Powers v. Credit Mgmt. Servs., Inc.
| Decision Date | 12 July 2013 |
| Docket Number | 8:11CV436 |
| Parties | LAURA POWERS, NICHOLE PALMER, and JASON PALMER, on behalf of themselves and all others similarly situated, Plaintiffs, v. CREDIT MANAGEMENT SERVICES, INC., DANA K. FRIES, TESSA HERMANSON, JESSICA L. V. PISKORSKI, BRADY W. KEITH, and MICHAEL J. MORLEDGE, Defendants. |
| Court | U.S. District Court — District of Nebraska |
This matter is before the court on the defendant's objection (Filing No. 107) to the magistrate judge's findings and recommendations (Filing No. 105) granting the plaintiffs' motion to certify class (Filing No. 77). The court conducted a de novo review of the magistrate judge's findings pursuant to 28 U.S.C. § 636(b)(1) and NECivR 72.3. The court reviewed the full record, including the plaintiff's brief and index of evidence (Filing Nos. 78, 79, 95, 97, & 98), the defendants' brief and index of evidence (Filing Nos. 88 & 89), and the transcript of the class certification hearing (Filing No. 104). The court concludes that the magistrate judge's findings and recommendations should be adopted in their entirety.
Credit Management Services, Inc. (CMS) is a corporation with its principal place of business in Grand Island, Nebraska. Michael J. Morledge is the sole owner of CMS. The company employs four in-house attorneys: Danna K. Fries (Fries), Tessa Hermanson (Hermanson), Jessica L.V. Piskorski (Piskorski), and Brady W. Keith (Keith). CMS is in the business of collecting debts from consumers. CMS routinely filesstandardized collection complaints and discovery requests to collect from debtors. The forms used in these complaints and requests have remained largely unchanged for at least four years.
On July 12, 2011, CMS filed its standardized collection complaint against Laura Powers (Ms. Powers) in the County Court of Douglas County, Nebraska. Exhibit A, Filing No. 17-1. The complaint alleges that Ms. Powers owed $454.00 to "GIKK ORTHO SPECIALISTS." The complaint demands that she pay this amount in addition to attorney fees and a prejudgment interest of $224.48 accruing from April 25, 2007, to June 7, 2011. The complaint also states that "[m]ore than 90 days have elapsed since the presentation of this claim." CMS lists all of its in-house attorneys on the claim (Fries, Hermanson, Piskorski, and Keith), but only Hermanson's signature appears on the document.
Ms. Powers disputed the claim in county court and motioned for summary judgment because CMS made the claim outside of the relevant statute of limitations. In response, CMS changed the cause of action in the complaint. CMS then served Ms. Powers with a discovery request. Exhibit B, Filing No.17-2. Question 3 of CMS's interrogatory asks for the "full name(s) and address(es) of your present place(s) of employment, your length of tenure, the regularity with which you receive compensation, whether it is weekly, biweekly, monthly or other, and your present rate of compensation." See Filing No. 17-2 at 5. The discovery request also includes a request for production of documents, in which CMS demands "the three most recent tax returns filed by the Defendant [and] the three most recent payroll stubs from defendant's employment." Id. at 6. CMS's four in-house attorneys are listed in the signature blockof this document. While attempting to collect from Ms. Powers, CMS called her place of employment and left a company-wide voicemail containing her Social Security number.
On July 26, 2011, CMS filed its standardized collection complaint against Nichole and Jason Palmer (the Palmers) in the County Court of Douglas County. Exhibit C, Filing No. 17-3. The complaint alleges that the Palmers owed a total of $856.38 to three separate service providers. The format and terminology of the Palmer complaint is nearly identical to the Powers complaint. Similar to the Powers complaint, the Palmer complaint seeks attorney fees and prejudgment interest and asserts that "[m]ore than 90 days have elapsed since the presentation of this claim." Comparable to the Powers complaint, only one in-house attorney's signature appears on the document, but the names of all four attorneys are present in the signature block.1 The Palmers filed an answer to the complaint in August of 2011. CMS then served the Palmers with a discovery request similar to the one served to Ms. Powers. Exhibit D, Filing Nos. 17-4 & 17-5. CMS also made a phone call to the Palmers' household.
Ms. Powers and the Palmers allege that CMS's collection complaints violate the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (FDCPA), and the Nebraska Consumer Protection Act, Neb. Rev. Stat. §§ 59-1601 - 59-1623 (NCPA). They assert that the collection complaints violate the FDCPA and the NCPA because the documents suggest that CMS routinely presents a claim to debtors 90 days prior to filing the complaint in county court when in fact CMS does not engage in this practice.2Additionally, the plaintiffs contend that the complaints seek to collect prejudgmentinterest and attorney's fees without adequate statutory support. Finally, Ms. Powers and the Palmers contend that CMS's discovery requests violate the FDCPA and the NCPA because they are misleading and attempt to collect sensitive financial information from consumers that is irrelevant to the case.
Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Ms. Powers and the Palmers requested class certification on behalf of the following four classes pursuant to Fed. R. Civ. P. 23. The first FDCPA class consists of all Nebraska residents who received a county court collection complaint from CMS in the form of Exhibits A or C within the last year. The second FDCPA class consists of all Nebraska residents who received a discovery request from CMS in the form of Exhibits B or D within the last year. The first NCPA class consists of all Nebraska residents who received a county court collection complaint from CMS in the form of Exhibits A or C within the four years. The second NCPA class consists of all Nebraska residents who received a discovery request from CMS in the form of Exhibits B or D within the last four years. See Filing No. 77, Motion for Class Certification.
The magistrate judge found that the plaintiffs satisfied all four of the 23(a) class certification requirements. The magistrate judge found that the plaintiffs met the numerosity, commonality, typicality, and adequacy of representation requirements. The magistrate judge also determined that the plaintiffs satisfied the 23(b)(3) requirements of predominance and superiority. Thus, the magistrate judge recommended certification of the four requested classes and concluded that the case should move forward as a class action lawsuit.
The court conducts a de novo review of the magistrate judge's findings. "Rigorous analysis" is necessary to ensure that the plaintiffs satisfied all Rule 23 requirements for certifying a class. Elizabeth M. v. Montenez, 458 F.3d 779, 784 (8th Cir. 2006) (quoting Gen. Tel. Co. of the S.W. v. Falcon, 457 U.S. 147, 161 (1982)). This rigorous analysis often results in some overlap with the merits of the plaintiff's claim. Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). A certified class must meet all the requirements discussed in Rule 23(a) and fit within one of the categories outlined in rule 23(b). See Fed. R. Civ. P. 23.
In order to certify a class to begin a class action lawsuit, Rule 23(a) necessitates that:
Fed. R. Civ. P. 23(a). These four 23(a) requirements are commonly referred to as numerosity, commonality, typicality, and adequacy of representation. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613 (1997). All four must be satisfied to certify a class.
Rule 23(a)(1) governs numerosity. To become certified under Rule 23(a)(1), a class must be "so numerous that joinder of all members is impracticable." There are no strict guidelines in the Eighth Circuit regarding the class size required to satisfy numerosity. See Estate of Mahoney v. R.J. Reynolds Tobacco Co., 204 F.R.D. 150,153 (S.D. Iowa 2001). Other courts have determined that "as few as forty class members is sufficient to show joinder is impracticable." Harris v. D. Scott Carruthers & Assoc., 270 F.R.D. 446, 450 (D. Neb. 2010) (citing Hale v. AFNI, Inc., 264 F.R.D. 402, 404 (N.D. Ill. 2009)).
The plaintiffs contend that over 27,000 Nebraska residents received CMS complaints in the applicable time frame. The defendants concede that it sent these documents to over 5,000 individuals. Therefore, the court finds the numerosity requirement is met in this case. The court also notes that the defendants do not dispute this issue.
Rule 23(a)(2) governs commonality. To become certified under Rule 23(a)(2), there must be "questions of law or fact common to the class." Fed. R. Civ. P. 23(a)(2). The requirement is met when the legal issue "linking the class members is substantially related to the resolution of the litigation." Paxton v. Union Nat. Bank, 688 F.2d 552, 561 (8th Cir. 1982) (quoting American Finance Sys., Inc. v. Harlow, 65 F.R.D. 94, 107 (D.Md. 1974). However, it is not required that every issue in the case be shared by each class member. Id. at 561. It is sufficient to base a class action upon a "common contention . . . capable of classwide resolution." Wal-Mart Stores 131 S. Ct. at 2551. The burden on the plaintiff to establish commonality is "very light . . . and is easily satisfied." In re Hartford Sales Practices Litig., 192 F.R.D. 592, 603 (D. Minn 1999).
Rule 23(a)(3) governs typicality....
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