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Morrison v. Clear Management Solutions

United States District Court, D. Utah

January 4, 2019



          Clark Waddoups United States District Court Judge

         Before the court is Defendant Clear Management Solutions' Motion for Summary Judgment (ECF No. 20) and Plaintiff Aimee Morrison's Motion to Certify Class (ECF No. 32) and Motion for Summary Judgment (ECF No. 36). Ms. Morrison alleges that she and other similarly situated individuals received collections letters from Clear Management Solutions (CMS) that violated the Fair Debt Collection Practices Act and the Utah Consumer Sale Practices Act. CMS argues that it did not violate the FDCPA because it is not a debt collector and therefore does not fall under the Act. The court heard oral argument on June 28, 2018. (ECF No. 43.) For the reasons stated herein, the court CERTIFIES the class, DENIES CMS's Motion for Summary Judgment, and GRANTS Ms. Morrison's Motion for Summary Judgment.


         Ms. Morrison seeks certification of the following classes:

All persons with addresses within Utah; who were sent any communication which was similar or identical to Plaintiff's Exhibit A on behalf of Utah Imaging Associates; to recover a consumer debt; in which this initial communication failed to provide the notice required by 15 U.S.C. § 1962g and/or 15 U.S.C. § 1692e(11); which were not returned undelivered by the United States Postal Service; from April 11, 2016 until April 11, 2017.

         (Motion to Certify 2, ECF No. 32.) Ms. Morrison also seeks appointment as class representative. (Id.) Finally Ms. Morrison seeks the appointment of David McGlothlin of Hyde & Swigart and Ryan McBride of Kazerouni Law Group be appointed as class counsel. (Id.)

         Under the Federal Rules of Civil Procedure, “[a]t an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action.” Fed.R.Civ.P. 23(c)(1)(A). The order “must define the class and the class claims, issues, or defenses, and must appoint class counsel under Rule 23(g).” A class may be certified only if all of the following prerequisites are met:

(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 or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.

         Id. 23(a); Shook v. El Paso Cty., 386 F.3d 963, 968, 971 (10th Cir. 2004) (“Rule 23(a) requires an analysis of four elements which are preconditions to class certification: numerosity, commonality, typicality, and adequacy of the named parties to represent the class.”). “A party seeking class certification must show ‘under a strict burden of proof' that all four requirements are clearly met.” Trevizo v. Adams, 455 F.3d 1155, 1162 (10th Cir.2006).

         Here, the purported class satisfies the numerosity requirement because there are sufficient potential members “as to make joinder impracticable.” Peterson v. Okla. Housing Auth., 545 F.2d 1270, 1273 (10th Cir. 1976). The proposed class is made up of individuals to whom CMS sent the same or similar communications as it sent Ms. Morrison on behalf of the original creditor Utah Imaging Associates (UIA) within a one-year time span. Based on discovery responses from UIA, Ms. Morrison estimates that 40, 887 people received such a communication. (Exhibit B ¶ 7, ECF No. 32-5.) Even assuming some of the intended recipients never received or opened the documents, this class of potential plaintiffs is too large to be accommodated through joinder.

         Commonality is also met. Commonality exists when plaintiffs share a “common contention . . . that 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.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Here CMS has admitted that all 40, 887 prospective class members received the same or nearly the same collections letter, which did not include the notices that 15 U.S.C. § 1692g and 15 U.S.C. § 1692e(11) require. (Exhibit C 38: 1-18, ECF No. 32-6.) Therefore, common questions-whether CMS was required to comply with FDCPA § 1692g and § 1692e(11) and whether the letter was deceptive in violation of the UCSPA-would resolve plaintiffs' entitlement to relief. If CMS was required to comply with the FDCPA and UCSPA, each of the 40, 887 notices it sent would be in violation of the FDCPA, entitling the class members to compensation. Because resolving a single legal issue would resolve the question of CMS's liability under each statute to each member of the purported class, commonality exists.

         Typicality is also met. “[L]ike commonality, typicality exists where . . . all class members are at risk of being subjected to the same harmful practices, regardless of any class member's individual circumstances.” DG ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1199 (10th Cir. 2010). Courts have concluded that typicality is met where each member of the purported class received the same communication in violation of the FDCPA. See, e.g., Gold v. Midland Credit Mgmt., 306 F.R.D. 623, 631-32 (N.D. Cal. 2014) (concluding typicality was met where the plaintiff “allege[d] that she and each class member were sent an identical and unlawful form collection letter and therefore subjected to the same violations of the FDCPA”). Because Ms. Morrison's harm, receipt of a communication that allegedly violated the FDCPA and UCSPA, is typical of the harm to the members of the purported class, this element is met.

         Finally, class representation is adequate. Class representation is adequate if the named plaintiff and her counsel (1) do not have “any conflicts of interest with other class members” and (2) “will . . . prosecute the action vigorously on behalf of the class” and if counsel (3) is competent. Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1187-88 (10th Cir. 2002). First, Ms. Morrison's claims are identical to those of the class and therefore her interests coincide with theirs. And she declares under penalty of perjury that she has no financial interest in the outcome aside from any damages to be awarded.[1] (Declaration of Aimee Morrison ¶ 9, ECF No. 32-1.) And there is no known conflict between Ms. Morrison or her counsel and the class. (Id. ¶¶ 6-7; Declaration of David McGlothlin ¶ 4, ECF No. 32-2; Declaration of Ryan L. McBride ¶ 7, ECF No. 32-3.)

         Second, Ms. Morrison has declared under penalty of perjury that she understands her responsibilities as class representative, is willing to serve in that capacity, and has hired competent counsel to represent the class. (Declaration of Aimee Morrison ¶¶ 3-5, 8, ECF No. 32-1.) Third, Ms. Morrison's counsel are experienced lawyers capable of serving as class counsel. Their declarations and supporting documents demonstrate they have significant experience serving as class counsel, including in FDCPA actions. (Declaration of David McGlothlin ¶¶ 5-17, ECF No. 32-2; Declaration of Ryan L. McBride ¶¶ 8-19, ECF No. 32-3.) Therefore, each of the elements of Federal Rule of Civil Procedure 23(a) are met.

         Having found that the Rule 23(a) prerequisites are met, the court must next “examine whether the action falls within one of three categories of suits set forth in Rule 23(b).” Adamson v. Bowen, 855 F.2d 668, 675 (10th Cir. 1988). Here Ms. Morrison alleges her action satisfies both Rule 23(b)(2) and (b)(3) and asks the court to certify a hybrid class. The two categories apply when

(2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or (3) the court finds 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.

         Id. 23(b)(2)-(3). Because she believes this action satisfies the requirements of Rule 23(b)(2) and (b)(3), Ms. Morrison asks the court to certify a hybrid class, which would entitle the class members to equitable relief under 23(b)(2) and monetary damages under 23(b)(3). The court first analyzes whether certification could be proper under either section of subpart (b) and then addresses the argument for a hybrid class.

         Subpart (b)(2) applies if “the remedies the class seeks . . . do not depend on the individual facts of each case, but apply equally to all cases pending within the class.” Adamson v. Bowen, 855 F.2d 668, 676 (10th Cir. 1988). But “[f]actually different claims of individual class members ‘should not preclude certification under Rule 23(b)(2) of a claim seeking the application of a common policy.'” Shook, 386 F.3d at 971 (quoting Adamson, 855 F.2d at 676). The court must examine “the ‘relationship between' a proposed class, ‘its injuries, and the relief sought.'” Vallario v. Vandehey, 554 F.3d 1259, (10th Cir. 2009) (quoting Shook v. Bd. of Cty. Comm'rs, 543 F.3d 597, 604 (10th Cir. 2008)). As an initial matter, the court notes that the FDCPA does not make equitable relief available as a remedy to private litigants. See 15 U.S.C. § 1692k (specifying damages awards available and factors to be considered by the court when determining what amount of damages to award); see also Jacobson v. Persolve, No. 14-cv-735-LHK, 2015 WL 3523696, at *9-*10 (E.D. Cal. June 4, 2015) (“While the Ninth Circuit has not addressed the issue, every circuit court that has considered this question has concluded that private litigants may seek damages but not injunctive and declaratory relief under the FDCPA.”). But because the UCSPA contemplates injunctive relief, Utah Code Ann. § 13-11-19, a 23(b)(2) class may be proper. See Campo v. Am. Corrective Counseling Serv., 254 F.R.D. 585, 595-96 (N.D. Cal. 2008) (concluding that state law provided alternative statutory basis for equitable relief and therefore a basis for certification under Rule 23(b)(2)). And because CMS is alleged to have sent an identical letter to the potential plaintiffs and equitable relief in which the court determined the letter was a violation of law would provide the same relief across the class, Ms. Morrison has satisfied Rule 23(b)(2).

         Rule 23(b)(3)'s requirements are also satisfied. A class may be certified under subpart (b)(3) if questions of law or fact pertaining to the class as a whole predominate over issues applying to individual class members such that a class action is the superior method of resolving the case. Amchem Prods, Inc. v. Windsor, 521 U.S. 591, 615 (1997). In evaluating the predominance and superiority requirements, the court is to consider the following nonexhaustive factors:

(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular ...

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