Opinion
Case No. 01-CV-514.
December 16, 2003
OPINION AND ORDER
I. INTRODUCTION
This matter is before the Court on both the Plaintiffs' Motion and Defendant Ward D. Coffman III's ("Coffman") Motion to Amend the Class Definition. This class action involves a claim against the Defendants, D.B.S. Collection Agency ("D.B.S."), Kathy Dickerson ("Dickerson"), and Coffman, for practices in which they allegedly engaged as debt collectors. In an Opinion and Order dated March 25, 2002, this Court granted the Plaintiffs' Motion for Class Certification pursuant to Fed.R.Civ.P. 23(b)(3), defining the class as,
All persons named as a party defendant in any Ohio civil action filed between August 10, 1998 and March 1, 2001, in which "D.B.S. Collection Agency" was the named Plaintiff.
The Court also certified a subclass defined as,
All such persons as to whom one or more of the defendants did or will engage in any debt collection activity thereto on or after March 2, 2001.
The Plaintiffs' suggested redefinition is based on the recent discovery that the Defendants purportedly lacked valid assignments for the debts they sought to collect. Defendants D.B.S. and Dickerson, in their response to the Plaintiffs' Motion, seek clarification of the class definition to reflect their alleged immunity from liability, based on the lack of sole proprietor successor liability, for any activity that occurred prior to March 1, 1999. Defendant Coffman, as part of his opposition to the Plaintiffs' Motion, sets forth his own Motion to Amend the Class Definition to create subclasses relating to the Plaintiffs' claims under the Ohio Consumer Sales Practices Act, Ohio Revised Code §§ 1345.01 et seq. ("OCSPA"). In their Reply Memorandum, the Plaintiffs offer a second proposed amendment to the class definition, one designed to enhance that definition's precision. For the following reasons, the Court GRANTS the Plaintiffs' Motion to Amend Class Definition, DENIES Defendant Coffman's Motion to Amend Class Definition, and REJECTS the proposed changes offered by Defendants D.B.S. and Dickerson and the proposed changes offered by the Plaintiffs in their Reply Memorandum.
II. FACTS
The following facts are taken from this Court's March 25, 2002 Opinion and Order granting in part and denying in part the Plaintiffs' Motion for Class Certification.
The named Plaintiffs, Ed and Carla Foster ("Mr. and Mrs. Foster"), allege that at all times relevant, the primary business of Defendants D.B.S. Collection Agency ("D.B.S.") and Kathy Dickerson ("Dickerson") has been the collection of consumer debts allegedly owed to third parties. They allege that at all times relevant, Defendant Ward D. Coffman, III ("Coffman") has regularly signed and filed pleadings to commence or maintain civil actions in various Ohio courts on behalf of D.B.S. for the purpose of collecting such consumer debts.
On April 28, 1982, Mary Jane Slaughter ("Ms. Slaughter") registered the fictitious name "D.B.S. Collection Agency" with the Ohio Secretary of State. Ms. Slaughter renewed the registration in February 1997, thereby extending the validity of the registration until February 2002. Ms. Slaughter transferred D.B.S. and the right to use that fictitious name to Michael Slaughter ("Mr. Slaughter") on August 10, 1998. The transfer was handled by Coffman. At that time, Mr. Slaughter did not register with the Ohio Secretary of State the transfer of the right to use the fictitious name, "D.B.S. Collection Agency," or his ownership of the business operating under that name.
After the transfer to Mr. Slaughter, the Defendants continued to collect consumer debts under the name, and on behalf of, D.B.S. The Defendants succeeded in collecting some of those debts by regularly commencing and maintaining actions for debt collection in various Ohio courts. After prevailing in such actions, the Defendants collected and executed the judgments that they were awarded, sometimes through the use of garnishment and attachment of debtors' property. The Plaintiffs allege that the Defendants' debt collection activities customarily involved the use of the mails, telephones, and interstate facilities for data transmission.
Although the Court presumes that D.B.S. as an entity, Dickerson, and Coffman all had slightly different roles in the debt collection practices that are the subject of this case, the parties have failed to draw such distinctions. The references herein to actions of "the Defendants" should be read to reflect the language utilized by the parties in this regard.
On March 1, 1999, Mr. Slaughter transferred D.B.S. and the right to use its fictitious name to Dickerson. The transfer was handled by Coffman. At that time, Dickerson did not register with the Ohio Secretary of State either the transfer of the right to use the fictitious name "D.B.S. Collection Agency," or her ownership of the business operating under that name.
The Plaintiffs allege that after the transfer from Mr. Slaughter, the Defendants continued regularly to collect consumer debts under the name "D.B.S. Collection Agency." Just as they had prior to this second transfer, the Defendants collected some debts after commencing, maintaining, and prevailing on actions that they filed in various Ohio courts, and then executing on the judgments that they were awarded, including through the regular use of garnishment and attachment.
On November 3, 2000, the Defendants commenced a civil action under the name "D.B.S. Collection Agency" against the named Plaintiffs in the Zanesville, Ohio Municipal Court to collect consumer debts that Mr. and Mrs. Foster allegedly owed to various third parties. Within a few days after receiving service of the complaint by certified mail, Mr. Foster called D.B.S. and spoke to Dickerson. Mr. Foster alleges that Dickerson told him that D.B.S. had the right to garnish his wages for $600 to $700 bi-weekly and Mrs. Foster's earnings for another $200 to $300 per month. Mr. Foster explained that such payments would be financially impossible for his family. He proposed, instead, that the parties arrange a $500 per month payment plan to end the lawsuit. The Fosters claim that at the end of the telephone conversation, Mr. Foster believed that he and Dickerson had agreed upon a $500 per month payment plan, in exchange for Dickerson's dismissing the suit she had filed against the Fosters in municipal court. Pursuant to Mr. Foster's understanding of the conversation, he paid D.B.S. a $500 installment check on November 17, 2000.
Mr. Foster alleges that this arrangement was entered into during the telephone conversation, despite his allegation that, during the same conversation, Dickerson explicitly told Mr. Foster that she would not accept the proposed payment plan because D.B.S. had the right to garnish his wages, as discussed above.
The Defendants did not dismiss the civil action filed against the Fosters in municipal court. On January 4, 2001, without prior notice to the Plaintiffs, Dickerson prepared and filed court documents on behalf of D.B.S. for a default judgment against the Plaintiffs. She did not inform the court that she had any intervening telephone conversation with Mr. Foster. The municipal court judge signed the default judgment entry that Dickerson submitted.
The Plaintiffs assert that they did not file an answer to Dickerson's complaint because they presumed the case had ended after Mr. Foster's telephone conversation with Dickerson.
After obtaining the default judgment, Dickerson attached the Fosters' household checking account by sending the court orders directly to their bank, without providing notice of such action to the Fosters. Both Mr. and Mrs. Foster are employed and participate in a direct deposit program with their employers, such that their paychecks go directly into their bank accounts. Consequently, Dickerson's attachment froze the Fosters' cash assets without prior notice to them. As a result, the Fosters allege that they were left without funds for basic necessities, and that outstanding checks that they had previously written were dishonored. The Fosters also allege that Dickerson failed to schedule a court hearing on the ex parte attachment of their bank account within the time required by law, thus causing them further economic and emotional loss.
Dickerson contends that it is the court's responsibility to schedule such a hearing.
The Fosters have not specified how this failure to schedule a court hearing caused them damage that extended beyond the damage caused by the attachment itself.
On January 25, 2001, the Fosters notified the Defendants that the attachment of their bank account was void ab initio and that Dickerson, who regularly signs pleadings in civil actions under the name D.B.S., was illegally practicing law. The Fosters based their allegations on the fact that the records of the Ohio Secretary of State at that time showed the lawful owner and registrant of D.B.S. to be Mary Jane Slaughter. Dickerson appeared before the Zanesville Municipal Court on January 25, 2001 to oppose the release of her attachment on the Fosters' bank account. She informed the court that she owned D.B.S. pursuant to the transfer from Mr. Slaughter in March 1999. The municipal court discharged the attachment.
On February 23, 2001, the municipal court heard evidence on the Fosters' motion to vacate the default judgment entered against them. Coffman appeared as counsel for D.B.S., and Dickerson testified on behalf of D.B.S. During the hearing, Dickerson testified that she had not registered her ownership or use of the name "D.B.S. Collection Agency" with the Secretary of State.
On March 2, 2001, Mr. Slaughter registered the August 10, 1998 transfer of ownership of D.B.S. to him from Mary Jane Slaughter. At the same time, Dickerson registered the March 1, 1999 transfer of ownership of the "D.B.S. Collection Agency" business and name to her from Mr. Slaughter. Both filings and registrations were prepared by Coffman, who thereafter filed copies of the registrations with the municipal court. The business address listed for D.B.S. on Dickerson's application for registration listed the same address for D.B.S. that had been registered by Mary Jane Slaughter in 1997.
On March 28, 2001, the municipal court ordered the January 4, 2001 default judgment vacated because, at the time judgment was entered, D.B.S. and Dickerson lacked the legal capacity to commence or maintain a civil action under the name "D.B.S. Collection Agency" due to the lack of proper registration. The municipal court also recognized that, pursuant to her March 2, 2001 registration, Dickerson now had legal capacity, and stated that the action brought by Dickerson remained pending in the municipal court.
III. PROCEDURAL HISTORY
Based on the foregoing series of events, the Fosters filed a Complaint with this Court on May 30, 2001, on behalf of themselves and all others similarly situated. In their Complaint, the Plaintiffs sought to recover based on (1) the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"); (2) the Ohio Consumer Sales Practices Act, Ohio Revised Code §§ 1345.01 et seq. ("OCSPA"); (3) common law fraud; (4) the Ohio Pattern of Corrupt Activities Act, Ohio Revised Code § 2923.31 et seq. ("PCA"); (5) negligence; and (6) 42 U.S.C. § 1983.In an Order dated March 8, 2002, this Court granted in part and denied in part Defendants D.B.S. and Dickerson's Motion for Judgment on the Pleadings. Pursuant to that Order, the OCSPA and negligence claims were dismissed. Pursuant to an Opinion and Order dated March 25, 2002, this Court granted the Plaintiffs' Motion to Certify a Class under Fed.R.Civ.P. 23(b)(3), while denying the Plaintiffs' Motion to Certify a Class under Fed.R.Civ.P. 23(b)(2). The Court certified a class defined as,
All persons named as a party defendant in any Ohio civil action filed between August 10, 1998 and March 1, 2001, in which "D.B.S. Collection Agency" was the named Plaintiff.
The Court also certified a subclass defined as,
All such persons as to whom one or more of the defendants did or will engage in any debt collection activity thereto on or after March 2, 2001.
On February 20, 2003, after the Defendants' petition to the Sixth Circuit for leave to appeal the class certification Order had been denied, this Court granted the Plaintiffs' Motion for an Order to Approve and Issue Class Notice. On March 6, 2003, the Court issued two Orders. The Court granted in part the Plaintiffs' Motion for Reconsideration of the March 8, 2002 Opinion and Order on Defendants D.B.S. and Dickerson's Motion for Judgment on the Pleadings, reinstating the Plaintiffs' claims under the OCSPA. The Court also granted in part and denied in part Defendant Coffman's Motion for Judgment on the Pleadings, dismissing the negligence claim but not the OCSPA claim as to Defendant Coffman.
On June 3, 2003, the Plaintiffs filed a Motion to Amend the Class Definition, seeking to amend the definition of the class and subclass to the following:
All persons named as a party defendant in any Ohio civil action filed with "D.B.S. Collection Agency" as the named plaintiff by alleged assignment at any time prior to November 30, 2002; and/or all such persons as to whom one or more of the defendants did or will engage in any debt collection activity in relation thereto on or after March 2, 2001.
On June 11, 2003, the Plaintiffs, in accordance with the Court's February 20, 2003 Order for providing class notice, filed with the Court a list of undeliverable notices and corrected addresses. The Plaintiffs requested, at that time, that the issuance of suggestions for additional class notice, as provided for in the February 20, 2003 Order, be deferred pending the Court's ruling on the Plaintiffs' Motion to Amend the Class Definition. This request for extension is hereby GRANTED.
On July 11, 2003, the Defendants filed their responses to the Plaintiffs' Motion. Defendants D.B.S. and Dickerson, in their Opposition, seek to adjust the amended class definition as follows:
CLASS 1
With respect to the claims against Defendant Ward Coffman, all persons named as a party Defendant in any Ohio civil action filed with "D.B.S. Collection Agency" as the named plaintiff by alleged assignment at any time prior to November 30, 2002.CLASS 2
With respect to the claims against Defendants Kathy Dickerson and D.B.S. Collection Agency, all persons named as a party Defendant in any Ohio civil action filed with "D.B.S. Collection Agency" as the named plaintiff by alleged assignment at any time between March 1, 1999, and November 30, 2002.
Defendant Coffman not only filed an Opposition to the Plaintiffs' Motion to Amend the Class Definition, but also filed his own Motion to Amend the Class Definition. Coffman's proposed amended class definition reads as follows:
Class Definition: All persons named as a party defendant in any Ohio civil action filed between August 10, 1998 and March 1, 2001, in which "D.B.S. Collection Agency" was the named plaintiff.
Subclass A: All persons named as a party defendant in any Ohio civil action filed between August 10, 1998 and March 1, 2001, in which "D.B.S. Collection Agency" was the named plaintiff, and which involved a dispute arising in connection with a "consumer transaction" as defined by O.R.C. § 1345.01(A).
Subclass B: All persons named as a party defendant in any Ohio civil action filed between August 10, 1998 and March 1, 2001, in which "D.B.S. Collection Agency" was the named plaintiff, and which only involved disputes that did not arise in connection with a "consumer transaction" as defined by O.R.C. § 1345.01(A).
The Plaintiffs, in their Reply Memorandum in Support of Amending the Class Definition, noted that "the D.B.S. defendants' memorandum did help plaintiffs realize some fine-tuning of the proposed amended definition could enhance its precision." The Plaintiffs then provided a new proposed amendment to the class definition, with changes italicized:
[A]ll persons named as a party defendant in any Ohio civil action filed by defendant Coffman with "D.B.S. Collection Agency" as the named plaintiff by alleged assignment at any time prior to November 30, 2002; and/or all such persons as to whom one or more of the defendants did or will engage in any debt collection activity in relation thereto on or afterMarch 2, 2001August 10, 1998.
This matter is before the Court on the Plaintiffs' Motion to Amend the Class Definition and on Defendant Coffman's Motion to Amend the Class Definition.
IV. STANDARD OF REVIEW
A district court has the authority to modify a class certification order in light of subsequent developments in the litigation. Gen. Tel. Co. of the Southwest v. Falcon, 457 U.S. 147, 160 (1982) (noting that a class certification order "is inherently tentative") (quoting Coopers Lybrand v. Livesay, 437 U.S. 463, 469 n. 11 (1978)); accord Mallory v. Eyrich, 922 F.2d 1273, 1282 (6th Cir. 1991); see Lindsey v. Memphis-Shelby County Airport Auth., 229 F.3d 1150 (table), 2000 WL 1182446, at *7 (6th Cir. Aug. 15, 2000) (stating that a district court has discretion to redefine a class); Fed.R.Civ.P. 23(c)(1) (noting that an order of class certification "may be conditional, and may be altered or amended before the decision on the merits"). The court may modify the class or establish subclasses as appropriate in response to factual development. In re Harcourt Brace Jovanovich, Inc. Sec. Litig., 838 F. Supp. 109, 115 (S.D.N.Y. 1993) (citing Richardson v. Byrd, 709 F.2d 1016, 1019 (5th Cir. 1983), and Bryan v. Amrep Corp., 429 F. Supp. 313, 317 (S.D.N.Y. 1977)).
Because the parties must be able to rely on the class certification order in conducting discovery, preparing for trial, and engaging in settlement discussions, the certification order should not be altered except for good cause. Manual for Complex Litigation, Third § 30.18 (1995) (noting that, sometimes, "developments in the litigation, such as the discovery of new facts or changes in parties or in the substantive or procedural law, will necessitate reconsideration of the earlier order and the granting or denial of certification or redefinition of the class"); accord Cook v. Rockwell Int'l Corp., 181 F.R.D. 473, 477 (Colo. 1998). The grounds offered for amendment should not be ones that have been given previously, or which could have been argued earlier but were not. Harcourt Brace Jovanovich, 838 F. Supp. at 115. In considering whether to modify its original decision, the court should consider whether the parties or the class would be unfairly prejudiced by a change in the proceedings at that point. Manual for Complex Litigation, Third § 30.18 (1995); accord Harcourt Brace Jovanovich, 838 F. Supp. at 115. This Court must thus determine (1) whether the moving party has established good cause for the redefinition, based on newly discovered facts or new law that could not have been argued earlier; and (2) whether the amendment would unfairly prejudice the adverse party.
Generally, the merits of a case are more properly considered at trial or on a motion for summary judgment than when addressing class certification issues pursuant to Rule 23. Kennedy v. United Healthcare of Ohio, Inc., 206 F.R.D. 191, 202 (S.D. Ohio 2002); see Eisen v. Carlisle Jacquelin, 417 U.S. 156, 177-78 (1974); Miller v. Mackey Int'l, Inc., 452 F.2d 424, 427 (5th Cir. 1971); In re Telectronics Pacing Sys., Inc., Accufix Atrial "J" Leads Prods. Liab. Litig., 172 F.R.D. 271, 282 (S.D. Ohio 1997); Thompson v. Midwest Found. Indep. Physicians Ass'n, 117 F.R.D. 108, 109 (S.D. Ohio 1987). But cf. Falcon, 457 U.S. at 160 ("Sometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim, and sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question."); Livesay, 437 U.S. at 469 n. 12 ("Evaluation of many of the questions entering into determination of class action questions is intimately involved with the merits of the claims. The typicality of the representative's claims or defenses, the adequacy of the representative, and the presence of common questions of law or fact are obvious examples.") (quoting 15 C.Wright, A. Miller, and E. Cooper, Federal Practice and Procedure § 3911 (1976)); Castano v. Am. Tobacco Co., 84 F.3d 734, 744 (5th Cir. 1996) ("[A] court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues."). When a court does examine the merits of a case in the context of a certification decision, it must always be in reference to a specific requirement of Rule 23. Kennedy, 206 F.R.D. at 200.
Here, this Court need not consider any of the particular requirements of Rule 23 since the Court's certification of the class is not being challenged. In other words, because the matter before the Court is the definition of the class rather than potential decertification of the class, the Rule 23 requirements to maintain a class need not be considered. There should thus be no need, at this juncture, to look into the merits of any of the claims or defenses in this case.
V. ANALYSIS 1. The Plaintiffs' Motion to Amend the Class Definition
The Plaintiffs' Motion to Amend the Class Definition is based on the purported revelation, through the discovery process, that written assignments meeting all the requirements of Ohio Revised Code § 1319.12 were never properly executed or in effect for any of the hundreds of accounts upon which D.B.S. sought to collect. The Plaintiffs contend that, as soon as permissible under local rules, they served the Defendants with discovery for the written assignments that Ohio law requires before an entity may legally own or sue on accounts. The Defendants provided only partial responses, and the Plaintiffs filed at least one Motion to Compel. It was not until a status conference before Magistrate Judge Kemp in November 2002 that the Defendants expressly stated that the assignments already produced constituted the only assignments for any of the accounts on which the Defendants had sued. In February 2003, class counsel spoke with Coffman's attorney about the lack of assignments and requested any additional assignments for accounts involved in suits filed after March 1, 2001, since any suits brought without a valid assignment would be illegal regardless of whether D.B.S. was properly registered at the time. Class counsel requested copies of any assignments for accounts sued on between March 2, 2001, and November 2002, when the filing of collection actions by D.B.S. ceased. While no post-March 1, 2001 assignments were ever provided to class counsel, counsel for D.B.S. and Dickerson provided class counsel, in early May 2003, with additional assignments for pre-March 1, 2001 accounts. Class counsel does not believe that any of the assignments provided are valid.
The Plaintiffs allege that they diligently pursued discovery about the purported assignments from the beginning of the case and that they delayed in bringing the instant Motion no longer than was necessary to obtain responses to their discovery requests, to receive confirmation that the assignments received were the only ones extant, and to investigate the Defendants' state court filings and request additional information to fulfill their obligations under Fed.R.Civ.P. 11. The Plaintiffs thus contend that the redefined class should be approved as proposed.
Defendants D.B.S. and Dickerson do not object, per se, to the Plaintiffs' proposed redefinition; rather, they propose an adjustment of their own.
Defendant Coffman argues that the Plaintiffs' Motion should be denied, first, because the Plaintiffs have failed to demonstrate that the proposed amendment is based on newly discovered facts or law that could not have been argued earlier, and, second, because allowance of the Motion would unfairly prejudice him. Coffman asserts that the Plaintiffs, by their own admission, were aware of this issue at the beginning of the litigation; yet they failed to raise the issue for over two years. He argues that the current Motion is based on a litigation tactic, rather than on newly discovered facts and that, regardless, this issue could have been argued earlier had the Plaintiffs not delayed in securing through discovery the documents relating to this issue.
Defendant Coffman also contends that he would be unfairly prejudiced by the Plaintiffs' proposed amendment. Coffman takes issue with the Plaintiffs' description of the discovery process, claiming that they never served a Motion to Compel on him and that his attorney never received a letter, as promised by class counsel, formally requesting assignments. In fact, he contends that he was never served with any requests for assignments at all. Coffman contends that he has relied on the Court's class certification Order in preparing his defense, that class notices have already been sent, that some completed discovery will have to be revisited should the Court grant the Plaintiffs' Motion, and that he would be exposed to a substantially larger sum of damages than he currently faces.
Coffman's argument here seems to be that he has not engaged in any of the delay tactics of which the other Defendants are guilty, so the proposed redefinition would unfairly prejudice him (and not Defendants D.B.S. and Dickerson). This argument is not persuasive. Expanding the Defendants' liability exposure by broadening the class definition is not a discovery sanction. Its purpose is not to punish the Defendants for failing to provide documents; it purpose is to more accurately reflect the class of people harmed by the Defendants' illegal practices in connection with D.B.S.'s collection of debts. Whether or not Coffman had access to documents which he had an obligation to produce and yet did not provide is irrelevant to whether or not the proposed redefinition would provide a more accurate definition of the class of people harmed by the underlying conduct. Whether the prejudice to Coffman would be unfair is based on the extent to which he has relied on the original class definition, not on the extent to which he contributed to the delay.
Coffman claims that the prejudice to him would stem from the Plaintiffs' unfair advantage in having been aware of this issue from the commencement of the litigation, yet allowing two years of complex litigation to proceed before raising it. The Plaintiffs counter that, since Defendant Coffman drafted and signed the complaints that falsely alleged the existence of valid assignments, he has always had knowledge of this issue and cannot claim unfair surprise. The Plaintiffs also contend that Coffman's reliance on the original definition has been limited and that any burden of providing additional class notices falls on the Plaintiffs rather than on Coffman.
The absence of valid assignments is a newly discovered fact. Class counsel was aware, from the commencement of the litigation, that lack of assignments was a potential issue in this case; however, the Plaintiffs are correct that Rule 11 requires them to investigate diligently the grounds for a motion before filing. The Plaintiffs received a final installment of assignments in May 2003 and filed this motion in June 2003. Any delay by the Plaintiffs in discovering this new evidence and bringing it to the attention of the Court was not unreasonable in light of the recalcitrance of the Defendants and the strictures of Rule 11. Even if the Plaintiffs previously had been aware of the fact that there were no assignments, it was reasonable for them to have waited until receiving evidentiary support for that fact. The argument the Plaintiffs now make before this Court could not have been made at any earlier stage of the litigation. The Plaintiffs did not have this evidence in their possession at the time the original class certification was argued, and there is no indication that they had this evidence yet refused to act on it in the hopes of gaining a tactical advantage over the Defendants.
Again, the fact that Defendant Coffman might not have been recalcitrant is not relevant. The refusal of the Defendants to produce requested documents or to acknowledge that they possessed no additional documents is relevant only to establish that the Plaintiffs could not reasonably be expected to have argued this point earlier.
Coffman has also failed to establish that he would suffer unfair prejudice if this Court were to accept the Plaintiffs' proposed redefinition. His reliance on the original class definition does not appear to have been significant to date. There is currently no discovery deadline or dispositive motion filing deadline in place, so Coffman's ability to prepare his defense based on the new class definition will not be hampered in any way. Coffman can point to no specific act of detrimental reliance, and this Court is unable to find any such reliance. As the Plaintiffs maintain, the fact that class notices have already been sent also does not prejudice Coffman in any way. The burden of providing additional notice falls on the Plaintiffs and will not affect Coffman. In addition, the fact that some discovery may have to be revisited does not warrant a finding of unfair prejudice. As noted, the discovery deadline has not passed. The burden to the Defendants of having to conduct additional discovery does not outweigh the Court's interest in establishing an accurate class definition in light of evidentiary developments. The mere fact that Coffman would be subject to substantially greater liability if the amended definition were adopted likewise does not suffice to demonstrate unfair prejudice. If expanded liability were adequate to establish unfair prejudice, then plaintiffs likely would never be able amend class definitions. The burden on the Defendants based on the amended class definition is no greater than it would have been had the amended definition been proposed initially. As noted above, there is no evidence that the Plaintiffs conclusively knew that there were no valid assignments, yet deliberately withheld this information as part of a litigation tactic designed to gain unfair advantage over the Defendants. Coffman thus has not demonstrated unfair prejudice.
To date, Coffman has conducted little, if any, discovery. Coffman will thus not be in the position of having to redo discovery that he had already substantially completed.
For the foregoing reasons, the Plaintiffs' Motion to Amend Class Definition is GRANTED.
2. Defendants D.B.S. and Dickerson's Proposed Changes
Defendants D.B.S. and Dickerson contend that since D.B.S. is and always has been a sole proprietorship, neither D.B.S. nor Dickerson may be held liable for the wrongful conduct of prior owners. They thus assert that the class definition should be amended to reflect the fact that there can be no claims against either of them that arose prior to March 1, 1999, when Dickerson purchased the assets of D.B.S. from Michael Slaughter. The Plaintiffs argue both that this issue represents a dispute on the merits not properly raised when considering the class definition and that there are factual issues as to when Dickerson's liability would begin.Adopting D.B.S. and Dickerson's proposed amendment to the class definition would necessitate an examination of the merits that is improper in this context. If, on a motion for summary judgment, D.B.S. and Dickerson are able to establish that they should not be liable for any activity occurring before March 1, 1999, then they may move this Court for an amendment to the class definition to reflect that ruling. The Court sees no reason to make that determination now. The Court therefore rejects the amendments offered by Defendants D.B.S. and Dickerson.
3. Defendant Coffman's Motion to Amend the Class Definition
Defendant Coffman contends that the Court's Order granting reconsideration of the dismissal of the Plaintiffs' OCSPA claims constitutes a new legal development that necessitates an amendment to the class definition to delineate those class members to whom the OCSPA will not apply as a matter of law. Coffman argues that some class members' claims do not meet the statutory requirement that the practice complained of be "in connection with a consumer transaction," since "consumer transactions" under the OCSPA do not include transactions between physicians or dentists and their patients. The Plaintiffs contend both that Defendant Coffman raises a liability question relating to the merits that should not be decided in the context of class certification and that Coffman's arguments as to the non-applicability of the OCSPA to transactions here are legally flawed. Defendant Coffman does not actually ask the Court to consider the merits of the OCSPA "consumer transaction" issue at this time; rather, he seeks the creation of subclasses to allow the parties to litigate that issue more clearly and efficiently.The Court's reinstatement of the Plaintiffs' OCSPA claims is not a new legal development, and Coffman has not otherwise shown good cause to amend the class definition. While an order granting reconsideration would ordinarily be considered a new legal development, this particular Order does not constitute new law for two reasons. First, the legal framework with respect to the OCSPA claims was no different when Coffman filed his Motion than it was when the parties filed their briefs regarding the original certification of the class. The Plaintiffs' OCSPA Count was a valid part of their claims against the Defendants until March 8, 2002, when the Court granted Defendants D.B.S. and Dickerson's Motion for Judgment on the Pleadings with regard to that claim. Though the Motion for Class Certification was not granted until March 26, 2002, Defendant Coffman's response to that Motion was filed on July 27, 2001. Coffman had ample time to argue for subclasses based on the OCSPA claim before that claim was eliminated.
Second, and more importantly, there was no time at which an OCSPA claim was not pending against Defendant Coffman. Coffman did not join with D.B.S. and Dickerson's Motion for Judgment on the Pleadings. Instead, he filed his own Motion for Partial Judgment on the Pleadings after the Court ruled on D.B.S. and Dickerson's Motion. The Court denied Coffman's Motion for Judgment on the Pleadings as to the OCSPA claim on the same day that it granted the Plaintiffs' Motion for Reconsideration, thereby reinstating the OCSPA claim against D.B.S. and Dickerson. The reinstatement of the Plaintiffs' OCSPA claim thus is not a new legal development as to Defendant Coffman.
While the proposed amendment likely would not cause unfair prejudice to the Plaintiffs, Defendant Coffman has not met the threshold requirement of proving that he has good cause for seeking the redefinition. At oral argument, Coffman's counsel conceded that there was no absolute need to establish the proposed subclasses at this point in the litigation. The creation of Coffman's proposed subclasses may be reconsidered by the Court after the Court has addressed the "consumer transaction" issue in a motion for summary judgment. Until then, the creation of such subclasses is unnecessary and premature. Accordingly, Defendant Coffman's Motion to Amend the Class Definition is DENIED.
4. The Plaintiffs' Second Set of Proposed Changes
The Plaintiffs provide little, if any, argument or justification for their second suggested amendment to the class definition. Adding "by defendant Coffman" is an unnecessary embellishment to the functional class definition. The change of date in the subclass definition would serve to transform the subclass into a completely different entity with a completely different purpose than it had before. The Plaintiffs have not provided sufficient justification to warrant the adoption of either of these two changes. The Court thus rejects the Plaintiffs' second set of proposed changes to the class definition.VI. CONCLUSION
Based on the foregoing analysis, the Court GRANTS the Plaintiffs' Motion to Amend the Class Definition, DENIES Defendant Coffman's Motion to Amend the Class Definition, and ADOPTS the proposed definition set forth by the Plaintiffs in their Motion.
IT IS SO ORDERED.