HEATHER GUDEX, Plaintiff-Respondent, v. FRANKLIN COLLECTION SERVICE, INC., Defendant-Appellant-Petitioner.
No. 2022AP1728
Supreme Court of Wisconsin
Decided March 4, 2026
2026 WI 6
Milwaukee County Circuit Court (Frederick C. Rosa, J.) No. 2021CV1965
BRIAN K. HAGEDORN, J., delivered the majority opinion of the Court, in which JILL J. KAROFSKY, C.J., and ANNETTE KINGSLAND ZIEGLER, REBECCA GRASSL BRADLEY, REBECCA FRANK DALLET, and JANET C. PROTASIEWICZ, JJ., joined. REBECCA FRANK DALLET, J., filed a concurring opinion, in which JILL J. KAROFSKY, C.J., and JANET C. PROTASIEWICZ, J., joined. SUSAN M. CRAWFORD, J., filed a dissenting opinion.
¶1 BRIAN K. HAGEDORN, J. Heather Gudex filed a class action against Franklin Collection Service, Inc. after receiving a letter requesting that she pay an alleged debt. Gudex sent a notice and demand indicating her intent to seek damages on behalf of a putative class. Franklin responded with an offer of relief that Gudex rejected. When the motion for class certification came, Franklin argued the class action for damages was barred because it had offered “an appropriate remedy” to Gudex under
The circuit court disagreed and certified the class, relying in part on its determination that the remedy in
I. BACKGROUND
¶2 In early 2021, Franklin sent a letter seeking to collect a debt Gudex owed to a third party. The letter read in part: “IF YOU ARE NOT PAYING THIS ACCOUNT, CONTACT YOUR ATTORNEY REGARDING OUR POTENTIAL REMEDIES, AND YOUR DEFENSES, OR CALL (877) 264-2172.” In smaller font, the letter also provided: “When this letter was mailed no attorney has personally reviewed your account.” Franklin acknowledges that it sent a version of this letter to others.
¶3 Gudex alleged that she felt “confused” by the letter and “feared that she might be sued.” She then met with an attorney and filed a putative class action for damages against Franklin. Gudex sought class-wide statutory damages under the Federal Fair Debt Collection Practices Act (“FDCPA”) and class-wide injunctive relief under the Wisconsin Consumer Act (“WCA”).2 Gudex claimed that Franklin violated various provisions of the WCA by providing the false impression that Franklin would sue Gudex. After some discovery, Gudex elected to seek monetary damages for the putative class under the WCA. She sent Franklin a notice and demand to that effect and moved the circuit court for leave to amend her complaint accordingly.
¶4 In response, Franklin offered Gudex relief it thought would constitute “an appropriate remedy” under
Specifically, Franklin offered individual relief to Gudex consisting of actual damages and the WCA’s maximum statutory penalty of $1,000. Franklin further promised that Franklin would not send out any more debt collection letters with the same language, and would enter a voluntary stipulation with Gudex so stating. Gudex rejected Franklin’s offer.
¶5 Gudex followed with a motion for class certification seeking monetary and injunctive relief for a class of Wisconsin consumers allegedly injured by Franklin’s letter. Franklin objected on several grounds. Among its arguments, Franklin contended that its offer of complete individual relief to Gudex constituted an appropriate remedy under
¶6 The circuit court granted Gudex’s motion for class certification. As part of its reasoning, the court rejected Franklin’s argument that it had offered an appropriate remedy under
¶7 Franklin moved for an interlocutory appeal on the class certification order, which the court of appeals granted. In an unpublished opinion, the court of appeals affirmed. Gudex v. Franklin Collection Service, Inc., No. 2022AP1728, unpublished slip op., ¶1 (Wis. Ct. App. Dec. 3, 2024). It too focused on the public policy favoring class actions, which it thought would be defeated by Franklin’s interpretation of
II. DISCUSSION
A. THE SCOPE OF OUR REVIEW
¶8 Franklin argues that the circuit court erred in granting class certification. The decision to certify a class is generally committed to the judgment and discretion of the circuit court. McDaniel v. Wis. DOC, 2025 WI 24, ¶15, 416 Wis. 2d 516, 21 N.W.3d 749. Its decision will be affirmed so long as the court applied the correct law to the relevant facts and reached a reasonable conclusion. Id. The interpretation of statutes is a legal question we review independently without deference to the circuit court. Id.
¶9 We conclude the circuit court did not apply the proper law when it interpreted
B. ANALYSIS
¶10 The question before us is one of statutory interpretation. This calls us to focus on “the language of the statutory text, read reasonably, along with relevant statutory context and structure.” Wis. Just. Initiative, Inc. v. WEC, 2023 WI 38, ¶19, 407 Wis. 2d 87, 990 N.W.2d 122.
¶11 WISCONSIN STAT.
¶12 Subsection
pertinent to this discussion. This brings us to subsec. (4), which establishes a series of processes and conditions attendant to a class action under the WCA.
¶13 WISCONSIN STAT.
At least 30 days or more prior to the commencement of a class action for damages pursuant to the provisions of this section, any party must:
1. Notify the person against whom an alleged cause of action is asserted of the particular alleged claim or violation; and
2. Demand that such person correct, or otherwise remedy the basis for the alleged claim.
¶14 This statute places a pre-commencement mandate on “any party” wishing to bring a class action for damages. Here, it is undisputed that Gudex is that party. What must this party plaintiff wishing to file a class action for damages do? She must notify the person against whom the litigation will be brought “of the particular alleged claim or violation.”
¶15 WISCONSIN STAT.
Such notice shall be in writing and shall be sent by certified or registered mail, return receipt requested, to such person at the place where the transaction occurred, such person’s principal place of business within this state, or, if neither will effect actual notice, the department of financial institutions.
¶16 In short, a customer affected by an alleged claim or violation who wishes to file a class action for damages must first notify the alleged violator in the manner specified in para. (b) and demand a remedy for the violation. All of this must happen at least 30 days before the class action for damages is commenced. Thus, we see right from the beginning a legislatively created window of time to remedy the injuries to a “party”—a “customer affected by a violation” who wishes to file a class action for damages—prior to and apart from class action proceedings.
¶17 This brings us to the disputed provision here. WISCONSIN STAT.
Except as provided in par. (e), no action for damages may be maintained under this section if an appropriate remedy, which shall include actual damages and may include penalties, is given, or agreed to be given within a reasonable time, to such party within 30 days after receipt of such notice.
¶18 As an initial matter, this statute provides that “no action for damages may be maintained” if certain conditions are met. Id. Here, that means Gudex cannot maintain her class action for damages under this section if the “appropriate remedy” is “given, or agreed to be given within a reasonable time.” Id.
¶19 The text also references a key timeframe—“30 days after receipt of such notice.” Id. What notice? This can only be referring to the notice just described in paras. (a) and (b), the one that must be provided by a party 30 days prior to commencing a class action lawsuit for damages. All of this works together. Paragraph (a) describes what an affected customer who wishes to commence a lawsuit must do prior to becoming a plaintiff—and therefore a “party.” Paragraph (b) says how that notice must be accomplished. And para. (c) discusses the response to that notice. The symmetry of the timing reinforces this; the person receiving the notice must satisfy the conditions “within 30 days.”
mechanism that precludes a party plaintiff from proceeding with a class action suit for damages if the remedial conditions are satisfied.
¶20 Paragraph (c) further specifies that to avoid a class action for damages, “an appropriate remedy” must be “given, or agreed to be given” “to such party.”
¶21 As we have explained, paras. (a)–(c) work together; there is no other way to read them. The prospective party plaintiff must provide notice to a prospective defendant prior to commencing suit, which affords the potential defendant an opportunity to remedy the problem. The “any party” in
¶22 Translating the statutory rules to this case is straightforward. Gudex is the “party” who intended to and then did bring a class action lawsuit for damages. Franklin is the defendant. Paragraph (c) says that the class action suit for damages may not be maintained if Franklin gave or agreed to give an appropriate remedy to the party who sent the notice. The litigation-commencing and notice-sending party is Gudex, and Gudex alone.4
¶23 Lest there be any remaining doubt, the additional provisions of
Except as provided in par. (e), no action for damages may be maintained under this section upon a showing by a person against whom the alleged claim or violation is asserted that all of the following exist:
1. All customers similarly situated have been identified, or a reasonable effort to identify such other consumers has been made;
2. All customers so identified have been notified that upon their request such person shall make the appropriate remedy;
3. The remedy requested by such customers has been or in a reasonable time will be given; and
4. Such person has ceased from engaging, or if immediate cessation is impossible under the circumstances, such person will, within a reasonable time, cease to engage in any acts on which the alleged claim is based.
¶24 Like para. (c), para. (d) states that “no action for damages may be maintained” if certain conditions are met. Id. So it contains a second set of conditions that, if satisfied, preclude the maintenance of a class action for damages.
¶25 Paragraph (d) also introduces us to the “customers similarly situated.” WISCONSIN STAT.
when the administrator brings or joins the action. Our analysis is confined to the circumstances here, where the “party” commencing the class action lawsuit is a “customer.”
course, those customers who would be part of the putative class. The conditions in para. (d) include identification of “All customers,” notification of “All customers,” and the provision of or agreement to provide an “appropriate remedy” that has been “requested by such customers.”
¶26 In addition, the use of the word “such” in this paragraph and throughout WISCONSIN STAT.
¶27 Putting this all together, paras. (a)–(c) describe a mandatory process that allows a prospective defendant to a class action for damages under this section to make a prospective party plaintiff whole and avoid the class action altogether. Paragraph (d) prohibits a class action for damages from proceeding when—among other things—all customers similarly situated have been identified and notified, and when a remedy requested by the class will be given. It would be inconsistent with the statutory scheme, then, to read “such party” in para. (c) as including the whole class when the statute uses different language, a different reference, and a different process for the remedy to the class in para. (d).
¶28 The final provision in
opportunity to foreclose a class action for damages following an amended complaint through either the mechanism of para. (c)—the provision of an appropriate remedy to the party plaintiff—or para. (d)—the provision of an appropriate remedy to the class.
¶29 Gudex counters that a putative class can sometimes be a “party.” Maybe so, but in the context of this statute, para. (c) explicitly references “such party.” And this unambiguously refers to the “party” from para. (a)—that is, the party who wishes to file a class action for damages. The statute is clear that Franklin is required to give or agree to give “an appropriate remedy” to the particular party who notified Franklin pursuant to paras. (a)–(b). That is Gudex, not the putative class.5
¶30 Gudex also points to the reasoning of the circuit court and court of appeals, both of which concluded that the policy of allowing class action lawsuits in Wisconsin would be frustrated by Franklin’s interpretation of para. (c). It is true our interpretation of para. (c) means that a class action for damages may be stopped before it even begins, provided an appropriate remedy has been given or will be given to the party plaintiff. But that is what the text plainly says and means. The text does not contain an unrestrained endorsement of class actions. A better view of the statutory policy choice is that the legislature chose to incentivize making an affected customer whole as quickly as possible, while still preserving access to the class action lawsuit if the customer does not receive an appropriate remedy. The legislature provided a strong incentive for a defendant like Franklin: make an injured party whole now, or face a costly and time-consuming class action proceeding that may require you to provide a remedy to a much larger group later.6 Moreover, the statute still allows a class action for injunctive relief to proceed under
occasioned by the provision of an appropriate remedy under para. (c) is limited to a class action “for damages.”
¶31 In this case, the circuit court based its decision to certify the class in part on its legal conclusion that
By the Court.—The decision of the court of appeals is reversed, and the cause is remanded to the circuit court for further proceedings consistent with this opinion.
GUDEX v. FRANKLIN COLLECTION SERVICE, INC. JUSTICE DALLET, concurring
¶32 I agree with the majority that when WISCONSIN STAT.
¶33 In the circuit court, Franklin argued that Gudex’s motion for class certification must be denied because it offered her an “appropriate remedy,”1 and thus that the case could not “be maintained” under
¶34 That argument is flawed for at least two reasons. First, it overstates what
damages,” means that when
¶35 Second, and more fundamentally, Franklin’s argument that class certification must be denied whenever
clear that if the affirmative defense applies, that is a basis for dismissing the action on the merits. See, e.g., Wenke v. Gehl Co., 2004 WI 103, ¶¶3–4, 274 Wis. 2d 220, 682 N.W.2d 405 (affirming a decision granting summary judgment pursuant to a statute providing that “no action may be maintained” if it is time-barred (citing
¶36 Because an affirmative defense under
¶37 This does not mean, however, that a
¶38 All of these potential arguments are focused directly on the class-certification requirements imposed by
¶39 In this case, Franklin neither raised its
instead addressed
¶40 Nevertheless, I emphasize that on remand, the circuit court remains free to grant a renewed motion for class certification if the requirements of
statutorily required pre-suit notice of her intention to pursue a damages class action under the WCA. See
GUDEX v. FRANKLIN COLLECTION SERVICE, INC. JUSTICE CRAWFORD, dissenting
¶41 Heather Gudex filed a class action lawsuit against Franklin Collection Service, Inc., alleging that a debt collection letter it sent to her and other consumers violated the Wisconsin Consumer Act (WCA) and the Fair Debt Collection Practices Act (FDCPA),1 causing damages to Gudex and similarly-situated persons in Wisconsin. Franklin proposed to settle the case by offering to pay damages to Gudex alone, which she rejected. Franklin opposed Gudex’s motion to certify the class on grounds that its offer to settle her individual claim for damages defeated her standing to maintain the class action for damages under WIS. STAT.
¶42 The consequences of the majority’s misinterpretation of this key provision of the WCA class action statute are significant. Allowing a defendant to avoid a consumer class action for damages by “picking off” the representative plaintiff defeats the class action mechanism under the WCA. This erroneous result will ensure that
I. ANALYSIS OF THE WCA CLASS ACTION PROVISIONS
¶43 When interpreting a statute, this court examines its language within the “relevant statutory context and structure.” Wis. Just. Initiative, Inc. v. WEC, 2023 WI 38, ¶19, 407 Wis. 2d 87, 990 N.W.2d 122. The WCA instructs that its provisions “shall be liberally construed and applied to promote their underlying purposes and policies.”
¶44 The class action statute begins by declaring that “[e]ither the administrator,4 or any customer affected by a violation” of the WCA or the federal consumer credit protection act “may bring a civil action on behalf of himself or herself and all persons similarly situated.”
¶45
At least 30 days or more prior to the commencement of a class action for damages pursuant to the provisions of this section, any party must:
1. Notify the person against whom an alleged cause of action is asserted of the particular alleged claim or violation; and
2. Demand that such person correct, or otherwise remedy the basis for the alleged claim.
Except as provided in par. (e), no action for damages may be maintained under this section if an appropriate remedy, which shall include actual damages and may include penalties, is given, or agreed to be given within a reasonable time, to such party within 30 days after receipt of such notice.
¶46 In arguing that the legislature intended the phrase “appropriate remedy” in paragraph (4)(c) to refer to the actual damages only of the party who furnished the notice and demand, Franklin relied heavily on a commentary on the WCA published soon after the law was enacted. See Edward J. Heiser Jr., Wisconsin Consumer Act: A Critical Analysis, 57 MARQ. L. REV 389 (1974). To the extent the article addresses the issue, it simply says: “If the merchant remedies the alleged error or agrees to remedy such violation in a reasonable time within thirty days after receipt of such notice, no class action may be maintained by that customer.” Id. at 478. Nowhere does it say that
¶47 These differing interpretations suggest that the phrase “appropriate remedy” in the context of
in which the legislature used an ambiguous word or phrase.” Id. at 88. Legislative intent may be “disclosed by the language of the statute in relation to its scope, history, context, subject matter, and the object intended to be remedied or accomplished.” Id. (citation modified). In the case of the WCA, the legislature has specifically directed the court to liberally construe its provisions to promote their underlying purposes and policies, at the heart of which is the protection of consumers. See Brunton, 325 Wis. 2d 135, ¶26.
¶48 Thus, assuming the phrase “appropriate remedy” is ambiguous, it should be reasonably interpreted to advance the WCA’s purpose of protecting consumers and
¶49 The majority, in interpreting these provisions, focuses on the phrases “any party” and “such party” in
¶50 The phrase “any party” recognizes that multiple individuals may be in a position to provide the required notice of a class action for damages to the defendant. A class action may be commenced by one or more representatives who assert a claim on behalf of themselves and other similarly-situated persons under Wisconsin law. See
¶51 Likewise,
¶52 In sum, the majority’s analysis of
individuals in a particular case may have standing under the statute to provide the mandatory notice of a class action.
¶53 The statute next directs that “any party” must notify the defendant of “the particular alleged claim or violation” that will be asserted in the class action for damages.
¶54 If Gudex had omitted the intended class-wide nature of the claim, and notified Franklin that she was asserting only an individual claim for damages and demanding only individual damages, the notice and demand would not satisfy
¶55 Paragraph (4)(c) then gives the defendant an opportunity to cure the claim or violation asserted and avoid the class action. As stated in this provision: “no action for damages may be maintained under this section if an appropriate remedy, which shall include actual damages and may include penalties, is given, or agreed to be given within a reasonable time, to such party within 30 days after receipt of such notice.”
¶56 Under the timelines required by
¶57 In determining whether the defendant’s response provides an “appropriate remedy” sufficient to avoid a class action for damages under this paragraph, the proper focus is on the claim and demand asserted. An “appropriate remedy” is determined, first, by reference to the claim for which the defendant received notice: the remedy must be one that “correct[s], or otherwise remedies” the “particular alleged claim or violation” for which the defendant received notice.
¶58 Thus, to prevent a class action for damages from being maintained against it, the defendant must give or agree to give an “appropriate remedy” to “correct, or otherwise remedy” the class claim for damages. An appropriate remedy “shall include actual damages.” To comply with the statute, the party providing notice must advise the defendant that the claim is a class action for damages and demand damages on behalf of a class. See
the individual damages claimed on behalf of the party providing the notice. Paragraph (4)(c) directs that the “appropriate remedy” will be “given, or agreed to be given within a reasonable time” to the party providing notice of the claim. This provision instructs the defendant to whom the offer to cure must be given. It does not limit or define what is an “appropriate remedy.” What remedy is “appropriate” is determined by examining the class claim and the demand for class relief, including actual damages.
¶59 What is an “appropriate remedy” is clearly intended to be case specific. At the pre-suit stage, the defendant typically has access to more information than the representative plaintiff, who has not had the opportunity to conduct discovery. A defendant may possess information that would constitute defenses to class certification (such as a lack of numerosity) or to the merits of the claim. A defendant may certainly take such information into account in determining what it believes is an appropriate remedy to the class claim for damages. Likewise, a representative plaintiff is not obliged to press ahead with filing the class action after the defendant offers a remedy.
¶60 As discussed in Justice Dallet’s concurring opinion, after the action is filed,
¶61 I believe the circuit court appropriately exercised its discretion here in determining that Franklin’s proposed remedy to pay Gudex’s damages was not an appropriate remedy that precluded the class action for damages from being maintained. The majority, in concluding that the circuit court erred in finding that Franklin’s offer of individual damages to Gudex was not an appropriate remedy, incorrectly construes the statutory provisions and fails to give deference to the circuit court’s exercise of discretion.
¶62 Paragraph (4)(d) separately requires a defendant who provides a class-wide remedy in a class action for damages to show the court that it has identified all similarly-situated persons and given them an opportunity to receive “the appropriate remedy” it has proposed. It states:
Except as provided in par. (e), no action for damages may be maintained under this section upon a showing by a person against whom the alleged claim or violation is asserted that all of the following exist:
1. All customers similarly situated have been identified, or a reasonable effort to identify such other consumers has been made;
2. All customers so identified have been notified that upon their request such person shall make the appropriate remedy;
3. The remedy requested by such customers has been or in a reasonable time will be given; and
4. Such person has ceased from engaging, or if immediate cessation is impossible under the circumstances, such person will, within a reasonable time, cease to engage in any acts on which the alleged claim is based.
II. CONSEQUENCES OF THE MAJORITY’S INTERPRETATION OF THE WCA PROVISIONS
¶63 The majority’s interpretation of WIS. STAT.
A. THE MAJORITY’S ANALYSIS FALTERS IN THE CONTEXT OF CLASS ACTIONS BROUGHT BY THE ADMINISTRATOR OR MORE THAN ONE REPRESENTATIVE PLAINTIFF.
¶64 The majority glosses over the fact that the administrator may bring a class action for damages under the WCA. In reciting WIS. STAT.
¶65
¶66 Likewise, the majority fails to acknowledge that multiple representative plaintiffs may bring a class action for damages. If six representative plaintiffs intend to file a class action lawsuit for damages, does the defendant avoid the lawsuit by paying the actual damages of just one representative (“any party”) who provides the notice of the class claim and the demand for damages? Must each individual representative submit an identical notice of claim and demand, in sequence? This illogical, piecemeal result can be avoided by a reasonable construction that advances the statutory purpose of allowing consumers to obtain class damages.
B. THE MAJORITY’S INTERPRETATION OF THE WCA CLASS PROVISIONS CONFLICTS WITH POLICIES FOR CLASS ACTIONS UNDER THE FDCPA.
¶67 Gudex sought class action relief for Franklin’s collection practices under both the WCA and the FDCPA. The majority’s interpretation of WIS. STAT.
class action for damages by offering to pay damages to a single representative plaintiff conflicts with policies for class actions under the FDCPA. This result is contrary to
¶68 The circuit court certified the class for both the claims brought under the WCA and those brought under the FDCPA. The majority holds that the circuit court and the court of appeals erred in concluding that the defendant’s proposal to pay only Gudex’s individual damages was not an appropriate remedy allowing it to defeat a class action for damages under
¶69 Under federal precedent, an offer of individual relief to a representative plaintiff does not bar a class action under the FDCPA. See, e.g., Conway v. Portfolio Recovery Assocs., 840 F.3d 333, 335–36 (6th Cir. 2016) (unaccepted settlement or judgment offer did not moot the case, even after money judgment and dismissal for lack of jurisdiction was erroneously entered in favor of plaintiff who rejected the offer); Webster v. Receivables Performance Mgmt., 414 F. Supp. 3d 1198, 1203–04 (S.D. Ind. 2019) (debt collector’s unaccepted settlement offer of statutory damages plus reasonable attorney fees where plaintiff requested both actual damages and statutory damages in her complaint did not moot the FDCPA claim).6
¶70 According to the majority’s opinion, the class claims under the WCA are extinguished by Franklin’s offer of individual relief to Gudex. Although the majority doesn’t address it, the certification of the class for claims asserted under the FDCPA arguably stands. The majority’s interpretation of the WCA provisions thus creates discord between the WCA’s and the FDCPA’s policies governing class actions. The WCA instructs that its provisions are to be liberally construed in accordance with the federal consumer credit protection act. The majority’s opinion violates this directive.
C. THE MAJORITY OPINION FAILS TO “LIBERALLY CONSTRUE” THE WCA TO GIVE EFFECT TO THE UNDERLYING PURPOSE OF PROTECTING CONSUMERS.
¶71 The majority recognizes that its decision hands debt collectors and other defendants a powerful mechanism for defeating class actions for damages under the WCA, defending its reasoning on grounds that the statute does not contain an “unrestrained endorsement of class actions.” Majority op., ¶30.
¶72 The purpose of the WCA is explicitly to provide protections for consumers. Its class action provisions should be “liberally construed” to fulfill that purpose.
a defendant to avoid exposure to class damages under the WCA simply by paying damages to a single consumer.
¶73 The WCA’s class action provision provides an effective mechanism (or did, before this decision) for consumers to obtain class-wide damages on claims that cannot be efficiently litigated individually. The availability of class actions also provides some recourse to unsophisticated consumers who lack the resources or knowledge to pursue individual claims arising from violations of consumer protection laws. Violations of consumer protection laws often involve small amounts of damages that affect many consumers, which is why class actions are a frequently-utilized tool for such claims.
¶74 Under the majority’s holding, a defendant receiving a notice of a proposed class action for damages under the WCA will be able to avoid the action simply by “picking off” the representative party by paying her individual damages. With a defendant having at its disposal this powerful, inexpensive, court-created tool for avoiding consumer class actions for damages, it is hard to imagine how any consumer class action for damages will be maintained. Paragraph (4)(c) undoubtedly gives defendants an opportunity to avoid potentially protracted and costly class action litigation by offering a remedy to a class claim for damages at the pre-suit stage. But by allowing defendants to evade class-wide liability under the WCA merely by paying damages to a single consumer, the majority guts the WCA’s class action remedies.
¶75 The majority opinion will leave unsophisticated consumers with little recourse to recover damages for “unfair, deceptive, false, misleading and unconscionable practices by merchants.”
¶76 For these reasons, I would affirm the court of appeals’ decision upholding the circuit court’s class certification. I dissent.