Erickson v. Elliot Bay Adjustment Co.
| Decision Date | 30 March 2017 |
| Docket Number | CASE NO. C16-0391JLR |
| Court | U.S. District Court — Western District of Washington |
| Parties | KELLY ERICKSON, Plaintiff, v. ELLIOT BAY ADJUSTMENT COMPANY, INC. and JOHN DOES 1-25, Defendants. |
Before the court is Plaintiff's Motion for Class Certification. (Mot. (Dkt. # 11).) The court has reviewed Mr. Erickson's motion, Defendant's ("Elliot Bay") response to the motion (Resp. (Dkt. # 13)), Mr. Erickson's reply memorandum (Reply (Dkt. # 16)), Mr. Erickson's response to the court's Order to Show Cause Regarding Standing under
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// Spokeo1 (Show Cause Order (Dkt. # 17); (Erickson Supp. Br. (Dkt. # 19)), Elliot Bay's response to the Order to Show Cause (Elliot Bay Supp. Br. (Dkt. # 18)), the relevant portions of the record, and the applicable law. Considering itself fully advised,2 the court GRANTS Mr. Erickson's motion for class certification.
Defendant Elliot Bay is a "collection agency" and "debt collector" as defined by the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692a(6). In 2015, Elliot Bay attempted to collect a debt from Plaintiff (and putative class representative), Mr. Erickson on behalf of Family Health Care ("FHC"), one of Elliot Bay's clients. (Compl. (Dkt. # 1), ¶¶ 15, 16; Resp. at 2.) Mr. Erickson alleges that many of Elliot Bay's attempts to collect the debt violated the FDCPA and two Washington consumer protection statutes. (See generally Compl.)
On March 17, 2015, in its first attempt to collect the debt, Elliot Bay delivered a letter to Mr. Erickson:
NOT HAVING HEARD FROM YOU ON THIS ACCOUNT, LEGAL ACTION IS NOW BEING CONSIDERED. TO AVOID PAYING ADDITIONAL COURT CHARGES AS WELL AS THIS AMOUNT, IMMEDIATELY SEND THE BALANCE IN FULL BY RETURN MAIL TO THE ABOVE ADDRESS.
Elliot Bay admits that at least forty customers in addition to Mr. Erickson received collection letters with identical language. (Mot. Ex. B at 6 ().) In fact, the collection letter contains standard language included in letters to all of Elliot Bay's costumers "on all types of accounts and on all types of amounts owed." (Id.) Although Mr. Erickson's two claims on behalf of the class—Counts II and III—allege many other FDCPA violations, Mr. Erickson seeks class certification solely on the basis of the March 17, 2015, collection letter. (See Mot. at 1, 7.) Mr. Erickson claims that the collection letter violates the FDCPA by threatening "additional court charges . . . [f]alsely representing that if payment [is] not made in full that court charges would automatically be added to the balance of the alleged debt." (Id. ¶¶ 26, 52, 53(e).)
On May 12, 2015, Elliot Bay sent a second letter to Mr. Erickson listing Mr. Erickson's alleged debt in the categories of "Principal," "Interest," and "Misc./CC." (Id. ¶¶ 27-28; Answer ¶¶ 27-28.) When Mr. Erickson's counsel contacted Elliot Bay about the "Misc./CC" charge, Mr. Erickson claims that Elliot Bay explained that the charge, totaling $283.00, represented $200.00 in attorney's fees and $83.00 in filing fees. (Id. ¶ 30.) According to Mr. Erickson, Elliot Bay had no legal or contractual right to attorney's fees. (Id. ¶ 31.)
On June 5, 2015, Mr. Erickson notified Elliot Bay that he had retained counsel and directed Elliot Bay not to contact him and to address all future communications regarding the debt to his attorney. (Id., ¶¶ 33-34 (citing Exs. C, D).) Nevertheless, Mr. Erickson received a third collection letter on September 10, 2015. (Compl. ¶ 37; Answer ¶ 37.)This time, the collection letter listed Mr. Erickson's debts as $120.00 in "Principal," $61.32 in "Interest," and $323.00 in "Misc./CC." (Compl. ¶ 39; Answer ¶ 39.) Mr. Erickson believes Elliot Bay did not have a legal or contractual right to charge $323.00 in "Misc./CC" fees. (Compl. ¶ 40.) The third collection letter also stated:
IF YOU PAY THE ACCOUNT IN FULL AND ASK FOR DELETION FROM YOUR CREDIT FILE(S), WE WILL REQUEST DELETION ON YOUR BEHALF.
Mr. Erickson claims that the third collection letter misleads by implying that Mr. Erickson could only clear his credit report by asking Elliot Bay for deletion, when there are other avenues for removing the debt from his report. (Compl. ¶ 42.)
On September 3, 2015, and January 19, 2016, Elliot Bay reported Mr. Erickson's debt to a credit bureau. (Id. ¶ 35; Answer ¶ 35.) Mr. Erickson alleges that Elliot Bay did not notify the credit bureau that his debt was disputed, as required under the FDCPA. (Compl. ¶ 36.)
On April 28, 2015, after six weeks of failed attempts to recover payment, Elliot Bay filed a collection lawsuit against Mr. Erickson in Snohomish County District Court. (Berggren Decl. (Dkt. # 15) ¶ 6, Ex. A.) The collection lawsuit was eventually dismissed after Elliot Bay made seven unsuccessful attempts to serve Mr. Erickson. (Id. ¶¶ 10, 12.)
On March 16, 2016, Mr. Erickson filed a putative class action complaint alleging that Elliot Bay violated certain provisions of the FDCPA as well as two Washington statutes—the Washington Collection Agency Act (WCAA), RCW ch. 19.16, and the Washington Consumer Protection Act (CPA), RCW ch. 19.86. (See generally Compl.)Mr. Erickson asserts that the court has federal question jurisdiction over the FDCPA claims and pendent jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367(a). (Compl. ¶ 2.)
On March 3, 2017, the court ordered Mr. Erickson to show cause why this action should not be dismissed for lack of subject matter jurisdiction. (Show Cause Order.) The court was concerned that Mr. Erickson failed to plead concrete harm, in support of the injury-in-fact requirement of Article III standing. (See id.) see also Spokeo, 136 S. Ct. 1540; Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). Mr. Erickson submitted a memorandum in response to the court's order arguing that federal subject matter jurisdiction exists under Spokeo. (See Erickson Supp. Br.) Elliot Bay also submitted a memorandum, which contends there is no federal jurisdiction because Mr. Erickson has solely alleged statutory violations, without alleging concrete harm. (See Elliot Bay Supp. Br.)
Before deciding Mr. Erickson's motion for class certification, the court first must be satisfied that Mr. Erickson has standing to bring his claims. Nelsen v. King Cty., 895 F.2d 1248, 1249-50 (9th Cir. 1990 ("Standing 'is a jurisdictional element that must be satisfied prior to class certification.'") (quoting LaDuke v. Nelson, 762 F.2d 1318, 1322 (9th Cir. 1985)). Accordingly, the court initially addresses standing and then turns to the question of class certification.
Article III of the United States Constitution limits federal jurisdiction to the resolution of cases and controversies. See U.S. Const. art. III, § 2. "[S]tanding is an essential and unchanging part of the case-or-controversy requirement of Article III." Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). In the absence of standing, the court lacks subject matter jurisdiction and the suit must be dismissed under Federal Rule of Civil Procedure 12(b)(1). Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004); Fed. R. Civ. P. 12(b)(1). The "irreducible constitutional minimum" of standing consists of three elements: (1) the plaintiff must have suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision. Id. at 560-61; Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000). With respect to the first element, an injury in fact must be "(a) concrete and particularized . . . ; and (b) actual or imminent, not conjectural or hypothetical." Lujan, 504 U.S. at 560 (internal citations and quotations omitted). The party invoking federal jurisdiction bears the burden of establishing standing. Id. at 561. Plaintiffs must plead or prove, with the requisite "degree of evidence required at the successive stages of the litigation," each element of standing. Id. at 561.
The Supreme Court recently revisited the principles of standing and the injury-in-fact element in Spokeo, 136 S. Ct. 1540. Spokeo involved a class action lawsuit under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681e, in which the plaintiff sued a company for violating the FCRA's procedural requirements by allegedlyproviding incorrect information about the plaintiff to the company's users. Id. at 1545-46. The Ninth Circuit held that the plaintiff's injury "satisfied the injury-in-fact requirement of Article III" because the defendant "violated [the plaintiff's] statutory rights, not just the statutory rights of other people." Id. The Supreme Court reversed, finding that the Ninth Circuit erred by focusing the injury-in-fact inquiry solely on whether the plaintiff's injury was particularized while omitting any analysis of concreteness. Id. at 1550.
The Supreme Court emphasized that to be concrete, an injury "must be 'de facto'; that is, it must actually exist." Id. at 1548. However, "concrete" does not necessarily mean "tangible." Id. at 1549. An intangible harm, such as the loss of one's right to free speech or to religious practice, can constitute a concrete injury. Id. (). Indeed, "Congress may 'elevat[e] to the status of legally cognizable injuries, de facto injuries that were previously inadequate in law.'" Id. (alteration in original) (quoting Lujan, 504 U.S. at 578). Nevertheless, a plaintiff does not "automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize...
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