1164, 1172-73
(N .D. Cal. 2005) (declining to certify a class limited to individuals residing in a particular California

county because to do so would "lead to piecemeal litigation," a result "inconsistent with the policy
behind both the FDCPA and class actions") with Macarz v. Transworld Sys., Inc., 193 F.R.D. 46,

9 - OPINION AND ORDER

56 (D. Conn. 2000) (stating it would be improper to decline certification "simply because plaintiff
seeks to limit the class to a specific geographic area") and Avila v. Van Ru Credit Corp., 1995 WL
41425, *4 (N.D. Ill. Jan. 31, 1995) (refusing to consider policy arguments about the statutory
damages cap because "[t]he FDCPA civil liability provision is clear and unambiguous" and "allows
statutory damages to be imposed in a series of class actions").
I am persuaded by the Seventh Circuit's reasoning in Mace. In a situation actually involving
multiple lawsuits based on the same underlying conduct, that multiplicity would be an appropriate
factor to consider in evaluating superiority -

indeed, the Federal Rules expressly direct

consideration of any related, ongoing litigation in the superiority analysis. 3 Fed. R. Civ. P.
23(b)(3)(B). But I will not deny certification based on the mere possibility another class action will
be filed.
Rule 23 asks a court to consider whether "a class action" is superior to "other available
methods" for fairly and efficiently adjudicating the controversy. Per the plain text of the rule, the
relevant comparison is not between the proposed class action and other, hypothetical class actions;
it is between a class action and other methods, i.e. non-class methods, taking into account "the class
members' interest individually controlling" separate actions, "the extent and nature of any litigation
concerning the controversy already begun by or against class members," "the desirability ... of
concentrating the litigation" in a particular form, and "the likely difficulties in managing a class

3

Multiplicity of lawsuits likely would affect not only the class certification analysis but
also the calculation of any statutory damages award under the FDCPA. See Avila, 1995 WL
41425 at *3 n.1 ("It is questionable whether courts will repeatedly impose large measures of
statutory damages for the same failure to comply with a provision of the FDCPA. ... [T]he
statutory damages provision [of the FDCPA] operates not to make the plaintiffs whole (that is the
domain of actual damages), but rather to impose a fine or penalty on the defendant in order to
deter future violations (because actual damages in consumer actions will be difficult to prove).")
10 - OPINION AND ORDER

action." Fed. R. Civ. P. 23(b)(3)(A)-(D). It is clear a class action is the superior vehicle in view of
these considerations. This is a case based solely on the text of identical letters, and in which
individual damages for a given class member likely would be quite low, so class members have a
limited interest in controlling individual actions. The parties have identified no ongoing, related
litigation. Because of the nature of the claim, it does not appear any particular forum would be the
best place to concentrate the litigation -

which means this Court is as good a forum as any. And

any difficulties managing the class action are far outweighed by the difficulties that would be
involved in overseeing even a fraction of the 17,446 potential class members' individual lawsuits.

See Avila, 1995 WL 41425 at *7 ("[A] class action remedy for vindicating the rights of thousands
of consumers is a more efficient use of judicial resources than forcing those consumers to each file
individual actions for statutory damages and assert offensive collateral estoppel to establish liablity
against [the debt collector].") A class action is the superior vehicle for adjudicating the class
members' claims.
III.

Remaining Factors
This case also satisfies the remaining requirements of Rule 23(a) and Rule 23(b)(3). First,

the proposed class must be "so numerous that joinder of all members is impractical." Fed. R. Civ.
P. 23(a)(l). The proposed class here, with its more than 17,000 members, easily satisfies this
requirement. See Wilcox, 97 F.R.D. at 443 .("[A]s a rough rule of thumb, approximately forty
members is sufficient to satisfy the numerosity requirement.") Second, there must be "questions of
law or fact common to the class." Fed. R. Civ. P. 23(a)(2). Here, commonality is satisfied because
each member of the proposed class received a letter containing the additional language. Third, "the
claims or defenses of the representative parties [must be] typical of the claims or defenses of the
11 - OPINION AND ORDER

class." Fed. R. Civ. P. 23(a)(3). The allegations

ofthe complaint concern only the additional

language. Accordingly, the typicality requirement is satisfied. Finally, "questions or law or fact
common to class members [must] predominate over any questions affecting only individual
members." Fed. R. Civ. P. 23(b)(3). Here, it appears there are two main questions oflaw or fact:
(1) did the additional language violate the FDCPA? and (2) what level of statutory damages is
appropriate? Predominance is satisfied because both questions are common to the class.
CONCLUSION

Plaintiffs Motion for Class Certification and Appoint of Class Counsel (doc. 28) is
GRANTED as follows:
1. The following class is certified:
(a) All persons with an address within the United States, (b) to whom Professional
Credit Service sent an initial written communication between April 1, 2015 and April
30, 2015, (c) that stated: "If you dispute any account referenced in this letter, please
send all information regarding the dispute to P.O. Box 70127, Springfield, OR
97475," (d) in connection with the collection of a consumer debt;
2. Plaintiff Jennifer McCurdy is appointed as Class Representative; and
3. Greenwald Davidson Radbil PLLC is appointed as Class Counsel.
IT IS SO ORDERED.
Dated this

eP Septetfi5'er 2016.
l1.. day of CVob.t~

AnnAiken
United States District Judge

12 - OPINION AND ORDER