District Court Declines to Extend Debt Collector’s Reading of TransUnion v. Ramirez

On April 27, 2022the United States 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.

By granting class certification, the West district Certification of defendants’ panel of arguments dismissed should be denied because plaintiffs failed to establish that each putative member of the panel had standing to sue. Specifically, the defendants argued that the United States Supreme Court in power in Trans Union vs. 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 reaching this conclusion, the Court relied on the Supreme Court statement in Trans Union that whether all putative band members must show their quality at the band certification stage was a “separate matter” and which they expressly declined to address.

As further support for declining to require each putative class member to establish standing prior to certification, the West 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. So the West 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 revolved around the debt collector‘s “use” of prohibited representations or means. to collect a debt. The Court held that such “use” occurred when the debt collector sends 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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Mrs Amelie HopkinsGoodwin Procter LLP
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Tana T. Thorsen