Northern District of Illinois Certifies FDCPA Claims, Rejecting Challenges based on Ascertainability and Article III

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A debt collector’s “attempt to impose percentage-based collection costs or fees absent a prior express agreement violates the FDCPA, unless such costs are allowed by applicable state law…. NRA contends that the proposed class is not ascertainable because ‘to the extent liability, if any, turns on whether or not the “costs” charged to each putative class member were expressly authorized by the agreement creating the debt or permitted by law, class membership cannot be determined without conducting individualized inquiries into the facts and circumstances surrounding formation of the agreements at issue.’ Specifically, NRA argues that ‘it is not clear, for example, where the agreements were entered into by proposed class members and whether prevailing law in such jurisdictions would permit the inclusion of such costs.’ This argument fails to persuade. First, settled law holds that if there are material factual disputes regarding class certification, the court must receive evidence and resolve the disputes before deciding to certify the class.  But NRA presents no evidence—not even an affidavit—that any putative class member, all from Illinois, entered into her Six Flags contract in a jurisdiction that permits percentage-based collection costs….  Second, and similarly, NRA adduces no evidence that any putative class member signed a Six Flags agreement different than Bernal’s, much less one that expressly authorized the imposition of percentage-based collection costs.”

And NRA’s challenge to Predominance under (b)(3) was rejected on largely the same grounds.

The court also notes, with respect to ascertainability, that “NRA’s argument appears to rest in part on ‘the potential difficulty of identifying particular members of the class and evaluating the validity of claims they might eventually submit.’ But that is not the standard for ascertainability. Although some federal courts have applied this ‘heightened ascertainability requirement,’ the Seventh Circuit has expressly disavowed it. For a class to be ascertainable in the Seventh Circuit, the ‘class must be defined clearly’ and class ‘membership [must] be defined by objective criteria.’ Class membership in this case is as objective as it comes: all Illinois residents from whom NRA attempted to collect a delinquent consumer debt allegedly owed for a Six Flags contract via a collection letter identical to the letter attached to the complaint, as to which a percentage-based charge for collection costs had been added to the debt and that was dated on or after February 3, 2015. This class is easily ascertainable….

With respect to Article III standing, the court found that “NRA’s collection letter allegedly violated Bernal’s right to be free from such misleading communications. The harm that he suffered may be intangible, given that it is not alleged that he actually paid the disputed percentage-based collection costs, but intangible injuries can nevertheless be concrete, and because Congress is well positioned to identify intangible harms that meet minimum Article III requirements, its judgment is instructive and important [under] Spokeo. The type of injury alleged here, receiving a debt collection letter that, it is alleged, wrongly assesses percentage-based collection costs, is concrete.”
Bernal v. NRA Group, No.16-1904, 2016 WL 4530321 (Aug. 30, 2016).

 

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