Case Information
*1 Before P OSNER R OVNER W ILLIAMS Circuit Judges . P OSNER Circuit Judge
. We granted plaintiff’s pe tition leave appeal court’s denial her mo certify class. plaintiff, consumer, Asset Acceptance, collector case, debt arising purchase natural household use. She riposted present suit, charges Asset *2 Acceptance sued statute of limitations on creditor’s claim had run. If this true, Asset Acceptance’s violated Collection Practices Act, U.S.C. §§ et seq .; see §§ 1692e, 1692f; Huertas Galaxy Asset Mgmt. (3d 2011) (per curiam); Harvey Great Seneca Financial Corp. Herkert MRC Receivables Corp. F. Supp. 2d (N.D. Ill. The complaint contains supplemental under states’ laws, making similar allegations. reason outlawing stale suits collect consumer well explained Kimber Federal Financial F. Supp. (M.D. Ala. 1987):
As stale claim, pas sage time only dulls consumer ʹ s memory circumstances validity debt, heightens probability she will longer have personal records detailing status debt. Indeed, unfairness such conduct particularly clear consumer context where courts imposed heightened standard care—that sufficient protect least sophisticated con sumer. Because few unsophisticated consumers would aware could used defend lawsuits based stale debts, such consumers unwittingly acquiesce such lawsuits. And, consumer realizes she can use time defense, she will likely still give rather fight lawsuit she must still expend energy sources subject herself embarrassment going into present defense; particularly true light costs attorneys today. *3 13 2251 3
Phillips moved certify plaintiff consisting debtors sued Asset Acceptance for arising the sale natural consumers—sued, had been sued, after the statute limitations had run. She had filed her at the tail end 2009 and her motion for certi ‐ fication in April the following year. By March 2011 the motion was ripe for the district judge rule on, but for un ‐ explained reasons he didn’t rule for 25 more months. When finally he did, he denied the motion, precipitating the peti ‐ tion for leave appeal.
According data compiled use in briefing the mo tion, the the plaintiff wants certified 793 mem bers, whom 343 reside Illinois; yet virtually information about the others. Of the were sued between four five years after claims against them accrued (debt collection accrue date sued became delinquent), sued more five years after accrual. We don’t know situation remaining debtors (343 – (290 + 45) = 8), though its brief filed district opposing certifica defendant said they’d sued within four years accrual. Of served not; corre sponding figures served/not served figures played part district court’s analysis. statute limitations applicable (343 – 8) Il
linoisans was either four five years; plaintiff says four, five. Indisputably plaintiff was five claim accrued. There fore, reasoned, she was indifferent years—the *4 suit was untimely either event—and she thus lacked an adequate incentive to litigate behalf the who victims untimely suits only if the years. So the judge discarded the which shrank the to 45—and then he shrank further, by ruling that suing to collect a but failing serve does not violate the Fair Debt Collec Practices Act suit untimely. No service, harm, he thought, because without service a filed does not obtain jurisdiction over de fendant. judge capped his analysis by ruling was too
small number claimants justify action; number so small, joinder plaintiff, he ruled, would adequate alternative action. This ruling knocked out Illinois state law claims, not necessarily fed eral ones, as they limited residents— remember total membership proposed thus fewer half Illinoisans. But yet information about Ausländers (such how many them had been sued years their had become delinquent), judge would ex clude possibility federal claims (that is, based Collection Practices Act) sufficiently numerous justify certification. presumably event—though didn’t mention wrin kle—either named plaintiff (Phillips) would have replaced another member, one who unlike had within accrual credi tor’s claim, member made second representative. *5 13 2251 5
We are skeptical is an adequate repre ‐ sentative debtors more four fewer than years creditors’ accrued, just her claim is solid is four five. To question her adequacy is be unrealistic about role class representative class action suit. The role nominal. Dechert v. Cadle Co. 333 F.3d 801, (7th Cir. 2003); Culver v. City Milwaukee 277 F.3d 908, 910 (7th Cir. 2002); cf. Amchem Products, Windsor 521 U.S. 591, (1997). class representative receives modest compensation (what called “incentive fee” “incen ‐ tive award”) what usually minimal services action suit, see Espenscheid DirectSat USA, LLC 872, (7th 2012); Theodore Eisenberg & Geof ‐ frey P. Miller, “Incentive Awards Class Action Plaintiffs: An Empirical Study,” UCLA L. Rev . (2006)— fact entirely managed counsel. For “class action attorneys real principals repre sentative/clients their agents” suits. William B. Rubenstein, Newberg Class Actions 3:52, p. (5th ed. 2011); see Mars Steel Continental Nat’l Bank & Trust Deposit Guaranty Nat’l Bank Roper U.S. (1980); Martin H. Re dish, “Class Actions Democratic Difficulty: Rethink ing Intersection Private Litigation Public Goals,” U. Chi. Legal F. 105. If suit successful, they ceive much greater compensation representa tive(s). Phillips’s (modest) services will great
er, incentive award likely therefore greater if successful, more complex is. And will complex includes year *6 ‐ well as the ‐ year debtors. So she does have incentive assist the claims of the four year debtors, though attorneys’ fees awarded the (if they win) will dwarf her compensation.
A greater concern that if nothing gain establishing the governing statute of limitations years, her claim typical of claims of the entire class, as also required Fed. R. Civ. P. 23(a)(3); see General Telephone of Southwest Falcon U.S. (1982). Were there doubt about Phillips’s adequacy as class representative—and given grounds doubt about typicality of claim—the judge could have cre ated a subclass consisting of four year class members directed counsel designate a representative it. There was reason refuse certify a class. Moreover, if statute limitations four years, all (and probably rest members well) same boat—sued statute limita tions creditors’ had run. In event issue typicality (along non issue adequacy) will evaporate. So judge, unwilling (as he was) appoint a second representative, have ruled whether statute limitations five. argues it would wrong do so because merits issue rather one action procedure. In case, actually, it’s both, resolving would determine composition might (if answer shrank size at joinder plaintiffs fea sible alternative) determine could main tained at all. See Amgen Connecticut *7 13 ‐ 2251 7 Retirement Plans & Trust Funds 133 S. Ct. 1184, 1194–95 (2013); Wal ‐ Mart Stores, Inc. v. Dukes 131 S. Ct. 2541, 2551–52 (2011); American Honda Motor Co. Allen F.3d 813, 815 (7th Cir. 2010) (per curiam); Szabo Bridgeport Machines, 672, (7th 2001). Since it pure ques tion law, district judge could answer it without requir ing additional discovery resolving factual disputes.
And for same reason we can rule on it. argues, no, district entitled to rule on first. That’s wrong. Appellate courts decide pure questions law—that is, questions law answers which do depend on resolving factual disputes—without deference answers given by trial judges (“ de novo ,” cases say). Pierce Underwood U.S. (1988); Superl Sequoia Ltd. Carlson 9C Charles Alan Wright & Arthur R. Miller, Federal Practice Procedure pp. (3d ed. There obligation allow district court opine on an issue when appellate obligation defer, slightest extent, court’s view matter.
With focus litigation date on debt ‐ collection suits residents, choice between Illinois’ ‐ year statute limitations for suits on sale contracts, ILCS 5/2 ‐ 725(1), its five ‐ year statute limitations suits on unwritten contracts. ILCS 5/13 ‐ 205. It’s true though ignored parties limitations suits written contracts ten years, ILCS 5/13 natural contracts defendant’s collection suits based written. both year ten year statutes excep contracts governed section Uniform *8 8 13 ‐ 2251 Commercial Code (codified in 810 ILCS 5/2 ‐ 725), ‐ year statute. So that’s one that governs sales contracts.
The defendant argues a sale natural gas pursuant utility contracts, type contract involved in case, a mixed goods ‐ and ‐ services sale; natural gas be usable must delivered, and usual mode delivery by pip ing it into user’s premises. Mixed goods ‐ and ‐ services sales are treated sales services when element ser vice predominates, Belleville Toyota v. Toyota Motor Sales, U.S.A., Inc. 770 N.E.2d 177, (Ill. 2002), and sales services subject UCC 2 ‐ 725 Article 2 limited (“unless context otherwise requires”) “transac tions goods.” 810 ILCS 5/2 102. Sales goods, however, being transactions goods, governed Article 2, specifically section 2 725—and UCC defines natural gas good. 810 ILCS 5/2 107(1); see Prenalta Corp. Colo rado Interstate Gas Co. F.2d 677, 678, (10th Cir. 1991); Pennzoil Co. FERC 360, (5th 1981); Energy Marketing Services, Homer Laughlin China Co. F.R.D. (S.D. Ohio 1999), affirmed, 2000); Stanton National Fuel Gas Pa. D. & C. 4th (Com. Pl. In Pilgrim’s Pride B.R. (Bankr. N.D. Tex. The drafters must aware natural gas usually delivered homes places use natural gas pipes. So good can delivered pipe. argues some collect both electric service, split authority over electric service
(like water service) considered sale good *9 No. ‐
or a service. Compare GFI Wisconsin, Inc. Reedsburg Util ‐ ity Comm’n B.R. 791, (W.D. Wis. 2010), Helvey Wabash County REMC N.E.2d 608, (Ind. App. 1972), with In Pilgrim ʹ s Pride supra B.R. at 238–40, Williams Detroit Edison N.W.2d (Mich. App. 1975). This not true sale to Phil lips, however, or sales to any other Illinois mem bers. As far record indicates, only utility company serving customers defendant purchased debts to collect, a company called Nicor, sells only gas. Anyway make difference mem bers sued just to collect money owing purchase or money owing purchase electricity well. The two costs separated customer’s bill.
All members, therefore, same boat, having their ac crued—unless was right carve out debtors who not served untimely complaints. His ground there’s service, debtor noth ing fear. That’s true sometimes, not always—probably often. “[F]iling complaint may cause actual harm debtor: pending legal action, pre service, could red flag debtor’s creditors anyone who runs background credit check, including landlords em ployers. debt collector may also use pending legal action pressure debtor pay back informally, without serving complaint—precisely type unfair practice prohibited FDCPA. See U.S.C. 1692e(5) (‘The threat take cannot legally taken intended taken.’).” Tyler DH Capital Mgmt., WL at *6 Nov.
But no debtors ever harmed being but not served, would wrong to exclude class debtors who not served. Proof injury not required when only damages sought statutory. Murray GMAC Mortgage Corp. F.3d (7th Cir. 2006) ; Bartlett Heibl F.3d (7th Cir. Baker G.C. Services (9th And those appear to be only dam ages sought in federal portion case. Fair Debt Collection Practices Act does specify amount stat utory damages be awarded, imposes ceilings: in class actions named plaintiff may receive more $1,000 as whole lesser ei ther $500,000 percent collector’s net worth. U.S.C. 1692k(a)(2)(B). But controlling consideration, so far as any potential difficulty computing damages violation Collection Prac tices Act concerned, does appear ground awarding different amount different members.
Actual damages are, however, sought at least one supplemental state law (the claim—and may sought others well), that’s complicating factor, actual damages bound vary across members. we said Butler Sears, Roebuck & 2013), “a limited determining liability wide basis, separate hearings determine—if liability established—the dam ages individual members, homogeneous groups members, permitted Rule 23(c)(4) [of Feder al Rules Civil Procedure] will often sensible way proceed. … It drive stake through heart *11 of class action device, in cases in which damages sought rather injunction or declaratory judgment, require that every member of identical damages. If issues liability genuinely common ‐ sues, damages individual members can be readily determined in individual hearings, in settlement ne ‐ gotiations, or by creation subclasses, fact that damages not identical across all members should not pre clude certification. Otherwise defendants be able escape liability tortious harms enormous ag gregate magnitude so widely distributed not be remediable in individual suits.”
Another complicating factor in this case, however, that different states members reside may differ respect their laws governing suits against debt col lectors. because these or any factors any all supplemental state law should tained this action, compartmentalized by crea tion subclasses, relinquished altogether, not before us.
To conclude: all Illinois residents appear proper members, adequately represented plaintiff applicable years, so all debt collection suits time barred hence violated Collec Practices Act (and perhaps law well, though we do opine question)—unless turn out can dock safe harbor U.S.C. 1692k(c) (“a debt collector may held liable brought under subchapter collector shows preponderance evidence violation *12 intentional resulted bona fide error notwith standing maintenance procedures reasonably adapted avoid such error”); or defens es, such equitable tolling equitable estoppel, bar limitations. But all remains dis trict do regarding certification determine proper scope class. It need limited residents under Collection Practic es Act. how far extends (and subclasses created residents different states differences among state laws) remains determined. denial certification reversed case returned further proceedings con sistent opinion.
R EVERSED AND R EMANDED .