FDCPA Class Action Certified Over Defense Objection that Range of 100-500 Class Members does not Satisfy Numerosity and that Allegation that Debt Collection Letters Violate Federal Fair Debt Collection Practices Act (FDCPA) Presented Common Questions of Law and Fact Illinois Federal Court Holds
Plaintiff filed a putative class action against Check Brokerage Corp. alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) based on debt collection letters sent by the company. Day v. Check Brokerage Corp., 240 F.R.D. 414, 415 (N.D. Ill. 2007). The class action alleged that defendant’s letters violate the FDCPA in that they are “false, deceptive, or misleading as determined by the unsophisticated consumer standard and therefore in violation of 15 U.S.C. § 1692(e), (e)(2)(A), (e)(5), and (e)(10).” Id., at 416. The class action complaint also alleged that defendant “used unfair or unconscionable means to collect or attempt to collect a debt in violation of 15 U.S.C. § 1692(f) and (f)(1)” and that the notice concerning a consumer’s right to dispute a debt failed to comply with 15 U.S.C. § 1692(g)(a), id. Plaintiff moved the court to certify the litigation as a class action; defense attorneys argued that class action treatment was inappropriate because neither numerosity nor commonality had been met. Id., at 415. The district court disagreed.
The class action complaint was premised upon four debt collection letters defendant sent to plaintiff concerning a $20 debt. Day, at 416. The first letter advised Day that his $20 check had not cleared, that he now owed $65 (which included a “return check charge” of $25 and a “bank charge to merchant” of $20), and that additional fees may be imposed if payment is not made promptly and it was in his “‘best interests to clear this check immediately,’ despite the notification at the end of the letter that Day had thirty days to dispute the validity of the debt.” Id. The second letter “suggest[ed] you give this matter your immediate attention” and quoted Illinois Commercial Code § 3-806 about liability for dishonored checks. Id. The third letter “demand[ed] the $65.40 and stat[ed], ‘WE MUST HAVE YOUR PAYMENT NOW!!’” The letter also warned plaintiff that he could be liable for additional amounts. Id. Finally, the fourth letter stated, “THIS CHECK REMAINS UNPAID! WE ARE, THEREFORE, GOING TO SHOW YOU HOW MUCH IT COULD COST SHOULD IT GO TO LITIGATION.” This letter included reference to warrants for arrest and adverse credit reports, and ended, “Common sense would dictate that this check be paid at this point. THE AMOUNT DUE, INCLUDING THE CHECK AND SERVICE CHARGES TO THIS POINT, IS $65.40.” Id.
Plaintiff moved the court to certify the litigation as a class action. Day, at 416. Defense attorneys challenged numerosity and commonality, id., at 417. With respect to numerosity, plaintiff relied upon discovery responses that admitted the letters went to more than 100 addresses but less than 500 addresses. Id. Defense attorneys argued that a “range” of 100-500 class members does not adequately establish numerosity, but the district court stated that the defense argument “miss[es] the point entirely.” Id. The court explained that the exact size of the class need not be known in order to secure class certification, and that assuming the smallest potential size of the class – viz., 100 class members – that number was still sufficient to satisfy the numerosity requirement. Id., at 417-18.
With respect to commonality, the federal court observed that “[t]his requirement is usually met where a class’s claims arise out of some form of standardized conduct by the defendant.” Day, at 418-19 (citations omitted). The district court agreed that common questions of law and fact exist as to whether defendant’s letters violate the FDCPA under the “unsophisticated consumer standard.” The court rejected defense arguments that there may be “variations among class members’ grievances” because it found that such variations, to the extent they exist, would not be significant. Id., at 419.
NOTE: The federal court concluded by finding that Rule 23(b)(3) was met, finding that common questions predominate and that a class action device is superior to other methods of adjudication. Day, at 419.