304 F.R.D. 446
S.D.N.Y.2015Background
- Plaintiffs (Vincent, Gutierrez, Garrido) are borrowers who received standardized "breach letters" from law firm Moss Codilis, sent under a program the Money Store defendants ran to notify borrowers of loan default and accelerate debt; Moss Codilis charged a per-letter fee that plaintiffs allege was passed to borrowers.
- Plaintiffs contend Moss Codilis falsely represented it was independently collecting debts while acting as a conduit controlled by the Money Store defendants, violating the FDCPA false-name exception (15 U.S.C. § 1692a(6)).
- The Second Circuit reversed earlier dismissal and held a creditor may violate the false-name exception by using a third party that is a mere conduit rather than a bona fide collector (Vincent v. The Money Store, 736 F.3d 88).
- Plaintiffs moved to certify a class of borrowers who reimbursed the defendants for fees charged for breach letters after March 1, 2000 (court limited the class to the temporal and transactional scope in the amended complaint).
- The district court assessed Rule 23(a) (numerosity, commonality, typicality, adequacy) and Rule 23(b)(3) (predominance, superiority), finding common issues (centralized mass-mailing program, similar form letters), typicality for Gutierrez, and that predominance/superiority were satisfied despite limited individualized follow-up by Moss Codilis.
- Court rejected equitable tolling for two named plaintiffs (Vincent and Garridos) whose letters predated class-action tolling; held American Pipe tolling saved Gutierrez’s claim; as two plaintiffs were time-barred, Gutierrez alone was adequate to represent the certified class.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Class definition / temporal scope | Class should include borrowers sent breach letters dating back to April 1, 1997 (or otherwise defined by receipt) | Plaintiffs cannot expand class beyond amended complaint (after March 1, 2000); unfair and untimely to expand backward | Court limited class to amended complaint scope: those who reimbursed fees after March 1, 2000 |
| Commonality (Rule 23(a)(2)) | The Breach Letter Program was centralized and used materially similar form letters; liability turns on program-wide conduct | Individual letter variations and follow-up communications require individualized inquiry | Commonality satisfied: centralized program and mass-mailing present common question for classwide resolution |
| Typicality / Adequacy (Rule 23(a)(3),(4)) | Named plaintiffs’ claims arise from same course of conduct as class; counsel is qualified | Two named plaintiffs’ claims time-barred; Gutierrez’s credibility and prior filings undermine adequacy | Typicality met; adequacy satisfied as to Gutierrez (others time-barred and therefore inadequate) |
| Predominance & Superiority (Rule 23(b)(3)) | Generalized proof about the program predominates; class action is superior given number of small claims | Defendants point to individualized inquiries on bona fide collection efforts and affirmative defenses (waiver, estoppel) | Predominance and superiority satisfied: common issues dominate; individualized follow-up is minimal and does not defeat class treatment |
Key Cases Cited
- Vincent v. The Money Store, 736 F.3d 88 (2d Cir. 2013) (creditor may violate FDCPA false-name exception by using a third party that is a mere conduit)
- Mazzei v. Money Store, 349 F. Supp. 2d 651 (S.D.N.Y. 2004) (earlier district-court ruling on breach-letter program and false-name issue)
- American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) (filing of class action tolls statute of limitations for putative class members)
- Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (party seeking class certification must demonstrate compliance with Rule 23; commonality requirement explained)
- In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24 (2d Cir. 2006) (district court must resolve relevant Rule 23 factual prerequisites before certifying a class)