REPORT AND RECOMMENDATION ON PRELMINARY CLASS APPROVAL
WILLIAM I. ARBUCKLE, III, Magistrate Judge.
Introduction:
The Fair Debt Collection Practices Act (FDCPA) establishes certain minimum standards for documents used by debt collectors attempting to collect consumer debts. This potential class action seeks statutory damages under the act for persons who received debt collection letters that did not meet those minimum standards. The named parties have proposed a settlement of this matter as a class action. For the reasons set forth below, I recommend that the District Court grant preliminary approval of this class action and refer the matter back to me for the required hearings needed for final approval of the proposed class settlement.
Jurisdiction and Venue:
Jurisdiction of this Court arises under 15 U.S.C. §1692k(d) and 28 U.S.C. §§1331. Venue lies in this District pursuant to 28 U.S.C. §1391(b)(2).
Factual Background:
Defendant, Premium Receivables, LLC d/b/a Premium Asset Services, was a collector of consumer debt within the meaning of Section 1692a(6) of the FDCPA with offices in Santa Ana, California. On June 13, 2014, Defendant sent correspondence to Dennis Rittle (plaintiff) demanding payment of an alleged Kay Jewelers credit card debt (Doc. #1, Exhibit A). The letter failed to notify the debtor that any dispute of the debt must be in writing. The FDCPA states that a written dispute, and not merely notification of a dispute, triggers the protections of the statute. See 15 U.S.C. §1692g(b). The Parties have engaged in extensive written discovery and arms-length discussions to resolve the Litigation, including conversations with me as a mediation judge, which ultimately culminated in the Proposed Agreement. Seeking class certification for all persons in Pennsylvania who received the offending letters, the parties have determined that the class consists of approximately eighty-three persons during the relevant time period. The Parties propose that Premium will pay $1,000.00 in statutory damages to the Settlement Class. Based upon discovery of Premium's assets and net worth, this amount is substantially higher than the maximum formula amount of statutory damages recoverable under the FDCPA if a class were successfully certified and the Plaintffs prevailed in the Litigation.
Procedural History:
A complaint against Premium Receivables was filed by Dennis Rittle on January 23, 2015 (Doc. #1). Defendant's Answer To Complaint With Affirmative Defenses was filed on October 12, 2015 (Doc. #9). After a case management conference, the matter was referred to me as a settlement judge on December 3, 2015 (Doc. #17). The parties then filed a Consent to Proceed Before a US Magistrate Judge, which was approved by Judge Rambo on February 23, 2016. The case was assigned to Magistrate Judge Schwab (Doc. #33). On March 11, 2016, Judge Schwab entered an order stating, "Upon consent of the parties, IT IS ORDERED that this case is reassigned to United States Magistrate Judge William I. Arbuckle, III, to conduct all proceedings and order the entry of a final judgment" (Doc. #38). On March 23, 2016, a Joint Motion to Certify Class and Grant Preliminary Approval of the Class Settlement Agreement was filed (Doc. #39). Oral argument on the motion was held by telephone on September 1, 2016 (Doc. #40). The matter is now ripe for decision on preliminary approval of the class; appointment of a representative plaintiff, class counsel, and a settlement administrator; approval of the proposed class notice; the establishment of notice and objection deadlines; and the scheduling of a final hearing on the fairness of the proposed settlement and counsel fees.
Requirements for a Class Action:
Rules 23(a) and (b) of the Federal Rules of Civil Procedure govern the requirements for class certification. Rule 23(a) sets forth four threshold requirements for class certification, each of which must be met: (1) the class is so numerous that joinder of class members is impracticable (numerosity); (2) there are questions of law or fact common to the class (commonality); (3) the claims or defenses of the class representatives are typical of those of the class (typicality); and (4) the class representatives will fairly and adequately protect the interests of the class (adequacy).
To certify a class, a court must also find that one of the following requirements, set forth in Rule 23(b), are met: (1) that prosecution of separate actions risks either inconsistent adjudications, which would establish incompatible standards of conduct for the defendant, or would as a practical matter be dispositive of the interests of others; (2) that defendants have acted or refused to act on grounds generally applicable to the class; or (3) that there are common questions of law or fact that predominate over any individual class member's questions and that a class action is superior to other methods of adjudication.
The Supreme Court has made it clear that plaintiffs must not merely plead the existence of the Rule 23 requirements but prove them. Wal-Mart Stores, Incorporated v. Dukes, 131 S.Ct. 2541, 2551 (2011). As a result, district courts must perform a "rigorous" analysis to determine whether the Rule 23(a) prerequisites are satisfied. Id. at 351 (citing Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 161 (1982)).
Analysis of the Requirements in this Case:
Under Rule 23(a) the Court must address four issues. Those are:
(1) Numerosity: In this case the class is so numerous (at least 83 individuals) that joinder of class members is impracticable.
(2) Commonality: The question of law common to all class members is the application of 15 U.S.C. § 1692g(a) to the letters written by Premium to the class members and whether the language in the letters fails to meet the requirements of the FDCPA. While each letter (if improper) is a violation of the act, the common question of fact is the author of the letter and its status as a debt collector.
(3) Typicality: The claims or defenses of the class representatives are not only typical of those of the class, but they are also identical given the representations of the defendant that a form letter was used for all members of the class.
(4) Adequacy: The proposed class representative has asserted his rights and the violation of the rights of all class members clearly and with specificity. Given the progress of the litigation to date, I believe he will fairly and adequately protect the interests of the class. The size of the class (approximately 83 individual Pennsylvania residents), the small amount of statutory damages available in total ($1,000) and for each class member (approximately $12.50 per class member) further support the adequacy of the named plaintiff's representation in this case.
Under Rule 23(b) the court must find one of three grounds justifying a class action. In this case Rule 23(b)(3) clearly applies. That rule states:
(3) 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. The matters pertinent to these findings include:
(A) the class members' interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action. Fed. R. Civ. P. 23(b)(3).
In this case, other than receipt of the letter, there are no apparent questions of fact that affect only individual members. The questions of law appear to be identical for all identified class members. There is little motivation for any individual to bring a separate action under the statute given the cap on damages for violations of the FCDPA. The court is not aware of any other actions brought against Defendant for the violations of the FDCPA pled in this case, and Counsel for the Defendant assured the court at oral argument that there are not any. Since the class is limited to Pennsylvania residents, concentrating the claims in the Middle District of Pennsylvania is appropriate. Finally, there appears to be little likely difficulty managing this case as a class action.
Conclusion:
For all these reasons, I recommend that the Court adopt the proposed order attached to this Report and Recommendation which grants preliminary approval of the class; appoints a representative plaintiff, class counsel, and a settlement administrator; approves the proposed class notice contained in the Joint Motion; establish the dates for notice and objection deadlines; and schedules a final hearing on the fairness of the proposed settlement and counsel fees. For the court's convenience, the dates established in the proposed order are stated in a formula based on the date the Court approves the Order.
IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
DENNIS RITTLE on behalf of himself and
all others similarly situated Civil Action No.: 1:15-CV-166
Plaintiff,
vs.
(Judge Rambo)
(MagistrateJudgeArbuckle)
PREMIUM RECEIVABLES, LLC
d/b/a Premium Asset Services,
Defendant.
NOTICE of REPORT & RECOMMENDATION
NOTICE IS HEREBY GIVEN that the Magistrate Judge has entered the foregoing Report and Recommendation.
Any party may obtain a review of the Report and Recommendation pursuant to Local Rule 72.3, which provides:
Any party may object to a magistrate judge's pro osed [sic] findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636 (b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses, or recommit the matter to the magistrate judge with instructions. M.D.Pa. LR 72.3 (2010). (emphasis added).
Signed on September 6, 2016.
s/ William I. Arbuckle III
WILLIAM I. ARBUCKLE III
UNITED STATES MAGISTRATE JUDGE
IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
DENNIS RITTLE, on behalf of himself and all Civil No.: 1:15-cv-0166
others similarly situated,
Plaintiff, (Judge Rambo)
(Magistrate Judge Arbuckle)
v.
(Proposed)
PREMIUM RECEIVABLES, LLC d/b/a Preliminary Approval Order
PREMIUM ASSET SERVICES,
Defendant.
The Court, having considered the Report of the Magistrate Judge on the Parties' motion for preliminary approval, hereby grants preliminary approval to the Class Settlement Agreement ("Agreement") between Plaintiff, Dennis Rittle ("Plaintiff"), individually and as representative of the class of persons defined below ("Settlement Class"), and Defendant, Premium Receivables, LLC d/b/a Premium Asset Services ("Premium").
WHEREFORE, with respect to certifying this action as a class action for settlement purposes, the Court finds:
A. The Settlement Class is so numerous that joinder of all members is impracticable;
B. There are questions of law and fact common to the proposed Settlement Class;
C. The individual claims of Plaintiff are typical of the claims of the Settlement Class;
D. Plaintiff is an appropriate and adequate representative for the Settlement Class;
E. The questions of law and fact common to the Settlement Class predominate over any questions affecting only individual members;
F. A class action is superior to other methods for fairly and efficiently settling this controversy;
G. With respect to the appointment of Settlement Class Counsel under Fed. R. Civ. P. 23(g), the Court finds, after consideration of the factors described in Fed. R. Civ. P. 23(g)(1)(A), Plaintiff's counsel, Andrew T. Thomasson and Craig Thor Kimmel, will fairly and adequately represent the interests of the Settlement Class;
H. With respect to the proposed Agreement, after consideration of the Agreement attached as Exhibit A to the Motion, the Court makes the preliminary finding, subject to a final hearing, that the proposed settlement is fair, reasonable, and adequate; and
I. The Court being duly advised in the premises, Page 2 of 6
IT IS HEREBY ORDERED:
1. Pursuant to Fed. R. Civ. P. 23(c)(1), the Court certifies this action as a class action pursuant to Fed. R. Civ. P. 23(b)(3) and, in accordance with Fed. R. Civ. P. 23(c)(1)(B):
(a) defines the "Settlement Class" as:
All consumers with addresses in the Commonwealth of Pennsylvania to whom Premium mailed an initial written communication, which failed to inform consumers they must (i) dispute the debt in writing to obtain verification, and/or (ii) make a request in writing to obtain information regarding the name and address of the original creditor, during the period beginning January 23, 2014, and ending February 13, 2015.
(b) defines the "Class Claims" as those claims arising from Premium's collection letter attached as Exhibit A to Plaintiff's Complaint in this action [Doc. 1] wherein Premium mailed consumers initial written collection communications, which failed to inform consumers they must (i) dispute the debt in writing to obtain verification, and/or (ii) make a request in writing to obtain information regarding the name and address of the original creditor, and which allegedly violates 15 U.S.C. §§1692g(a)(4) and 1692g(a)(5);
(c) appoints Plaintiff as the Class Representative;
(d) appoints Plaintiff's counsel, Andrew T. Thomasson and Craig Thor Kimmel, as Class Counsel; and
(e) appoints Heffler Claims Group as the Settlement Administrator to administer notice to the class and the settlement.
2. The Court approves the Parties' proposed Class Notice and directs that it be mailed to the last known address of the Settlement Class Members as shown in Premium's business records. Plaintiff will cause the Class Notice to be mailed to Settlement Class members on or before _[+14 days]____, 2016. Plaintiff will have the notice sent by any form of U.S. Mail providing forwarding addresses.
3. The Court finds that mailing of the Class Notice is the only notice required and such notice satisfies the requirements of due process under the Federal Rules of Civil Procedure, including Rule 23, the United States Constitution, and other applicable laws.
4. Settlement Class members shall have until __[+60 days]_, 2016, to exclude themselves from the proposed settlement. Any Settlement Class members desiring to exclude themselves from the settlement must serve copies of their request on the Settlement Administrator by that date.
5. Any Settlement Class members who wish to object to the proposed Settlement must submit in writing to the Clerk of the United States District Court for the Middle District of Pennsylvania, and serve copies of the objection on the Settlement Administrator by Settlement Class members shall have until __[+60 days]________, 2016.
All objections must be in writing and personally signed by the Settlement Class Member and include: (1) the objector's name, address, telephone number, and the last four digits of their Social Security Number; (2) a sentence stating that to the best of his or her knowledge s/he is a member of the Settlement Class; (3) the name and number of the case: Rittle v. Premium Receivables, LLC d/b/a Premium Asset Services, Case No. 1:15-cv-00166-SES; (4) the factual basis and legal grounds for the objection to the Settlement; (5) the identity of any witnesses whom the objector may call to testify at the Final Fairness Hearing; and (6) copies of any exhibits the objector may seek to offer into evidence at the Final Fairness Hearing. The objection must indicate whether the Settlement Class Member and/or their lawyer(s) intend to appear at the Final Fairness Hearing. Any lawyer who intends to appear at the Final Fairness Hearing also must enter a written _[+70 days]____, 2016, and shall include the full caption and case number of each previous class action case in which that lawyer(s) has represented an objector.
6. To be effective, any request for exclusion or objection must be postmarked by_[+60 days]_______, 2016.
7. If not already filed, Premium shall file with the Court proof of compliance with the notice requirements of the Class Action Fairness Act of 2005, 28 U.S.C. § 1715(b).
8. A final hearing on the fairness and reasonableness of the Agreement and whether final approval shall be given to it and the requests for fees and expenses by Class Counsel will be held on __[+75 days]__, 2016, at ________ __.m. in Courtroom # ____, before Magistrate Judge William Arbuckle in the Ronald Regan Federal Building and U. S. Courthouse, 228 Walnut Street, Harrisburg, Pennsylvania.
SO ORDERED.
____________________________
Sylvia H. Rambo
United States District Judge
