United States District Court, D. Nebraska
KENNETH M. REYNOLDS, on behalf of himself and all others similarly situated; Plaintiff,
CREDIT BUREAU SERVICES, INC., and C. J. TIGHE, Defendants.
MEMORANDUM AND ORDER
Joseph F. Bataillon Senior United States District Judge
This matter is before the court on the plaintiff's unopposed motion for class certification and for preliminary approval of class action settlement, Filing No. 21. This is an action for damages and injunctive relief under the Fair Debt Collection Practices Act, 15 U.S.C. §1692, et seq. (hereinafter "FDCPA”) and the Nebraska Consumer Protection Act (hereinafter “NCPA”), Neb. Rev. Stat. §59-1601, et seq.
I. CLASS ACTION
Under the Federal Rules of Civil Procedure, “one or more members of a class may sue or be sued as representative parties on behalf of all members only if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a); see Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613 (1997) (describing requirements as (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation). "In order to obtain class certification, a plaintiff has the burden of showing that the class should be certified and that the requirements of Rule 23 are met." Coleman v. Watt, 40 F.3d 255, 258-59 (8th Cir. 1994).
A number of factors are relevant to the numerosity requirement of Rule 23(a), "the most obvious of which is, of course, the number of persons in the proposed class." Paxton v. Union Nat'l Bank, 688 F.2d 552, 559 (8th Cir. 1982); compare Tate v. Weyerhaeuser Co., 723 F.2d 598, 609 (8th Cir. 1983) (noting that seven to fourteen class members is not enough) with Arthur Young & Co. v. Reves, 937 F.2d 1310, 1323 (8th Cir. 1991) (finding that 1, 685 potential plaintiffs was a sufficiently large number). In addition to the size of the class, the court may also consider the nature of the action, the size of the individual claims, the inconvenience of trying individual suits, and any other factor relevant to the practicability of joining all the putative class members. Paxton, 688 F.2d at 559-60; Tate, 723 F.2d at 609 (it is appropriate for the district court to consider "that trying the individual suits would not be inconvenient because it could examine the factual basis of" each class member's complaint). A putative representative may fail its burden to show numerosity where he or she does not actually identify even the approximate size of the class or demonstrate the impracticability of joinder. Belles v. Schweiker, 720 F.2d 509, 515 (8th Cir. 1983).
Commonality is not required on every question raised in a class action. DeBoer v. Mellon Mortgage Co., 64 F.3d 1171, 1174 (8th Cir. 1995). Rather, “Rule 23 is satisfied when the legal question ‘linking the class members is substantially related to the resolution of the litigation.’” Id. (quoting Paxton, 688 F.2d at 561). "Commonality requires a showing that class members 'have suffered the same injury.'" Powers v. Credit Mgmt. Servs., 776 F.3d 567, 571 (8th Cir. 2015) (quoting General Tel. Co. v. Falcon, 457 U.S. 147, 157 (1982)). "However, '[w]hat matters to class certification . . . is not the raising of common 'questions'-even in droves-but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation.’” Id. (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, ___, 131 S.Ct. 2541, 2551 (2011) (quotation omitted; emphasis in original)); see Comcast Corp. v. Behrend, ___ U.S. ___, 133 S.Ct. 1426, 1433, (2013) (allowing variation in damages unless "individual damage calculations . . . overwhelm questions common to the class"); Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791, 797 (8th Cir. 2014), cert. granted, 135 S.Ct. 2806 (2015); DeBoer, 64 F.3d at 1174 ("The fact that individuals . . . will have . . . claims of differing strengths does not impact on the commonality of the class"); Mejdrech v. Met–Coil Sys. Corp., 319 F.3d 910, 911 (7th Cir. 2003) (“If there are genuinely common issues, issues identical across all the claimants, issues moreover the accuracy of the resolution of which is unlikely to be enhanced by repeated proceedings, then it makes good sense, especially when the class is large, to resolve those issues in one fell swoop.”).
Typicality under Rule 23(a)(3) means “that there are ‘other members of the class who have the same or similar grievances as the plaintiff.’” Alpern v. UtiliCorp United, Inc., 84 F.3d 1525, 1540 (8th Cir. 1996) (quoting Donaldson v. Pillsbury Co., 554 F.2d 825, 830 (8th Cir. 1977). The burden is fairly easily met so long as other class members have claims similar to the named plaintiff. Id. (noting that factual variations in the individual claims will not normally preclude class certification if the claim arises from the same event or course of conduct as the class claims, and gives rise to the same legal or remedial theory). In certain contexts “[t]he commonality and typicality requirements of Rule 23(a) tend to merge.” Dukes, 131 S.Ct. at 2551 and n. 5 (noting that commonality and typicality "serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence”).
Further, the named plaintiffs must fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a)(4). The adequacy inquiry under Rule 23(a)(4) serves to uncover conflicts of interest between named parties and the class they seek to represent. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625 (1997). The inquiry also factors in competency and conflicts of class counsel. Id. at 626 n.20. “[A] class representative must be part of the class and ‘possess the same interest and suffer the same injury’ as the class members.” Id. at 625–26 (quoting East Texas Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403 (1977)). A consumer who is eligible only for statutory damages can represent a class of persons who are eligible for both actual and statutory damages. Keele v. Wexler, 149 F.3d 589, 594-595 (7th Cir. 1998).
If the plaintiffs meet the requirements under Rule 23(a), they must then establish that their class fits into one of the provisions of Rule 23(b) in order to be certified. Fed.R.Civ.P. 23(b). The Supreme Court has explicitly determined that "individualized monetary claims belong in Rule 23(b)(3)." Dukes, 131 S.Ct. at 2558. For the plaintiffs to prevail on a motion for certification under Rule 23(b)(3), they must demonstrate the existence of superiority and predominance. Fed.R.Civ.P. 23(b)(3).
Rule 23(b)(3) does not require a plaintiff seeking class certification to prove that each element of his or her claim is susceptible to classwide proof. Amgen Inc. v. Connecticut Ret. Plans and Trust Funds, 133 S.Ct. 1184, 1196 (2013). Rather, all that is required is that a class plaintiff show that “common questions ‘predominate.'" Id. (quoting Fed.R.Civ.P. 23(b)(3)). The predominance inquiry requires an analysis of whether a prima facie showing of liability can be proved by common evidence or whether this showing varies from member to member. Halvorson v. Auto-Owners Ins. Co., 718 F.3d 773, 779 (8th Cir. 2013) (explaining that the lack of an individualized injury would impact predominance and mean that “individual questions necessary to determine breach of contract and bad faith” would include “individual inquiries” that would “predominate over” whether the defendant's claim-processing methodologies were reasonable.). For the purposes of class certification, however, plaintiffs cannot “identif[y] damages that are not the result of the wrong.” Comcast Corp., 133 S.Ct. at 1434; Sykes v. Mel S. Harris & Assocs., LLC, 780 F.3d 70, 82 (2d Cir. 2015) (finding a common injury among all plaintiffs in an FDCPA action, a fraudulently procured default judgment). That is, “the plaintiffs must be able to show that their damages stemmed from the defendant's actions that created the legal liability.” Leyva v. Medline Indus. Inc., 716 F.3d 510, 514 (9th Cir.2013) (“[T]he presence of individualized damages cannot, by itself, defeat class certification under Rule 23(b)(3).”).
“Predominance is a test readily met in certain cases alleging consumer or securities fraud or violations of the antitrust laws.” Amchem Prods., Inc., 521 U.S. at 625. “[C]ommon questions can predominate if a ‘common nucleus of operative facts and issues' underlies the claims brought by the proposed class.” Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 815 (7th Cir. 2012) (quoting In re Nassau County Strip Search Cases, 461 F.3d 219, 228 (2d Cir. 2006)).
If the requirements of numerosity, commonality, typicality, and adequacy are satisfied, a plaintiff must satisfy one of the three subsections of Rule 23(b). In re St. Jude Medical, Inc., 425 F.3d 1116, 1119 (8th Cir. 2005). Rule 23(b)(3) provides that a class action may be maintained if the court finds the questions of law or fact common to members of the class predominate over the questions affecting only individual class members, and a class action is the superior method for fair and efficient adjudication of the dispute. Id.; Fed.R.Civ.P. 23(b)(3). The matters pertinent to the Rule 23(b)(3) inquiry include: the class members' interests in individually controlling the prosecution or defense of separate actions; the extent and nature of any litigation concerning the controversy already begun by or against class members; the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and the likely difficulties in managing a class action. Fed.R.Civ.P. 23(b)(3)(A)-(D). The superiority requirement asks whether the class action is the best available method for resolving the controversy. See Fed.R.Civ.P. 23(b)(3). A significant consideration in evaluating superiority is whether the claims are too small to be litigated individually. Amchem Prods., Inc., 521 U.S. at 617; Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997) (stating “[t]he policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights”).
The essence of an FDCPA claim is that a debt collector has injured an individual in the collection process. See, e.g., Whitaker v. Ameritech Corp., 129 F.3d 952, 958 (7th Cir. 1997); Keele, 149 F.3d at 593 (stating that the injury common to classes in an FDCPA action is the receipt of collection letters or pleadings that allegedly illegally add unauthorized collection ...