MEMORANDUM OPINION AND ORDER
Pending before the court is the plaintiffs Motion for Class Certification [Docket 220]. For the reasons discussed below, the motion [Docket 220] is GRANTED.
I. Background
This case arises out of Quicken Loans, Inc.’s (“Quicken”) alleged failure to provide credit score disclosures “as soon as reasonably practicable,” in violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681g(g). Section 1681g(g), provides as follows:
Any person who makes or arranges loans and who uses a consumer credit score, as defined in subsection (f) of this section, in connection with an application initiated or sought by a consumer for a closed end loan or the establishment of an open end loan for a consumer purpose that is secured by 1 to 4 units of residential real property ... shall provide the following [notice] to the consumer as soon as reasonably practicable[.]
15 U.S.C. § 1681g(g).
To establish a claim under FCRA, Ms. Kingery must show that Quicken violated § 1681g(g) and that the violation was either negligent or willful. See Dalton v. Capital Associated Indus., Inc.,
After 15 U.S.C. § 1681g(g) was enacted, Quicken consulted with in-house and outside counsel to determine how to comply with the statute. After consulting with counsel and reviewing the plain language of the statute, Quicken decided to send the notice in the first mailing to the client. Quicken then implemented procedures to send the notice with the application package or the prequali-fication denial letter.
A. How Quicken Processes Loan Inquiries and Delivers Credit Disclosures
Quicken uses several software programs to process loan inquiries. Quicken uses a program called Loan Origination and Lead Allocation (“LOLA”) to track, deliver, and allocate mortgage leads. A lead is a consumer who contacts Quicken online, by telephone, or through email-inquiry. Once the loan inquiry process is initiated, the lead’s contact information is transmitted to LOLA A Quicken mortgage banker will contact the lead to solicit verbal permission to pull the lead’s credit report. If the banker obtains consent, the banker will pull the report.
LOLA then communicates with Loan Platform, an intermediary software, which contacts third-party vendors to obtain the lead’s credit report. The report contains the lead’s three credit scores. When it receives the lead’s credit report, Loan Platform scrapes the data in the credit report. In addition, Loan Platform sorts the three credit scores into high, medium, or low categories. This information is transmitted to LOLA for storage in its database.
Quicken bankers can access the stored credit data for multiple purposes. For example, if the banker wants to market different programs to the lead, he or she can press the “Get Programs” button. (Ex. H, Bradley Hein Dep. Tr. [Docket 216-8], at 96-98, 102-03). An underlying program called Keystroke will look at the lead’s middle credit score and provide a list of recommended loan programs.
For various reasons, a mortgage banker may preliminarily deny or withdraw the lead from LOLA. If the banker denies the lead, he or she may manually transfer the lead to AMP, Quicken’s originating and underwriting system, for ultimate denial. The banker may also manually transfer the lead to Second Voice, a program that provides a second review of leads by a senior banker.
A nightly program may also send the lead to Second Voice via a two-step process. First, the nightly program runs an exclusionary logic to determine whether to automatically exclude the lead. The lead is automatically excluded if certain conditions are present, including whether the lead has “two or more banker contacts[.]” (Ex. G, Kevin Lang Deck [Docket 216-7] ¶ 18). If the nightly program does not first exclude the lead, the program will then run an inclusion-ary logic to determine whether to send the lead to Second Voice. Under the inclusion-ary logic, the lead will be submitted to Second Voice if the lead’s score is greater than or equal to 640.
After the lead is transferred to AMP, the lead will receive a status of “10,” which means the loan inquiry is accepted, or “100,” which means the loan inquiry is denied. At this time, AMP automatically creates a credit disclosure notice. If the lead has created a MyQL account, the credit disclosure, along with the application package or denial letter, is sent to that account. The lead then receives an email notification that documents are available in his or her MyQL account. These documents are usually placed in the MyQL account on the same day AMP enters a status of 10 or 100. If the lead has not provided an email for document disclosure, the documents are mailed to the lead.
B. The Facts of Ms. Kingery’s Case
On April 29, 2010, Ms. Kingery sent a loan inquiry to MortgageLoans.com.
Mr. Muskan claims he preliminary denied Ms. Kingery’s lead due to a pending foreclosure on her property. Allegedly, Ms. King-ery’s credit score played no role in Mr. Mus-kan’s decision to deny her lead. However, Chris McConville, Ms. Kingery’s expert, opined that any banker would have considered Ms. Kingery’s score in denying her loan inquiry. In addition, a screenshot of a sample Quicken credit report reveals that the banker must scroll past the credit scores to get to the foreclosure information.
After the preliminary denial, the nightly program reviewed Ms. Kingery’s lead. (See Ex. G, Decl. of Kevin Lang [Docket 216-7]). The nightly program automatically excluded her lead from Second Voice because multiple bankers had attempted to contact her. Therefore, Ms. Kingery’s lead was never reviewed by the nightly program’s inelusionary logic. (See Ex. K, Lang & Lusk 30(b)(6) Dep. Tr. [Docket 216-11], at 26).
On May 24, 2010, Ms. Kingery’s lead was entered into AMP and assigned a 100 status, which indicated that her loan inquiry was denied. On the same day, AMP sent Ms. Kingery’s credit disclosure and denial letter to her MyQL account. Quicken sent Ms. Kingery an email that these documents were available for review in her MyQL account.
II. Legal Standard
An implicit prerequisite of class certification is “ascertainablity.” Roman v. ESB,
The court has “wide discretion in deciding whether or not to certify a proposed class.” Cent. Wesleyan College v. W.R. Grace Co.,
Nevertheless, the court must still engage in “rigorous analysis” to determine whether the proposed class meets the Rule 23 requirements. See Wal-Mart Stores, Inc. v. Dukes, — U.S. -,
A. Ascertainability
An implicit requirement of Rule 23 is that the proposed class definition be “ascertainable.” Roman v. ESB,
The proposed class definition is as follows: All natural persons residing in the United States who were the subject of at least one consumer credit score obtained and used by Quicken between May 1, 2010 through May 1, 2012 in connection with its evaluation of an application initiated or sought by such natural person for a consumer mortgage loan secured by 1 to 4 units of residential property, whose request for credit was coded by Quicken with an AMP code of “100” and not an AMP code of “10,” and to whom the credit score disclosure notice was not provided to that person within 21 days after Quicken obtained the credit score.
(Pl.’s Mot. for Class Certification [Docket 220]).
Ms. Kingery argues that the class is ascertainable because the relevant class variables are in Quicken’s “data warehouse,” which is electronically searchable. These variables include:
[T]he class member’s name; address; the presence of multiple borrowers; credit score, date and time the three-bureau credit scores were converted to a “middle score”; date and time this score was obtained and used to integrate into Quicken’s systems and processes; date and time a consumer ran through the Second Voice or Keystroke processes; date and time the consumer was coded as a “100” code signifying the final denial of the consumer’s credit request; and ever the date and time Quicken provide its credit score notice.
(Mem. in Supp. of Pl.’s Mot. for Class Certification (“Pl.’s Mem. in Supp.”) [Docket 221], at 11).
Based on the class definition, I conclude that class membership can be ascertained through an objective criteria—consumers, between May 1, 2010 to May 1, 2012, who initiated a loan inquiry, whose scores were used by Quicken, who were denied a loan application, and who did not receive the credit score disclosure within twenty-one days after Quicken obtained the scores. The availability of the data warehouse enhances the feasibility of determining class membership. Although it will require some effort to sift through the data warehouse, I conclude that identifying class members will be manageable. Accordingly, I FIND that the class is sufficiently ascertainable.
B. Federal Rule of Civil Procedure 23(a) Prerequisites
i. Numerosity
Federal Rule of Civil Procedure 23(a)(1) requires that the class be of sufficient size that joinder of all members is “impracticable.” Fed.R.Civ.P. 23(a)(1); see also Cypress v. Newport News Gen. & Nonsectarian Hosp. Ass’n,
Under Federal Rule of Civil Procedure 23(a)(2), the proposed class must share common questions of law or fact. Fed.R.Civ.P. 23(a)(2). “This factor is stated in the disjunctive,” meaning that either common questions of law or fact can establish sufficient commonality. Black v. Rhone-Poulenc, Inc.,
To show commonality, the class “claims must depend upon a common contention.” Id. at 2551. The class representative cannot satisfy commonality by simply asserting that the class has “suffered a violation of the same provision of law.” Id. The class representative must “demonstrate that the class members ‘have suffered the same injury.’ ” Id. (quoting Gen. Tel. Co. of Sw. v. Falcon,
There are several common questions in this case, which Ms. Kingery has identified: “(1) What constitutes sufficient use of a credit score to trigger the disclosure requirement of § 1681g(g)?; (2) Whether Quicken provides its score notices ‘as soon as reasonably practicable’ when it waits at least 21 days and until after its final application denial decision has been made; and (3) Whether Quicken’s violation of FCRA disclosure requirements was ‘willful.’” (Pl.’s Mem. in Supp. [Docket 221], at 13). Answering these questions will resolve issues central to the class claims.
In addition, the class claims arise from a common set of facts. All class members were denied at the prequalification stage and were not sent a credit disclosure after Quicken obtained their scores. According to Quicken’s standard policy, the class members’ scores were obtained from a third-party vendor, sorted by Loan Platform, and stored for later use in LOLA Also, the class members alleged injuries result from Quicken’s uniform practice of sending the disclosure at the prequalifieation denial. Considering that Ms. Kingery need only identify one common question of law or fact, I FIND the commonality element is satisfied.
iii. Typicality
“The typicality requirement goes to the heart of a representative's] ability to represent a class.” Deiter v. Microsoft Corp.,
The commonality and typicality requirements of Rule 23(a) tend to merge. Both serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiffs claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.
— U.S.-,
“A plaintiffs claim cannot be so different from the claims of absent class members that their claims will not be advanced by plaintiffs proof of [her] own individual claim.” Deiter,
Ms. Kingery’s claims under § 1681g(g) require her to prove (1) that Quicken used her score (2) that the use was in connection with an application initiated or sought by her, and (3) that Quicken failed to provide that score “as soon as reasonably practicable.” 15 U.S.C. § 1681g(g). Ms. Kingery’s score was sorted by Loan Platform and stored by LOLA. In addition, Quicken sent the required disclosure three weeks after it obtained her score. These facts, which Ms. Kingery shares with the proposed class, tends to advance the class claims that Quicken used their scores and that their credit disclosures were not sent “as soon as reasonably practicable.”
Quicken argues that Ms. Kingery’s claim is atypical because she did not seek an application to refinance her home. Instead, Quicken contends Ms. Kingery initiated the loan inquiry to generate damages for a collateral lawsuit. Even if this contention is true, this variation does not “strike at the heart” of the class claims. As already mentioned, under 15 U.S.C. § 1681g(g), to trigger the disclosure requirement all that is required is that the mortgage lender use the score in connection with a loan application initiated or sought by a consumer. Therefore, Ms. King-ery’s intent in initiating the loan inquiry is irrelevant to the § 1681g(g) claim.
In addition, Quicken contends that in January 2011 it started sending integrated disclosures, which was in accordance with the Federal Trade Commission’s and the Federal Reserve Board’s final rules regarding risk-based pricing disclosures. The integrated disclosure contains both supplemental information and the information required under 15 U.S.C. § 1681g(g). According to Quicken, these regulations set the outer time limit for the integrated disclosure, which is the consummation
iv. Adequacy
Rule 23(a)(4) requires that the class representative and class counsel adequately represent the class. This requirement tends to merge with the typicality and commonality requirements, “although [it] also raises concerns about the competency of class counsel and conflicts of interest.” Wal-Mart Stores, Inc. v. Dukes, — U.S. -,
There is no evidence that Ms. Kingery has interests that are antagonistic to or conflict with the interests of the proposed
C. Federal Rule of Civil Procedure 23(b) Categories
A proposed class action must also meet the requirements of at least one of the subsections of Rule 23(b). Here, Ms. Kingery claims the proposed class satisfies Rule 23(b)(3). A class action under Rule 23(b)(3) is appropriate when (1) common questions predominate over individual questions and (2) the class action is superior to other means of adjudicating the dispute.
i. Predominance
Federal Rule of Civil Procedure 23(b)(3), “as an adventuresome innovation, is designed for situations in which class-action treatment is not as clearly called for.” Comcast Corp. v. Behrend, — U.S. -,
Quicken presents several arguments as to why individual issues predominate in this ease. First, Quicken argues that “as soon as reasonably practicable” requires a case-by-case analysis of “(1) the reasonableness of the period between when Quicken Loans used a class member’s credit score and when the member received the credit score; and (2) the reasonableness of Quicken Loans’ procedures for sending out the disclosure.” (Def.’s Mem. in Opp’n [Docket 227], at 18). Because “reasonableness” is a fact-specific inquiry, Quicken argues that individual issues will predominate.
Reasonableness is essentially an individualized inquiry. However, where a defendant’s conduct is uniform as to all class members, the chance that this individualized inquiry will overwhelm common questions of liability is slight. Here, it was Quicken’s standard policy to send out the credit disclosure at the prequalification denial or application. As a result of Quicken’s uniform conduct, the class members did not receive their disclosures within twenty-days after Quicken obtained their scores.
Second, Quicken argues that actual damage determinations will predominate. To obtain actual damages under 15 U.S.C. § 1681o, the plaintiff must establish a causal connection between the statutory violation and the alleged harm. See 15 U.S.C. § 1681o. Therefore, actual damages require individualized proof.
However, the Fourth Circuit has found that “the need for individualized proof of damages alone will not defeat class certification.” Gunnells v. Healthplan Servs., Inc.,
Here, Ms. Kingery alleges that she and the class have suffered actual damages of $25.85
As an initial matter, I find that Ms. King-ery’s theory of damages is speculative. At minimum, class members must prove that they actually purchased the score and did so due to Quicken’s violation of the statute. Nevertheless, establishing that a score was purchased and the reason for the purchase will not require complex proof. Therefore, the issues of actual damages will not overwhelm the common issues of liability.
Finally, Quicken argues that the determination of statutory damages will predominate. In support, Quicken cites Judge Wilkinson’s concurrence in Stillmock v. Weis Markets, Inc.,
However, the majority in Stillmock did not find that statutory damages precluded common issues from predominating. Id. at 273. With respect to statutory damages, the only significant issue was common—whether the defendant’s uniform conduct was willful. To prove willfulness, the jury must determine whether the defendant’s interpretation of this statute was “objectively unreasonable.” Safeco Ins. Co. of Am. v. Burr,
ii. Superiority
Rule 23(b)(3) requires the proposed class action to be superior to other methods of adjudication so that the class action will “achieve economies of time, effort and expense, and promote uniformity of decision as to persons similarly situated, without sacrific
As discussed above, this case will not be difficult to manage. However, several courts have questioned the superiority of FCRA class actions for two interdependent reasons: (1) the potential enormity of statutory damages where actual damages are non-existent or de minimus and (2) FCRA’s provision for attorney fees and costs in any successful action establishing the defendant’s violation as willful or negligent. See, e.g., Ehren v. Moon, Inc., No. 09-21222-CIV,
Other courts have rejected these arguments and found that statutory and/or punitive damages and attorney fees are insufficient to incentivize individual litigation. See, e.g., Summerfield v. Equifax Info. Servs. LLC,
As succinctly stated in Chakejian v. Equi-fax Info. Servs.,
Although the availability of attorney’s fees to litigants is indicative that a class action is by no means the “only” feasible route for litigants, it remains the superior mechanism here, where there is an inverse relationship between the cost of an individual action relative to the potential recovery, and where meaningful enforcement of the statute through individual consumer litigation is unlikely. Although it could have done so, Congress has not chosen to preclude class actions under the FCRA, and the availability of attorney’s fees does not undermine the advantages of class certification in this ease.
First, the low amount of statutory damages available means no big punitive damages award on the horizon, thus making an individual action unattractive from a plaintiffs perspective. Second, there is no reasoned basis to conclude that the fact that an individual plaintiff can recover attorney’s fees in addition to statutory damages of up to $1,000 will result in enforcement of FCRA by individual actions of a scale comparable to the potential enforcement by way of class action....Other factors also cut definitively in favor of concluding that the class action which Plaintiffs propose is superior to individual cases. First, there is no indication in this case that class members would have a strong interest in individual litigation. Second, class certification promotes consistency of results, giving Weis Markets the benefit of finality and repose.
Although it is debatable whether class actions are superior in the FCRA context, I find the unpublished analysis of the Fourth Circuit as well as the opinions of other courts sufficiently persuasive. While class members may have some incentive to pursue individual litigation, that incentive is insufficient to spur meaningful litigation of these rights. In addition, even if significant individual litigation would ensue without the class action device, the possibility of inconsistent judgments suggests that individual litigation is not superior. Accordingly, I FIND that this class action is superior to other methods of adjudication.
IV. Conclusion
For the reasons discussed above, Ms. Kingery’s motion to certify a class action [Docket 220] is GRANTED. The court DIRECTS Ms. Kingery to file a proposed notice form on or before May 28, 2014.
The court DIRECTS the Clerk to send a copy of this Order to counsel of record and any unrepresented party.
Notes
. The property that Ms. Kingery sought to refinance has already been subject to litigation. Ms.
. "Consummation means the time that a consumer becomes contractually obligated on a credit transaction.” 12 C.F.R. § 1026.2(a)(13).
. Quicken also argues that Ms. Kingery's claim is atypical because Quicken did not use her score and because she did not submit an application. First, Ms. Kingery’s claim is not atypical because Quicken believes the requisite use did not occur in Ms. Kingeiy's case. Ms. Kingery’s claim is typical because Quicken’s software programs stored and sorted both Ms. Kingeiy’s and the class members’ scores in the same fashion. Second, as Quicken admits, "neither the Plaintiff nor any putative class member submitted 'an application.’ ” (Mem. in Opp’n to Pl.’s Mot. for Class Certification ("Def.’s Mem. in Opp’n”) [Docket 227], at 10). Although Quicken may disagree about whether a formal application is required under the statute, Ms. Kingery's claim is typical because she and the class members share the same facts—they did not submit an application.
. In her Second Class Action Complaint, Ms. Kingery alleged this amount was $19.95. (See Second Class Action Compl. [Docket 23] ¶ 33]). Ms. Kingery's expert now estimates this amount to be $25.85. (See Ex. 44, Expert Report Prepared by Chris McConville [Docket 230-44], at 17).