Class Action Alleging FDCPA (Fair Debt Collection Practices Act) Violations Based on Form Letters Sent to Debtors Warranted Class Certification Montana Federal Court Holds, Rejecting Defense Argument that Plaintiff’s Statute of Limitations Defense to Debt Collection Defeated Predominance Requirement of Rule 23(b)(3)
Plaintiff filed a putative class action against a debt collector seeking to collect on dishonored checks for alleged violations of the Fair Debt Collection Practices Act (FDCPA) based on letters sent to debtors that demanded fees not authorized by state or federal law. Alexander v. JBC Legal Group, P.C., 237 F.R.D. 628, 629 (D. Mont. 2006). Plaintiff’s lawyer moved for certification of the class action; defense attorneys opposed the motion arguing that the numerosity requirement of Rule 23(a) is not met and that plaintiff’s statute of limitations defense defeats certification under Rule 23(b)(3).
In 2004, defendant JBC Legal Group sent a letter to plaintiff seeking to collect $6.07 for a dishonored check that had been written more then 12 years earlier. Alexander, at 629. “The letter demanded that Alexander remit to Defendants $46.07 and stated that he would be subject to a penalty of triple the amount of the check, or $100.00, whichever was greater, if he failed to make payment within thirty days.” Id. A month later, defendant sent plaintiff a letter demanding $146.07. Id. Several months later, defendant sent plaintiff another letter demanding $146.07. Id.
First, the district court addressed the class action requirements of Rule 23(a). It discussed Ninth Circuit authority on numerosity and held that the numerosity requirement was satisfied because the class consists of more than 100 members. Alexander, at 630-31. “Joinder of that many parties would be impracticable.” Id., at 631. The district court next held that commonality existed because plaintiff alleges that the same form letter was sent to each class member and that the form letter violated the FDCPA, id., at 631. For the same reason, the court concluded that the typicality requirement had been satisfied, id. Finally, the court concluded that the adequacy of representation requirement was met, id., at 631-32.
Next, the federal court turned to the class action requirements of Rule 23(b). Alexander, at 632. The court explained that plaintiffs sought certification under Rule 23(b)(3), which requires a showing that “questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and … a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” The district court concluded that a class action would be “more efficient” than requiring individual lawsuits seeking small sums in damages. Id. Defense attorneys argued that plaintiff’s statute of limitations defense to efforts to collect on his 12-year-old debt “will predominate over the other members’ claims.” Id. The court rejected this argument, explaining at page 632:
…the primary legal question in Alexander’s claim as well as all other proposed plaintiffs’ claims is whether the collection form letter violated the FDCPA. The form letter could have violated the FDCPA in a number of ways, one of which may be that it threatened a penalty that was not available due to the statute of limitations. As discussed above, more than one of the proposed class members may have the same statute of limitations claim.
The court also found that common questions of fact and law existed regardless of plaintiff’s statute of limitation defense. Alexander, at 632-33. Accordingly, the court held that “[plaintiff’s] statute of limitations claim is not a barrier to class certification,” id., at 632. We do not here discuss the fact that plaintiff alleged three different classes existed. one with more than 100 members, one with 34 members, and one with 29 members.