Johnson v. Ally Financial Inc.
MEMORANDUM (Order to follow as separate docket entry) re: 17 MOTION to Strike filed by Ally Financial Inc. (See order for complete details.)Signed by Chief Judge Christopher C. Conner on 8/10/17. (ki)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ALLY FINANCIAL INC.,
CIVIL ACTION NO. 1:16-CV-1100
(Chief Judge Conner)
Plaintiff Jayla Johnson (“Johnson”) commenced this action against
defendant Ally Financial Inc. (“Ally Financial”) under the Telephone Consumer
Protection Act, 47 U.S.C. § 227. Before the court is Ally Financial‟s motion (Doc. 17)
to strike the class allegations in Johnson‟s amended complaint. (Doc. 12). For the
reasons that follow, the court will deny the motion.
Factual Background & Procedural History
Ally Financial is a debt collection company. (Doc. 12 ¶¶ 1, 5). Johnson
contends that Ally Financial called her cell phone number at least 34 times to
collect a consumer debt she never incurred. (Id. ¶¶ 16-17). When Johnson
answered Ally Financial‟s calls, its representatives asked to speak with “William”
instead of Johnson. (Id. ¶ 23). Johnson consistently told Ally Financial that it had
called the incorrect party and asked representatives to stop calling her, but Ally
Financial ostensibly persisted in its pursuit of Johnson‟s purported debt. (Id. ¶ 27).
Johnson never granted Ally Financial consent to call her cell phone number. (Id.
Johnson initiated this action with the filing of a complaint on June 9, 2016.
(Doc. 1). She filed an amended complaint on August 8, 2016. (Doc. 12). Johnson‟s
amended complaint contains class action allegations. (Id. ¶¶ 34-50). She avers that
Ally Financial violated the Telephone Consumer Protection Act when it contacted
putative class members‟ cell phone numbers using an automatic telephone dialing
system and/or an artificial or prerecorded voice without the members‟ prior express
consent. (Id. ¶¶ 34, 36).
Johnson‟s proposed class contains two subclasses, to wit: an autodialer
subclass and a wrong number subclass. (Id. ¶ 34). The autodialer subclass consists
of all persons in the United States who received a call from Ally Financial with the
aid of an automatic telephone dialing system when Ally Financial‟s business records
do not indicate it received prior express consent. (Id.) The wrong number subclass
includes all individuals in the United States whose phone numbers Ally Financial
dialed more than once using an automated telephone dialing system when it had
intended to call a different person. (Id.) Johnson advances two claims in her
complaint, viz.: standard violations of the Telephone Consumer Protection Act
(Count 1) and knowing or willful violations of the Act (Count 2). (Id. ¶¶ 51-60).
Under Federal Rule of Civil Procedure 12(f), the court may strike from a
pleading “any redundant, immaterial, impertinent, or scandalous matter.” FED. R.
CIV. P. 12(f). District courts have “considerable discretion” in resolving a Rule 12(f)
motion. Krisa v. Equitable Life Assurance Soc‟y, 109 F. Supp. 2d 316, 319 (M.D. Pa.
2000) (quoting N. Penn. Transfer, Inc. v. Victaulic Co. of Am., 859 F. Supp. 154, 158
(E.D. Pa. 1994)). In general, such a motion will be denied unless the allegations are
severely prejudicial to one of the parties and unrelated to the plaintiff‟s claims. Id.;
see also 5C CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE & PROCEDURE § 1382
(3d ed. 2016). A party is prejudiced when the challenged pleading “confuses the
issues” or places an undue burden on the responding party. Karpov v. Karpov, 307
F.R.D. 345, 348 (D. Del. 2015).
Ally Financial contends that the court should strike Johnson‟s class
allegations from her amended complaint because her proposed subclasses are
prima facie uncertifiable. (Doc. 18 at 1-2). As a threshold matter, Johnson disputes
whether the court may strike class allegations in this procedural posture. (See Doc.
29 at 2-4). Johnson alternatively asserts that both subclasses are facially certifiable
and satisfy the requirements of Federal Rules of Civil Procedure 23(a), 23(b)(2), and
23(b)(3). (See Doc. 29 at 7-10; Doc. 12 ¶ 34). The court will consider each argument
Propriety of Motion to Strike
Johnson argues that Ally Financial‟s motion to strike is an improper
procedural device and that the court cannot consider arguments concerning class
qualifications until Johnson submits a motion for class certification. (Doc. 29 at
2-4). Courts grant motions to strike “to clean up the pleadings, streamline litigation,
and avoid unnecessary forays into immaterial matters.” Wirt v. Bon-Ton Stores,
Inc., 134 F. Supp. 3d. 852, 857 (M.D. Pa. 2015) (quoting Goode v. LexisNexis Risk
& Info. Analytics Grp., 284 F.R.D. 238, 243 (E.D. Pa. 2012)). However, striking class
allegations is a “drastic remedy to be used sparingly because of the difficulty of
deciding a case without a factual record.” Id. (quoting Dann v. Lincoln Nat. Corp.,
274 F.R.D. 139, 142-43 (E.D. Pa. 2011)).
The United States Court of Appeals for the Third Circuit counsels against
striking class allegations if discovery may reveal a certifiable class. See Landsman
& Funk PC v. Skinder-Strauss Assocs., 640 F.3d 72, 93-94 (3d Cir. 2011) (quoting
Weiss v. Regal Collections, 385 F.3d 337, 347-48 & n.17 (3d Cir. 2004)), opinion
reinstated in part, No. 09-3105, 2012 WL 2052685 (3d Cir. Apr. 17, 2012). The Third
Circuit has nevertheless noted that there are a “rare few” instances in which “the
complaint itself demonstrates that the requirements for maintaining a class action
cannot be met.” Id. at 93 n.30 (citing Rios v. State Farm Fire & Cas. Co., 469 F.
Supp. 2d 727, 740 (S.D. Iowa 2007)). The court concludes that Ally Financial‟s
motion is not an improper litigation device per se and that we may consider the
merits of Ally Financial‟s motion to strike.
Ally Financial contends that the court should strike Johnson‟s allegations
regarding the proposed autodialer subclass because the class is defined through
the lens of consent. (Doc. 18 at 12-14). The description of the subclass adopts a
legal element of the Telephone Consumer Protection Act. (Id.) Such a subclass,
according to Ally Financial, is facially uncertifiable because it is defined without
reference to factual, objective criteria. (Id.) Ally Financial argues that the court
would need to adjudicate each individual subclass member‟s claim on the merits
to determine membership, rendering the subclass impermissibly “fail-safe.” (Id.
Johnson remonstrates that the proposed autodialer subclass is not fail-safe.
(Doc. 29 at 5-6). Her subclass specifically limits its members to those consumers
who received calls from Ally Financial with the aid of an autodialer. (Doc. 12 ¶ 34).
The proposed subclass further limits membership to those who Ally Financial
called without prior express consent. (Id.) Johnson intends to test members‟ claims
using Ally Financial‟s business records. (Id.) Johnson posits that these records
constitute objective criteria which provide a mechanism for the court to identify
subclass members. (Doc. 29 at 6-7).
A fail-safe class bases its membership upon the validity of putative members‟
legal claims. Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir.
2012). Fail-safe classes are not ascertainable until the end of litigation, as a finding
of liability is a necessary condition for membership in the class. See, e.g., Zarichny
v. Complete Payment Recovery Servs., Inc., 80 F. Supp. 3d 610, 623-24 (E.D. Pa.
2015) (citing Slapikas v. First Am. Title Ins. Co., 250 F.R.D. 232, 250-51 (W.D. Pa.
2008)). The Third Circuit has not explicitly considered whether fail-safe classes
are permissible, but has cited approvingly to cases in other circuits that have
categorically disallowed fail-safe classes. See Byrd v. Aaron‟s Inc., 784 F.3d 154,
167 (3d Cir. 2015) (quoting In re Nexium Antitrust Litig., 777 F.3d 9, 22 (1st Cir.
2015); Messner, 669 F.3d at 825). Two recent decisions in the Eastern District of
Pennsylvania conclude that fail-safe classes are not certifiable. See O.P. Schuman
& Sons, Inc. v. DJM Advisory Grp., LLC, No. 16-3563, 2017 WL 634069, at *4 (E.D.
Pa. Feb. 16, 2017); Zarichny, 80 F. Supp. 3d at 623-24.
The principal concern with fail-safe classes is ascertainability.
Ascertainability is an “essential prerequisite” for class actions brought under
Federal Rule of Civil Procedure 23(b)(3).1 Marcus v. BMW of N. Am., LLC, 687
F.3d 583, 592-93 (3d Cir. 2012) (citations omitted). The ascertainability inquiry
requires plaintiffs to demonstrate that a proposed class is “defined with reference
to objective criteria,” and that there is “a reliable and administratively feasible
mechanism for determining whether putative class members fall within the class
definition.” Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 355 (3d Cir. 2013) (citing
Marcus, 687 F.3d at 593-94). The court may not certify a class if it cannot identity
class members “without extensive and individualized fact-finding or „mini-trials.‟”
Marcus, 687 F.3d at 593. But the ascertainability analysis is exceedingly narrow
and wholly distinct from other class certification requirements. Byrd, 784 F.3d at
165. The requirement demands only that courts be able to identify putative class
members; it does not require exacting precision and the ability to find all class
Johnson also cites Federal Rule of Civil Procedure 23(b)(2) to support
her proposed subclasses. (Doc. 12 ¶ 34). Ascertainability is not a certification
requirement for Rule 23(b)(2) classes in which class members seek only injunctive
and declaratory relief. Shelton v. Bledsoe, 775 F.3d 554, 559-63 (3d Cir. 2015). Both
parties‟ filings discuss ascertainability at length without distinguishing between
Johnson‟s proposed subclass types or discussing the applicability of Shelton in
Rule 23(b)(2) classes where plaintiffs seek statutory damages. The Third Circuit
limited its holding in Shelton to Rule 23(b)(2) classes where plaintiffs seek only nonmonetary damages. See id. We accordingly analyze ascertainability with respect to
both putative subclasses.
members at the moment of class certification. Id. at 163 (citing Carrera v. Bayer
Corp., 727 F.3d 300, 308 n.2 (3d Cir. 2013)).
Ally Financial relies heavily upon Zarichny in support of its argument.
(Doc. 18 at 5-7, 10; Doc. 33 at 4, 7). The plaintiff in Zarichny defined a putative
class as those “„who received one or more telephone calls from [d]efendants on
the individual‟s cellular telephone that was initiated using an automatic telephone
dialing system‟ without prior consent” in violation of the Telephone Consumer
Protection Act. Zarichny, 80 F. Supp. 3d at 614 (citation omitted). The court
held that the plaintiff pleaded a fail-safe class which ipso facto failed to satisfy the
ascertainability requirement. Id. at 625-26 (quoting Erin L. Geller, The Fail-Safe
Class as an Independent Bar to Class Certification, 81 FORDHAM L. REV. 2769, 2782
(2013)). The court concluded that it could not provide notice to potential class
members without conducting “extensive fact-finding” which the ascertainability
requirement seeks to quell. Id. The putative class also required the court to
identify class members using only their “say so.” Id. at 625 (quoting Marcus,
687 F.3d at 594).
Another recent case from the Eastern District of Pennsylvania is instructive
with respect to the issue sub judice. The defendant in Abella v. Student Aid Center,
Inc., No. 15-3067, 2015 WL 6599747 (E.D. Pa. Oct. 30, 2015), also sought to strike
class allegations relating to violations of the Telephone Consumer Protection Act.
Abella, 2015 WL 6599747, at *3-4. The court noted several distinctions between
the proposed class therein and the class allegations in Zarichny. The putative
class definition in Abella did not reference the existence or use of an automated
telephone dialing system like the proposed class in Zarichny, eliminating the risk
that the class was fail-safe. Id. at *4 (citation omitted). The plaintiff also defined
class membership by the defendant‟s business records—as opposed to putative
class member‟s “say so”— satisfying the ascertainability requirement by providing
objective criteria and a feasible identification mechanism. Id. (citing In re Cmty.
Bank of N. Va. Mortg. Lending Practices Litig., 795 F.3d 380, 397 (3d Cir. 2015)).
We conclude that Ally Financial has not demonstrated Johnson‟s autodialer
subclass is facially uncertifiable. The subclass is properly “defined with reference
to objective criteria.” Hayes, 725 F.3d at 355 (citing Marcus, 687 F.3d at 593-94).
The subclass specifically references Ally Financial‟s business records which may
(with discovery) reveal an ascertainable subclass. The records constitute factual
criteria outside of the legal requirements of the Telephone Consumer Protection
Act. The records also allow Johnson to identify potential subclass members without
relying exclusively on member “say so.” Hence, Ally Financial‟s records may allow
Johnson to identify putative subclass members. See Carrera, 727 F.3d at 308 n.2.
The court also finds that there is “a reliable and administratively
feasible mechanism for determining whether putative class members fall within
the class definition.” Hayes, 725 F.3d at 355 (citing Marcus, 687 F.3d at 593-94).
Ally Financial‟s business records may very well obviate the need for a series of
“mini-trials” or extensive, individualized findings of fact. See Marcus, 687 F.3d
at 594. Notwithstanding Johnson‟s reference to consent in terms of her subclass
definition, discovery will demonstrate whether Ally Financial‟s records explain
how, if at all, it obtained consent from consumers. The court will accordingly deny
Ally Financial‟s motion (Doc. 17) to strike Johnson‟s autodialer class allegations.
Wrong Number Subclass
Ally Financial asserts that the wrong number subclass is also prima facie
uncertifiable because it “is facially overbroad and lacks commonality.” (Doc. 18
at 2). Commonality requires plaintiffs to demonstrate that “there are questions
of law or fact common to the class.” FED. R. CIV. P. 23(a)(2). Courts generally
require “class members [to] „have suffered the same injury‟” to satisfy Rule 23‟s
commonality analysis. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350-51 (2011)
(quoting Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 157 (1982)). In other words,
a plaintiff must raise a claim that “is capable of classwide resolution—which means
that determination of its truth or falsity will resolve an issue that is central to the
validity of each one of the claims in one stroke.” Id. at 350. The commonality
requirement is not especially arduous. The Third Circuit has acknowledged
commonality “even when not all members of the plaintiff class suffered an actual
injury[,] . . . when class members did not have identical claims[,] . . . and, most
dramatically, when some members‟ claims were arguably not even viable.” In re
Cmty. Bank, 795 F.3d at 397 (citations omitted).
Ally Financial contends that “there are significant factual differences among
class members.” (Doc. 18 at 16). But Ally Financial‟s arguments fail to consider the
primary question underlying the commonality inquiry, to wit: whether members of
Johnson‟s putative subclass “have suffered the same injury.” Dukes, 564 U.S. at
349-50 (quoting Falcon, 457 U.S. at 157). We conclude that discovery is necessary to
determine whether Johnson‟s proposed subclass satisfies Rule 23‟s commonality
threshold. Johnson alleges a subclass whose members share a common, essential
injury, namely receiving telephone calls from Ally Financial yet not the person Ally
Financial intended to call. (Doc. 12 ¶ 34). Discovery may reveal that Johnson‟s
proposed wrong number subclass contains members with disparate injuries. The
court cannot, however, conclude that this subclass is facially uncertifiable at this
juncture. The court will accordingly deny Ally Financial‟s motion (Doc. 17) to strike
Johnson‟s wrong number class allegations.2
For the foregoing reasons, the court will deny Ally Financial‟s motion (Doc.
17) to strike Johnson‟s class allegations. An appropriate order shall issue.
/S/ CHRISTOPHER C. CONNER
Christopher C. Conner, Chief Judge
United States District Court
Middle District of Pennsylvania
August 10, 2017
Ally Financial provided supplemental authority to the court on March 30,
2017. (Doc. 34); see Davis v. AT&T Corp., No. 15-2342, 2017 WL 1155350 (S.D. Cal.
Mar. 28, 2017). The court concludes that this authority undergirds our conclusion,
namely, that any ruling regarding class certification must wait until Johnson
submits a motion for class certification.
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