Gwendolyn Phillips v. Asset Acceptance, LLC
736 F.3d 1076
| 7th Cir. | 2013Background
- Plaintiff consumer sues Asset Acceptance for debt arising from natural gas service and alleges the suit was filed after the creditor’s claim had lapsed under the statute of limitations, in violation of the FDCPA and state laws.
- Phillips moves to certify a class of debtors—sued by Asset Acceptance after the statute of limitations had run—similar to her claim.
- Proposed class includes 793 members, with 343 Illinois residents; most Illinois claims were filed 4–5 years after accrual; 45 were filed after more than five years.
- Illinois law presents four-year and five-year SOLs depending on contract type; gas sales are governed by four-year UCC 2-725, making the four-year period applicable.
- District court declined to certify, excluding some members and rejecting the FDCPA claims for untimely suits unless served; judge did not resolve the four-year vs five-year question for all members.
- The Seventh Circuit reverses, holding the four-year period governs and that the court should determine the proper class scope and potential subclasses rather than prematurely limiting the class.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What SOL governs Illinois class members' claims? | Phillips argues four years (UCC 2-725) governs gas sales. | Asset accepts five years for unwritten contracts is applicable otherwise. | Four-year SOL governs. |
| May the district court exclude untimely, non-served plaintiffs from the class? | Non-service does not defeat injury in FDCPA claims; all class members may be included. | Lack of service means no harm, so those members should be excluded. | Exclusion based on service is not warranted for FDCPA class. |
| Are Phillips’ adequacy and typicality appropriate to certify a class or require a subclass? | Phillips is an adequate representative and typical of the four-year and five-year cohorts with possible subclassing. | Adequacy/typicality may be suspect; subclassing may be necessary to preserve typicality. | Phillips is adequate; subdivision may be used if needed but not required here. |
| Should the class be limited to Illinois residents or include others, given varied state-law claims? | Favors broader class to litigate FDCPA claims; equity and efficiency support broader scope. | State-law differences counsel subclassing by state. | Scope to be determined; not limited to Illinois residents; subclasses possible. |
| Is the district court's failure to decide the SOL issue pre-certification reversible? | Solving the SOL issue is essential to form the class and should proceed on appeal. | SOL issue is merits/sequence; not a prerequisite for certification. | Court may decide pure legal questions about class composition; reversal for further proceedings warranted. |
Key Cases Cited
- Dechert v. Cadle Co., 333 F.3d 801 (7th Cir. 2003) (class representative role is nominal; incentives and control by counsel)
- Culver v. City of Milwaukee, 277 F.3d 908 (7th Cir. 2002) (class action adequacy considerations)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (S. Ct. 1997) (class actions not to be dismissed lightly; settlements and representative scope)
- Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, 133 S. Ct. 1184 (2013) (pure questions of law; de novo review for statutory interpretations impacting class)
- Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (class certification standards; common questions can support a class)