Fariasantos v. Rosenberg & Associates, LLC, No. 3:2013cv00543 - Document 63 (E.D. Va. 2014)

Court Description: MEMORANDUM OPINION. Signed by District Judge Robert E. Payne on 10/27/2014. (jsmi, )
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Fariasantos v. Rosenberg & Associates, LLC Doc. 63 IP L_L-_i-n OCTtfZOW IN THE tJNITED STATES DISTRICT COURT CLEW RlCHWOiiD.VACOURT U.S. DISTBICI FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division CLAUDIO FARIASANTOS, on behalf of himself and all others similarly situated, Plaintiff, V. Civil Action No. ROSENBERG & ASSOCIATES, 3:13CV543 LLC, Defendant. MEMORANDUM OPINION This matter is before the DEFENDANT ROSENBERG CERTIFICATION (Docket CERTIFICATION TO FILE reasons HIS set & (Docket FIRST ASSOCIATES, No. 37), No. 49), AMENDED forth Court on denied, and MOTION FOR PLAINTIFF'S AMENDED COMPLAINT CLASS and (Docket No. (Docket FOR No. CLASS FOR LEAVE 44). For the & ASSOCIATES, 37) is granted, (Docket TO CLASS FOR MOTION (Docket No. LEAVE FOR MOTION ROSENBERG CERTIFICATION 44) MOTION PLAINTIFF'S DEFENDANT MOTION following motions: PLAINTIFF'S LLC'S MOTION FOR CLASS CERTIFICATION PLAINTIFF'S LLC'S COMPLAINT herein, the FILE No. 49) HIS is FIRST is denied. PROCEDURAL BACKGROUND Plaintiff, of himself action and against Claudio all Fariasantos others Defendant ("Fariasantos"), similarly Rosenberg situated, & on brought Associates, behalf this LLC Dockets.Justia.com ("Rosenberg") alleging Practices Act, violations 15 U.S.C. § of 1692, the ^ Fair seq. Debt ("the Collection FDCPA"). See Class Action Complaint (Docket No. 1). Rosenberg filed a motion to dismiss pursuant to Fed. 12(b)(6) R. Civ. P. By Memorandum Opinion issued on March 10, the motion to dismiss, allege violations 2014, ruling that Counts I, of the Fair Debt and an answer. the Court denied II, and III, Collections Practices ("FDCPA"), each state a plausible claim for relief. (Mar. 2014) (Docket the 10, pending motions, judgment, 30, No. as 30) . well as Thereafter, a motion Act See Mem. Op. the parties for which partial filed summary which was denied as moot by Order issued on September 2014. The Court heard argument on the pending motions on September 29, 2014. PROCEDXJRAL This parties case, matter agree but is that there are in class an POSTURE unusual procedural certification competing motions is for "Either plaintiff or defendant may move whether the action may be Wright 2014) . & Miller, Federal posture. appropriate class for a The in certification. determination of certified under Rule 23(c)(1)." Practice and The difference between the Procedure this § 1785 competing motions 7AA (3d ed. for class certification is the scope of the class definition and thus the scope of class membership. DISCUSSION Introduction Rosenberg's certify Class the statewide Action definition Motion for class Complaint i s as (A) Class that (Docket Certification's Fariasantos No. 1). seeks proposed That proposed in to the class follows: All Virginia residents to whom Defendant sent a letter in the which contains the of form of Exhibit A, rights validation 15 U.S.C. in § text (B) 1692g notice identical to that in Exhibit A, (C) in an attempt to collect a home loan debt, (D) that was incurred primarily for personal, household or family purposes, (E) during the one year period prior to the filing of the Complaint in this matter. Class Motion seeks Action Complaint for to Class certify (Docket No. Certification a class than Virginia residents) case after discovery." 50) at 2 n.l. of 1), SI (Docket Henrico 40, No. County at 49), 10. his Fariasantos residents (rather "to comport with the narrowing of this Pl.'s Mem. Supp. Class Cert. (Docket No. The new proposed class definition is as follows: (A) All residents of Henrico County, Virginia to whom Defendant sent a letter in the In form of Exhibit A, (B) which contains the 15 U.S.C. § 1692g notice of validation rights in text identical to that in Exhibit A, (C) in an attempt to collect a home loan debt, (D) that was incurred primarily for personal, household or family purposes, (E) during the one year period prior to the filing of the Complaint in this matter. Pl.'s Mem. Supp. Class Cert. Thus, if so, which class to certify. class or not, scope of the 6 F.3d 177, Pilot Ins. Life Co., Meyer v. Citizens (M.D. Ga. 1985); (5th Cir. The Court has the discretion to See 185 445 MAMSI Life & Health Ins. The at 2. and this discretion extends to defining class. Grace Co., 414 n.7 50) the Court must decide whether to certify a class and, certify a the (Docket No. Wesleyan {4th Cir. F.3d Co., 311, 1993); 317 256 F.R.D. & Southern In Cent. Nat. Thorn v. (4th Cir. 158, Bank., related motion for leave to 162 106 re Monumental Life Ins. 2004), cert, denied, College 125 S. Ct. file an W.R. Jefferson- 2006); (D. 365 277 Wu v. Md. F.R.D. Co., v. 2008); 356, 360 F.3d 408, (2004). amended complaint filed by Fariasantos would amend the class definition to a class of Henrico County residents rather than a statewide class. Federal Rule of Civil Procedure 23's Requirements To satisfy Federal Rule of Civil Procedure 23(a), must find that prerequisites the - class numerosity, adequacy of representation. members also must it be certifies complies commonality, Fed. R. ascertainable Civ. and P. the Court with four typicality, and 23(a). The class identifiable. Rule 23 was amended in 2003 to require that "[a]n order that certifies a class action must define the class and the class claims, or defenses." Fed. R. Civ. P. issues, 23 (c) (1) (B) (emphasis added). See also Wm. Moore et al., ed.) 5 Moore^s Federal Practice § 23.21[1] (3d ("A class action is possible only when the class definition provides a determining "For a court who with is tangible and who and is practicable not a member class to be sufficiently defined, standards of the for class."). the court must be able to resolve the question of whether class members are included or excluded Moore, from supra, the Here, enumerated Servs., Inc., both parties of Civil reference to "the class action must categories Healthplan by objective criteria." § 23.21[3][a]. In addition, three class 348 in Rule F.3d fall 417, within one of the 23(b)." 424 Gunnells (4th seek certification pursuant to Procedure 23(b)(3). Rule 23(b)(3) Cir. v. 2003). Federal Rule requires that: (1) common questions of law or fact predominate over any questions affecting only individual class members; and (2) proceeding as a class must be superior to other available methods of litigation. Fed. R. Civ. obligation to P. 23(b)(3). perform a The "rigorous Court has analysis" to of the prerequisites of Rule 23 are met. Adair, Inc. V. 764 F.3d 347, Dukes, 131 S. The parties class members in 358 (4th Cir. Ct. agree both 2541, and 2551 independent ensure that EQT Production Co. all v. 2014) (citing Wal-Mart Stores, (2011)). the Court proposed an concurs classes are that the putative ascertainable and identifiable. at issue would In fact, have already include statewide 83 those who received the FDCPA form letter been identified. consumers class would in Henrico include 2,332 A county-wide County, class Virginia. consumers A throughout Virginia. Rule 23(a)(1) requires that the class be "so numerous that joinder of all members is impracticable." claimants Lines, 74); 375 is 726 required. F.2d 136, Cypress F.2d v. 648, See, 146 Newport 653 e.g., (4th Cir. No specific number of Brady v. 1984) (certifying a News Gen. Cir. (4th Thurston & Nonsectarian 1967) (certifying a Motor class of Hosp. class Ass'n, of 18). Both proposed classes satisfy the numerosity requirement. Rule member's 23(a)(2) claim requires "depend[s] commonality, upon a common that each contention" class that "is capable of classwide resolution - which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." 131 S. Ct. at 2551. The requirement is satisfied. parties agree that the Dukes, commonality This Court and others have held that commonality is met in cases involving the receipt of identical debt-collection Assocs., Nov. 3, P.C., 2011); letters. No. See 3:llcv78, Talbott v. Bickinq 2011 v. Mitchell WL 5325674, GC Servs. Ltd. Pshp., at Rubenstein *2 191 & (E.D. Va. F.R.D. 99, 103 (W.D. Va. 2000). Both proposed classes satisfy the commonality requirement. Rule 23(a)(3) are typical of typicality claims or Dieter v. requires of the that the class members. must defense involve with Microsoft a "[T]he plaintiff's of 436 the F.3d of the absent 461, claims appropriate analysis comparison those Corp., named 466 plaintiffs' class (4th members." Cir. 2006). The parties agree that the typicality requirement is satisfied. Fariasantos' All class claims and the class members' members were sent FDCPA form the identical language at issue herein. about Fariasantos' claims. claims are letters identical. that contained There is nothing unique Both proposed classes satisfy the typicality requirement. The fourth requirement representation pursuant satisfied as argument to both that he statewide class. on behalf demonstrates (1) in of favor of Fed. be an Rule The 23(a), Civ. R. classes. may P. Court unwilling adequacy 23(a) (4), rejects is of also Fariasantos' representative of the The Class Action Complaint that counsel filed Fariasantos that Fariasantos' to of there is and a proposed adequacy of statewide class representation because: counsel is well-qualified to prosecute the case either class; and (2) Fariasantos has no interests that are antagonistic to the interests of the class members of either class. The parties requirement Court is "The classes adjudication Rule 23(b)(3)'s as both classes predominance inquiry by are to sufficiently representation.'" (quoting Amchem Prods., (1997)). As in Bicking, turns the on that satisfied concurs. proposed *3 agree single Inc. and, 2011 Windsor, again, 'tests cohesive Bicking, v. predominance 521 whether to WL the warrant 5325674, U.S. 591, at 623 "[e]ach class member's potential claim question of whether [the letter] violated the FDCPA. That shared issue clearly predominates over potential peripheral matters, this case." Id. predominate members. making over All the resolution Questions of law and fact any class claims questions members letters by Rosenberg, establish collective were in common to the class affecting sent sensible the only same individual FDCPA form and no individualized proof is needed to of Fariasantos or the other class members. The predominance requirement is satisfied as to both classes. The action is final requirement superior to is other methods adjudicating the controversy." Bicking, "class whether, litigation Fed. for adjudicating the claims presented here, this fairly R. Civ. provides 8 in a P. case, "a class and efficiently 23(b)(3). superior As in means of as the minimal recovery available to incentive most for litigants class under members individually." 2011 WL 5325674, preclude In some class FDCPA certification, cases, the the to pursue at *4. particularly in class Eltman, Eltman & Cooper, members P.C., gives their little claims Small recoveries do not the only award is distributed cy pres. V. FDCPA FDCPA cases. receive no payment Id. and See, e.g., Reade-Alvarez 2006 WL 3681138 (E.D.N.Y. 2006) (approving a $15,000 cy pres payment to the local legal aid society) . A class action will be a far more efficient means of adjudicating this prosecutions, controversy, even incentive, assuming time, individually. and Many rather that not, many consumers knowledge would than to and individual would pursue their have their claims the claims would be unprosecuted.^ The factors to be considered in determining the superiority of a class individual action are: prosecutions; litigation; (2) the the interest existence in of controlling other related (3) the desirability of concentrating the litigation in the forum; and Here, who those (1) (4) manageability. wish prosecutions may do so. to opt out Fed. and R. Civ. pursue P. 23(b)(3). individual Currently, there is no other litigation ^ In addition, the statute of limitations may run before the potential plaintiffs understand that they may have a claim and how to pursue it. pending that arises letters have since potential statewide But whether are class a identical revised. Virginia Finally, the the been classes appropriate. from form Since letters, the members residents, this both classes are manageable. would Henrico satisfy County the class superiority would and of the both forum is Undoubtedly, requirement. satisfy this final requirement will be addressed in the next section. Given the Court's findings with regard to Rule 23's requirements, this matter will proceed as a class action. Which Class Should Be Certified? Rosenberg asks that the Court grant its motion for class certification and certify the original statewide class "on the issues of both Rosenberg's liability and damages available to the class and impose a statutory damages cap of one percent (1%) of Rosenberg's net worth pursuant to 1692k(a)(2)(B).Def.'s Mem. Supp. Class Cert. ^ In a class action, the FDCPA 15 tJ.S.C. § (Docket Nos. 38 & provides for a maximum recovery of statutory damages of up to $1,000 to each named plaintiff and limits the recovery available to the class "not to exceed the lesser of $500,000 or 1 of the debt collector." 15 U.S.C. per centum of the net worth § 1692k (a) (2) (B) . Rosenberg has provided, under seal, its purported net worth, from which the parties have calculated the limited statutory damages. The recovery, per class member, would be much less if there are 2,332 class members rather than 83 class members. 10 43) at 1. Fariasantos opposes Rosenberg's motion and asks the Court to grant his motion to certify the Henrico County class. According presented by to Fariasantos, "the only material [his motion for class certification] issue is whether or not this smaller class meets Rule 23's numerosity requirement." Pl.'s Mem. Supp. Class Cert. noted previously herein, (Docket No. 50) at 2. But, as the Court finds that both classes meet Rule 23's numerosity requirement. In response Fariasantos to Rosenberg's motion "agree [s] certification are met original complaint," Rosenberg cannot statewide class representative. Court has Fariasantos all of for the class but he establish it seeks his also adequacy because Pl.'s Mem. rejected and that for Opp'n it the class requirements defined takes of certification, the in of Plaintiff's position representation cannot (Docket No. this argument counsel satisfy for this that the compel an unwilling 55) at 2, is and class 4-6. confident requirement for The that both classes. Rosenberg argues that the class of Henrico County residents "is not a superior method particularly as of compared to a adjudicating Virginia Class." Pl.'s M. Class Cert. (Docket Nos. determined statewide that the Plaintiff's 54 & 57) class 11 at 11. satisfies claims, Def.'s Opp'n to The Court has the superiority requirement, does so. but must now consider whether the county-wide class The superiority requirement requires the Court to determine whether the "class action is superior to other methods for fairly and efficiently adjudicating the controversy." Plaintiff s arguments in support of the narrower Henrico County class include that such a class would include "uniformly treated such consumers," class manner, sign member using the deeds timing of uniform." that and the the would "foreclosures have been threatened handled in for an each identical same third party collection subcontractor to process foreclosure advertisements Pl.'s Mem. Supp. for sales," the and sales Class Cert. that would (Docket No. "tt]he have 50) been at 17. Fariasantos also argues that the class members would be close to each other geographically, and that the limited fund would be "more effective and fair" if divided among a smaller group. Rosenberg disputes plaintiff's arguments. Id. It contends that, even if plaintiff's arguments for limiting the class to Henrico residents, such as how the foreclosures were handled, are true, they are irrelevant because this action has nothing to do with how the based foreclosures solely on Rosenberg about the sent the to were conducted. violations all disclosures members is in of the the tailored 12 Instead, to FDCPA this form Virginia letters class. consumers action who is that Nothing live in Henrico County. court, rejecting Hennepin logical start to Minnesota, limit with "R" (Docket Nos. certification County, Messerli *5 Def.'s Opp'n the or & Kramer, (D. Minn. Mar. P.A., 21, to [] a [] with addresses in "it would as consumers who whose own lasts out Borcherding-Dittloff v. than that there are Wenig v. at decisions Transworld Systems, 1999)(granting certification a nationwide class in Credit Solutions, Inc., 297 FDCPA reasons plaintiff for relies doing so. address authorizes statewide, 42 Inc., of action); F.R.D. And the Court would consider a sound that permit a See, statewide Diaz e.g., 185 F.R.D. v. (E.D.N.Y. 558 rather Residential 2014)(same). county-wide class if there were But most the issue as opposed to, of of the cases whether nationwide, as opposed to a statewide class, on the which FDCPA class actions, and those cases do not support the argument that a class, names 2013 WL 1176062, 11CV3547, cats." classes to be limited to specific geographic areas. Wis. be 2013). Plaintiff points (W.D. One that consumers Case No. at 8-9. class observed class to of 54 & 57) county-wide is a superior method of adjudication here. If the Court certifies Fariasantos' class, form then letter the from 2,000-plus Rosenberg individuals but 13 who do proposed Henrico County who not received reside the in FDCPA Henrico County would have to bring individual lawsuits or other countyby-county actions, or their claims would go unprosecuted. Such a result would be counter to one of the main purposes of class actions - avoiding multiple lawsuits. Services, Inc., 2005) (citing 404 Crown, F. Supp. Cork Campos v. 2d & Seal 1164, Co. Western Dental 1172 v. Parker, Rosenberg's (N.D. 462 motion Ca. U.S. 345 (1983)) . Fariasantos certification at is trying to itself of damages Pl.'s previously, recovery least in part insulate forced payment possible." opposes to Opp'n statutory "from as damages he contends, greater large (Docket in a class action, of because, a No. class Rosenberg exposure group 55) for at of and consumers 1. As the as noted the FDCPA provides for a maximum of up to $1,000 to each named plaintiff and limits the recovery available to the class "not to exceed the of the lesser of debt $500, 000 collector." 15 or 1 U.S.C. per centum of the net worth § 1692k(a) (2) (B) . Rosenberg contends that plaintiff's counsel wants to limit this action to Henrico County residents and thereafter bring a class action like this one in other counties in the Commonwealth of Virginia in order to increase the recovery per plaintiff. liability for attorneys' fees This would, thus, 1% of its net worth, 14 and obtain a larger subject Rosenberg to over and over again for the same infirmities Virginia class. Essentially, aimed at in the Def.'s FDCPA form Opp'n (Docket Rosenberg's argument avoiding the letter is sent Nos. that statutory damages 54 to & the entire 57), at 1. "serial class actions cap are not a superior method of adjudication under Rule 2 3 ( b ) ( 3 ) I d . at 5. Although Fariasantos contends that the "net worth" argument is not relevant to these motions, he also argues that a capped fund of money divided among 83 Henrico County consumers will be more He its fair than dividing also contends that letters after this FDCPA has a one-year that same fund since Rosenberg case was statute among 2,332 claims to have filed about a of consumers. corrected year ago and the limitations, then it is not likely that plaintiff s counsel can bring other county-by-county actions. The Court does not believe that plaintiff's counsel intends to bring additional county-by-county actions. hearing, as an partners have officer of lined the Court, class actions against Rosenberg based on this FDCPA form letter. But, plaintiff's wide action is superior, for that neither he nor his county-wide notwithstanding up plaintiffs He stated at the arguments other regarding possibility a county- the Court disagrees with that position. If the Court certified a Henrico County class, the why of multiple lawsuits. 15 And, it would increase if there were not multiple lawsuits, unprosecuted. then the claims of most Virginians would go Neither of those results is desirable. A Henrico County class is not superior to other means of adjudication and, therefore, denied. Fariasantos' See Campos, There County are claims no and motion for class certification will be 404 F. Supp. 2d at 1173. material those differences from other between counties. the Henrico Dividing the Virginia class based on geography is not supported by any facts or case law. A Virginia class is a manageable number of class members, and it the number judicial resources, would reduce and adjudicate the residents who received the same letter. plaintiff sought in the beginning. of claims And, Clearly, action is superior to many individual suits. cases, preserve of all Virginia that class is what a statewide class Rosenberg's motion for class certification will be granted. Plaintiff s Motion for Leave to File His First Amended Complaint Citing Fed. R. Civ. P. 15(a), Fariasantos moves for leave to file an amended complaint in order to conform with his motion for class requires certification that requires." "leave and a shall Henrico be freely County given class. The Rule when justice so The Supreme Court listed the factors that should be considered. 16 In the absence of any apparent or declared reason - such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. - the leave sought should, as the rules require, be "freely given." Foman v. Davis, enumeration of 371 U.S. factors 178, cannot 182 be (1962). thought "While exclusive, Foman^ s they do embody a principle which focuses on prejudice or futility or bad faith as the only legitimate concerns in denying leave to amend, since only these truly relate to protection of the judicial system or other litigants." Davis v. Piper Aircraft Corp., F.2d Fourth Circuit 606, 613 "Unless a because (4th of substantive or Having Rule deny the The determined 23(b)(3)'s motion procedural the merits of the the decision whether meet 1980) . proposed amendment may clearly be conjecture about into Cir. for to that leave to seen to be futile litigation should not Henrico superiority continues: considerations allow amendment." the the enter Id. County requirement, file 615 class the amended fails Court to will complaint as futile. CONCLUSION For the ASSOCIATES, reasons set LLC'S MOTION forth above, DEFENDANT FOR CLASS CERTIFICATION 17 ROSENBERG (Docket No. & 37) is granted, No. 49} PLAINTIFF'S MOTION FOR CLASS CERTIFICATION (Docket is denied, and PLAINTIFF'S MOTION FOR LEAVE TO FILE HIS FIRST AMENDED COMPLAINT (Docket No. 44) is denied. I t is so ORDERED. /s/ Robert E. Payne Senior United States District Judge Richmond, Virginia Date: October 2^7/ 2014 18