WILLIAM P. JOHNSON, Chief District Judge.
THIS MATTER comes before the Court upon Plaintiff's Motion to Certify Class, filed March 17, 2017
This is a putative class action for relief under the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. §227. Plaintiff alleges that Defendant First Community Bancshares, Inc., and its subsidiary Defendant First National Bank Texas ("Defendants") violated the TCPA by placing telephone calls to her cellular telephone for nonemergency purposes, without her consent, using an "automatic telephone dialing system" ("ATDS") as defined by the TCPA, 47 U.S.C. § 227(a)(1).
Defendant First National Bank of Texas is a retail bank with locations in Texas, Arizona and Mexico. It is a subsidiary of Defendant First Community Bancshares, Inc. Defendants contracted with GC Services to place calls to their customers with overdrafted bank accounts. Plaintiff alleges that, after she acquired her cell phone number ending -4951, Defendants repeatedly called her using an auto-dialer, in reference to an over-drafted bank account, despite the fact that she repeatedly told Defendants they have the wrong person. Plaintiff was not a customer of the Defendants. Plaintiff alleges that, after seeing GC Service's number on caller ID, she called in an explained that Defendants were calling the wrong person. Apparently, GC Services noted in their logs that the number they used to call Plaintiff was a "Bad/Wrong Number", but the calls persisted. GC Services' call logs are returned to Defendants each day. Plaintiff alleges that Defendants did not consider the "Bad/Wrong Number" entries, but simply resubmitted her phone number to GC Services for use the next day. Thus, it is unclear whether Defendants and GC Services had any system in place to maintain compliance with the TCPA.
Customers of the Defendants sign deposit agreements, and consent to receive calls from Defendants placed through an automatic dialer.
Plaintiff seeks to certify, pursuant to Fed. R. Civ. P. 23(b)(3), a class of:
See
Mark Schordock, a GC Services Representative, testified that an incoming call coded as "Bad/Wrong Number" means that "somebody's saying it's not them that we're dialing." Tr., Mark Schordock, p. 51, ll. 17-18. He also testified that it could mean that "the person doesn't live there anymore . . . it could be giving you a different number to reach customer at . . . there could be a lot of reasons. But, basically, they're saying they got a call from — and who we're trying to reach is not there." Much later, in an affidavit, Mr. Schordock listed numerous reasons why a call could be coded as "Bad/Wrong Number", other than that the called party was calling back to give express notice that they were not customers.
This class certification litigation has been burdened by four separate rounds of briefing, and an eight month delay for additional discovery. The surreply was filed on April 23, 2018, and this matter is now ready for ruling.
To certify a class under Fed. R. Civ. P. 23, Plaintiff bears the burden of showing that "(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 and 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). The Plaintiff must also show that the action is maintainable under Fed. R. Civ. P. 23(b)(1)-(3).
The Court must engage in a "rigorous analysis of whether the threshold requirements of Rule 23(a) are satisfied." Shook v. El Paso County, 3865 F.3d 963, 968 (10th Cir. 2004); Wallace B. Roderick Revocable Living Trust v. XTO Energy, Inc., 725 F.3d 1213, 1218 (10th Cir. 2013). This is not a pleading standard, and Plaintiff must "affirmatively demonstrate" her compliance with the rules. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 131 S.Ct. 2541, 2551 (2011); XTO Energy, Inc., 725 F.3d at 1218 (plaintiff has "strict burden of proof"). "Whether a case should be allowed to proceed as a class action involves intensely practical considerations, most of which are purely factual or fact-intensive. Each case must be decided on its own facts, on the basis of `practicalities and prudential considerations." Monreal v. Potter, 367 F.3d 1224, 1238 (10th Cir.2004) (internal quotation marks omitted), quoted in Trevizo v. Adams, 455 F.3d 1155, 1163 (10th Cir. 2006).
Fed. R. Civ. P. 23(a)(1) requires that a "class is so numerous that joinder of all members is impracticable. There is "no set formula to determine if the class is so numerous that it should be so certified." Rex v. Owens ex rel. State of Okla., 585 F.2d 432, 436 (10th Cir.1978), quoted in Trevizo v. Adams, 455 F.3d 1155, 1162 (10th Cir. 2006). "The numerosity requirement requires examination of the specific facts of each case and imposes no absolute limitations." Gen. Tel. Co. of the Nw., Inc. v. Equal Emp't Opportunity Comm'n, 446 U.S. 318, 330, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980).
Although Plaintiff bears the burden of establishing numerosity, she need not establish any precise number of class members at this stage, or have already identified who is part of the class. Colorado Cross Disability Coal. v. Abercrombie & Fitch Co., 765 F.3d 1205, 1214-15 (10th Cir. 2014); Neiberger v. Hawkins, 208 F.R. D. 301, 313 (D. Colo. 2002) ("the exact number of potential members need not be shown"); See also Abdeljalili, 306 F.R.D. 303 (finding numerosity satisfied despite no list of class members); Colorado Cross Disability Coal. v. Abercrombie & Fitch Co., 765 F.3d 1205, 1215 (10th Cir. 2014) (court was reasonable in inferring under circumstances that there would be substantial number of class members); See also In Re Alcoholic Bevereages Litig., 95 F.R.D. 321, 324 (E.D.N.Y.1982) ("The fact that the size of the proposed class has not been exactly determined is not a fatal defect in the motion; a class action may proceed upon estimates as to the size of the proposed class."), cited in Stern v. DoCircle, Inc., 2014 WL 486262, at *4 (C.D. Cal. Jan. 29, 2014).
Plaintiff submitted an affidavit by Ms. Verkhovskya's, that included an analysis of Defendants' own call logs to identify 38,125 separate phone numbers (both landline and cell phone) that called in, were coded as "Bad/Wrong Number", and were subsequently called again by Defendants and coded as "Bad/Wrong Number." Ms. Verkhovskya then used data from Nexxa, a third party, to identify that 37,219 of these numbers belonged to cell phones.
Defendants filed a motion to strike the affidavit of Ms. Verkhovskaya.
Even setting aside the sections of the Ms. Verkhovskya's affidavit tainted by alleged hearsay, Plaintiff has established numerosity. Even if only a fraction of the approximately 38,125 are in fact class members, the numerosity requirement here is readily satisfied. West v. California Servs. Bureau, Inc., 2017 WL 6316823, at *7 (N.D. Cal. 2017), Munday v. Navy Fed. Credit Union, 2016 WL 7655807, at *3 (C.D. Cal. 2016) ("Because joinder of even a fraction of these individuals is impracticable, Rule 23(a)'s numerosity requirement is readily satisfied.").
Plaintiff must also show that "there are questions of law or fact common to the class. Fed. R. Civ. P. 23(a)(2). "Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury." Wal-Mart, 131 S.Ct. at 2551. However, Plaintiff need only show a single issue of law or fact that is common to the class and is substantially related to the resolution of the litigation. Realmonte v. Reeves, 168 F.3d 1280, 1285 (10th Cir. 1999). "For a common question of law to exist, the putative class must share a discrete legal question of some kind." J.B. ex rel Hart, 186 F.3d at 1289. "What matters to class certification. . . is. . . the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation." Walmart, 564 U.S. at 350, 131 S.Ct. at 2551. There must be a "common contention" that is "of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Id. "[E]ven a single common question will do." Wal-Mart, 131 S.Ct. at 2556; see also Colorado Cross Disability Coal. v. Abercrombie & Fitch Co., 765 F.3d 1205, 1216 (10th Cir. 2014).
Plaintiff identifies a number of common questions of law or fact:
The Court agrees that these are issues common to all class members and apt to drive resolution of the litigation, and are sufficient by themselves to establish commonality. Moreover, Plaintiff has devised a methodology which appears to (1) weed out customers of the bank (those who consented to being called), and (2) identifies individuals who called in and were coded as "Bad/Wrong Number", yet were called again.
Defendants argue that commonality is not satisfied, because there will be individualized issues of consent, such as whether Defendants were expressly notified that the called numbers had been reassigned, or that the wrong people were being called. The Court disagrees. Because of the narrowly tailored class definition, the factual situation for all class members appears to be the same. The same evidence, Defendants' own records, will provide common answers to legal and factual questions related to consent issues for all class members. See Abdeljalil v. Gen. Elec. Capital Corp., 306 F.R.D. 303, 309 (S.D. Cal. 2015) (In identical "wrong number" case, "the factual situation for all the class members here is the same, that is, defendant called third parties on their cellular telephone number via an ATDS and/or prerecorded voice without prior express consent after defendant was on notice that it was calling a third party."); see Stern v. DoCircle, Inc., 2014 WL 486262, at *4 (C.D. Cal. 2014) ("What steps Defendant took to comply with TCPA, and whether it can be held to have negligently or willfully violated the TCPA when it took those steps, are factual and legal issues common to all class members."); See also Munday v. Navy Fed. Credit Union, 2016 WL 7655807, at *4 (C.D. Cal. 2016) ("Here, the crux of this action turns on whether, in fact, Navy Federal coded certain telephone numbers as a "wrong number," but, nevertheless, continued to call "a portion of the coded `wrong numbers'" as a result of "a `gap' in Navy Federal's system logic." An affirmative determination on this issue would generate [a] common answer apt to drive the resolution of the litigation."). As explained below, these cases have found that commonality is satisfied even though defendants argued that phone numbers "marked `wrong number' in defendant's call log databases may not have actually been a wrong number." See also West v. California Servs. Bureau, Inc., 323 F.R.D. 295, 301-02 (N.D. Cal. 2017), quoting Johnson v. Navient Solutions, Inc., 315 F.R.D. 501, 503 (S.D. Ind. 2016).
Rule 23(a)(3) requires "the claims or defenses of the representative parties [to be] typical of the claims or defenses of the class." Fed R. Civ. P. 23(a)(3). The commonality and typicality requirements tend to merge. Wal-Mart, 131 S.Ct. at 2551 n. 5. "The interests and claims of Named Plaintiffs and class members need not be identical to satisfy typicality. Provided the claims of Named Plaintiffs and class members are based on the same legal or remedial theory, differing fact situations of the class members do not defeat typicality." DG ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1198-99 (10th Cir. 2010) (internal citations omitted). Here, the claims of Plaintiff and class member are based on the same legal theory. Whether there was a lack of consent, and liability under the TCPA, will be determined on a class-wide basis.
Moreover, both the Plaintiff and putative class members are in the same factual situation. The proposed class is narrowly tailored to include individuals who called in to GC services to report that Defendants were calling the wrong person and coded as "Bad/Wrong Number", but were subsequently called again by Defendant and coded as "Bad/Wrong Number." Plaintiff has agreed to narrow the class to only include non-customers. The proposed class is therefore most likely factually identical to Plaintiff. See, e.g., Munday v. Navy Fed. Credit Union, 2016 WL 7655807, at *4 (C.D. Cal. 2016) (typicality satisfied where "[Plaintiff]—like members of the putative class—"was called on his cellular telephone by Navy Federal, with an [automatic telephone dialing system], between October 9, 2011 through the present and the call was coded as a `wrong number.'"). For these reasons and the reasons pertaining commonality, the Court concludes the typicality requirement is satisfied.
Fed. R. Civ. P. 23(a)(4) requires that "the representative parties will fairly and adequately protect the interests of the class." "Resolution of these two questions determines legal adequacy: 1) do the named plaintiffs and their counsel have any conflicts of interest with other class members and (2) will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?'" Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1187 (10th Cir. 2002), quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998).
Defendants have not contested adequacy of representation. There appears to be no conflicts of interest, and it appears that Plaintiff and her counsel will vigorously prosecute the action on behalf of the class. Plaintiff shares the interest of the putative class members. The Court finds that Plaintiff and her counsel will fairly and adequately protect the interests of the class.
Moreover, in considering the factors under Fed. R. Civ. P. 23(g)(1)(c), the Court concludes that Lemberg Law, LLC (Stephen Taylor) should be appointed as class counsel. See
Plaintiff seeks certification under Fed. R. Civ. P. 23(b)(3). Certification under that subsection is proper if "the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. R. 23(b)(3) (emphasis added). The Court may consider:
Fed. R. Civ. P. 23(b)(3)(A)-(D).
Defendants argue that the class is not ascertainable, and that individual issues predominate over common issues. Since Defendants' arguments on both points are substantially similar, the Court will consider the analysis of these issues together. Moreover, it appears that the Tenth Circuit considers ascertainability as part of the Fed. R. Civ. P. 23(b)(3) inquiry. See Shook v. El Paso Cty., 386 F.3d 963, 972 (10th Cir. 2004) (identifiability and manageability of class are part of Rule 23(b)(3)), and Fed. R. Civ. P. 23(b)(3)(D) (court must consider "the likely difficulties of managing a class action").
Rule 23(b)(3) requires a "rigorous analysis" into whether common questions predominate over individual ones. Wallace B. Roderick Revocable Living Tr. v. XTO Energy, Inc., 725 F.3d 1213, 1220 (10th Cir. 2013). The predominance inquiry is "far more demanding than Rule 23(a)'s commonality requirement." Wallace B. Roderick Revocable Living Tr. v. XTO Energy, Inc., 725 F.3d 1213, 1220 (10th Cir. 2013). "Predominance is satisfied when common questions represent a significant aspect of a case and can be resolved for all members of a class in a single adjudication." Costello v. BeavEx, Inc., 810 F.3d 1045, 1059 (7th Cir. 2016). "It is not necessary that all of the elements of the claim entail questions of fact and law that are common to the class, nor that the answers to those common questions be dispositive. Put differently, the predominance prong asks whether the common, aggregation-enabling, issues in the case are more prevalent or important than the non-common, aggregation-defeating, individual issues." CGC Holding Co., LLC v. Broad & Cassel, 773 F.3d 1076, 1087 (10th Cir. 2014) (internal citations and quotation marks omitted).
Defendants argue that the proposed class fails to satisfy the implied requirement that a class be ascertainable. Although not expressly a requirement of Rule 23, most courts imply a requirement that a class definition "be precise, objective, and presently ascertainable." In re: Syngenta AG MIR 162 Corn Litig., 2016 WL 5371856, at *1 (D. Kan. 2016) (internal quotation marks omitted).
For a class definition to be ascertainable, identifying class members must be administratively feasible. Davoll v. Webb, 194 F.3d 1116, 1146-47 (10th Cir. 1999). "An identifiable class exists if its members can be ascertained by reference to objective criteria." Rhodes v. Olson Assocs., P.C., 83 F.Supp.3d 1096, 1111-12 (D. Colo. 2015), quoting Manual for Complex Litigation (Fourth) § 21, 222 (2004). Ascertainability requires that "[t]he method of determining whether someone is in the class must be administratively feasible" and must not depend on "individualized fact-finding or mini-trials." Id., quoting Donaca v. Dish Network, LLC., 303 F.R.D. 390, 396-97 (D.Colo. 2014); see also Leyse v. Lifetime Entm't Servs., LLC, 679 F. App'x 44, 47 (2d Cir. 2017), cert. denied, 138 S.Ct. 637 (`) ("A class is ascertainable when defined by objective criteria that are administratively feasible and when identifying its members would not require a mini-hearing on the merits of each case.").
Plaintiff proposes that the class includes all individuals, according to Defendants records, who (1) called in to Defendants and were coded as "Bad/Wrong Number", and were (2) subsequently called again by Defendants, and were coded as "Bad/Wrong Number." Plaintiff proposes to weed out any customers either by reference to (1) affidavits from potential class members averring they are not customers of the Defendants, or (2) Defendants' deposit agreements. By excluding Defendants' customers, Plaintiff excludes any individuals who could have consented to Defendants' calls. The Court concludes that the class is ascertainable, as class members can be readily identified by objective criteria based on Defendants' business records.
Moreover, the Court concludes that common issues predominate, and Plaintiff's proposed methodology eliminates individualized inquiries or mini-trials. The class members appear to be in the same factual situation, and the class is likely to fail or succeed on the merits (such as whether class members expressly revoked consent) on the same common evidence, i.e., Defendants' business records.
Defendants argue that the class cannot be ascertained, because Plaintiff has no way to weed out customers from its class. As explained above, Plaintiff has devised a methodology to weed out Defendants' customers. Defendants did not object to this methodology, and Defendants have provided no evidence that Plaintiff's proposed class actually consists of bank customers. The fact that the class may inadvertently include some customers that consented is not fatal to the predominance inquiry, especially since they can be weeded out. Bridging Communities Inc. v. Top Flite Fin. Inc., 843 F.3d 1119, 1125-26 (6th Cir. 2016) ("Even where defendants point to some evidence that a defense will indeed apply to some class members, which is more than Top Flite did here, courts routinely grant certification because "Rule 23(b)(3) requires merely that common issues predominate, not that all issues be common to the class."), cert. denied, 138 S.Ct. 80, 199 L. Ed. 2d 25 (2017), citing Smilow v. Sw. Bell. Mobile Sys., Inc., 323 F.3d 32, 39 (1st Cir. 2003) ("As the First Circuit has recognized, moreover, if evidence later shows that a defense is likely to bar claims against at least some class members, then a court has available adequate procedural mechanisms. For example, it can place class members with potentially barred claims in a separate subclass, or exclude them from the class altogether.").
Defendants also argue that this litigation will devolve into individualized issues of consent, because there is no way to tell whether any of the customers who called in gave express notice to Defendants that (1) they were calling the wrong person, or that (2) the number had been reassigned. They assert that a call could be coded "Bad/Wrong Number" for many reasons unrelated to the fact that a third party was called. Initially, a number of courts have rejected this theory in "Wrong Number" cases, under similar factual circumstances, at the class certification stage. See Johnson v. Navient Sols., Inc., 315 F.R.D. 501, 503 (S.D. Ind. 2016); Munday, 2016 WL 7655807, at *4; Abdeljalil, 306 F.R.D. at 309 (rejecting argument that class is not ascertainable because notation in account for "bad number" does not necessarily mean that number belonged to non-account holder); West v. California Servs. Bureau, Inc., 2017 WL 6316823, at *4 (N.D. Cal. 2017) ("Defendant does not persuade. As an initial matter, several district courts have deemed commonality and predominance satisfied in TCPA cases despite the possibility that a substantial proportion of the phone numbers marked as `wrong number' in defendant's call log databases `may not have actually been a wrong number.").
Moreover, Defendants' theory conflicts with their representatives' own testimony.
Defendants' assertion that non-customers called in for some reason other than notifying Defendants that they were calling the wrong person defies common sense. In any event, Defendants' objections do not show any individualized issues. Either this evidence will or not will be sufficient to establish liability on a class-wide basis. There is unlikely to be much, if any, individualized evidence. See, e.g., Stern v. DoCircle, Inc., 2014 WL 486262, at *3 (C.D. Cal. Jan. 29, 2014) ("But this is an argument that Plaintiff will lose on the merits, not an argument as to whether the class definition is administratively feasible."). Practically, for these types of TCPA violations, liability is likely only to be established by business records. The issue of whether Defendants received express notice that the number has been reassigned, but continued to call class members anyway, will be resolved based on legal theories and evidence common to all class members.
Finally, Defendants argue that the class is overbroad, because it includes individuals who consented to being called, i.e., bank customers. As explained above, Plaintiff's proposed method is to exclude customers either by (1) affidavit or attestation by the proposed customer, or (2) cross-reference with Defendants' deposit agreements. The Court finds this methodology workable, and Defendants have not objected to it or explained why it would not work.
In sum, Defendants' consent defense applies to whether liability can be established on a class-wide basis, and does not create individualized issues nor make this class action administratively infeasible. The Court concludes that the class is ascertainable and that common issues predominate over individual issues.
Class actions certified under Rule 23(b)(3) must also be "superior to other available methods for the fair and efficient adjudication of the controversy." Amchem, 521 U.S. at 615 (quoting Fed.R.Civ.P. 23(b)(3)). "The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights." Id. at 617. See also Fed. R. Civ. P. 23(b)(3)(A)-(D).
Here, Plaintiff has met the superiority requirement. It is unlikely that putative class members will file a case under TCPA for $500-1500, and will have little interesting in controlling the prosecution of the TCPA claims. Moreover, the complex nature of this TCPA action lends itself to the efficiencies of class certification. It would inefficient to reinvent wheel on approximately 30,000 separate cases. Moreover, the courts would be substantially burdened by 30,000 separate suits — or even a fraction of that. As explained above, Plaintiff has shown that the class action appears to be manageable. Any difficulties in managing this class action are outweighed by the desirability of concentrating this matter in one litigation. Fed. R.. Civ. P. 23(b)(3)(C), (D).
Plaintiff has crafted a well thought-out methodology, based on using objective criteria (i.e. business records) to both identify class members and resolve legal and factual issues on a class-wide basis. If it becomes apparent later in this litigation that the class is not administratively feasible or individual issues predominate, the parties may file motions for appropriate relief, such as a motion to decertify or modify the class.
The Court may sua sponte modify a class definition. In re Whirlpool Corp. Front-Loading Washer Prod. Liab. Litig., 302 F.R.D. 448, 463 (N.D. Ohio 2014), citing Powers v. Hamilton Cty. Pub. Def. Comm'n, 501 F.3d 592, 619 (6th Cir. 2007) ("district courts have broad discretion to modify class definitions, so the district court's multiple amendments merely showed that the court took seriously its obligation to make appropriate adjustments to the class definition as the litigation progressed."); see also Schorsch v. Hewlett-Packard Co., 417 F.3d 748, 750 (7th Cir. 2005) (noting that "[l]itigants and judges regularly modify class definitions "); In re Monumental Life Ins. Co., 365 F.3d 408, 414 (5th Cir. 2004) ("District courts are permitted to limit or modify class definitions to provide the necessary precision."). To make the class definition clear to potential class members, the Court modifies the class definition as follows:
(modification in bold). This modification does not create an improper "fail-safe" class.
