Pennsylvania District Court rejects law firms defense to class certification in FDCPA actio

In Gibbons, v. Weltman, Weinberg & Reis Co., LPA, No. 17-1851 (E.D. Penn Oct. 31, 2018) a Pennsylvania District Court granted a consumer’s class certification in an FDCPA suit against a law firm alleging that debt-collection letters printed on the firm’s letterhead falsely implied that they were being sent by an attorney and/or that an attorney had reviewed the underlying account.

The facts are that the consumer received a collection letter printed on the law firm’s letterhead and bearing the signature of the firm. The consumer later discovered that no attorney at the firm had reviewed her account prior to the sending the letter. The consumer filed a class action complaint against the law firm alleging that the letters violated the FDCPA, which prohibits the “false representation or implication…that any communication is from an attorney.”

The consumer moved for class certification under Federal Rule of Civil Procedure 23(b)(3), which requires “the Court [find] 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 of fairly and efficiently adjudicating the controversy” – commonly referred to as the predominance and superiority requirements.

During discovery, the law firm revealed that it was its practice and procedure to generate initial debt-collection letters from a template that included the firm’s letterhead and signature and that it had sent approximately 18,808 such letters within the Third Circuit in the past 2 years. The law firm argued that individual questions of fact predominated because a “key issue that would arise is whether each of the members of the class received a letter related to a ‘consumer’ obligation under the FDCPA” and therefore, class certification was inappropriate because it would be “necessary to individually depose each putative class member regarding the underlying nature of their obligations.” The Court rejected this argument because based on the firm’s records and deposition testimony it would be possible for the firm to identify the individuals who received its debt-collection letter as consumers under the FDCPA and those who are not consumers.

The firm also argued that class certification was not the superior method to adjudicate the case because based on the firm’s net worth, class members “will recover significantly less than the statutory amount of damages…than if they pursued individual claims.” The Court rejected this argument for several reasons. First, courts have generally held that superiority is not destroyed unless Defendant’s net worth is negative. Second, Rule 23(c) allows Rule 23(b)(3) class members to opt out of the class and bring their own claims. Finally, there was no evidence that any class member had already initiated litigation concerning this controversy. For these reasons, class certification was granted.

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