Jаmes L. FREY, Plaintiff-Appellee v. FIRST NATIONAL BANK SOUTHWEST, Defendant-Appellant.
No. 13-10375.
United States Court of Appeals, Fifth Circuit.
Feb. 20, 2015.
Eric Graham Calhoun, Esq., Travis, Calhoun & Conlon, P.C., Dallas, TX, for Plaintiff-Appellee.
Leslie Scheuermann Johnson, Winstead, P.C., Dallas, TX, for Defendant-Appellant.
PER CURIAM:*
James Frey instituted a class action against First National Bank Southwest (“First National“) because its ATM at a particular location lacked a fee notice on the exterior of the machine, in violation of the Electronic Funds Transfer Act (“EFTA“).
I. Factual and Procedural Background
First National operates an ATM in Plano, Texas. The ATM charges a fee for use by those who are not account-holders at First National. EFTA requires that operators of ATMs provide notice to consumers when a fee will be imposed for use of the ATM.
Section 1693m of EFTA creates a cause of action for violation of the fee notice provision, and permits recovery of actual damages and statutory damages.
On October 20, 2011, James Frey made a withdrawal from First National‘s ATM. While the ATM had an on-screen notice advising him of the transaction fee, Frey alleges that the ATM did not have the required exterior notice of the fee. Frey was charged a $3.50 fee for withdrawing cash from the ATM.
On November 9, 2011, Frey filed a class aсtion suit against First National on behalf of himself and all others similarly situated, alleging violation of the EFTA exterior notice requirement. His complaint seeks statutory damages, costs, and attorney‘s fees. In February 2013, the district court granted Frey‘s motion for class certification. It certified a class of consumers who were charged withdrawal fees from the allegedly noncompliant ATM machine between November 9, 2010 and April 26, 2012, the date First National pоsted a compliant notice on the ATM. First National appeals the class certification. After hearing oral argument in this case, we held the appeal in abeyance pending the resolution of Mabary v. Home Town Bank, No. 13-20211, a previously-argued case which raised identical issues. That case has now been resolved. Mabary v. Home Town Bank, N.A., 771 F.3d 820 (5th Cir.2014). We now decide the instant appeal.
II. Discussion
First National challenges the class certification on two grounds. First, it argues that a 2012 amendment to EFTA applies retroactively tо extinguish Frey‘s claims. Second, it argues that the district court erred in concluding that the requirements of Rule 23 were satisfied. We address each issue in turn.
A. Retroactivity of EFTA Amendment
EFTA was amended in December 2012 to remove the requirement for an exterior fee notice on the machine.
“Our starting point is the ‘deeply rooted’ presumption against retroactivity of Landgraf v. USI Film Products.” Mabary v. Home Town Bank, N.A., 771 F.3d 820, 825 (5th Cir.2014) (citing Landgraf v. USI Film Products, 511 U.S. 244, 265, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994)). We apply the Landgraf two-part test to determine whether a statutory amendment applies retroactively. Id. First, we “determine whether Congress unambiguously has prescribed the statute‘s proper reach, determined by applying normal rules of statutory construction to the express language to determine Congress‘s intent.” Id. Second, if Congress has not clearly expressed an intent to apply the statute retroactively, we determine “whether the
Mabary v. Home Town Bank establishes that under the Landgraf test, the 2012 EFTA amendment should not be applied retroactively to Frey‘s claims. Id. at 826-27. The Mabary court found that the text of the EFTA amendment is silent as to retroactive application, and that applying the statute retroactively would have an impermissible retrospective effect by destroying a cause of action that had already accrued. See id. at 826. The court concluded that “[a]t the time Mabary‘s claim arose, she had a substantive right to two notices or statutory damages, and without clear Congressional intent to the contrary, the presumption against retroactivity restricts the application of the EFTA amendment to eliminate her claim.” Id. at 827.1 Frey‘s claim similarly accrued during the time he and others similarly situated had a right to two notices or statutory damages, and the EFTA amendment does not apply retroactively to extinguish those claims.
First National also argues that, regardless of whether the EFTA amendment is retroactive, the amendment precluded certification because it took effect before the class was certified and thus before putative class members were parties to the suit. Mabary also expressly rejected this argument: “[T]he EFTA amеndment poses no more a barrier for putative class members than it does for Mabary, for claims alleging violations before the amendment was enacted.” Mabary, 771 F.3d at 827.
Thus, the EFTA amendment has no effect on the district court‘s certification of the class and the pending class claims.
B. Rule 23
Next, First National contends that the district court erred in certifying a class under Rule 23. “[T]he district court maintains great discretion in certifying and managing a class action. We will revеrse a district court‘s decision to certify a class only upon a showing that the court abused its discretion, or that it applied incorrect legal standards in reaching its decision.” Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 624 (5th Cir.1999) (citations omitted). Though, of course, the district court‘s “discretion must be exercised within the framework of rule 23.” Castano v. Am. Tobacco Co., 84 F.3d 734, 740 (5th Cir.1996).
The district court certified the class pursuant to
(1) numerosity (a class so large that joinder of all members is impracticable); (2) commonality (questions of law or fact common to the class); (3) typicality (named parties’ claims or defenses are typical of the class); and (4) adequacy of representation (representatives will fair-
Id. (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)). The two additional
First National does not challenge the district court‘s conclusions with regard to the four
1. Ascertainability
We have stated that “in order to maintain a class action, the class sought to be represented must be adequately defined and clearly ascertainable.” Union Asset Mgmt. Holding A.G. v. Dell, Inc., 669 F.3d 632, 639 (5th Cir.2012) (quotation and alteration omitted). “However, the court need not know the identity of each class member before certification; ascertainability requires only that the court be able to identify class members at some stage of the proceeding.” William B. Rubenstein, Newberg on Class Actions § 3:3 (5th ed.2011). First National argues that because EFTA applies only to consumers whose accounts are “established primarily for personal, family, or household purposes,”
The district court‘s conclusion that the class is sufficiently ascertainable was not an abuse of discretion. The class definition here is clear and definite. It includes an estimated 1,500 identifiable individuals charged a recorded fee after using one specified ATM between two specified dаtes. The district court found that class members may be identified from account numbers and bank identification numbers associated with the ATM transactions. See Gawarecki v. ATM Network, Inc., No. 11-CV-1923, 2014 WL 2600056, at *17 (D. Minn. June 10, 2014) (describing how account holders in a similar case could be identified). Moreover, as the district court found, the class size is estimated at 1,500 members, which renders the identification of consumers by account and bank identification numbers manageable. Partly on this basis, the district court persuasivеly distinguished other EFTA cases which have found ascertainability lacking or identification of class members to be unmanageable. See Ballard v. Branch Banking and Trust Co., 284 F.R.D. 9, 14 (D.D.C. 2012) (noting that it would be difficult to identify class members where hundreds or thousands of banks might be involved, and notice by publication would be “fraught with difficulties” specific to the particular ATM‘s location); Mowry v. JP Morgan Chase Bank, N.A., 2007 WL 1772142, at *6 (N.D.Ill. June 19, 2007) (finding a proposed class including approximately twenty million transactions unmanageable).
First National argues a fact-intensive analysis would be required to differentiate EFTA-protected consumer accounts from commercial accounts. It argues that we should import the test courts have applied under the Truth in Lending Act (“TILA“), which applies only to consumer loans rather than commercial or business loans.
However, in spite of Cobb‘s recognition that some TILA case law may be illustrative in the EFTA context, we see no basis for importing all the elements of the transactiоn-specific TILA test into the instant case. EFTA defines “account” by means of the purpose for which the account is “established.”
2. Predominance
Before certifying a class under
The district court found that common questions of law or fact predominate, because “[c]ommon proof can be used to establish liability, or lack thereof.” Frey, slip op. at 13. Specifically, the court concluded that proof of missing notice at thе time a consumer used the ATM is sufficient to establish a claim, and if Frey can prove a period of time in which the notice was missing, “every proposed class member can utilize that proof.” Id. Additionally, the district court found that First National‘s entitlement to either of the two statutory defenses is a common issue. The district court concluded that these issues affect each class member‘s claim and predominate over the individual issues.
We agree. The primary questions with regard to First National‘s liability are whether and when First National failed to provide the on-machine fee notice in violation of the EFTA‘s requirements during the class period; if so, the appropriate amount of statutory damages; and whether the bank can avail itself of either of the two statutory defenses to liability. The answers to these questions will affect all class member‘s claims. See Christy v. Heritage Bank, No. 3:10-CV-0874, 2013 WL 6858008, at *6 (M.D.Tenn. Nov.8, 2013); Gawarecki, 2014 WL 2600056, at *15. These common issuеs “constitute a significant part of the individual cases,” sufficient to meet the predominance requirement. Jenkins, 782 F.2d at 472.
First National argues that common issues do not predominate because: (1) each class member must prove that the account was established primarily for personal use, rather than business use; and (2) each class member must prove that notice was absent when he or she used the ATM. First National‘s arguments often assume that all questions rеgarding liability must be capable of being proved by common evidence. This, however, is not the standard. Frey must show that common issues predominate, not that there are no individual issues to be resolved. See id.
First National‘s argument regarding the nature of the account is nearly identical to the argument it makes regarding the ascertainability of the class. It argues that because EFTA applies only to consumer accounts, the court must do an intensivе individualized analysis to determine if each class member‘s account was personal. As explained above and as the district court found, differentiating consumer accounts from business accounts may be done by inquiring of the banks or requiring class members to answer some threshold questions about the nature of the account. See Gawarecki, 2014 WL 2600056, at *1; Kinder, 2012 WL 4490874, at *5. Regardless, the fact that some inquiry into the nature of each account will have to be made does not rendеr that issue predominant over the multiple common issues bearing on First National‘s liability.2
However, we find the district court‘s analysis in the instant case, in line with the analysis in Christy and Gawarecki, to be more persuasive. The district court here found that:
[A]ssuming sufficient evidence such that a reasonable juror could conclude that fee notice was absent for any particular period of time, any class member without affirmative proof that the notice was not there on any particular day is entitled to some inference that the notice was absent. Thus, the period in which the sign was absent is a common issue of fact, and whether the notice was absent on any particular day is not an individualized inquiry defeating predominance.
Frey, slip op. at 13-14. The Christy court held likewise, explaining that the named plaintiff “will have to prove the period of time during which the on-machine fee notice was missing, but each proposed class member will not have to do the same.” Christy, 2013 WL 6858008, at *7; see Gawarecki, 2014 WL 2600056, at *15 (“[T]he determination of the time period in which Dеfendant was, or was not, in compliance with the EFTA notice provision applies to the entire class and so will be made by common evidence.“). If the plaintiff‘s evidence “allows a reasonable juror to conclude the notice was not affixed for a particular period, every class member who used the ATM during that time is entitled to an inference that the notice was absent.” Christy, 2013 WL 6858008, at *7. Any evidentiary inferences to be drawn from the proof regarding the dates the notice was absent will need to be resolved by the trier of fact. The proof that is ultimately produced may or may not ultimately entitle all class members to relief, but the proof required is still common to the class.
Further, this case does not involve the type of individualized issues that have led courts to find predominance lacking. For example, in Amchem Products, 521 U.S. 591, 117 S.Ct. 2231 (1997), the Supreme Court found that common issues did not predominate where the members of the plaintiff class were exposed to asbestos-containing products from different sources in different time periods, some of the class members had no symptoms while others were ill, and the class members were from different states requiring the application of different legal standards. See id. at 623-28, 117 S.Ct. 2231. Similarly, in Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir.1996), this court found that a putative class of addicted smokers did not meet the predominance requirement because there were complex choice-of-law issues and the case involved novel claims with no history from which a court could determine which common issues were “significant,” as compared to the individual issues. See id. at 741-45. By contrast, in Mullen v. Treasure Chest Casino, this court found that common issues did predominate when casino employees became ill because of a malfunctioning ventilation system, because the employees suffered the same injury, were exposed to the same alleged sоurce of the illness, were subject to the same federal law, and presented a common theory of liability. See Mullen, 186 F.3d at 626-27.
Here, the putative class members all used the same ATM during the specified time period, and were allegedly charged a fee without the required notice being posted. Because there is a common course of conduct that provides a class-wide basis for deciding significant common issues of fact and law, including whether and when the required notice was absent and whether First National has proven any defense, the district court correctly concluded that common issues predominate. See Mullen, 186 F.3d at 626-27.
III. Conclusion
For the foregoing reasons, the district court‘s certification of the class is AFFIRMED.
CHRISTUS HEALTH SOUTHWESTERN LOUISIANA, doing business as Christus Saint Patrick Hospital, Plaintiff-Appellee v. GREENBRIER DEVELOPMENT COMPANY, L.L.C., Defendant-Appellant.
No. 14-30813
United States Court of Appeals, Fifth Circuit.
March 3, 2015.