Summary
finding typicality met where allegations state that every class member received a letter from defendants that violated FDCPA
Summary of this case from Hays ex rel. Situated v. Eaton Grp. Attorneys, LLCOpinion
CIV. NO. 98-3599 SECTION "L" (2).
April 14, 2000.
ORDER AND REASONS
Before the Court is plaintiff's motion for class certification on two separate claims. For the following reasons, plaintiff's motion for class certification on the claim of attorneys fees is DENIED, and plaintiffs' motion for class certification on the claim of deceptive practices using attorney letterhead is GRANTED.
I. BACKGROUND
Plaintiffs, James and Jeanne Cope ("Copes"), received a letter from defendants dated December 9, 1997 which sought to collect a debt owed by them to De La Salle High School. The letter was prepared on letterhead from defendant David Huggins's law firm and is signed by defendant Glenn Laigast, collection supervisor. It indicates that the Copes owe $2,065.70 to De La Salle, of which, $413.14 is assessed for attorneys fees. The letter states that "this office has been retained to collect the past due debt," and if the debt is not paid, it explains "we will proceed with further collection as authorized by law."
Plaintiffs present two claims contending that the defendants violated the Fair Debt Collection Practices Act ("FDCPA") by sending their debt collection letter. First, plaintiffs argue that defendants assessed attorneys fees prior to the involvement of an attorney and without the consent of plaintiffs or the court. While plaintiffs admit that their contract permits attorney fees, they complain that defendants unilaterally set the amount of attorney fees to be paid at 25%. Secondly, plaintiffs claim that defendants deceived them and violated the FDCPA by using attorney stationery to send a collection letter signed by a non-attorney. Plaintiffs seek to certify a class of plaintiffs with like claims. Because defendants sent letters to more than 100 accounts of at least three clients, plaintiffs believe more than 300 individuals constitute the potential class.
Defendants respond that it contracted for the payment of attorneys fees with plaintiffs and other debtors. The terms of the contracts, explain defendants, varied with each debtor and should be evaluated on an individual basis. Defendants argue that class certification is inappropriate because each debtor contracted for different terms including those related to attorneys fees. Moreover, defendant insists a class should not be certified concerning plaintiffs' second claim because the letter sent by defendants does not suggest that it was signed by an attorney.
II. ANALYSIS
A. Requirements for Class Certification
Class actions permit representative plaintiffs to litigate their claims on behalf of members of the class not before the Court. The purpose of a class action is to avoid multiple actions and to allow claimants who could not otherwise litigate their claims individually to bring them as a class. See Crown, Cork Seal Co. v. Parker, 462 U.S. 345, 349 (1983).
Class actions may have several benefits. They can provide a more efficient and economical method for trying multiple claims and expedite relief to a group of similarly situated claimants from a single defendant. Nevertheless, class actions may also prove expensive for plaintiffs and present problems for resolving claims through settlement.
A district court has great discretion in certifying and managing a class action. See Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 624 (5th Cir. 1999) (citing Montelongo v. Meese, 803 F.2d 1341, 1351 (5th Cir. 1986). The Court must adhere to the requirements of Rule 23 of the Federal Rules of Civil Procedure to determine whether certification of a class is appropriate.
A class may be certified under Rule 23 if it meets four prerequisites of Rule 23(a) and one of two additional requirements of Rule 23(b). See id. at 623. The four prerequisites for certifying a class include:
(1) numerosity (a class so large that joinder of all members is impracticable); (2) commonality (questions of law or fact common to the class); (3) typicality (named parties' claims or defenses are typical of the class); and (4) adequacy of representation (representatives will fairly and adequately protect the interests of the class)Amchem Products, Inc. v. Windsor, 521 U.S. 591, 613 (1997).
If the four prerequisites of 23(a) have been demonstrated, then the plaintiffs must satisfy one of the elements of 23(b). In the present case, plaintiffs seek to certify their class under either 23(b)(2) or (b)(3). Rule 23(b)(2) applies when "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole." Rule 23(b) requires:
the court [to] find that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.
B. Deceptive Practices Claim
Plaintiffs seek to certify a class based upon their claim that the defendants violated the FDCPA by sending a collection letter signed by a non-attorney on attorney stationery. On this claim, plaintiffs do satisfy the requirements of Rule 23.
First, plaintiffs satisfy the numerosity requirement because they allege that more than 300 individuals received debt collection letters from the defendants. While there is no magic number for the number of plaintiffs that makes class certification appropriate, a class of more than forty members raises a presumption of numerosity and a class of more than 100 generally satisfies the numerosity requirement. See Mullen, 186 F.3d at 624 (citing 1 Newberg on Class Actions § 3.05, at 3-25 (3d ed. 1992). Plaintiffs aver that letters were sent to at least 100 accounts of at least three of the defendants' clients. They estimate the class to include at least 300 people, and defendants do not dispute this total. Therefore, plaintiffs satisfy the numerosity requirement.
Second, plaintiffs meet the condition of commonality because they identify at least one significant question of law or fact that affects all potential class members. See id. at 625 (citing Lightbourn v. County of El Paso, 118 F.3d 421, 426 (5th Cir. 1997)). Plaintiffs state that every class member received a letter from defendants which violated the FDCPA because it was prepared on attorney letterhead by a non-attorney. While plaintiffs may or may not have a valid cause of action under the FDCPA, they need only present a common factual and legal issue to certify a class. Defendants do not dispute that the letter which was prepared by a non-attorney using attorney letterhead was sent to potential class members. Thus, plaintiffs raise a common question as to whether defendants violated the FDCPA by using a debt collection letter prepared on attorney letterhead and signed by a non-attorney.
Plaintiffs claims are also typical of the class because all potential class members received the same letter. The purpose of this requirement is to ensure that the interests of the representative of the class are the same or similar enough as the other members of the class. A plaintiffs claim is typical if it arises from the same event or practice giving rise to the claims of other class members and is based on the same legal theory as the class members. See Rosario v. Livaditis, 963 F.2d 1013, 1018 (7th Cir. 1992). Because plaintiffs base their claims on the same letter received by all members of the purported class, they satisfy the typicality requirement.
Plaintiffs further demonstrate that they may fairly and adequately protect the interests of the class because they are knowledgeable, have no conflicting interests with other class members, and are represented by qualified and competent counsel. Fed.R.Civ.P. 23(a)(4); see Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978).
Finally, certification of plaintiffs' class is appropriate because plaintiffs satisfy the predominance and superiority requirements of Rule 23(b). Common questions of law or fact predominate among class members when the common issues constitute a significant portion of individual cases. See Mullen, 186 F.3d at 626. The purpose of this criterion is to promote economy and efficiency in hearing similar claims. In the present case, the common issue of whether the letter prepared by a non-attorney and distributed on attorney letter-head predominates members of the class. Moreover, plaintiffs demonstrate that a class action is a superior method for resolving the claims of members of the class because it is the most efficient mechanism for managing numerous claims involving small amounts.
Plaintiffs also propose to certify their class pursuant to Rule 23(b)(2) because they seek declaratory relief as well as actual damages. The Fifth Circuit in Washington v. CSC Credit Service, Inc., however, explained that the FDCPA provides for money damages and not injunctive relief. 199 F.3d 263, 268, n. 4 (5th Cir. 2000). The Court further explained that in order to maintain an action under 23(b)(2), "declaratory relief rather than monetary damages must be the predominant form of relief plaintiffs pursue." Id. (quoting Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998). In the present case, plaintiffs primarily seek money damages and therefore certification of the class under Rule 23(b)(2) is inappropriate.
C. Attorney Fees Claim
Plaintiffs also seek class certification for their claim that the defendants violated the FDCPA by improperly assessing attorneys fees in its debt collection letter. To certify the class, plaintiffs must demonstrate at least one significant question of law or fact that affects all potential class members. See Mullen, 186 F.3d at 625 (citing Lightbourn v. County of El Paso, 118 F.3d 421, 426 (5th Cir. 1997). Although not every issue in the case must be common to all class members, there muse be at least one issue "common to the class as a whole" of sufficient importance to determining the rights of the parties. See General Tel. Co. v. Falcon, 457 U.S. 147, 155 (1982).
Plaintiffs explain that the commonality requirement is satisfied in this case because each potential class member received the same letter which allegedly violated the FDCPA. While this may be so, each debtor agreed to separate terms and conditions in its contract. To determine whether the defendants properly assessed attorneys fees in each case, the Court will need to examine the terms of each debt agreement. Each case will vary according to the terms of the agreement and with respect to the work done by the attorney. Common issues of fact and law do not predominate in the case of plaintiffs' first claim for violation of the FDCPA, and therefore, class certification is not appropriate.
III. CONCLUSION
For the reasons stated above, plaintiffs' motion for class certification on the claim of attorneys fees is DENIED, and plaintiffs' motion for class certification on the claim of deceptive practices using attorney letterhead is GRANTED.
Done this 13 day of April, 2000 New Orleans, Louisiana