District Court Declines to Extend Debt Collector’s Reading of TransUnion v. ramírez | Goodwin

[author: Amelie Hopkins]

On April 27, 2022, the U.S. District Court for the Western District of Pennsylvania certified a class of individuals alleging that defendants violated the Fair Debt Collection Practices Act (FDCPA). Plaintiffs allege that defendants violated the FDCPA by sending collection letters encouraging individuals to accept discounted refund offers before a court judgment was entered against them, even though there was no of such legal cases pending against them.

In granting class certification, the Western District rejected defendants’ argument class certification should be denied because plaintiffs failed to establish that each putative member of the class had standing to sue. Specifically, the defendants argued that the United States Supreme Court’s decision in TransUnion v. Ramirez required plaintiffs to show that each putative member of the class had standing to sue in order for a court to certify a class.

The Court disagreed with the defendants’ reading of Trans Union, concluding instead that the ruling only required each class member to establish standing to obtain post-trial damages, not as a prerequisite for class certification. In coming to this conclusion, the Court relied on the Supreme Court’s statement in Trans Union that the question of whether all putative members of the group must show their quality at the group certification stage was a “separate matter” and which they expressly declined to address.

As further support for refusing to require each putative band member to establish their standing prior to certification, the Western District pointed to the existing Third Circuit precedent. In particular, the Court pointed to Third Circuit cases that, at the certification stage, the ongoing investigation focused only on the named plaintiff and not on individual class members. Thus, the Western District pointed out that because Trans Union only required class members to establish their ability to recover post-trial damages, it did not abrogate any existing Third Circuit precedents.

Further, the court also held that the FDCPA claims accrued at the time the letters were sent, as liability under the FDCPA rests on the debt collector‘s “use” of representations or prohibited means to collect a debt. The Court held that such “use” occurred when the debt collector sent a letter to a consumer. Once the letter is sent, “a consumer has a ‘full and current cause of action’ under the FDCPA, whether or not they are already aware of it.”

The Court rejected defendants’ argument that defining a class based on time of dispatch would result in a class that is nearly impossible to determine, especially since debt collection suits could be filed and concluded in the deadlines indicated in the letter offer. Instead, the Court found that the time of mailing would result in a much more easily verifiable category, since determining when a letter was mailed would simply require an investigation into the records of a debt collector. , as opposed to the individualized, claimant-by-claimant determination that a time-of-receipt approach would require.

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Tana T. Thorsen