MEMORANDUM OPINION AND ORDER
This сase arises out of a $13.92 payment that Hartley allegedly owed to Suburban Radiologic Consultants, Ltd. (“Suburban”), a physician-owned radiology practice in the Twin Cities. Suburban retained CT Inc. Services
The parties bring cross motions for summary judgment on Hartley’s flat-rating claim. The Court will deny Defendants’ motion because they have not established that they are entitled to judgment as a matter of law. The Court will deny Hartley’s motion as premature, because Hartley cannot, at this stage, obtain a binding judgment on class members that have not yet received notice of the action and an opportunity to opt out. Defendants also move for summary judgment with respect to Hartley’s remaining individual claims. Because no material issues of fact remain regarding whether Defendants sent Hartley the mandated notices
BACKGROUND
I. THE COLLECTION AGREEMENT
Colltech is a debt-collection company with its principle place of business in Plymouth, Minnesota. (Aff. of Ray Costello ¶2, Dec. 17, 2012, Docket No. 41.) Suburban is a physician-owned radiology practice with multiple locations throughout Minneapolis and Saint Paul. (Id. ¶ 3.)
On November 30, 2006, Suburban and Colltech entered into a Collection Agreement. (Id. ¶ 3, Ex. A.) The Collection Agreement appoints Colltech as Suburban’s agent “to collect and receive for [Suburban] all sums of money due or payable to [Suburban] for claims which [Suburban] lists with [Coll-tech].” (Id., Ex. A ¶1.) The Collection Agreement also provides Colltech with the authority to receive payments from debtors, after which Colltech is directed to “remit all monies due [Suburban] by the 10th of each calendar month for collections made during the previous month.” (Id., Ex. A ¶ 3.) Suburban is required to notify Colltech of any payments received by Suburban within seven days of receipt. (Id., Ex. A ¶ 4.)
With respect to methods of debt collection, the Collection Agreement provides that Coll-tech “shall use only ordinary and reasonable collection efforts permitted by local, State, and Federal laws including the Fair Debt Collections Practices Act,” but otherwise does not specify the mechanisms for Coll-tech’s debt collection. (Id., Ex. A ¶ 2.) The Collection Agreement indicates that “any negotiations carried on between [Colltech] and Debtors will be at [Colltech]’s discretion, and that [Suburban] will in no way hamper, interfere or attempt to alter arrangements made by [Colltech] as long as the negotiations аre within the law.” (Id., Ex. A ¶ 5.) Colltech is not, however, authorized to “accept any compromise settlement without prior consent from Suburban.” (Id.)
II. COLLTECH’S COLLECTION PROCESS
Colltech engages in two phases of collection activity on behalf of Suburban. (Costello Aff. ¶ 3.) Phase 1 involves a three-series letter writing campaign. (Aff. of Mary Fredin ¶ 2, Dec. 17, 2012, Docket No. 40.) Phase 2 includes traditional debt collections methods such as additional letter writing and telephone calls. (Id. ¶ 4.)
A. Phase 1 Letter Creation and Mailing
Phase l’s series of three letters is triggered when a Suburban client’s account is between 120 and 150 days past due. (Second Decl. of Mark L. Vavreck, Ex. 5, (Dep. of Mary Fredin (“Fredin Dep.”) 8:22-25, 9:4-14), Jan. 7, 2013, Docket No. 47; Fredin Aff. ¶ 2.) The purpose of Phase 1 is “[t]o try and get the patient to contact [Suburban] to pay their outstanding bill.” (Fredin Dep. 9:6-9.) Suburban’s goal in Phase 1 is to encourage “account holders or the debtors” receiving the letters to “call and respond directly to Suburban.” (Id. 13:12-15.)
Suburban does not draft or create the letters used by Colltech in Phase 1, but Colltech sends copies of the draft letters to Suburban for Suburban’s review and approval. (Id. 16:22-17:14; Second Decl. of Thomas J. Lyons Jr., Ex. 3 (Dep. of Ray Costello (“Costello Dep.”) 12:7-20), Dec. 14, 2012, Docket No. 31.)
When Suburban first refers an account to Phase 1, it creates a credit letter for every overdue account. (Fredin Dep. 23:14-23.) These letters are identical to the letters that Suburban would have sent оut to debtors when Suburban was conducting its own
Collteeh sends the completed letters electronically to a third-party, Apex Print Technologies, LLC (“Apex”), for printing and mailing. (Costello Dep. 25:5-26:25; Aff. of Warren Becker ¶ 3, Dec. 17, 2012, Docket No. 42.) Apex prints the letters on preprinted letterhead bearing the insignia “CT Inc. Services.” (Costello Dep. 26-27.) Apex mails the letters to the identified account holder and sends an email confirmation to Collteeh acknowledging receipt of the file and representing that the total number of documents within the file were mailed. (Becker Aff. ¶ 7.)
Collteeh provides Suburban with acknowledgements that the first letter has been sent on the Phase 1 accounts. (Fredin Dep. 32:3-11.) After thirty days, Suburban returns this report to Collteeh with a list of accounts that have been paid, directing Collteeh not to send a second letter on those accounts. (Id. 33:19-24.) If an account is paid after the second letter is sent, Suburban emails Collteeh, alerting it that a third letter should not be sent. (Id. 35:17-22.) The entire series of letters is typically sent within forty-five days of Suburban’s referral of the account. (Id. 9:12-16; Costello Dep. 29:17-23.) After a third letter is sent, Collteeh closes the debt- or’s account. (Fredin Dep. 36:6-9.) The account automatically reverts to Suburban who reviews the account to determine whether to send it to Phase 2 collection. (Id. 22:14-20, 36:14-17; Costello Dep. 21:1-12.)
ll. Defendants’ Roles During Phase 1
During Phase 1, if a letter is returned because of an incorrect or insufficient address, Collteeh returns the account to Suburban, and makes no effort to locate a correct address. (Costello Dep. 35:19-36:1.) Suburban does not provide Collteeh with the social security numbers or dates of birth of the debtors linked to its Phase 1 accounts. (Fredin Dep. 29:8-15.)
During the course of Phase 1, Suburban handles debtors’ calls and written communications and collects payment on the overdue accounts. (Id. 41.) Collteeh refers all debt- or communications to Suburban. (Id. 72:9-11.) Suburban also handles debtors’ disputes regarding the allegedly overdue accounts. (Id. 42:1-4.) A Suburban representative indicated that Collteeh does receive payments from some debtors through the mail, but did not know what percentage of payments was received by Collteeh rather than Suburban. (Id. 69:25-70:11.) During collection Suburban always maintains and owns the debtors’ accounts. (Id. 10:22-24.) Suburban pays Collteeh a flat fee of $3.75 per account during Phase 1. (Id. 12:18-20,13:3-4.) If an account is collected during Phase 1, Suburban does not pay Collteeh any portion of the recovery. (Id. 12:23-13:2.)
C. Phase 2
If a debtor does not respond to the final Phase 1 letter within thirty days, Suburban places the account into Phase 2. (Id. 36:18-22.) Suburban uses Collteeh as well as another collection agency to implement Phase 2. (Id. 10:1-8.) A Collteeh Phase 1 account therefore is not necessarily referred to Coil-tech for Phase 2 collection. (Id. 36:24-37:5.)
Suburban transfers information to the collection agency for Phase 2 collection including the debtor’s name, address, account number, balance due, social security number, employment telephone number, location of
D. Credit Reporting
Suburban does not report to credit reporting agencies. (Id. 11:18-21.) Colltech does not report to a credit reporting agency on Suburban accounts when the account is in Phase 1. (Costello Dep. 15:22-16:2,18:20-24.) Suburban understood that no credit reporting was done during Phase 1. (Fredin Dep. 39:3-9.) In Phase 2 Colltech reports accounts with outstanding amounts over $10 to credit reporting agencies. (Id. 43:7-9; Costello Dep. 18:2-7.)
III. COLLECTION OF HARTLEY’S ACCOUNT
One of Suburban’s overdue accounts included Hartley’s debt in the amount of $13.92. (Fredin Aff. ¶ 6.) Suburban referred this account to Colltech for Phase 1 collection. (Id.)
A. Third Phase 1 Letter
Hartley alleges that he received only a single letter from Colltech, dated February 15, 2011 (“Letter 3”). (Aff. of Keith Hartley ¶¶ 3-4, Jan. 7, 2013, Docket No. 46.) The letter Hartley admits receiving is the third letter in the Phase 1 series. (Costello Aff. ¶ 5.) As the third letter in the series, Letter 3 does not contain certain statutorily mandated notices that Colltech allegedly provided in the first letter of Phase 1. (See Costello Aff., Ex. C.)
Letter 3 bears Colltech’s letterhead and provides a P.O. Box address for Colltech adjacent to the letterhead. (Second Vavreck Deck, Ex. 1.) Letter 3 also lists Suburban’s address and includes the phone number for Suburban’s customer service department. (Id; Fredin Dep. 40:10-13.)
With respect to Hartley’s payment obligation, Letter 3 states the balance due of “$13.92” as well as Hartley’s account number. (Second Vavreck Deck, Ex. 1.) The Letter states: “Respond to this obligation without further delay. The alternatives available to our client should you not clear this obligation may include damage to your credit rating or further collection activity.” (Id.) The only directions for making payment provided by Letter 3 is an instruction “[t]o pay on-line go to: www.subrad.com, click on ‘pay my bill’ in the lower right corner, and enter the account number listed above.” (Id.)
Letter 3 is signed by Jim Miller “Collections Manager,” and states in all caps “This is an attempt to collect a bilk Any information obtained will be used for that purpose. This communication is from a debt collector. This collection agency is licensed by the Minnesota Dept of Commerce.” (Id.)
B. First and Second Phase 1 Letters
The parties dispute whether Colltech ever sent Hartley the first two letters in the Phase 1 series. This dispute is relevant to Hartley’s claim that Defendants violated the FDCPA by failing to provide him with mandated notices. The first letter in the Phase 1 series (“Letter 1”) contains the mandated notices that Letter 3 lacks. (See Costello Aff., Ex. C.) Specifically, Letter 1 alerts the debtor that “[ujnless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt or any portion thereof, this office will obtain verification of the debt....” (Id.)
Colltech submitted a screen shot of Hartley’s account indicating that actions were taken on his account on December 29, 2010, February 2, 2011, and February 15, 2011. (Costello Aff. ¶ 5, Ex. B.) The account information indicates that a different form letter was generated by Colltech on each of the above dates and transmitted to Apex. (Id. ¶ 5, Ex. B.) Costello, the CEO and owner of Colltech, avers that Letter 1 was generated by Colltech on December 29, 2010, and was sent to Apex for printing on the same day. (Id. ¶¶ 1, 5.) The copy of Lettеr 1 attached to Costello’s affidavit is addressed to Hartley and contains information about Hartley’s account. (Id, Ex. C.) The letter bears a print
Warren Becker, the CFO of Apex, submitted an affidavit indicating that Letter 1 was received from Colltech on December 29, 2010, at 6:08 p.m. (Becker Aff. ¶ 8.) Letter 1 was addressed to Hartley, printed, inserted into an envelope, and delivered for mailing on December 30, 2010, at 9:00 a.m. (Id.) Pursuant to Apex’s regular business practices, Letter 1 would then have been delivered to its presort house for input into the United States Postal Service mail stream. (Id. ¶ 5.) Each step in Apex’s print and mail process is documented electronically, and a confirmation email would have been sent to Colltech containing validation that each document sent to Apex was mailed. (Id. ¶¶ 6-7.) Becker’s affidavit contains no information about the mailing of the second letter in Phase 1 (“Letter 2”).
The language and content of Letters 1 and 2 are substantially similar to that of Letter 3. (Costello Dep., Ex. 15; Costello Aff., Ex. C; Second Vavreck Deck, Ex. 1.) The letters are printed on Colltech’s letterhead but contain Suburban’s address and customer service telephone. (Costello Dep., Ex. 15; Costello Aff., Ex. C; Becker Aff. ¶ 5.) The letters also direct payment to be mailed to Suburban Radiologic at the address listed or submitted online through www.subrad.com. (Costello Dep., Ex. 15; Costello Aff., Ex. C.)
On September 14, 2011, Hartley filed a complaint alleging violations of the FDCPA against Suburban and Colltech. (Compl., Sept. 14, 2011, Docket No. 1.) First, the complaint alleges that Letter 3 was misleading because the telephone number listed on the letter was controlled by Suburban, not Colltech, in violation of 15 U.S.C. §§ 1692j, 1692e, 1692e(10), 1692e(14) and 1692f(8). (Compl. ¶ 12.) Second, the complaint alleges that Defendants violated 15 U.S.C. § 1692g(a) because Letter 3 failed to provide Hartley with mandated notices, including but not limited to, alerting Hartley of the dispute and validation process. (Compl. ¶ 10.) Finally, the complaint alleges that Letter 3 contained false or misleading information in violation of 15 U.S.C. § 1692e(8), by stating that “damage to your credit rating” may happen. (Compl. ¶ 11.) The complaint alleges that this statement is false because Suburban does not report overdue accounts to credit reporting agencies. (Id.) The complaint also states generally that “[t]he foregoing acts and omissions of Defendants constitute numerous and multiple violations of the FDCPA, including but not limited to each and every one of the above cited provisions of the FDCPA.” (Id. ¶ 22.)
Hartley’s complaint seeks $1,000 in statutory damages pursuant to 15 U.S.C. § 1692k(a)(2)(A) as well as reasonable attorneys’ fees and costs pursuant to 15 U.S.C. § 1692k(a)(3). (Compl. ¶ 23.) The complaint also contains class allegations, on behalf of the class of “all consumers in the state of Minnesota to whom letters were sent identical or similar to [Letter 3], within one (1) year from the date of the filing of this action.” (Id. ¶ 13.) The complaint identifies the principle common question of law as “whether the Defendants violated the FDCPA by its misleading and false collection communication.” (Id. ¶ 15.)
ANALYSIS
I. MOTIONS FOR SUMMARY JUDGMENT
A. Standard of Review
Summary judgment is appropriate where there are no genuine issues of material fact and the moving party can demonstrate that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A fact is material if it might affect the outcome of the suit, and a dispute is genuine if the evidence is such that it could lead a reasonable jury to return a verdict for either party. Anderson v. Liberty Lobby, Inc.,
The FDCPA is a remedial, strict liability statute “and is liberally construed to protect consumers.” Zortman v. J.C. Christensen & Assocs., Inc.,
B. Propriety of Deciding the Motions for Summary Judgment
As an initial matter, the Court must determine whether it is appropriate to consider at this time the parties’ motions for summary judgment that were filed simultaneously with Hartley’s motion for class certification. See Friedman v. May Dep’t Stores Co.,
Federal Rule of Civil Procedure 23 provides that a district court must rule on the issue of class certification “[a]t an early practicable time after a person sues or is sued as a class representative.” Fed.R.Civ.P. 23(c)(1). Consequently, “[a]s a general rule, courts decide class certification motions before addressing dispositive motions.” Hyman v. First Union Corp.,
Courts have recognized that defendants may have a right to waive the protections of this general rule and seek a ruling on the merits of putative class claims prior to class certification. See, e.g., Curtin v. United Airlines, Inc.,
Recognizing a defendant’s right to waive the protections of a decision binding upon class members, courts have considered a defendant’s dispositive motion prior to resolving class certification issues where such consideration will not prejudice the parties and “an initial ruling on the merits of a claim would protect the parties from needless and costly further litigation.” In re Starbucks Emp. Gratuity Litig.,
Consideration of Defendants’ motion for summary judgment in this case has the potential to dispose of Hartley’s claims or narrow the issues subject to class certification. Therefore resolution of Dеfendants’ motion could protect all parties from additional costs associated with class certification. Furthermore, the Court finds no reason that Hartley will be prejudiced by consideration of Defendants’ motion. Therefore, the Court will exercise its discretion to consider Defendants’ motion at this juncture. The Court notes, however, that any decision regarding Defendants’ motion will be binding only upon Hartley, the named plaintiff, and will not be binding upon any potential class members that have not received notice and an opportunity to opt out of the litigation. See Reynolds v. Barrett,
The Court will not, however, address Hartley’s motion for summary judgment at this stage. Although courts have recognized a defendant’s waiver of the right to secure a judgment that will be binding upon a putative class by seeking resolution of the representative plaintiffs claims on the merits prior to a determination on class certification issues, courts have been reluctant to allow the same waiver by plaintiffs. See Weir v. Joly, No. CV-10-898,
Hartley’s current motion for summary judgment raises the problem of one-way intervention identified by other courts — in that putative class members will be able to opt in or out of the proceedings based on Hartley’s success or lack thereof on his motion for summary judgment — the Court will decline to consider Hartley’s motion at this time, and will deny the motion without prejudice. See Weir,
Additionally, the Court notes that unlike Defendants, Hartley should have little incentive to seek a ruling on the merits prior to class certification. Even if Hartley were to prevail on his motion for summary judgment, that determination would not be binding on class members. Therefore, obtaining a ruling on the merits of his claims prior to class certification would not promote efficiency or achieve Hartley’s purported goal of securing victory for all class members. Moreover, the Court will decline to decide Hartley’s motion for summary judgment because such a decision could result in the denial of his motion for class certification. See Owens v. Hellmuth & Johnson PLLC,
C. Flat-Rating Under 15 U.S.C. § 1692j
The Court will now turn to Defendants’ motion for summary judgment and begin with Hartley’s claim for violation of 15 U.S.C. § 1692j. The FDCPA prohibits a practice known as “flat-rating,” providing that:
(a) It is unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to*370 collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating.
(b) Any person who violates this section shall be liable to the same extent and in the same manner as a debt collector is liable under section 1692k of this title for failure to comply with a provision of this subchapter.
15 U.S.C. § 1692j. Although the Eighth Circuit has not addressed liability for flat-rating, other courts have held that “[t]his provision of the FDCPA typically addresses the use by a creditor of a third party’s letterhead in order to ‘give the delinquency letters added intimidation value, as it suggests that a collection agency or some other party is now on the debtor’s back.’ ” Passa v. City of Columbus,
1. Suburban’s Liability for Flat-Rating
The Court must first determine whether Suburban, as a creditor,
One circumstance in which a creditor may be deemed a debt collector under the latter part of § 1692a(6), and therefore fall within the FD CPA’s scheme оf liability, is when the creditor engages in a flat-rating arrangement. See Larson,
While 15 U.S.C. § 1692j is silent as to the creditor’s liability under a flat rating arrangement — assigning liability only to the party furnishing the form — a creditor participating in the flat-rating arrangement can be liable under the provision of the FDCPA prohibiting a creditor from using a name to create the false impression that a third party is involved in the collection of the creditor’s debt.
Sokolski,
Some courts have taken a narrow approach to creditor liability under the FDCPA, finding creditors to be debt collectors under § 1692a(6) only where the creditor “actually pretends to be someone else or uses a pseudonym or alias.” Villarreal v. Snow, No. 95 C 2484,
The Court finds the better-reasoned and more prevalent view is that liability can be imposed upon creditors not only where the creditor uses aliases or pseudonyms but also “where the creditor merely implies that a third party is collecting a debt when in fact it is the creditor that is attempting to do so.” Larson,
Under this approach, “[m]inimal participation by a debt collector in the collection process” is insufficient to prevent a creditor from being deemed a debt collector and therefore subject to liability under the FDCPA. Peters v. AT & T Corp.,
(1) the collection agency is a mere mailing service or performs only ministerial functions; (2) the letters state if the debtor does not pay, the debt “will be referred for collection”; (3) the collection agency is paid merely for sending letters rather than on the percentage of debts collected; (4) the collection agency does not receive any payments or forwards payments to [the] creditor; (5) if the debtor fails to respond*372 to the letter(s), the collection agency has no further contact with the debtor or the creditor decides whether to pursue collection; (6) the collection agency does not receive the files of the debtors; (7) the collection agency never discussed with the creditor the collection process or what steps should be taken with certain debtors; (8) the collection agency cannot initiate phone calls to debtors; (9) any correspondence received by the collection agency is forwarded to the creditor; (10) the collection agency has no authority to negotiate collection of debts; (11) the letters do not state the collection agency’s address or phone number; (12) the letter directs questions or payments to the creditor; and (13) the creditor has substantial control over the contents of the letters.
Larson,
Exаmining these factors, the Court finds that the record does not support granting summary judgment in Defendants’ favor as to Suburban’s liability for flat-rating. Letter 3 gives the consumer the impression that Colltech is involved in the collection by using Colltech’s letterhead, stating that the communication is from a debt collector, and noting that the collection agency is licensed with the Minnesota Department of Commerce. Although Letter 3 creates the perception that Colltech is participating, the facts show that Colltech may have been acting as little more than a mail service for Suburban. During Phase 1, for example, Suburban paid Colltech merely for sending letters, rather than a percentage of debts collected. Colltech did not typically receive debtor’s payments, and when it did, would immediately forward those payments to Suburban. If a debtor failed to respond to Phase 1, Colltech would have no further contact with the debtor unless Suburban decided to pursue further collection. Colltech did not receive the files of the debtors, and only had enough information to mail the Phase 1 letters. Colltech could not initiate telephone calls, as it did not have the debtor’s telephone numbers. Correspondence received by Colltech from debtors was forwarded to Suburban. Letter 3 did not include Collteeh’s telephone number and dirеcted both questions and payments to Suburban. Additionally, Colltech did not have the authority to negotiate debts on Suburban’s behalf. These facts indicate that Defendants are not entitled to summary judgment with respect to Suburban’s liability for acting as a debt collector and participating in a flat-rating scheme.
2. Colltech’s Liability for Flat-Rating
Colltech can only be liable for acting as a flat-rater if it was not acting as a debt collector. See Anthes v. Transworld Sys., Inc.,
The analysis of whether a collection agency is acting as a flat-rater instead of as a true debt collector examines identical factors to those in the analysis described above for determining whether a creditor is acting as a debt collector. Essentially, to prove a violation of the FDCPA for flat-rating, a plaintiff must show that the collection agency was not acting as a debt collector, but was merely providing its name or letterhead for collection purposes. Therefore, in determining whether a collection agency is acting as a debt collector rather than a flat-rater, courts examine, among other factors, whether the agency collects money from debtors, whether debtors are directed to contact the agency, whether the agency provides follow-up collection services after letter mailing, and whether the agency receives a flat fee instead of a percentage of accounts paid pursuant to collection efforts. See Randle v. GC Servs. L.P.,
As explained above, examination of the collection efforts of Suburban and Coll-tech indicate that summary judgment in Defendants’ favor as to Colltech’s liability for flat-rating is inappropriate. It is undisputed that Colltech used its letterhead on the Phase 1 letters, which created the impression that a debt collection agency was now “on [Hartley]’s back.” See Passa,
D. Failure to Give Mandated Notices Under 15 U.S.C. § 1692g(a)
Hartley also brings a non-class claim, alleging that Defendants never provided him with the notices required by the FDCPA. Specifically, Hartley contends that Letter 3 failed to include language notifying him that if he disputed the alleged debt, the debt collector would obtain verification of the debt.
The FDCPA provides that:
Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer аnd a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
15 U.S.C. § 1692g(a).
The parties agree that Letter 3 did not include language giving Hartley all of the notices mandated by § 1692g(a). Defendants therefore concede that if Letter 3 was the only letter sent to Hartley, they are liable for a violation of the FDCPA. The
“Under the FDCPA a debt collector must send a written notice to an alleged debtor containing, among other things, the amount of the debt and statements that the consumer may dispute the debt in writing and may request written verification.” Antoine v. J.P. Morgan Chase Bank,
The undisputed evidence in the record shows that Colltech prepared Letter 1 on December 29, 2010, and delivered the letter to Apex for printing. Apex received the letter the same day. Apex’s records reflect that on the next day, Letter 1, which was addressed to Hartley, was printed, inserted into an envelope, and delivered for mailing. Pursuant to Apex’s regular business practices, Letter 1 would have been delivered to Apex’s presort house for input into the United States Postal Service mail stream. Additionally, Letter l’s input into the United States Postal Service mail stream would have been electronically documented, with verification sent to Colltech that the letter had been delivered for mailing. Hartley’s only response to this evidence is that Becker’s affidavit is insufficient to support summary judgment because it does not state “to whom” the letter was delivered.
E. False Credit Reporting Under 15 U.S.C. § 1692e
Hartley also claims that Letter 3 violated 15 U.S.C. § 1692e by stating that Hartley’s failure to pay the balance due on his account could result in damage to his credit score. The FDCPA provides that “[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Under this provision, a debt collector is prohibited from “[ejommunicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.” 15 U.S.C. § 1692e(8).
As a preliminary matter, Hartley did not respond to Defendants’ motion for summary judgment on this claim, and therefore has likely waived the claim. See Satcher v. Univ. of Ark. at Pine Bluff Bd. of Trs.,
Even if Hartley had not waived the claim, however, the Court finds that the credit reporting language of Letter 3 did not violate the FDCPA. The Act prohibits threatening to communicate credit information which is known, or should be known to be false. 15 U.S.C. § 1692e(8). Here, Letter 3 states that “[t]he alternatives available to [Suburban] should you not clear this obligation may include damage to your credit rating or further collection activity.” Nothing in this phrase indicates an intent to communicate credit information that is false. Failure to respond to Letter 3 can result in Suburban placing an account in Phase 2. During Phase 2, Colltech may credit report any debts over $10, including Hartley’s overdue account. Therefore, the letter is an accurate statement of the possible outcomes of failing to respond to Letter 3. Because no genuine issues of material fact remain with respect to whether Letter 3 threatens to communicate credit information that is false, the Court will grant Defendants’ motion for summary judgment.
II. CLASS CERTIFICATION
Hartley seeks class certification under Fed.R.Civ.P. 23(b)(3). Hartley clarified at oral argument that the class he seeks to certify inсludes all consumers in Minnesota who received any of the three Phase 1 letters, bearing the letterhead of “CT Inc. Services” in the one year prior to the filing of the instant action.
A. Rule 23(a) Prerequisites
The Rule 23(a) requirements for class certification are: (1) the putative class is so numerous that it makes joinder of all members impractical; (2) questions of law or fact are common to the class; (3) the class representatives’ claims or defenses are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.
In re St. Jude Med., Inc.,
1. Numerosity
With respect to numerosity, although exact numbers have not been determined, there appears to be somewhere in the range of 10,000 to 20,000 class plaintiffs. One year prior to the filing of the present complaint, Colltech received 23,213 accounts from Suburban for Phase 1 treatment. (Costello Dep., Ex. 12.) The exact number of class members will be 23,213 minus accounts for debts incurred by non-Minnesota resi
2. Commonality and Typicality
Rule 23(a)(2) requires that “ ‘there are questions of law or fact common to the class.’” Wal-Mart Stores, Inc. v. Dukes, — U.S.-,
Defendants do not dispute that the requirements of commonality and typicality have been met. The questions of law and fact implicated by this action all arise out of Phase 1 form letters, and therefore would be identical among class members. All class members claims “would share the legal question of whether the language in the form letter violates [§ 1692j] of the FDCPA.” Bryant v. Bonded Account Serv./Check Recovery, Inc.,
3. Adequacy of Representation
Finally, “[t]o ensure that the interests of unnamed class members are fairly and adequately protected, Rule 23(a)(4) requires a finding that named plaintiffs and counsel will competently and vigorously pursue the action on behalf of all class members.” Jones,
Defendants do not dispute that Hartley would adequately represent the class. As explained above, Hartley’s claims are identical to those of other class members and he has a common interest in recovering statutory damages for Defendants’ alleged
B. Rule 23(b)(3) Certification
In addition to satisfying the prerequisites of Rule 23(a), a class may be maintained under Rule 23(b)(3) if “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). A party proposing to be a class representative bears the burden of showing that a class action is appropriate, and that the requirements of Rule 23 are met. Coleman v. Watt,
1. Predominance
Predominance “tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” Amchem Prods., Inc. v. Windsor,
2. Superiority
In determining whether a class action is superior to other available methods, courts cоnsider (1) the class members’ interests in individually controlling the litigation; (2) the extent and nature of any litigation concerning the controversy already begun by or against class members; (3) the desirability of concentrating the litigation of the claims in the particular forum; and (4) the likely difficulties in managing a class action. Fed.R.Civ.P. 23(b)(3)(A)-(D). A class action is a superior form of litigation if it is capable of addressing “the rights of groups of people who individually would be without effective strength to bring their opponents into court at all.” Amchem Prods.,
The parties” primary dispute regarding the superiority of a class action revolves around the amount of damages that would be recoverable by class members. In an individual FDCPA case, the Court has the discretion to award a successful plaintiff up to $1,000 in statutory damages. 15 U.S.C. § 1692k(a)(2)(A). With respect to class actions, however, the FDCPA provides that the total recovery for unnamed class members shall “not exceed the lesser of $500,000 or 1 per centum of net worth of the debt collector.” 15 U.S.C. § 1692k(a)(2)(B). A court’s class award is to be made “without regard to a minimum individual recovery.” Id.
Defendants argue that the provision of the FDCPA limiting class recovery to $500,000 or 1 per centum of net worth of the debt collector in this case will render a class ac
As an initial matter, Hartley contends that he “is skeptical of’ the net worth figures provided by Defendants, “and plans to take further discovery on net worth if the Class is certified.” (Pl.’s Mem. in Supp. of Mot. for Class Cert, at 6.) In particular, Hartley notes that Suburban’s employee in charge of collections testified that $139,220,19 seemed low to her. (Fredin Dep. 64:21-65:4.) Additionally Hartley notes that Suburban did not produce a representative to testify regarding net worth even though Hartley noticed Suburban’s deposition as to net worth. {Id. 52:18-53:2.) As for Collteeh, Hartley disputes that all of the liabilities claimed in Colltech’s balance sheet are actually business liabilities. Furthermore, Hartley believes Colltech’s net worth calculation is incorrect because no Collteeh witness testified as to the company’s finances generally or the preparation of the balance sheet. Despite Hartley’s general objections to the veracity of Defendants’ stated net worth, the Court is still equipped to decide the issue of class certification. Notably, issues of net worth aside, the FDCPA caps damages for the class recovery at $500,000 which in this case would yield a damages award of approximately $22.73.
Some courts have determined that “[t]he maximum potential award of statutory damages if [an FDCPA] action were maintained as a class action is clearly relevant to ‘the interest of members of the class in individually controlling the prosecution or defense of separate actions.’” Bryant,
Other courts, however, have reasoned that the potential maximum recovery is not the only, or most relevant, consideration when determining whether an FDCPA class action may be certified, and have certified classes even where the potential recovery for each class member is small. See Jancik,
The Court agrees with the reasoning of the court in Jancik, and finds that the small amount of recovery is not a bar to class certification in this case. While individual plaintiffs could potentially obtain a greater amount of damages in an individual suit, the Court is unaware of any other Suburban clients that have sued over these possible FDCPA violations. Because all class plaintiffs are unlikely to bring their own claims for FDCPA violations, the Court finds that a class action in this case is best suited to address “the rights of groups of people who individually would be without effective strength to bring their opponents into cоurt at all.” Amchem Prods.,
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS HEREBY ORDERED
1. Defendants’ Motion for Summary Judgment [Docket No. 38] is GRANTED in part and DENIED in part as follows:
a. Defendants’ motion is DENIED with respect to Plaintiffs claim for violation of 15 U.S.C. § 1692j.
b. Defendants’ motion is GRANTED with respect to Plaintiffs claims for failure to provide mandated notices pursuant to 15 U.S.C. § 1692g(a) and communication of false credit reporting information pursuant to 15 U.S.C. § 1692e(8). Plaintiffs claims arising out of § 1692g(a) and § 1692e(8) are hereby DISMISSED WITH PREJUDICE.
2. Plaintiffs Motion for Partial Summary Judgment [Docket No. 33] is DENIED without prejudice as premature. Plaintiff may refile its motion for Partial Summary Judgment within thirty (30) days, after the time period for a putative class member to opt out of the class action has expired.
Notes
. CT Inc. Services is an assumed name for the entity Colltech, Inc.
. Prior to contracting with Collteeh, Suburban conducted its own Phase 1 collection, sending out past due notices on its own letterhead. (Fredin Dep. 18:21-19:2.) Suburban switched to running Phase 1 through Collteeh in part because the Suburban letters were not generating the response Suburban desired and because it was more cost effective for Suburban to have a different entity print and mail the letters. (Id. 19:3-13.)
. Defendants make several arguments in their brief that seem to suggest they are bringing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). For example, Defendants cite Ashcroft v. Iqbal,
. The FDCPA defines a creditor as "any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.” 15 U.S.C. § 1692a(4).
. The Court also notes that if Hartley prevails on his claim for flat-rating, and establishes that Suburban was acting as a debt collector, it is likely that Suburban would also be liable for using a “false, deceptive, or misleading representation or means in connection with the collection of a[] debt,” in violation of the FDCPA. See 15 U.S.C. § 1692e. Such a finding in addition to a conclusion that Defendants were liable for a flat-rating scheme would, however, have little practical impact because a single violation of the FDCPA is sufficient to expose a defendant to liability for statutory damages. See Picht v. Hawks,
. As previously explained, the FDCPA imposes liability only upon debt collectors, and § 1692g(a) clearly states that a debt collector shall provide the statutorily required notices. The statutory provision can only apply to one of the Defendants in the present case, that is, whichever Defendant is determined to be a debt collector pursuant to the analysis outlined above. Therefore, either Suburban or Colltech — but not both — could ultimately be liable for violation of § 1692g(a).
. Hartley also makes a passing reference to his possible entitlement to a continuance under Federal Rule of Civil Procedure 56(d). Hartley argues that Defendants did not list Apex or its employees as persons likely to be used in support of their defenses. Therefore, Hartley argues he has not had the opportunity to depose Apex’s representative, and should be allowed that opportunity before summary judgment is granted. Defendants supplemеnted their discovery answers on December 14, 2012, to reflect Apex's inclusion as an entity used to support the defense. (Aff. of Matthew Doherty ¶ 2, Ex. A, Jan. 21, 2013, Docket No. 51.) Defendants disclosed Apex after Costello's deposition in which Hartley's counsel focused on the mailing mechanisms used by Colltech. (Id., Ex. A.) Because Defendants appear to have promptly disclosed their reliance on Apex, and discovery did not close until April 1, 2013, (see Pretrial Scheduling Order, Apr. 2, 2012, Docket No. 12), there appears
to be no legitimate justification for continuing the summary judgment motion.
Furthermore, Hartley did not make any attempt to comply with the requirement of Rule 56(d). Under Rule 56(d) a "party opposing summary judgment is required to file an affidavit [or declaration] showing what specific facts further discovery might uncover.” Roark v. City of Hazen,
. It is possible that the final number of class members will be less than 22,000. Even a substantial reduction in the number of class members is unlikely, however, to increase the amount of damages recoverable by unnamed class members to an amount close to the $1,000 recoverable by individuals.