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Gold v. Midland Credit Management, Inc.

United States District Court, N.D. California, San Jose Division

October 7, 2014

ELLEN ANNETE GOLD, Plaintiff,
v.
MIDLAND CREDIT MANAGEMENT, INC., et al., Defendants.

ORDER GRANTING IN PART, DENYING IN PART MOTION FOR CLASS CERTIFICATION [RE: ECF 58]

BETH LABSON FREEMAN, District Judge.

In this putative class action lawsuit, plaintiff Ellen Annete Gold alleges that defendants Midland Credit Management, Inc. and Midland Funding, LLC (collectively, "Defendants") violated provisions of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq., and the California Rosenthal Fair Debt Collection Practices Act ("Rosenthal Act"), Cal. Civ. Code § 1788 et seq., by sending an allegedly false, deceptive, and misleading letter concerning Plaintiff's past-due balance with third party creditor HSBC Bank Nevada, N.A. Plaintiff now seeks to certify a class of California residents who received the same allegedly misleading letter.

On August 14, 2014, the Court heard oral argument on Plaintiff's motion and ordered supplemental letter briefs regarding the use of a claim form to identify class members, an identification method that Plaintiff raised for the first time in her reply brief. The supplemental briefing concluded on September 12, 2014.[1] Having carefully considered all of the parties' respective written submissions and the oral argument of counsel, for the reasons stated herein, the Court GRANTS IN PART and DENIES IN PART Plaintiff's Motion for Class Certification.

I. BACKGROUND

Plaintiff owes a financial obligation, "namely a consumer credit account issued by HSBC Bank Nevada, N.A, " that was at some time prior to this lawsuit "consigned, placed or otherwise transferred to Defendants for collection." Compl. ¶¶ 13-14, ECF 1. The subject of this action is a collection notice dated May 3, 2012 that Defendants sent to Plaintiff. Id. ¶ 15-17, Exh. 1. Though the letter states that the current owner of the debt is defendant Midland Funding, LLC, id. ¶ 18, Plaintiff alleges that the following passages in the notice and accompanying brochure are misleading:

"We can help you reduce your past balance with HSBC Bank Nevada, N.A. and get your finances back on track."
"Your credit report will be updated with each payment made, and once you've completed your agreed-upon payments to settle the account, your credit report will be updated as Paid in Full'!"
"Having a good credit report is important... We can help you get your finances back on track."

Id. ¶¶ 19, 21, 23. It appears to be Plaintiff's theory that because Defendants are the "current owners" of the debt, these passages misleadingly imply either that any debt is still owed to HSBC Bank or that Defendants can affect the manner in which HSBC Bank reports the debt to credit bureaus. Id. ¶¶ 20, 22, 24. Based on this theory of alleged misrepresentation, Plaintiff contends that Defendants violated provisions of the federal Fair Debt Collection Practices Act ("FDPCA"), 15 U.S.C. § 1692 et seq., and of the California Rosenthal Fair Debt Collection Practices Act ("Rosenthal Act"), Cal. Civ. Code §§ 1788-1788.33, and seeks to certify a class under both acts.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 23, which governs class certification, has two sets of distinct requirements that a plaintiff must meet before the Court may certify a class. As the Supreme Court has recently reiterated:

The class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only. To come within the exception, a party seeking to maintain a class action must affirmatively demonstrate his compliance with Rule 23. The Rule does not set forth a mere pleading standard. Rather, a party must not only be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, typicality of claims or defenses, and adequacy of representation, as required by Rule 23(a). The party must also satisfy through evidentiary proof at least one of the provisions of Rule 23(b).

Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013) (quotations and citations omitted).

A court's analysis of class certification "must be rigorous' and may entail some overlap with the merits of the plaintiff's underlying claim.'" Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 133 S.Ct. 1184, 1194 (2013) (quoting Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011)). However, merits questions may only be considered to the extent that they are "relevant to determining whether the Rule 23 prerequisites for class certification are satisfied." Id. at 1195. Within the framework of Rule 23, the Court ultimately has broad discretion over whether to certify a class. Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001).

III. DISCUSSION

Plaintiff seeks to certify a "hybrid" class under Rule 23(b)(2) and (b)(3) defined as:

"(i) all persons with addresses in California (ii) to whom Defendants sent, or caused to be sent, a notice in the form of Exhibit 1' attached to the Class Action Complaint (iii) in an attempt to collect an alleged debt originally owed to HSBC Bank Nevada, N.A. (iv) which was primarily for personal, family, or household purposes (as shown by Defendants' records or the records of the original creditor), (v) which were not returned undeliverable by the U.S. Post Office (vi) during the period one year prior to the date of filing this action."

Pl.'s Mot. 1. As previously stated, Plaintiff's proposed class would encompass claims under both the FDCPA and the Rosenthal Act. The parties do not appear to dispute that the same definition can be used for classes under both acts. See Def.'s Opp. 1, n.1, ECF 61. The Court's task is thus to determine whether Plaintiff has affirmatively demonstrated compliance with Rule 23. If Plaintiff has satisfied the Rule 23 requirements, then a class may be certified for claims under both the FDCPA and the Rosenthal Act.

A. Rule 23(a) Requirements

Under Rule 23(a), the Court may certify a class only where "(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). In addition to these explicit requirements of "numerosity, commonality, typicality and adequacy of representation, " Mazza v. Am. Honda Motor Co., 666 F.3d 581, 588 (9th Cir. 2012), an implied prerequisite to class certification is that "the class must be sufficiently definite; the party seeking certification must demonstrate that an identifiable and ascertainable class exists." Xavier v. Philip Morris USA Inc., 787 F.Supp.2d 1075, 1089 (N.D. Cal. 2011); Wolph v. Acer Am. Corp., 272 F.R.D. 477, 482 (N.D. Cal. 2011); see also Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 592-93 (3d Cir. 2012).

Defendants contend that Plaintiff cannot satisfy the Rule 23(a) requirements of ascertainability, numerosity, commonality, and adequacy of representation. Def.'s Opp. 4-14. Because Defendants' arguments are largely premised on the ascertainability of the class as ...


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