AMANSEC v. MIDLAND CREDIT MANAGEMENT, INC., No. 2:2015cv08798 - Document 204 (D.N.J. 2022)
Court Description: OPINION. Signed by Judge Evelyn Padin on 10/24/2022. (ld, )
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AMANSEC v. MIDLAND CREDIT MANAGEMENT, INC. Doc. 204 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 1 of 15 PageID: 3103 Not for Publication UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY ROMMEL AMANSAC, on behalf of himself and those similarly situated, Plaintiff, Civil Action No. 15-8798 v. OPINION MIDLAND CREDIT MANAGEMENT, INC., Defendants. Evelyn Padin, U.S.D.J. brought pursuant to Federal Rule of Civil Procedure 23. D.E.s 186, 187. Defendant Midland Credit MCM . D.E.s 190, 191. The Court has reviewed all submissions in support and in opposition, and considered the motion without oral argument. See Fed. R. Civ. P. 78(b); L. Civ. R. 78.1(b). For the following reasons, Amans motion is denied. I. BACKGROUND MCM collects on debt purchased and owned by its affiliate, Midland Funding, LLC .1 Amansac is a consumer who incurred debt after purchasing a bed platform from 1 Amansac claims that only MF, and not MCM, can enforce the arbitration provisions identified infra because MCM can only be raised by MF. D.E. 177 at 2. The Court disagrees. Indeed, this assertion ignores both MCM -established agent-affiliate relationship, see, e.g., Harris v. Midland Credit Management, Inc., Civil Action No. 15-4453 (SDW)(SCM), 2016 WL 475349, at *2 n.4 (Feb. 28, 2016) (collecting cases), and the broadly-worded assignment provisions within the arbitration agreements at issue. See Lance v. Midland Credit Management Inc., Civil Action No. Dockets.Justia.com Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 2 of 15 PageID: 3104 Fingerhut on credit in 2012. in that debt. D.E. 190-2 ¶ 15; D.E. 190-3 at Ex. C. Thereafter, on or about December 22, 2014, MCM sent a collection notice to Amansac requesting payment in the amount of $651.42 for his Fingerhut debt. See D.E. 1-1. Per the collection notice, $140.60 of that $651.42 sum represented accrued interest. Id. . D.E. 1 at ¶ 32. And on December 21, Fair Debt Collection Practices Act 15 U.S.C. § 1692, et seq. D.E. 1. Amansac now moves for class certification under Rule 23. In so doing, he seeks to 2 D.E. 189-1 at 1. The following additional facts : a. Amansac Opens His Fingerhut/MetaBank Account On May 6, 2012, Amansac applied for, and was approved for, a Fingerhut-branded credit account (the 7. ; that account was originated by MetaBank. D.E. 190-2 ¶¶ 3, Fingerhut credit application was approved, a welcome packet was mailed to him at his New Jersey address; the packet contained a copy of the MetaBank Fingerhut Credit 18-4933, 2019 WL 2143362, at *1 ( MCM,] the debt collector[,] may compel individual 2 This class is beginning December 21, 2014, through and including March 20, 2020, [MCM] attempted to collect a charged-off consumer debt allegedly owed to [MF], (a) by sending a collection letter stating balances higher than the charged-off balance because interest was added by [MCM] to the chargedoff balance, and (b) was seeking to collect a consumer debt alleged to be originally owed to -1 at 1. 2 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 3 of 15 PageID: 3105 Account Agreement ). D.E. 190-2 ¶ 8. That agreement contains the following arbitration provision: By requesting an Account from us and accepting this Agreement, you agree that if a dispute of any kind arises out of this Agreement, either you or we, at our sole discretion, can choose to have that dispute resolved by binding arbitration. If arbitration is chosen by any party, neither you nor we will have the right to litigate that claim in court or to have a jury trial on that claim, or to engage in prearbitration discovery, except as provided for in the arbitration rules. In addition, you will not have the right to participate as a representative or member of any class of claimants pertaining to any claim subject to arbitration. D.E. 190-2 at Ex. A. The MetaBank Agreement further and MetaBank will be bound by Id. It also states that the account issuer, MetaBank, Id. MetaBank transferred its rights in, inter alia, via an account transfer agreement dated June 28, 2012. D.E. 190-2 ¶¶ 3, 7. As of July 1, 2012, Id. at ¶ 10. The account agreement was likewise updated. Id. at ¶ 11. b. The WebBank Agreement The WebBank Fingerhut Credit Account Agreement , which as of July 1, 2012, supplanted the prior MetaBank Agreement, contains the following arbitration provision: Arbitration. Please review this provision carefully. It provides that any dispute may be resolved through binding arbitration. Arbitration replaces the right to go to court and the right to have a jury decide the dispute. Under this provision, your rights may be substantially limited in the event of a dispute. You may opt out of 3 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 4 of 15 PageID: 3106 this Arbitration provision by following the instructions below. By accepting this Agreement, unless you opt out by following the instructions below, you agree that either you or we, at our sole discretion, can choose to have any dispute arising out of or relating to this Agreement or our relationship resolved by binding arbitration. If arbitration is chosen by any party, neither you nor we will have the right to litigate that dispute in court or to have a jury trial on that dispute. Pre-arbitration discovery will be permitted only as allowed by the arbitration rules. In addition, you will not have the right to participate as a representative or member of any class of claimants pertaining to any dispute subject to arbitration. . . . For purposes of this Arbitration provision, dispute shall be construed as broadly as possible, and shall include any claim, dispute or controversy (whether in contract, regulatory, tort or otherwise, whether pre-existing, present or future and including constitutional, statutory, common law, international tort and equitable claims) arising from or relating to this Agreement, the credit offered or provided to you or the goods or services you purchase; the actions of yourself, us or third parties; or the validity of this Agreement or this Arbitration provision. It includes disputes brought as counterclaims, cross claims, or third party claims. A party that has brought a dispute in court may elect to arbitrate any other dispute that may be raised in that litigation. Disputes brought as part of a class action or other representative basis are subject to arbitration on an individual (non-class, non-representative) basis. IF YOU DO NOT OPT OUT, THEN YOU WILL HAVE WAIVED YOUR RIGHT TO INDICATE OR PARTICIPATE IN A CLASS ACTION RELATED TO THIS AGREEMENT. In this Arbitration provision, the words we, us, and our shall include WebBank and any assignees of any WebBank s rights, any merchant from which you purchased goods or services using your Account, as well as their respective affiliates, servicers, employee, agents, and future assigns. .... This arbitration provision shall survive repayment of your extension of credit and termination of your Account. D.E. 190-2 at Ex. B. The WebBank Agreement further and WebBank will be Id. 4 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 5 of 15 PageID: 3107 Critically, the parties agree that the specific WebBank Agreement provisions cited above are applicable to the Fingerhut credit accounts of all members of the putative class Amansac seeks to represent. See D.E. 189D.E. 186-1 at 2 (Amansac aver . c. Amansac made his one and only purchase using the Fingerhut Account on or about June 30, 2012. D.E. 190-2 ¶ 9; D.E. 21 at 3. Amansac never made a payment towards the Fingerhut Account, and his account was charged off on February 7, 2013 due to nonpayment. D.E. 190-2 ¶ 13. On or about February 19, 2013, WebBank sold, assigned, and conveyed accounts, including .3 Id. at ¶ 14. On or about Bluestem February 26, 2013, Bluestem sold charged off MF. D.E. 190-2 ¶ 15; D.E. 190-3 at Ex. C. MF , D.E. 190-3 at ¶ 2 & Ex. C. MCM, an MF affiliate, is the debt servicer of this account. D.E. 190-3 at ¶ 1. On or about December 22, 2014, MCM sent a collection notice to Amansac requesting payment in the amount of $651.42, inclusive of $140.60 in accrued interest. See D.E. 1-1. As noted, assess any interest or And on December 21, 2015, llection practice. D.E. 1. 3 Bluestem also -2 ¶ 4. 5 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 6 of 15 PageID: 3108 d. Notably, Amansac, since initiating this matter, has successfully resisted all attempts by MCM to compel arbitration under the terms of the WebBank Agreement. On August 15, 2016, MCM moved for the first time to compel Plaintiff to adjudicate his claims in arbitration. D.E. 13. MCM, by way of that motion, asserted that the language in the WebBank Agreement, including the arbitration provisions detailed above, controlled, and that both MF, the present owner of the who is the servicer of the debt, were entitled to enforce those provisions. D.E. 13 at 3-4, 10-11. Amansac opposed. D.E. 21. His primary argument in opposition was that due to frequent moves in 2012, he never received the original MetaBank Agreement or the updated WebBank Agreement, both of which were sent to him via U.S. mail, and thus, Amansac could not have consented to the terms in those agreements. See D.E. 21-1. On January 20, 2017, Judge Mannion issued a Report & Recommendation recommending yet conclude that Mr. Amansac agreed to arbitration since it is unclear whether the written terms under either [the original MetaBank Agreement or the updated WebBank Agreement] were Wigenton entered an Order adopting Judge Mann D.E. 31. On February 21, 2019, after additional discovery, MCM filed its second motion to compel arbitration. D.E. 84. Amansac again opposed, again averring, inter alia, that, based on frequent moves during the relevant period in 2012, he never received either of the account agreements that were both sent to him via U.S. mail. D.E. 89, 90; accord D.E. 110 at 8. On July 18, 2019, Judge second motion to 6 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 7 of 15 PageID: 3109 compel arbitration received either [the original MetaBank or updated WebBank] Agreements [in the mail] 110 at 13. second Report & Recommendation issued in this matter. D.E. 117. he Federal Arbitration Act[, provides that a written contract provision pertaining to a commercial transaction shall be valid, irrevocable, and enforceable ny doubts concerning the scope of arbitrability should be resolved in favor of arbitration, in light of the liberal federal policy favoring arbitration agreements federal court has limited jurisdiction to address a challenge to the validity of an arbitration agreement nder the FAA, this Court is not and must only decide whether a valid agreement to arbitrate exists. Judge Mannion -8 (citations omitted). accordingly emphasized that it was the highly unique factual findings of non-arbitrability. See D.E. 110 at 11-13. Indeed, His Honor denied because MCM failed to satisfactorily demonstrate that Amansac ever received copies of the agreements compelling arbitration; his decisions, in other words, were not grounded in the validity of the language within those agreements. e. The Present Class Certification Motion The parties thereafter engaged in further discovery, and Amansac now moves for class certification of Rule 23(b)(3) class. Amansac seeks to represent a class of 1,741 New Jersey consumers to whom MCM sent a collection letter in which it improperly added interest on debt -1 at 1. Critically, Amansac, in so 7 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 8 of 15 PageID: 3110 moving, expressly notes that only two WebBank Fingerhut account agreements see D.E. 186-1 at 2, which, as noted supra, both contain the broadly-worded arbitration and class action waiver provisions cited above. II. LEGAL STANDARD -action certification bears the burden of affirmatively demonstrating by a preponderance of the evidence [its] compliance with the requirements of Rule 23. , 784 F.3d 154, 163 (3d Cir. 2015), as amended (Apr. 28, 2015) (citing Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013)). action must satisfy the four requirements of Rule 23(a) and the requirements of either Rule Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 590 (3d Cir. 2012). Under Rule 23(a), a class may be certified only if: (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. Fed. R. Civ. P. 23(a)(1)-(4). These requirements are, respectively, referred to as numerosity, commonality, typicality, and adequacy. See, e.g., Marcus, 687 F.3d at 590-91. A party, like Amansac, who seeks class-certification under Rule 23(b)(3) must satisfy several additional requirements. First, Rule 23(b)(3) requires the party seeking certification to stions affecting only individual members, and that a class action is superior to other available methods Fed. R. Civ. P. 23(b)(3). Second, plaintiff seeking certification of a Rule 23(b)(3) class must prove by a preponderance of the Byrd, 784 F.3d at 163. To do so, the plaintiff must show 8 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 9 of 15 PageID: 3111 administratively feasible mechanism for determining whether putative class members fall within Id. (quoting Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 355 (3d Cir. 2013)). These additional requirements are, respectively, referred to as predominance, superiority, and ascertainability. See, e.g., Byrd, 784 F.3d at 161 n.4, 162, 164. III. ANALYSIS a. Typicality lass actions in which the legal or factual position of the representatives is markedly different from that of other members of the Marcus, 687 F.3d at 598 (citation omitted). To determine whether a plaintiff has satisfied the typicality requireme Id. (citing In re Schering Plough Corp. ERISA Litig., 589 F.3d at 597). This comparative analysis addresses: three distinct, though related, concerns: (1) the claims of the class representative must be generally the same as those of the class in terms of both (a) the legal theory advanced and (b) the factual circumstances underlying that theory; (2) the class representative must not be subject to a defense that is both inapplicable to many members of the class and likely to become a major focus of the litigation; and (3) the interests and incentives of the representative must be sufficiently aligned with those of the class. Id. (quoting In re Schering Plough Corp. ERISA Litig., 589 F.3d at 599). t is well established that a proposed class representative is not typical under Rule 23(a)(3) if the representative is subject to a unique defense that is likely to become a major 9 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 10 of 15 PageID: 3112 focus of the litigation. In re Schering Plough Corp. ERISA Litig., 589 F.3d at 598 (citation omitted). requirement because he, unlike virtually every other putative class member, is not bound to the arbitration and class action waiver provisions contained within the Amansac himself claims Br. in Supp. of Class Cert., D.E. 186-1 at 2; see also at 23-24. MCM, in other words, asserts s matter are uncommon and atypical because he is . . . not subject to the WebBank/Fingerhut arbitration The Court agrees. Here, Amansac has vigorously and successfully opposed to compel arbitration based on his assertion that due to frequent relocations in 2012, he never received a copy of the WebBank Agreement that was sent to him members of the putative class via regular U.S. mail. Due to and presumably to all other highly unique situation, he is not subject to the broadly-worded arbitration provision that it wholly appears all other nearly all other or putative class members would be subject to. That the relevant arbitration provision would likely be valid and applicable to virtually every other class member is sufficient to preclude Amansac, who has successfully resisted efforts to compel arbitration based on his unique circumstances, from representing a class largely made up of individuals that may be subject to the agreement.4 4 is not the validity of the agreement but whether the presence of class members that are potentially subject to the provision satisfies the requirements of Rule 23. This Court will not compel absent 10 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 11 of 15 PageID: 3113 This consideration, in other words, typicality requirement. See Abdul(D.D.C. 2015) , 149 F. Supp. 3d 1, 11 claims are atypical of the alleged class because he is the only member who has exhausted his obligation to arbitrate. All other members of the possible class are subject to mandatory arbitration before they are free to sue in court. Because Plaintiff has failed to meet the typicality requirement, his class action claims will be stricken Jensen v. Cablevision Systems Corporation, 372 F.Supp.3d 95, 122-24 (E.D.N.Y. 2019) (denying class certification for lack of typicality sin to a potentially valid arbitration provision that the named plaintiff opted out of, and thus, were -action waiver] defenses that are inapplicable Spotswood v. Hertz Corp., No. CV RDB-16-1200, 2019 WL 498822, at *11 (D. Md. Feb. 7, 2019) cannot meet the typicality requirement because he did not sign an arbitration agreement while other putative class members did Tan v. Grubhub, Inc., No. 15-cv-05128, 2016 WL 4721439, at *3 (N.D. Cal. July 19, 2016) (named she he had opted out of the arbitration agreement); Quinlan , Civ. No. 12 00737DDP, 2013 WL 11091572, at *3 (C.D. Cal. Aug. 22, 2013) (denying class certification motion as plaintiff was atypical of the class because he was a union member and not required to arbitrate, while class members were non-union and subject to mandatory arbitration); Renton v. Kaiser Found. Health Plan, Inc., Civ. No. C00-5370RJB, 2001 putative class members who are not before this Court to binding arbitration or issue a ruling Jensen v. Cablevision Systems Corporation, 372 F.Supp.3d 95, 123 (E.D.N.Y. 2019) (citing Whittington v. Taco Bell of America, Inc., No. 10-CV01884, 2011 WL 1772401, at *7 (D. Colo. May 10, 2011)). 11 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 12 of 15 PageID: 3114 WL 1218773, at *7 (W.D. Wash. Sept. 24, 2001) (named plaintiff was atypical because she was not compelled to arbitrate like proposed class members were); see also Forby v. One Technologies, LP, Civil Action No. 3:16-CV-856-L, 2020 WL 4201604, at *10 (N.D. Tx. July 22, 20 court determines that the putative class members are likely bound by the arbitration clause at issue, unlike Ms. Forby, which precludes her ability to certify a class under Federal Rule of Civil . b. Adequacy Rule 23(a)(4) requires a showing that named plaintiffs will fairly and adequately protect Rivet v. Off. Depot, Inc., 207 F. Supp. 3d 417, 430 (D.N.J. 2016) (citing In re Cmty. Bank of N. Virginia Mortgage Lending Practices Litig., 795 F.3d 380, 393 (3d Cir. 2015)). the representative plaintiffs Id. the class and possess the same interest and suffer the same injury Beneli v. BCA Fin. Servs., Inc., 324 F.R.D. 89, 98 (D.N.J. 2018) (citation omitted). Determining adequacy involves a two- Id. A named plaintiff is adequate if their interests do not conflict with those of the class members. Id. Here, the Court finds, for substantially the same reasons and considerations detailed in the requirements. See Jensen In the instant case, the Defendants argument that opting out of the arbitration provision subjected the absent class to unique defenses 12 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 13 of 15 PageID: 3115 encompasses both typicality and adequacy Forby unlike Ms. Forby, the putative class members would be bound by the terms of the arbitration agreement . . . [and thus cannot satisfy] the typicality and adequate representative requirements c. Regarding Arbitration Are Unpersuasive affects the class are on to list a litany of disjointed arguments in support of this claim. The Court will briefly explain why arguments fail. Amansac principal assertion against the enforceability of the arbitration provision is that -so) that any of the class members -serving argument disregards the fact that MCM has provided copies of the relevant credit account agreements which Amansac himself claims are applicable to all members of the putative class, and likewise ignores that those agreements include WebBank and any assignees of any WebBank s rights [and] their respective affiliates, servicers, employee, agents, and future assigns. Fingerhut Accounts, inclusive of the right to arbitrate. Amansac also conveniently fails to make any reference to his successful, efforts to resist arbitration through significant motion practice in this Court, and the resulting, well-thought out decisions by Judge Mannion which make clear that the nonapplicability of this mandatory arbitration provision to Amansac is indeed based on his unique circumstances. In short, there is significant supporting evidence in the record which suggests that 13 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 14 of 15 PageID: 3116 substantially all of the other putative class members may be subject to the arbitration provision set forth in the relevant credit account agreements. Furthermore, while it is undisputed that MF was not a party to the original credit account agreements, the cases Amansac cites for the proposition that the enforceability of the arbitration provision does not extend to MF as a non-party to the original agreements are entirely distinguishable, and ultimately unpersuasive. See White v. Sunoco, Inc., 870 F.3d 257, 267-68 (3d elevant Saroza v. Client Services, Inc., No. 17-3429, 2020 WL 948793, at *2-3 (D.N.J. Feb. 27, 2020) (denying third- opened the account and the original credit issuer) (citing White, 870 F.3d at 267-68.); RodriguezOcasio v. Midland Credit Management, Inc., No. 17-3630-ES-MAH, 2021 WL, at *4 (D.N.J. Aug. Purchase Agreements indicates that [plaintiff] did not purchase and was not assigned the right to d. No Additional Rule 23 Analysis is Required As noted, action must satisfy the four requirements of Rule 23(a) and Marcus, 687 F.3d at 590 (emphasis added). As the foregoing makes clear, Amansac has not and cannot requirement these two requirements is dispositive of the present motion. The Court therefore declines to engage in further analysis under Rules 23(a)(1), 23(a)(2), and 23(b)(3). In re Actiq Sales & Mktg. Pracs. 14 Case 2:15-cv-08798-EP-LDW Document 204 Filed 10/24/22 Page 15 of 15 PageID: 3117 Litig., 307 F.R.D. 150, 173 (E.D. Pa. 2015) Plaintiffs failure to satisfy the criteria of Rule 23(b)(3) is dispositive in this Court s decision regarding class certification. This Court therefore declines to engage in further analysis under Rule 23(a). accord In re Ford Motor Co. Ignition Switch Prod. Liab. Litig., 174 F.R.D. 332, 339 (D.N.J. 1997); Chin v. Chrysler Corp., 182 F.R.D. 448, 453 (D.N.J. 1998). IV. CONCLUSION For the foregoing reasons, motion for class certification is denied. appropriate Order accompanies this Opinion. Dated: October 24, 2022 Evelyn Padin, U.S.D.J. 15 An
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