United States District Court, S.D. California
ORDER DISMISSING CLASS CLAIM
Cathy Ann Bencivengo United States District Judge.
matter before the Court is a class action alleging a
violation of the Fair Debt Collection Practices Act
(“FDCPA”). Plaintiff David Tourgeman represents
the class. The law firm of Nelson & Kennard is the
Defendant debt collector. On June 30, 2016, the Court held a
hearing on the parties’ motions in limine. At
the hearing, the parties disputed whether Plaintiff or the
Defendant bears the burden of proof at trial to establish the
Defendant’s net worth for the purpose of awarding
statutory damages to the class under FDCPA. Having considered
the submissions of the parties,  the arguments of counsel and
the pleadings in this case, the Court finds that it is
Plaintiff’s burden, on behalf of the class, to present
competent evidence of the Defendant’s current net worth
to establish the first element necessary for a determination
of class statutory damages. Plaintiff has no competent
evidence to offer to establish the proper amount of damages
the finder of fact may consider in the award of statutory
damages, and therefore cannot prove this necessary element of
the class claim. The class claim is therefore DISMISSED.
FDCPA Statutory Damages for a Class Claim
are 31 identified members of the certified class in this
action, including the Plaintiff. These individuals were each
individually served with a complaint prepared and filed by
Defendant on behalf of its client Collins Financial Services
to collect an alleged debt. The complaint erroneously
identified the original creditor as American Investment Bank,
N.A., when, in actuality, CIT Online Bank originated the
loans at issue in the complaints.
Ninth Circuit found this misidentification of the loan
originator in the complaint to be a material
misrepresentation, subjecting the Defendant to strict
liability. See Tourgeman v. Collins Fin. Servs.,
Inc., 755 F.3d 1109, 1116 (9th Cir. 2014). Consequently,
the remaining focus of Plaintiff’s case-in-chief for
trial is the presentation of evidence to support the damage
award for the named plaintiff and the other 30 class
members. In civil cases, the plaintiff generally
has the burden of proving damages by a preponderance of the
evidence and the award must be based on evidence and not upon
speculation, guesswork or conjecture. See e.g.,
Ninth Circuit Model Civil Jury Instructions §5.1.
Plaintiff acknowledges that, individually and on behalf of
the class, he is solely seeking statutory damages. There is
no claim for actual damages in this case. The award of
statutory damages for the class requires two factual
determinations by the finder of fact. First, there must be a
determination of the potential ceiling for class recovery.
debtor collector who fails to comply with any provision of
this subchapter with respect to any person is liable to such
person in an amount equal to the sum of -
[I]n the case of a class action, (i) such amount for each
named plaintiff as could be recovered under subparagraph (A)
[i.e., an amount not exceeding $1, 000], and (ii) such amount
. . . for other class members, . . ., not to exceed the
lesser of $500, 000 or 1 per centum of the net worth of the
15 U.S.C. §1692k(a)(2)(B)(emphasis added).
once the damages ceiling is established, the jury determines
the amount to be awarded within that limit based on a
non-exhaustive list of factors.
determining the amount of liability in any action under
subdivision (a), the court shall consider, among other
relevant factors -
[I]n any class action . . ., the frequency and persistence of
the noncompliance by the debt collector, the nature of such
noncompliance, the resources of the debt collector, the
number of persons adversely affected, and the extent to which
the debt collector’s noncompliance was intentional.
parties dispute which party bears the burden of proving the
maximum amount of recovery the jury must consider in
assessing class damages. Plaintiff conceded at the motion
hearing that there is no evidence upon which he could
reasonably assert that Defendant’s net worth exceeds
$50 million, therefore the potential amount of damages the
class may recover must be something less than $500, 000.
Plaintiff, however, can proffer no evidence as to what one
percent of the Defendant’s current net worth is.