DINAPLES v. MRS BPO, LLC et al
ORDER entered. Plaintiff's motion for summary judgment as to liability (Dkt. No. 65) is hereby ALLOWED, and Defendant's motion for summary judgment (Dkt. No. 62) hereby DENIED. Plaintiff's motion for class certification (Dkt. No. 63) i s hereby ALLOWED. The court has this day allowed Plaintiff's proposed Order Certifying Class, with the agreed modification permitting Plaintiff's counsel to submit a proposed form of Class Notification for review by the court within 45 (not 20) days and allowing Defendant to produce the Class List within 45 days as well. It is So Ordered. Signed by Judge Michael A. Ponsor on 11/21/2017. (jhk)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF PENNSYLVANIA
MRS BPO, LLC,
C.A. No. 2:15-cv-01435-MAP
MEMORANDUM AND ORDER ON MOTIONS FOR
SUMMARY JUDGMENT AND MOTION FOR CLASS CERTIFICATION
(Dkt. Nos. 62, 63, and 65)
November 21, 2017
Plaintiff brings suit under the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA") against
Defendant debt collector, MRS BPO, LLC ("MRS").
and Defendant both move for summary judgment on liability.
Plaintiff also moves for class certification.
reasons set forth below, Plaintiff's motion for summary
judgment will be allowed, Defendant's motion will be denied,
The undersigned, a Senior U.S. District Judge in the
District of Massachusetts (Western Division), is presiding
over this case pursuant to 28 U.S.C. § 294(d).
and Plaintiff's motion for class certification will be
The facts are essentially uncontested.
To the extent
disputes may exist, the facts are viewed in the light most
favorable to the non-moving party.
On or about November 4, 2014, Defendant mailed
Plaintiff a collection letter that displayed a Quick
Response Code ("QR Code") on the outside of the envelope.
It is undisputed that a QR Code may be scanned by a widely
available QR Code reader downloadable to a cell phone.
is further undisputed that, through the use of such a
reader, Plaintiff’s unencrypted account number –- the number
used by Defendant to identify Plaintiff for its own purposes
-- would be displayed.
Plaintiff contends that this
disclosure of her account number through the QR Code
constituted a violation of the FDCPA.
A. Cross Motions for Summary Judgment.
Summary judgment must be granted if "the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law."
Celotex Corp. v. Catrett, 477 U.S. 317, 317 (1986).
56(c) of the Federal Rules of Civil Procedure "mandates the
entry of summary judgment, after adequate time for discovery
and upon motion, against a party who fails to make a showing
sufficient to establish the existence of an element
essential to that party's case, and on which that party will
bear the burden of proof at trial."
Sorba v. Pennsylvania
Drilling Co., 821 F.2d 200, 202 (3d Cir. 1987) (quoting
Celotex, 477 U.S. at 317).
The movant bears the burden of
establishing no genuine issue of material fact.
477 U.S. at 323.
If the movant meets the burden, the
nonmovant must set forth specific facts that demonstrate the
existence of a genuine issue for trial.
Id. at 323-24.
The FDCPA was enacted in 1977 "to eliminate abusive
debt collection practices by debt collectors."
Bank of America, N.A., 783 F.3d 168, 174 (3d Cir. 2015).
The statute prohibits debt collectors from using "unfair or
unconscionable means to collect or attempt to collect any
15 U.S.C. § 1692f.
The list of prohibited means
includes: "Using any language or symbol, other than the debt
collector's address, on any envelope when communicating with
a consumer . . . , except that a debt collector may use his
business name if such name does not indicate that he is in
the debt collection business." Id. at § 1692f(8).
The question before the court is whether Defendant
violated the FDCPA by sending Plaintiff a collection letter
with her account number embedded in the QR Code on the face
of the envelope.
The critical case governing this analysis
is Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir.
In Douglass, the Third Circuit held that a debt
collector's disclosure of a debtor's account number visible
through the clear plastic window of an envelope violated the
Defendant would distinguish Douglass on the ground
that the QR Code "itself is nothing more than black markings
against white paper," lacking any "independent meaning
without being scanned".
(Dkt. No. 62-1 at 8.)
Since even a
scan would reveal only an unlabeled string of numbers,
"nothing about the scan results" would reveal that "the
number is an account number or relates to debt collection."
(Id. at 9.)
This attempt to avoid the Douglass holding does not add
If the display of an account number on an envelope
constitutes a violation of the FDCPA, then it is difficult
to see how a coded insignia containing the same account
number, accessible by any teenager with a smartphone app,
does not constitute a similar forbidden disclosure.
Numerous district courts in the Third Circuit have
already reached this conclusion.2
See Styer v. Prof'l Med.
Mgmt., Inc., 114 F. Supp. 3d 234, 241 (M.D. Pa. 2015)
(stating that "disclosure of [a] QR code [containing]
Plaintiff's account number ... implicates a core concern
animating the FDCPA, specifically the invasion of privacy");
Park v. ARS Nat’l. Servs. Inc., No. 15-02867, 2015 WL
Very recently, the Third Circuit itself approached
the issue of a disclosure through a readable QR Code, in
Daubert v. NRA Group, LLC, 861 F.3d 382 (3d Cir. 2017). In
that case, the District Court had held that display by a
debt collector of a barcode with an embedded account number
on an envelope to a debtor violated § 1692(f)(8), "even if
the bare account number had not been visible." Id. at 393.
Because that conclusion was not challenged upon appeal,
however, the Third Circuit reserved judgment on the lower
6579686, at *4 (D.N.J. Oct. 30, 2015) (stating that "this
Court cannot draw a meaningful distinction between the
FDCPA's application to account numbers, as in Douglass, and
to barcodes containing account numbers, as in the instant
case"); Stever v. Harrison, No. 16-298, 2017 WL 2869505, at
*6 (D.N.J. July 5, 2017); Berry v. ARS Nat’l. Servs., Inc.,
Nos. 15-1529, 15-2611, 15-2883, 2015 WL 9315993 (E.D.Pa.
Dec. 23, 2015); Palmer v. Credit Collection Services, Inc.,
160 F. Supp. 3d 819 (E.D.Pa. 2015); Kostik v. ARS Nat’l.
Servs., Inc., No. 14-2466 2015 WL 4478765 (M.D. Pa. July 22,
2015); In re ACB Receivables Mgmt., No. 14-6418, 2015 WL
5248567 (D.N.J. Sept. 9, 2015); and Link v. ARS Nat’l.
Servs., Inc., No. 15-643, 2015 WL 8271651 (W.D. Pa. Dec. 8,
In an attempt to push back against this wall of
authority, Defendant argues that Plaintiff has not
established that she suffered a concrete injury, insofar as
she does not allege that she or any members of the proposed
class were harmed by the QR Code, or that anyone has, in
fact, ever scanned the code.
Again, this argument is
The injury suffered by Plaintiff is the
disclosure of confidential information.
To invoke the
FDCPA, she does not have to identify harm quantifiable in
dollars and cents.
Douglass makes clear that to prove an
FDCPA violation, Plaintiff need only demonstrate the
potential harm that a disclosure could have had upon her.
"The account number is a core piece of information
pertaining to [plaintiff's] status as a debtor and to
[Defendant's] debt collection effort.
Disclosed to the
public, it could be used to expose her financial
Douglass, 765 F.3d at 303, 304 (emphasis
The relevant test "is not whether a third party
could lawfully access the disclosed information," but
whether that information "was disclosed to the public and
thus, there for the taking."
Styer, 114 F. Supp. 3d at 243.
Defendant's disclosure of confidential information protected
under the FDCPA is per se sufficient to sustain a finding of
a violation of the statute.
The degree of harm, of course,
may factor into any assessment of damages, but liability is
In a further effort to fend off summary judgment,
Defendant invokes the "benign or harmless language"
exception under the FDCPA.
Goswami v. American Collections
Enterprise, Inc., 377 F.3d 488, 494 (5th Cir. 2004).
factual pattern presented by this case, however, bears
little resemblance to those where this exception has been
In these cases, debt collection
letters featured labels on the envelope including: "priority
letter", id. at 493-4; "PERSONAL AND CONFIDENTIAL" and
"IMMEDIATE REPLY REQUESTED", Strand v. Diversified
Collection Serv., Inc., 380 F.3d 316, 319 (8th Cir. 2004);
"Revenue Department", Johnson v. NCB Collection Servs., 799
F. Supp. 1298, 1305 (D. Conn. 1992), on reconsideration
(Aug. 21, 1992). By contrast, "disclosure[s] implicat[ing] a
core concern animating the FDCPA -- the invasion of privacy"
would not fall under the benign language exemption.
Douglass, 765 F. 3d at 303.
The simple fact is that
disclosure of an account number is not “benign” under the
statute, and this exception does not apply.
Defendant's final argument is that the disclosure
occurred as a result of bona fide error and despite its own
maintenance of procedures reasonably adapted to avoid such
This appeal to the bona fide error defense must also
The Third Circuit has made clear that "[t]he
FDCPA is a strict liability statute to the extent it imposes
liability without proof of an intentional violation."
ex rel. Martin v. LaSalle Bank, N.A., 629 F.3d 364, 368 (3d
Even if this defense were available to
Defendant, Daubert makes clear that it may apply where a
defendant can point to, for example, a clerical error, but
not where an alleged violation results from deliberate
conduct based upon a mistake of law.
861 F. 3d at 393-94.
Defendant has not alleged that the barcode was stamped in
error upon the envelope by an errant employee or the like.
In fact, it admits it was company -- and indeed, industry -policy to do so.
Given that Defendant’s conduct was
intentional, the bona fide error defense offers Defendant no
Based on the foregoing, the court will allow
Plaintiff’s motion for summary judgment on liability, and
deny Defendant’s motion.
B. Class Certification
Plaintiff seeks certification of the following Class
pursuant to Fed. R. Civ. P. 23:
All consumers with an address in Westmoreland County
who, beginning November 2, 2014 through and including
the final resolution of this case, were sent one or
more letters from Defendant attempting to collect a
consumer debt allegedly owed to Chase Bank, which
displayed on the outside of the mailing a Quick
Response ("QR") Code containing the account number
associated by Defendant with that consumer's account.
(Dkt. No. 64 at 14.)
To certify a class, a court must determine whether
plaintiffs meet the four threshold requirements of
numerosity, commonality, typicality, and adequacy of
Fed. R. Civ. P. 23(a).
A putative class
must also meet the "essential prerequisite" of
ascertainability, meaning that it must be defined with
reference to objective criteria, and a reliable and
administratively feasible mechanism must exist for
determining whether putative class members fall within the
Marcus v. BMW of N. Am., LLC, 687 F.3d
583, 592-3 (3d Cir. 2012).
Where a plaintiff in a class
action suit seeks monetary compensation, certification also
imposes the prerequisites of predominance and superiority.
Sullivan v. DB Investments, Inc., 667 F.3d 273, 296 (3d Cir.
2011); Fed. R. Civ. P. 23(b)(3).
A review of the record confirms that Plaintiff has met
all these requirements.
First, as to numerosity, similar
letters were mailed to approximately 264 consumers in
Westmoreland County; second, the putative class shares
common questions of fact and law; third, class members can
be easily identified through a review of Defendant's
records; fourth, Plaintiff's claims are typical of other
putative class members; fifth, Plaintiff is a competent
class representative; and, finally, Plaintiff has retained
counsel experienced in prosecuting FDCPA matters and
consumer class actions.
The prerequisites of predominance and superiority have
also been met.
Congress specifically contemplated class
actions as a means of enforcing the FDCPA. See 15 U.S.C. §
The likely interest of class members in
prosecuting claims against Defendant individually is small,
even in the case of a clear statutory violation, because
statutory damages are capped under the FDCPA.
individual litigation were practical, class action treatment
is more efficient than the management of myriad individual
actions by consumers standing alone.
Defendant’s arguments opposing class certification lack
Defendant’s contention that Plaintiff is not an
adequate class representative because she is a "serial
filer" misses the point.
If the specifics of her situation
fit within the definition of the class, which Defendant does
not dispute, her role in other cases is irrelevant.
Moreover, Defendant’s argument that Plaintiff lacks an
understanding of her claim is supported only by out-ofcontext citations to the record.
As Plaintiff’s counsel
points out, Plaintiff in her deposition exhibited more than
adequate knowledge of the basics of her lawsuit.
The need for some individual analysis of class members’
claims is no bar to certification on the facts of record
Ascertaining precisely which collection letters were
sent to Westmoreland County can be easily accomplished based
on zip codes contained in discovery disclosures.
moreover, be no objection based on any confusion between
business debtors and consumer debtors, because the pertinent
credit advances made by Chase involved only consumer debts.
Finally, the fact that the class has been drawn to
include only residents of Westmoreland County, as opposed to
Pennsylvania residents generally, is no bar to class
First, as Plaintiff points out, in class
action suits under the FDCPA, no authority requires the
participation of the broadest possible class.
Mace v. Van
Ru Credit Corp., 109 F.3d 338, 341 (7th Cir. 1997).
Plaintiff’s explanation for its decision to limit the class
to Westmoreland County makes sense from the point of view of
the class members.
Because the FDCPA caps statutory damages
at 10% of a defendant's total net worth, certification of a
class consisting of all affected residents of Pennsylvania
would result in a miniscule recovery for each class member.
Significantly, Plaintiff’s counsel offered at oral argument
to modify the class definition to include a state-wide
population, if the court preferred.
Counsel’s motive to
enhance the chance of some noticeable recovery by the actual
injured parties is laudable, and the court will leave the
proposed class definition as it stands.
Because the statute
of limitations has already expired for FDCPA violations
based on this set of facts, Defendant's risk of being
pummeled by class actions drawn from each of Pennsylvania’s
sixty-seven counties is nonexistent.
In some other
scenario, where the risk of prejudice to a defendant is
greater, the analysis might be different.
Based on the foregoing, the motion for class
certification will be allowed.
For the foregoing reasons, Plaintiff's motion for
summary judgment as to liability (Dkt. No. 65) is hereby
ALLOWED, and Defendant's motion for summary judgment (Dkt.
No. 62) hereby DENIED. Plaintiff's motion for class
certification (Dkt. No. 63) is hereby ALLOWED.
has this day allowed Plaintiff’s proposed Order Certifying
Class, with the agreed modification permitting Plaintiff’s
counsel to submit a proposed form of Class Notification for
review by the court within 45 (not 20) days and allowing
Defendant to produce the Class List within 45 days as well.
It is So Ordered.
/s/ Michael A. Ponsor
MICHAEL A. PONSOR
U.S. DISTRICT JUDGE
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