Eggen, Bradley et al v. WESTconsin Credit Union
Filing
69
ORDER granting 41 Motion to Certify Class under Rule 23; defining the class; appointing Thomas John Lyons, Jr. as class counsel; directing plaintiffs to prepare a proposed notice to all members of the class for the court's approval; denying without prejudice 48 Motion for Summary Judgment; and extending the deadline for filing dispositive motions to 6/1/2016. Signed by District Judge Barbara B. Crabb on 2/26/2016. (jls)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - BRIAN EGGEN and MARY EGGEN,
on behalf of themselves and all others
similarly situated,
OPINION and ORDER
Plaintiffs,
14-cv-873-bbc
WESTCONSIN CREDIT UNION,
Defendant.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Plaintiffs Brian Eggen and Mary Eggen are suing defendant WESTconsin Credit
Union under the Driver’s Privacy Protection Act (18 U.S.C. §§ 2721-2725), and the
common law of nuisance for disclosing plaintiffs’ unredacted driver’s license numbers and
Social Security numbers in complaints filed in delinquency actions in small claims court.
Plaintiffs have filed a motion in which they seek to represent the following class under Fed.
R. Civ. P. 23(b)(3): “All individuals whose [driver’s license numbers] Defendant
WESTconsin disclosed in a Wisconsin circuit court filing.” (Because plaintiffs’ proposed
class definition omits any mention of Social Security numbers, I will assume that plaintiffs
have abandoned that issue with respect to anyone other than the named plaintiffs.)
Plaintiffs filed their motion on November 6, 2015. Dkt. #41. Under the court’s
briefing schedule, defendant’s response brief was due on November 30, 3015. When nearly
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two months passed without any response from defendant, I treated the motion as
unopposed.
In an order dated December 30, 2015, dkt. #54, I granted plaintiffs’ motion after
conducting my own analysis under Fed. R. Civ. P. 23.
I concluded that the class is
sufficiently numerous; the named plaintiffs’ claims and defenses are typical of the rest of the
class; the named plaintiffs and their counsel can adequately represent the interests of the
class; the class was defined clearly; common questions predominate over individual
questions; and a class action is superior to other methods of adjudication in light of the small
amount of damages involved in any one claim. I stated that, “[i]n the absence of any
objection by defendant regarding potential individualized inquiries in determining liability,
it is reasonable to conclude that common questions predominate over individualized
inquiries because plaintiffs allege that defendant had a common practice of publishing the
driver’s license numbers of anyone it sued for failing to repay a loan.” Dkt. #54 at 4.
I had two concerns about the scope of the class.
First, plaintiffs put no time
limitations on the proposed class, even though I concluded in a previous order that plaintiffs’
claims under the Driver’s Privacy Protection Act have a four-year statute of limitations under
28 U.S.C. § 1658 and that the continuing violation doctrine did not apply to plaintiffs’
claims under the Act. Dkt. #35. In addition, plaintiffs did not limit their proposed class to
individuals sued to recover unpaid loan balances, even though that is the only type of lawsuit
discussed in the complaint and plaintiffs included such a limitation in their original class
definition. Dkt. #1, ¶ 62. Accordingly, I directed the parties to show cause why the court
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should not adopt the following class definition: “All individuals whose driver’s license
numbers defendant WESTconsin disclosed on or after December 16, 2010 in an action filed
in Wisconsin circuit court to recover unpaid loan balances.”
The following day it came to the court’s attention that the parties had agreed to an
unusually lengthy briefing period, giving defendant until January 20, 2016, to file a response
to plaintiffs’ motion. Dkt. #38. As a result, I vacated the December 30 order to allow the
parties to complete briefing. Dkt. #55. (In the future, if counsel receive a briefing schedule
that is at odds with a stipulation, they should notify the court of the discrepancy.)
Now that the court has received an opposition brief and a reply brief, plaintiffs’
motion for class certification is ready for review. I adhere to my original decision and am
granting plaintiffs’ motion. Defendant raises several objections to plaintiffs’ motion, but
most of those objections rely on basic misunderstandings of the case law applying Rule 23.
Plaintiff’s counsel’s professional disciplinary history is a valid concern, but I am persuaded
that sufficient time has passed without any new problems to allow Thomas Lyons, Jr. to
serve as class counsel.
OPINION
In their reply brief, plaintiffs adopt the class definition proposed in the December 30
order: “All individuals whose driver’s license numbers defendant WESTconsin disclosed on
or after December 16, 2010 in an action filed in Wisconsin circuit court to recover unpaid
loan balances.” Because I already concluded that this proposed class satisfied Rule 23, I will
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limit my discussion to the objections raised in defendant’s opposition brief.
A. Differences in Alleged Injuries
Defendant makes several arguments related to alleged differences in plaintiffs’ and
the other class members’ injuries.
First, defendant cites Kohen v. Pacific Investment
Management Co. LLC, 571 F. 3d 672, 677 (7th Cir. 2009), for the proposition that “a class
should not be certified if it is apparent that it contains a great many persons who have
suffered no injury at the hands of the defendant.” Defendant says class certification should
be denied in this case because plaintiffs “have presented no evidence of injury to anyone,
including themselves.” Dft.’s Br., dkt. #61, at 5.
Defendant’s argument does not make any sense. The concern in Kohen was with a
class definition that swept so broadly it would include individuals who were not affected by
the defendant’s conduct. In this case, individuals are included in the class only if defendant
published their driver’s license numbers, so all class members suffered the same injury.
Defendant’s point seems to be that plaintiffs have not cited evidence of class members who
suffered an injury beyond disclosure, such as identity theft. However, that type of injury is
not required to confer standing for a violation of the Driver’s Privacy Protection Act.
Graczyk v. West Publishing Co., 660 F.3d 275, 278 (7th Cir. 2011) (plaintiff has standing
to sue under Act if she alleges that defendant obtained, used or disclosed personal
information in violation of Act). In any event, an argument that none of the class members
were injured would be an argument for dismissal of the case for lack of subject matter
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jurisdiction, not an argument that the plaintiff’s claims lack any common questions.
Second, defendant makes an alternative argument that “[e]ven if there were injuries
suffered by members of the putative class, those injuries likely vary in severity, which would
result in differing levels of damages.” Dft.’s Br., dkt. #61, at 5. Defendant cites Jamie S.
v. Milwaukee Public Schools, 668 F.3d 481, 497 (7th Cir. 2012), for the proposition that
plaintiffs cannot satisfy the commonality requirements of Rule 23 by alleging that “each class
member suffered a violation of the same provision of law.” Rather, “[c]ommonality requires
the plaintiffs to demonstrate that the class members have suffered the same injury.” Id.
Defendant has misread Jamie S. and the cases cited in that opinion. The requirement
that class members must suffer the “same injury” does not mean that they must suffer the
same damages. The next sentence in Jamie S. explains that the “same injury” means that
“[t]he class claims must depend upon a common contention and that common contention,
moreover, must be of such a nature that it 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. (internal quotations omitted). That test is
satisfied in this case because all class members are contending that defendant published their
driver’s license numbers without a legitimate reason, in violation of the Driver’s Privacy
Protection Act and the common law of nuisance. Suchanek v. Sturm Foods, Inc., 764 F.3d
750, 756 (7th Cir. 2014) (“Where the same conduct or practice by the same defendant gives
rise to the same kind of claims from all class members, there is a common question.”).
Defendant makes a related argument that plaintiffs do not allege that they suffered
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any injuries other than disclosure, so they cannot adequately represent class members who
may have suffered additional injuries. Defendant attempts to compare plaintiffs’ situation
to that of the plaintiffs in Amchem Products, Inc. v. Windsor, 521 U.S. 591, 619 (1997),
a case in which the Supreme Court denied class certification to individuals who claimed that
the defendant had exposed them to asbestos. According to defendant, the Court denied
certification because “[t]he proposed class in Amchem consisted of currently injured
members as well as those who were exposed to future injury,” Dft.’s Br., dkt. #61, at 8,
which defendant says is similar to the situation of class members in this case whose only
injury thus far has been disclosure and class members who have suffered additional injuries.
Defendant’s characterization of Amchem is inaccurate. The Court did not deny
certification simply because the class members could recover different damages. Rather, the
differences in damages were only one of many differences described by the Court:
Class members were exposed to different asbestos-containing products, for
different amounts of time, in different ways, and over different periods. Some
class members suffer no physical injury or have only asymptomatic pleural
changes, while others suffer from lung cancer, disabling asbestosis, or from
mesothelioma.... Each has a different history of cigarette smoking, a factor that
complicates the causation inquiry. The exposure-only plaintiffs especially share
little in common, either with each other or with the presently injured class
members. It is unclear whether they will contract asbestos-related disease and,
if so, what disease each will suffer. They will also incur different medical
expenses because their monitoring and treatment will depend on singular
circumstances and individual medical histories. Differences in state law, the
Court of Appeals observed, compound these disparities.
Amchem, 521 U.S. at 624 (internal quotations, alterations and citations omitted). More
generally, the Court stated that the proposed class was not “sufficiently cohesive to warrant
adjudication by representation.” Id. at 623.
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The complexities involved with asbestos exposure cannot be compared fairly to the
relatively simple matter of the disclosure of driver’s license numbers. In short, Amchem is
not instructive.
One of the most well established principles in the context of the law of class actions
is that plaintiffs do not need uniform damages in order to proceed as a class. Bell v. PNC
Bank, National Association, 800 F.3d 360, 379 (7th Cir. 2015) (“The fact that the plaintiffs
might require individualized relief or not share all questions in common does not preclude
certification of a class.”); Messner v. Northshore University HealthSystem, 669 F.3d 802,
815 (7th Cir. 2012) (“It is well established that the presence of individualized questions
regarding damages does not prevent certification under Rule 23(b)(3).”); Schleicher v.
Wendt, 618 F.3d 679, 685 (7th Cir. 2010) (“The possibility that individual hearings will
be required for some plaintiffs to establish damages does not preclude certification.”).
If
uniform damages were required, class actions involving claims for damages would be nearly
impossible. Butler v. Sears, Roebuck & Co., 727 F.3d 796, 801 (7th Cir. 2013) (“It would
drive a stake through the heart of the class action device, in cases in which damages were
sought rather than an injunction or a declaratory judgment, to require that every member
of the class have identical damages.”).
Defendant ignores all of this case law and relies instead on Comcast Corp. v. Behrend,
133 S. Ct. 1426 (2013), for the proposition that “class certification is inappropriate in cases
where, as here, the determination of damages for each class member necessarily requires
individualized analysis.” Dft.’s Br., dkt. #61, at 13. Defendant also quotes a passage from
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Espenscheid v. DirectSat USA, LLC, 705 F.3d 770, 773 (7th Cir. 2013), to argue that a class
should not be certified unless “it appear[s] that the calculation of monetary relief will be
mechanical, formulaic, a task not for a trier of fact but for a computer program.”
Defendant’s reliance on both of these cases is misplaced. The Court of Appeals for
the Seventh Circuit has rejected the view that Comcast requires the plaintiffs to show that
“their claimed damages are not disparate.” In re IKO Roofing Shingle Products Liability
Litigation, 757 F.3d 599, 602 (7th Cir. 2014). Rather, “Comcast holds that a damages suit
cannot be certified to proceed as a class action unless the damages sought are the result of
the class-wide injury that the suit alleges.” Butler, 727 F.3d at 799. Again, that test is
satisfied in this case because plaintiffs allege that all class members suffered the same injury,
public disclosure of their personal information.
The statement quoted from Espenscheid has no bearing on this case. To begin with,
the quoted language was taken from another case, Johnson v. Meriter Health Services
Employee Retirement Plan, 702 F.3d 364, 372 (7th Cir. 2012), that involved a proposed
class under Rule 23(b)(2), not Rule 23(b)(3). Because Rule 23(b)(2) relates primarily to
classes for injunctive or declaratory relief, damages can be awarded under that rule only if
they are “purely incidental” to the injunction or declaration. Johnson, 702 F.3d at 372.
Thus, language regarding the requirements for a Rule 23(b)(2) are not instructive in a Rule
23(b)(3) class such as this one. In Espenscheid, 705 F.3d at 773, the court quoted Johnson
in identifying one way that damages can be obtained in a class action, but the court did not
incorporate the requirements of Rule 23(b)(2) into Rule 23(b)(3).
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Rather, the court
affirmed a denial of class certification in Espenscheid because “determin[ing] damages would
. . . require 2341 separate evidentiary hearings” and the plaintiffs had not come up with a
feasible way for doing that. Id.
Defendant has cited no evidence that the claims in this case will face similar
challenges. By defendant’s own assertion, few class members are likely to have suffered harm
beyond the disclosure itself. Defendant has not identified any reason why it would be
unduly onerous to calculate the damages of the relatively few who suffered from identity
theft or a similar problem. In the unlikely event that damages determinations become too
difficult to manage, the class may be decertified after determining liability to allow the
plaintiffs to pursue individual damage claims. Carnegie v. Household International, Inc.,
376 F.3d 656, 661 (7th Cir. 2004).
B. Differences in Claims
Defendant says that plaintiffs’ claims may not be typical of other class members’
claims because of differences in the ways that defendant may have obtained driver’s license
information from the class members. Although defendant says that it obtained plaintiffs’
driver’s license numbers from the plaintiffs themselves, it may have obtained other class
members’ numbers from the Department of Motor Vehicles. In that situation, the class
member could have a claim against the department under 18 U.S.C. § 2721(a), but plaintiffs
are not seeking to bring any claims under that statute.
This is another odd argument. I am not aware of any authority in which a court has
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held that a class may not be certified unless the plaintiffs seek to bring every potential cause
of action against every potential defendant. Obviously, if a potential class member believes
that he or she could raise other claims against other defendants, that class member is free to
bring a separate lawsuit.
Defendant cites Gustafson v. Polk County, Wisconsin, 226 F.R.D. 601 (W.D. Wis.
2005), and Landsman & Funk, P.C. v. Lorman Business Center, Inc., No. 08-cv-481-bbc,
2009 WL 602019 (W.D. Wis. Mar. 9, 2009), but neither case supports defendant’s
argument. In Gustafson, 226 F.R.D. at 606, I denied a motion for class certification with
respect to claims involving allegedly unconstitutional strip searches because the plaintiffs
failed to show that the strip searches were conducted under a uniform policy. In Landsman
& Funk, 2009 WL 602019, at *8, I denied a motion for class certification with respect to
claims involving unwanted faxes because deciding the merits “would require individual fact
intensive inquiries that would make class wide decisions impractical.” In neither case did
I conclude that plaintiffs must raise all potential causes of action that any class member
might be entitled to bring.
In any event, defendant does not cite any evidence that it obtained any driver’s
license numbers from the Department of Motor Vehicles. Because defendant should know
better than anyone where it obtained that information, defendant’s silence on that issue is
telling. It would make no sense to deny a motion for class certification for a particular issue
without some indication that the issue will actually present a problem in the case. CE
Design Ltd. v. King Architectural Metals, Inc., 637 F.3d 721, 728 (7th Cir. 2011) (“Serious
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challenges to typicality and adequacy must be distinguished from petty issues manufactured
by defendants to distract the judge from his or her proper focus under Rule 23(a)(3) and (4)
on the interests of the class.”).
Defendant includes one sentence in its briefs in which it says that the court may have
to consider the individual question “whether the proposed class member gave permission for
the use of his or her driver’s license information.” Dft.’s Br., dkt. #61 at 7. However,
defendant does not develop this argument, much less cite any evidence that it ever obtained
consent from consumers to include their driver’s license numbers on small claims complaints
filed against those consumers. Accordingly, I decline to consider that issue.
C. Adequacy of Class Counsel
Defendant’s last objection relates to Fed. R. Civ. P. 23(g)(1)(B), under which a court
may deny a motion for class certification if class counsel’s past conduct “demonstrate[s] a
lack of integrity” or shows that they will not “act as conscientious fiduciaries of the class.”
Creative Montessori Learning Centers v. Ashford Gear LLC, 662 F.3d 913, 918 (7th Cir.
2011). Defendant says that Thomas Lyons, Jr. and Eric Crandall “may not be capable of
fairly representing the class” as a result of professional discipline that they have received.
Dft.’s Br., dkt. #61, at 8.
With respect to Crandall, defendant cites In re Disciplinary Proceedings Against
Crandall, 2015 WI 111, 365 Wis. 2d 682, 872 N.W.2d 649, in which the Wisconsin
Supreme Court publicly reprimanded Crandall for failing to promptly notify multiple clients
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that his license had been suspended and for failing to cooperate with an investigation into
his alleged misconduct. In the decision, the court noted other instances of discipline in the
past for issues such as neglecting clients, filing frivolous claims, engaging in dishonest
conduct and failing to hold advance fees in trust. Id. at ¶¶ 4-7.
With respect to Lyons, defendant cites In re Disciplinary Action Against Lyons, 780
N.W.2d 629 (Minn. 2010), in which the Minnesota Supreme Court suspended Lyons from
practicing law for failing to disclose his client’s death during settlement negotiations. In the
opinion, the court noted that it had disciplined Lyons on seven previous occasions for
making material misrepresentations, prosecuting frivolous claims and failing to follow
appropriate procedure. Id. at 631.
Plaintiffs provide different responses as to each lawyer. With respect to Crandall,
plaintiffs say that they “did not seek appointment of attorney Crandall as class counsel.”
Plts.’ Br., dkt. #64, at 10. I construe that statement as a representation that Crandall will
not be engaging in any work on behalf of the class. Accordingly, in the future, the court will
disregard any filings on behalf of the class if Crandall’s name appears on the filing.
With respect to Lyons, plaintiffs say that Lyons has since been reinstated to practice
and that he has represented “numerous consumer classes” since then. Plts.’ Br., dkt. #64,
at 11. Plaintiffs do not say when Lyons was reinstated, but in my own research I discovered
that Lyons was reinstated in 2011. In re Reinstatement of Lyons, 808 N.W.2d 585 (Minn.
2011). Lyons’s curriculum vitae shows that he has been approved as class counsel in
approximately 20 cases since 2011. Dkt. #44-1.
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Lyons’s past misconduct was serious, but I am not persuaded that it prevents him
from serving as class counsel in this case. Defendant does not point to any instances since
2010 when Lyons was disciplined by any court. Because plaintiff has been acting as class
counsel without any known incidents for several years, I see no reason to deny his request
to serve as class counsel in this case either.
E. Summary Judgment Motion
Several weeks after plaintiffs filed their motion for class certification, defendant filed
a motion for summary judgment, dkt. #48, but it is not clear why. Defendant’s deadline for
filing dispositive motions is not until April 1, 2016. Dkt. #19. Even more important, a
review of defendant’s motion suggests that many of the issues defendant is raising would
apply to the whole class, not just the named plaintiffs. Now that the class is being certified,
I cannot resolve the merits of any class claims until the members of the class have notice and
an opportunity to opt out. Accordingly, I am denying the motion without prejudice to
defendant’s renewing the motion after the notice process is complete.
ORDER
IT IS ORDERED that
1. The motion for class certification filed by plaintiffs Brian Eggen and Mary Eggen,
dkt. #41, is GRANTED.
2. Pursuant to Fed. R. Civ. P. 23(c)(1)(B), the class is defined as follows: “All
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individuals whose driver’s license numbers defendant WESTconsin disclosed on or after
December 16, 2010 in an action filed in Wisconsin circuit court to recover unpaid loan
balances.”
3. Pursuant to Fed. R. Civ. P. 23(g), Thomas John Lyons, Jr. is APPOINTED as class
counsel.
4. Pursuant to Fed. R. Civ. P. 23(c)(2), plaintiffs are directed to prepare a proposed
notice to all members of the class for the court's approval. Plaintiff may have until March
14, 2016, in which to submit a proposed notice to defendant. By March 21, 2016, the
parties must file a joint agreed notice, or, if they cannot agree, plaintiffs should submit their
proposed notice and defendant should submit its objections to that notice.
5. Defendant WESTconsin Credit Union’s motion for summary judgment, dkt. #48,
is DENIED without prejudice to renewing it after the class receives notice and an
opportunity to opt out. Because notice will not be complete before the April 1, 2016
deadline for filing dispositive motions, that deadline is EXTENDED to June 1, 2016.
Entered this 26th day of February, 2016.
BY THE COURT:
/s/
__________________________________
BARBARA B. CRABB
District Judge
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