FDCPA Class Action Defense Cases–Gaisser v. Portfolio Recovery Associates: Florida Federal Court Grants Motion To Dismiss Certain Class Action Claims But Denies Motion To Dismiss FDCPA Class Action

Motion to Dismiss FDCPA Class Action Claim Premised on Filing Untimely Debt Collection Lawsuits Fails but Motion to Dismiss State Law Class Action Claims and to Dismiss FDCPA Class Action Claim based on Attorney Fees Sought in Debt Collection Lawsuits were Meritorious Florida Federal Court Holds

Plaintiff filed a class action against Portfolio Recovery Associates (PRA) and certain individuals (PRA’s lawyers) alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and Florida’s Consumer Collections Practices Act (FCCPA); the class action complaint asserted that in violation of state and federal law, defendants engaged in a pattern and practice of filing lawsuits to collect debts after the statute of limitations had expired for doing so, and that defendants sought a standard amount of attorney fees without supporting documentation and without actually having incurred the stated amount in attorney fees. Gaisser v. Portfolio Recovery Associates, LLC, 571 F.Supp.2d 1273, 1274-75 (S.D. Fla. 2008). According to the class action, “Defendants’ practice of attempting to collect on debts after expiration of the applicable statute of limitations and Defendants’ practice regarding attorney’s fees runs afoul of the FDCPA.” Id., at 1275. More specifically, the class action complaint alleged that “Defendants used false or misleading representations to collect or attempt to collect a debt in violation of 15 U.S.C. § 1692e,” and “used unfair or unconscionable means to collect or attempt to collect a debt in violation of 15 U.S.C. § 1692f.” Id. The class action further alleged that defendants’ conduct violated Florida state law. Id. Defense attorneys moved to dismiss the first amended class action complaint. Id., at 1274. The district court granted the motion in part and denied the motion in part.

Plaintiff incurred credit card debts but was unable to keep up with the required payments. Gaisser, at 1274. The debt was assigned to PRA, who retained counsel to file suit against plaintiff to collect on the debt. Id. The first issue the district court addressed was whether New Hampshire’s three-year statute of limitations applied or Florida’s five-year statute of limitations applied to the debt collection lawsuits filed by defendants. Id., at 1275-76. The Court concluded that New Hampshire law applied, id., at 1276-77, and that defense attorneys failed to establish that the lawsuit – filed against plaintiff four years after the commencement of the statute of limitations – was filed timely, id., at 1277-78. But the district court granted the defense motion to dismiss the class action claims premised on the lawyer’s attorney fees, concluding that the lawyer verified only what a “reasonable fee” would be for the services rendered, not that the amount sought represented his “actual fee.” Id., at 1278. Because defendants did not represent the amount of attorney fees requested was a “sum certain,” and because defendants invited the court to determine the “reasonable fee” to be awarded, the class action claims based on the attorney fee requests failed. Id., at 1277-78.

Class Action Court Decisions FDCPA Class Actions Uncategorized

Class Action Defense Cases–Stewart v. Cheek & Zeehandelar: Ohio Federal Court Strikes Rule 68 Offer Of Judgment In FDCPA Class Action Holding Rule 68 Offer To Settle Individual Claims After Class Action Certification Motion Filed Cannot Moot Class Claims

Class Action Claims not Rendered Moot by Rule 68 Offer of Judgment to Settle Individual Claims of Named Plaintiffs so long as Plaintiffs have not Delayed in Seeking Class Action Treatment of Litigation Ohio Federal Holds

Two class action lawsuits were filed against the law firm of Cheek & Zeehandelar, a consumer debt collection firm, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and Ohio’s Consumer Sales Practices Act (CSPA); the class action complaints alleged that defendant “engages in misleading and deceptive debt-collection practices” and that it “uniformly fails to properly investigate whether debtor funds are lawfully subject to attachment, prior to seeking and obtaining orders of attachment. Stewart v. Cheek & Zeehandelar, LLP, 252 F.R.D. 384, 384-85 (S.D. Ohio 2008). The class actions were consolidated, and the district court ordered that plaintiffs file their motion for class action certification by February 15, 2008. Id., at 385. Prior to February 15, defendant served a Rule 68 offer of judgment on plaintiffs, which offered to compensate them for their individual claims only; the Rule 68 offer did not offer to settle the claims of the putative class. Id. Plaintiffs moved to strike the offer of judgment and, on February 15, 2008, filed their motion for certification of the litigation as a class action. Id. The district court granted plaintiffs’ motion to strike the offer of judgment.

The district court began its analysis by noting that “[t]he purpose of Rule 68 ‘is to encourage settlement and avoid litigation.’” Stewart, at 385 (quoting Marek v. Chesny, 473 U.S. 1, 5 (1985)). Rule 23 class actions, by contrast, serves to vindicate important constitutional and statutory rights by permitting individually small damage claims to be grouped together so that the amount of money involved is worth the fight. Id. Or as the Supreme Court put it, “Where it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages, aggrieved persons may be without any effective redress unless they may employ the class-action device.” Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326, 339 (1980). The district court observed at page 385, “The great weight of federal authority holds that a Rule 68 offer of judgment cannot moot the named plaintiffs’ claims after a motion for class certification has been filed.” (Citations omitted.) To hold otherwise would permit defendants to “unilaterally control whether the district court ever heard the certification motion,” id., at 385-86 Moreover, “Although courts are somewhat more divided about the effect of a Rule 68 offer before a class-certification motion has been filed, most have endorsed the view that the settlement offer will not moot the named plaintiffs’ claims so long as the plaintiffs have not been dilatory in bringing their certification motion.: Id., at 386 (citations omitted). After summarizing the reasons behind the majority view, the district court adopted that rule and held, further, that plaintiffs had not been dilatory in seeking class action certification. Id., at 386-87. Accordingly, the district court granted plaintiffs’ motion to strike the Rule 68 offer of judgment, id., at 387.

Certification of Class Actions Class Action Court Decisions FDCPA Class Actions Uncategorized

FDCPA Class Action Defense Cases–Barany-Snyder v. Weiner: Sixth Circuit Affirms Judgment On The Pleadings on FDCPA Class Action Holding Attachment Of Entire Contract To Debt Collection Complaint Was Not An Effort To Enforce Each Term In Contract

Class Action Complaint Failed to Adequately Allege Violations of Fair Debt Collection Practices Act (FDCPA) because Mere Attachment of Entire Contract with Unenforceable Attorney Fee Clause to Debt Collection Complaint Underlying Class Action was not an Attempt to Collect Attorney Fees where Debt Collection Complaint did not Pray for Such Fees Sixth Circuit Holds

Plaintiff filed a class action complaint in Ohio federal court against two debt collection attorneys and the law firm where they worked, Keith D. Weiner & Associates; defendants had filed a lawsuit against plaintiff in Ohio state court seeking to recover $8,146.53, plus interest at the rate of 16% per annum and costs alleged owed a college under a revolving credit agreement that contained the following attorney fees clause: “I/We understand that upon default of any, or all of the terms and conditions of this credit agreement and upon proper service of a NOTICE OF DEFAULT by the College, all signers immediately become, at the option of the college, liable for attorney fees and/or actual or reasonable collection costs which may be added to the Total Amount Due.” Barany-Snyder v. Weiner, 539 F.3d 327, 330 (6th Cir. 2008). The collection action did not seek attorney’s fees, and the court entered in favor of the college did not award attorney fees because the college did not seek such an award. Id., at 331. Plaintiff filed for bankruptcy protection, and the college’s debt ultimately was discharged. Id. Plaintiff’s class action complaint alleged that defendants violated the federal Fair Debt Collection Practices Act (FDCPA) and Ohio’s Consumer Sales Practices Act; the class action alleged that Ohio law “prohibits creditors from recovering attorney’s fees in connection with the collection of a consumer debt,” and that defendants violated state and federal law by attaching the college’s credit agreement with the attorney fees clause to the state court complaint. Id. Defense attorneys moved for judgment on the pleadings, arguing that the class action failed to state a claim; the district court granted the motion and plaintiff appealed. Id. The Sixth Circuit affirmed.

Plaintiff’s theory of the case was that “all signers immediately become, at the option of the college, liable for attorney fees and/or actual or reasonable collection costs” and that this violated the FDCPA’s prohibition against making false, deceptive, or misleading representations in connection with the collection of a debt. Barany-Snyder, at 332. The Sixth Circuit disagreed, holding that because the credit agreement was attached in its entirety, and because the attorney fee clause was not “drawn to the consumer’s attention,” even the “least sophisticated debtor” would not have interpreted the debt collection lawsuit as one seeking attorney fees. Id., at 334-35. The Circuit Court explained at page 335, “Indeed, as the district court noted, adopting [plaintiff’s] position leads to the untenable conclusion that the attachment of a contract to a complaint or dunning letter is equivalent to a present threat to exercise every provision of that contract.” Additionally, “while attachment of an affidavit asserting a possible entitlement to attorney’s fees might have been misleading and deceptive to the least sophisticated consumer, this conduct simply did not amount to a false representation in violation of § 1692e(2).” Id., at 335 (citation omitted). Accordingly, defendants’ debt collection action failed to state a claim under § 1692e(2). Id., at 335-36. Finally, the Circuit Court further affirmed that the debt collection action did not attempt to collect a debt in excess of the amount lawfully owed, so defendants did not violate § 1692f(1) as alleged in the class action complaint. Id., at 336. Accordingly, the Sixth Circuit affirmed the district court judgment dismissing the class action complaint, id.

Class Action Court Decisions FDCPA Class Actions Uncategorized

FDCPA Class Action Defense Cases–Yack v. Washington Mutual: California Federal Court Dismisses Class Action Complaint Because Plaintiffs Lacked Standing To Prosecute Class Action Claims

Plaintiffs Lacked Standing to Prosecute Class Action because Underlying Events Occurred Prior to Filing of Chapter 7 Bankruptcy Proceeding by Plaintiffs and Plaintiffs Failed to Disclose Existence of Class Action Claims in Bankruptcy California Federal Court Holds Plaintiffs filed a class action against Washington Mutual and other defendants alleging inter alia violations of the federal Fair Debt Collection Practices Act (FDCPA); specifically, the class action complaint alleged that defendants improperly froze plaintiffs’ checking account funds.

Class Action Court Decisions FDCPA Class Actions Uncategorized

FDCPA Class Action Defense Cases–Camacho v. Bridgeport Financial: Ninth Circuit Vacates Fee Awarded FDCPA Class Action Plaintiff Lawyers Due To District Court’s Failure To Explain Hourly Rate Utilized And Failure To Use Lodestar To Award Fees-On-Fees

Following Class Action Settlement Providing for Award of Reasonable Attorney Fees to Plaintiff’s Lawyers in FDCPA Class Action, District Court Failed to Explain Why $200 per hour was Reasonable for the Relevant Community and Failed to Determine Lodestar for Fees-on-Fees Request, thus Requiring that Fee Award be Vacated and Matter Remanded for Further Proceedings Ninth Circuit Holds

Plaintiff debtor filed a putative class action against Bridgeport Financial, a debt collector, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA); the class action complaint alleged that defendant “misrepresented the rights of consumers in its initial collection letter by requiring her to dispute her debt in writing.” Camacho v. Bridgeport Financial, Inc., _\_F.3d __ (9th Cir. April 22, 2008) [Slip Opn., at 4242-43]. The district court granted class action certification of a statewide class, and the parties entered into a Class Action Settlement Agreement that the district court ultimately approved. Id., at 4243. The Ninth Circuit opinion identifies but a single benefit provided by the class action settlement for the 7,000 class members – a cy pres award of $341.50; the agreement provided that the named plaintiff receive $1,000 in actual and statutory damages. Id. The Class Action Settlement Agreement provided further that plaintiffs’ three law firms could file a motion for attorney fees and costs if the parties could not agree on the amount of such an award, id. Plaintiff’s lawyers sought almost $170,000 in attorney fees and costs, reflecting hourly rates ranging from $425 to $500 for the attorneys, and $115 to $200 for law clerks, id., at 4243-44. The district court found the hours spent by plaintiff’s lawyers to be reasonable, but reduced the reasonable hourly rate to $200 for all attorneys and awarded a flat fee of $500 for the motion seeking fees and costs, which the court found to be “virtually identical to the materials these attorneys have submitted in other cases.” Id., at 4245-46. In the end, the district court awarded approximately $77,000 in fees and costs, id., at 4246. The lawyers appealed, and the Ninth Circuit reversed and remanded for further proceedings.

The Circuit Court noted that under the terms of the Class Action Settlement Agreement defendant “agreed to pay reasonable and necessary attorneys’ fees and costs.” Camacho, at 4247. The Court stated that the FDCPA “makes an award of fees mandatory.” Id. The Ninth Circuit explained that the district court’s order would be reversed only for clear error, id., at 4246 (citation omitted), and that and that district courts are required to use the “lodestar” method for determining the amount of attorney fees to be awarded, id, at 4247 (citations omitted). The lodestar takes the reasonable hourly rate and multiplies it by the reasonable number of hours incurred by counsel, id.; because the district court found that the hours spent by plaintiff’s lawyers were reasonable, the only issue was whether the district abused its discretion in reducing the hourly rate for plaintiff’s lawyers to $200 per hour. Id., at 4247-48.

Class Action Court Decisions FDCPA Class Actions Uncategorized

FDCPA Class Action Defense Cases-Jacobson v. Healthcare Financial: Second Circuit Reverses Summary Judgment In Favor Of Defense In FDCPA Class Action And Vacates Award Of Attorney Fees And Costs Against Class Action Plaintiff

As Matter of First Impression, FDCPA Permits Consumers to Notify Debt Collectors of Dispute Within 30 Days of Receiving Debt Collectors’ Letter Necessitating Reversal of Summary Judgment in Favor of Defense in FDCPA Class Action Second Circuit Holds

Plaintiff filed a putative nationwide class action complaint against Healthcare Financial Services (HFS), a “debt collector” within the meaning of the federal Fair Debt Collection Practices Act (FDCPA), alleging that a debt collection letter he received from HFS violated the FDCPA by failing to advise debtors of their right to dispute the validity of the debt. Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 2008 WL 383060, *1 (2d Cir. 2008). The class action complaint did not allege that plaintiff suffered any actual loss, limiting recover to statutory damages and attorney fees. Id. Defense attorneys moved to dismiss the class action, or in alternative sought summary judgment, on the ground that the debt collection letter did not violate the FDCPA; the defense also sought attorney fees from plaintiff, arguing that he had filed the class action “in bad faith and for the purpose of harassment,” see 15 U.S.C. § 1692k(a)(3). Id. The district court granted summary judgment in favor of HFS and awarded HFS attorney fees and costs, id. The Second Circuit affirmed in part and reversed in part.

The FDCPA provision at issue provides that a debtor has the right to dispute a debt and seek verification of the validity of the debt by notifying the debt collector of the right to dispute the debt. Jacobson, at *2. The Second Circuit recognized that it must view the issue from the perspective of the “least sophisticated consumer,” see id., at *3 (citing Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)), but observed also that “the objective test we apply [also] protects debt collectors from unreasonable constructions of their communications,” that the Second Circuit has “carefully preserved the concept of reasonableness,” and that “the FDCPA does not aid plaintiffs whose claims are based on ‘bizarre or idiosyncratic interpretations of collection notices.’” Id. (citations omitted). So viewed, the Circuit Court held that the letter sent by HFS clearly advised debtors of their right to dispute the validity of the alleged debt.

Class Action Court Decisions FDCPA Class Actions Uncategorized

FDCPA Class Action Defense Cases-Evory v. RJM Acquisitions: Seventh Circuit Consolidates Class Action And Individual Lawsuits To Resolve Nine Difficult FDCPA Questions With Direct Impact On FDCPA Class Actions

Using Consolidated Individual and Class Action Lawsuits Alleging Various Violations of the Federal Fair Debt Collection Practices Act (FDCPA), Seventh Circuit Resolves Nine Issues of Recurring Concern Including Debt Collection Communications with Lawyers for Consumers

The Seventh Circuit consolidated for decision four class action and individual lawsuits brought under the federal Fair Debt Collection Practices Act (FDCPA) “that present nine questions…, several of which have engendered considerable controversy at the circuit level and even some circuit splits.” Evory v. RJM Acquisitions Funding LLC, ___ F.3d ___ [Slip Opn., at 3] (7th Cir. October 23, 2007). Two of the consolidated cases were filed as putative class action lawsuits, but the issues addressed by the Seventh Circuit frequently arise in FDCPA class action litigation. The nine questions are: (1) the FDCPA notice requirements apply if the consumer is represented by legal counsel; (2) whether the FDCPA prohibition against “harassing, deceptive, and unfair practices in debt collection” applies to communications with a debtor’s lawyer and, if so, (3) whether the applicable standard for determining if such a violation occurred is the same if made to a lawyer as if made to the debtor; (4) whether the FDCPA prohibits debt collectors from including settlement offers in a debt collection letter and, if not _per se_ unlawful, (5) whether it matters if the offer is made to a lawyer rather than directly to a debtor; (6) whether a safe harbor exists for debt collectors accused of violating § 1692e based on settlement offers and, if so, (7) the evidence required to establish that a settlement offer violates that statute; and finally, (8) “[w]hether the determination that a representation is or is not false, deceptive, or misleading under section 1692 is always to be treated as a matter of law,” and, if not, (9) whether the court may nonetheless dismiss a claim under § 1692e “on the ground that the challenged representation was, as a matter of law, not false or misleading.” _Id._, at 3-4.

The Seventh Circuit held as follows. First, that the notice requirements apply regardless of whether the debtor is represented by counsel because it would be “odd if the fact that a consumer was represented excused the debt collector from having to convey to the consumer the information to which the statute entitles him.” Evory, at 6. Second, that while lawyers are “less likely to be deceived,” the FDCPA prohibits debt collectors from using “any unfair or unconscionable means to collect or attempt to collect any debt” and there is no reason to “immuniz[e] practices forbidden by the statute when they are directed against a consumer’s lawyer.” Id., at 7. However, the Circuit Court held that the standard generally applicable for determining violations of the FDCPA – viz., whether the representation would mislead an “unsophisticated consumer” – does not apply to communications with lawyers, id., at 7-8; rather, the Seventh Circuit held “that a representation by a debt collector that would be unlikely to deceive a competent lawyer, even if he is not a specialist in consumer debt law, should not be actionable,” id., at 9. But this is not true for statements that are false or misleading, because “[a] false claim of fact…may be as difficult for a lawyer to see through as a consumer.” Id., at 9. Representations that are false or misleading – that is, where the lawyer “might be unable to discover the falsity of the representation without an investigation that he might be unable, depending on his client’s resources, to undertake” – are actionable irrespective of whether they are made to the debtor or to the debtor’s counsel. Id., at 9-10.

Class Action Court Decisions FDCPA Class Actions Uncategorized

FDCPA Class Action Defense Cases-Guevarra v. Progressive Financial: California Federal Court Holds Congress Must Address “Ethically Questionable” Conduct of Plaintiff’s Counsel In Multiplying Class Action Litigation

Class Action Plaintiff Lawyer’s Collusion with Plaintiff’s Counsel in Separate Fair Debt Collection Practices Act (FDCPA) Class Action Against Same Defendant is not Condoned but Remedy lies with Congress not with Disciplinary Bodies California Federal Court Holds

Plaintiff filed a putative class action against a debt collection agency and one of its employees alleging that letters sent to debtors violated the federal Fair Debt Collection Practices Act (FDCPA) and California’s state law equivalent, the Rosenthal Fair Debt Collection Practices Act (Rosenthal Act). Guevarra v. Progressive Fin. Servs., Inc., 497 F.Supp.2d 1090, 1090-91 (N.D. Cal. 2007). The class action complaint originally sought “class-wide relief on behalf of all debtors who received the letter at issue here”; however, plaintiff’s counsel subsequently amended the class action allegations to seek relief solely on behalf of debtors of a single creditor. IKEA. Id., at 1091. Plaintiff’s counsel then asked the district court to certify the litigation as a class action, and admitted at oral argument that counsel was “coordinating with plaintiff’s counsel in a separate [class action] pending in the Central District of California concerning the same letter as the one at issue here.” Id. As the district court explained at page 1091, “Apparently, plaintiff’s counsel agreed with counsel in the [other class action] to divide up the class between the IDEA and non-IKEA creditors.” The district court refused to certify the litigation as a class action and issued an Order to Show Cause why plaintiff’s counsel should not be referred to the State Bar for disciplinary action. Id.

The district court denied the class certification motion “citing plaintiff’s arbitrary distinction between IKEA and non-IKEA creditors and concluding that plaintiff’s proposed definition is not ‘superior’ to other means available under FRCP 23(b)(3).” Guevarra, at 1091. The federal court explained at page 1091, “Because plaintiff’s counsel appeared to have divided up the class in order to maximize attorney fees without significant benefit to their clients, the court ordered plaintiff’s counsel to show cause why the court should not refer this matter to the State Bar of California and the Northern District’s Standing Committee on Professional Conduct” (citations omitted). The court also concluded that the case relied upon by plaintiff’s counsel, Mace v. Van Ru Credit Corp., 109 F.3d 338 (7th Cir.1997), was in applicable because the Mace court merely refused to impose on counsel a duty to bring a class action “on behalf of the broadest possible class”; “Mace does not, however, condone post-suit collusion between counsel in separate actions in order to cut a class in two.” Id., at 1091.

Certification of Class Actions Class Action Court Decisions FDCPA Class Actions Uncategorized

FDCPA Class Action Defense Cases–Gonzales v. Arrow Financial: California Federal Court Holds Debt Collection Letter Violated FDCPA And California Rosenthal Act And Denies Defense Motion To Decertify Class Action

Federal Court Holds Least Sophisticated Debtor would be Misled by Language in Debt Collection Letter thus Entitling Plaintiff in FDCPA Class Action to Summary Judgment and Finds Fact Plaintiff was not Misled Irrelevant to its Decision or to Defense Motion to Decertify Class Action

Plaintiff filed a class action in California federal court against Arrow Financial Services alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and its state-law equivalent, California’s Rosenthal Act, in that debt collection letters sent by defendant failed to comply with the applicable laws. Gonzales v. Arrow Fin. Servs. LLC, 489 F.Supp.2d 1140, 1143 (S.D. Cal. 2007). The class action complaint was premised on the following language in defendant’s “form collection letters”: “Upon receipt of the settlement amount and clearance of funds, and if we are reporting the account, the appropriate credit bureaus will be notified that this account has been settled.” Id. Plaintiff alleged this violated the FDCPA and the Rosenthal Act because the debt underlying defendant’s collection effort had been charged off more than 7 years ago and “a credit bureau cannot report a debt charged off more than 7 years previously,” id. An unsophisticated consumer thus may be misled by the form letter into believing that “payment or nonpayment of the claimed debt may impact the consumer’s credit reporting, when that is not true.” Id., at 1143-44. After the district court certified the lawsuit as a class action, defense and plaintiff attorneys filed cross-motions for summary judgment, and defense attorneys moved to decertify the class, id., at 1144. The district court denied both defense motions, and granted partial summary judgment in favor of plaintiff.

After summarizing the FDCPA and the “least sophisticated debtor” standard applied in the Ninth Circuit, Arrow, at 1146, a determination made by the court, not a jury, measured by an “objective standard,” id., and after setting forth the relevant section of the Rosenthal Act, id. (quoting Cal. Civil Code, § 1788.13(f)), the district court turned to the defense motion for summary judgment. Defense attorneys argued that the debt collection letters did not violate the FDCPA or the Rosenthal Act because the letters are not false or misleading – the letters did not “illegally threaten[] any action” or mislead or deceive anyone, and “Arrow does not have a policy to report debts such as plaintiff’s debts to the credit bureaus and in no way seeks to use credit reporting as a means to illegally collect debts.” Id., at 1147. The defense also relied on plaintiff’s deposition testimony that (1) he knew he did not have to pay the debt and that Arrow would not report such a failure to credit bureaus, and (2) he was not confused by the letter he received from Arrow, id. The federal court noted that it had already found the letters to be misleading or deceptive because “without any explanation detailing what debts are likely to be reported or even if the subject debt is one that is reportable, ‘the least sophisticated debtor could likely believe his [or her] debt is reportable just because the letters indicate the credit bureaus will be notified’” and that even though the letters did not expressly threaten to contact credit bureaus they implied that “the status of the debt may have already been or may, at some later date, be submitted to the credit bureaus” and that such conduct “is actionable under the Act.” Id., at 1148 n.1.

Certification of Class Actions Class Action Court Decisions FDCPA Class Actions Uncategorized

FDCPA Class Action Defense Case-Griffith v. Javitch: Ohio Federal Court Holds Pre-Certification Notice To Putative Class Of Dismissal Of Class Action Not Required Because No Evidence Of Reliance Or Prejudice

Dismissal of Class Action Alleging Violations of Federal Fair Debt Collection Practices Act (FDCPA) did not Warrant Notice to Absent Members of Putative Class because no Evidence of Reasonable Reliance on Prosecution of Class Action Ohio Federal Court Holds

Plaintiff/debtor filed a putative class action against attorneys for a creditor alleging that the law firm’s collection efforts violated the federal Fair Debt Collection Practices Act (FDCPA). Defense attorneys successfully moved to dismiss plaintiff’s claims in her class action complaint on the ground that she lacked standing to prosecute claims that now belonged to the bankruptcy trustee, and the federal court rejected plaintiff’s effort to bar the bankruptcy trustee from settling with the defense. Thereafter, the bankruptcy trustee “acting in good faith on behalf of the estate’s creditors, negotiated a settlement with Defendants”; however, the district court agreed with plaintiff/debtor that “notice of the involuntary dismissal should be given to the putative class members, because some risk existed that those class members would be prejudiced by the expiration of the statute of limitations later this year.” Griffith v. Javitch, Block & Rathbone, LLP, 241 F.R.D. 600, 601 (S.D. Ohio 2007). Plaintiff filed her proposed notices and requested that defendant be ordered to pay for the notice; defense attorneys moved the court to reconsider its order requiring notice to putative class members, id. The court granted the defense motion, holding that notice need not be provided to putative class members.

Preliminarily, the federal court found that the proposed notices prepared by plaintiff’s counsel were “clearly inadequate” and that they “simply invite contact with Plaintiff’s counsel.” Griffith, at 601. The court further stated that it would not order defendant to pay the costs of the notice, noting that as a general rule in class actions the plaintiff is responsible for the costs associated with notices to the class, especially when the court has not yet ruled on the merits of any claim alleged in the class action complaint id.

Class Action Court Decisions FDCPA Class Actions Uncategorized