The opinion of the court was delivered by: Cathy Ann Bencivengo United States District Judge
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S AMENDED MOTION FOR CLASS CERTIFICATION, AND DENYING DEFENDANTS' MOTION FOR RECONSIDERATION [Doc. Nos. 259, 234]
Presently before the Court is Plaintiff David Tourgeman's Amended Motion for Class Certification. [Doc. No. 259.] On March 28, 2012 the Court held oral argument on the motion. Brett Weaver, Esq. and Daniel P. Murphy, Esq. appeared on behalf of the Plaintiff. Brandon Wisoff, Esq. and Paul Alsdorf, Esq. appeared on behalf of Defendant Dell Financial Services ("DFS"). Tomio B. Narita, Esq. appeared on behalf of Defendants Nelson & Kennard and the Collins Financial Defendants. Upon consideration of the parties' filings and oral argument the Court GRANTS IN PART AND DENIES IN PART the Amended Motion for Class Certification.
The Court also indicated to the parties during oral argument that it would consider and address in this Order the Collins Financial Defendants' Motion for Reconsideration of Judge Sammartino's Order on the Motion to Dismiss the Third Amended Complaint. [Doc. No. 234.] As set forth below, that motion is DENIED.
On July 31, 2008, Plaintiff filed the present action against, inter alia, Collins Financial, Nelson & Kennard, and DFS alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), and the California Rosenthal Act, invasion of privacy, and negligence, arising out of the Defendants' efforts to collect the outstanding balance on a computer the Plaintiff purchased from Dell, and financed through DFS. [Doc. No. 1.] DFS sold a portfolio containing approximately 85,000 charged-off debts, including Plaintiff's debt, to Collins Financial. Collins Financial and its affiliated companies then sent letters to the individuals in the portfolio seeking to collect on the debts, which Plaintiff himself did not receive. Collins Financial then referred approximately 2,000 accounts, including Plaintiff's account to the law firm of Nelson & Kennard, who sent additional letters to the individuals in the portfolio they received, and ultimately brought at least 30 lawsuits in various state courts with respect to the debts. When Plaintiff was served with the lawsuit, he contacted an attorney and ultimately succeeded in having the lawsuit dismissed because Plaintiff contended that he had already paid the debt owed.*fn1
In November of 2010, after multiple rounds of motions and extensive discovery, the Court granted Plaintiff's contested motion for leave to file the operative Third Amended Complaint ("TAC"). [Doc. Nos. 156 and 157, respectively.] The TAC amends the class definition, and alleges that the collection letters addressed to, and lawsuit filed against, the Plaintiff were misleading in that they incorrectly identified the original creditor on the debt as American Investment Bank, N.A. ("AIB"), instead of the actual original creditor on Plaintiff's, and others' accounts, CIT Bank ("CIT"). See TAC at ¶ ¶ 21-22.
The Collins Financial entities and Paragon Way moved to dismiss the TAC [Doc. No. 165,] as did Nelson & Kennard [Doc. No. 166.] Judge Sammartino denied the motion as to certain of the FDCPA/ Rosenthal Claims, finding that the FDCPA is a strict liability statute which focuses on collectors' as opposed to consumers' behavior, and therefore the Court could not hold, as a matter of law, "that Defendants are free from liability under the FDCPA because, by chance, their representations never reached Plaintiff." [Doc. No. 230 at 8.] Accordingly, Judge Sammartino found that the TAC adequately states a claim under 15 U.S.C. §§ 1692e and 1692f of the FDCPA, despite the fact that the Plaintiff does not allege that he received the allegedly misleading validation letters. Id. at 5-8. Judge Sammartino also rejected defendants' arguments that the misstatement as to the original creditor were not "material," finding that knowledge of creditor identity is critical to allowing the "'least sophisticated consumer' to make more informed decisions on how to communicate with the creditor and avoid being misled." Id. at 8, quoting Isham v. Gurstel, Staloch & Chargo, P.A., 738
F.Supp.2d 986, 996 (D. Ariz. 2010).
The Collins entities moved for reconsideration of this order, arguing that the Court erred in denying the motion as to the FDCPA claims because Plaintiff did not receive the offending letters and therefore has no injury sufficient to meet Article III standing requirements. [Doc. No. 234] This motion will be addressed below.
Plaintiff moved for class certification in April of 2011, seeking certification of the following subclasses:
1. Negligence class (against all Defendants): All consumers residing in the United States and abroad who financed a Dell computer through DFS where CIT Online Bank provided the funds and, during a period of two years of the date of the filing of his lawsuit, paid money or incurred expenses in response to a collection letter or lawsuit stating that American Investment Bank was the original creditor for the loan.
2. The UCL class (against all Defendants): All consumers residing in the United States and abroad who financed a Dell computer through DFS where CIT Online Bank provided the funds and, during a period of four years of the date of the filing of his lawsuit, paid money or incurred expenses in response to a collection letter or lawsuit stating that American Investment Bank was the original creditor for the loan.
3. The FDCPA/ Rosenthal Act I Class (against Collins, Collins USA, and Paragon Way): All consumers residing in the United States and abroad who financed a Dell computer through DFS where CIT Online Bank provided the funds and, during a period of one year of the date of the filing of his lawsuit, received a collection letter or were named in a lawsuit stating that American Investment Bank was the original creditor for the loan.
4. The FDCPA III Class (against Nelson & Kennard): All consumers residing in the United States and abroad who financed a Dell computer through DFS where CIT Online Bank provided the funds and, during a period of one year of the date of the filing of his lawsuit, received a collection letter from Nelson & Kennard or were named in a lawsuit filed by Nelson & Kennard stating that American Investment Bank was the original creditor for the loan.
Judge Sammartino denied the Motion for Class Certification without prejudice on October 21, 2011. [Doc. No. 240.] Relevant to the present motion, the Court granted Plaintiff leave to amend his class certification motion to cure the following defects:
1) Plaintiff did not provide evidence of numerosity as to any subclass. "Rule 23(a)(1) does not set a high bar but it requires more than speculation. Because Plaintiff has failed to provide evidence regarding critical aspects of his four proposed classes, the Court cannot conclude that the numerosity requirement is satisfied." Id. at 10-12. As to the UCL/FDCPA claims, Judge Sammartino found that evidence as to how many CIT accounts the DFS debt portfolio contained was lacking. Id. at 11. As to the UCL class specifically, she found that Plaintiff failed to show that numerous CIT account holders paid money or incurred expenses as a result of Defendants' alleged wrongful conduct. Id. at 11-12. As to the Nelson and Kennard class, the Court found that there was no evidence of which of the 2000 account holders received a case-initiating ...