GARCIA v. PORTFOLIO RECOVERY ASSOCIATES, LLC
1:15-cv-03685
D.N.J.Aug 9, 2017Background
- Plaintiff Rufino Garcia had a Citibank Sears card balance; Portfolio Recovery Associates, LLC (PRA) acquired the account and sued in New Jersey state court to collect.
- Garcia answered and served discovery including a request for his credit card application; PRA produced monthly statements but its counsel stated he did not have the application and testified he did not try to obtain the agreement.
- On the day set for trial PRA did not appear and the state court dismissed the suit; Garcia alleges PRA routinely files suits without intending to prove them, seeking defaults or early settlements.
- Garcia points to PRA’s Standard Operating Procedures (SOP) that instruct law firms to consider costs, explore settlement, obtain PRA approval before suit, and coordinate with PRA for witnesses; Garcia contends the SOP evidences a blanket practice of not intending to prove claims.
- PRA produced data showing 2,041 Citibank cases with determinable dispositions during the class period: 1,376 default judgments, 592 dismissals, 72 settlements, and zero trials; the SOP also requires individualized pre-suit approval and case-by-case litigation decisions.
- Garcia moved for class certification of New Jersey consumers sued by PRA for Citibank debts (June 2, 2014–June 2, 2015); the district court considered Rule 23 commonality and predominance and denied certification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether class satisfies Rule 23(a)(2) commonality — do claims depend on a common contention capable of classwide resolution? | Garcia: PRA has a uniform policy/practice of filing suits without intent to prove them, shown by SOP and practice, so intent can be resolved classwide. | PRA: SOP requires individualized eligibility and attorney approval; practices reflect case-by-case decisions, not a uniform unlawful intent. | Denied — no commonality: evidence shows individualized litigation decisions, not a common mode of exercising discretion. |
| Whether Rule 23(b)(3) predominance is met | Garcia: common question of PRA’s intent predominates and class adjudication is superior. | PRA: Individualized issues (intent, reasons for dismissal/default, pre-suit evaluations) will predominate. | Denied — lack of commonality defeats predominance; individualized issues would predominate. |
| Whether PRA’s SOP and aggregate disposition data prove a companywide intent not to litigate | Garcia: SOP language and high rate of defaults/dismissals indicate a policy to pursue settlement/default rather than prove claims. | PRA: SOP explicitly contemplates individualized assessments, attorney approvals, and circumstances that may justify settlement or dismissal; disposition statistics are ambiguous without context. | Court: SOP and data do not support inference of a uniform intent; they indicate individualized decision-making. |
| Whether Dukes analogy supports denial | Garcia: N/A (argues company policy shows common practice) | PRA: Litigation decisions are like local supervisory discretion in Dukes—individualized and not susceptible to common proof. | Court: Analogous to Wal‑Mart v. Dukes; failure to identify a common mode of exercising discretion causes class failure. |
Key Cases Cited
- Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (plaintiffs must identify a common contention capable of resolving classwide liability; discretionary, individualized decisionmaking defeats commonality)
- Sullivan v. DB Investments, Inc., 667 F.3d 273 (3d Cir. 2011) (Rule 23(b)(3) predominance incorporates and demands more rigorous commonality analysis)