Lоri Liles; Kristine Burgess; Robert Mettler; Rebecca Reynolds, on their behalf and on behalf of all others similarly situated, Plaintiffs - Appellees, v. Elena Del Campo; Lydia Rosario; Audra Phillips, Intervenor Plaintiffs - Appellants, v. American Corrective Counseling Services, Inc.; Donald R. Mealing, Defendants - Appellees.
Nos. 02-8020/02-3724
United States Court of Appeals FOR THE EIGHTH CIRCUIT
Submitted: October 20, 2003 Filed: December 2, 2003
Appeal from the United States District Court for the Southern District of Iowa.
MURPHY, Circuit Judge.
Lori Liles brought this action on behalf of a class against American Corrective Counseling Servicеs, Inc. and its owner Don Mealing (collectively ACCS), alleging that their bad check restitution programs violated the Fair Debt Collection Practices Act,
ACCS is a private company based in California which contracts with local prosecutors to administer bad check misdemeanor diversion programs.3 These prоgrams give writers of nonsufficient fund (NSF) checks an opportunity to avoid criminal prosecution by voluntarily participating in them. The programs provide restitution to the check payee and instruct the issuer on how to manage home finances. ACCS contacts individuals who have written NSF checks and offers them an opportunity to participate in a bad check misdemeanor diversion program for a fee.
A participating individual is required to pay ACCS the money owed on the NSF check, a program fee, and an additional processing fee. Participants are supposed to attend a class on writing checks, but ACCS allegedly fails to offer such classes in every state. After participants attend the class, the рrosecutor is to dismiss the bad check charges.
Lori Liles received an official notice sent by ACCS after she wrote an NSF check to Wal-Mart in July 2000. The notice was printed on the stationery of a county attorney. It stated that a criminal cоmplaint was being processed against her because of a NSF check and that she could avoid prosecution if she participated in the bad check restitution program. The notice required Liles to pay the balance оn the notice within 30 days. That balance included the amount of the NSF check, plus a $10 returned item fee and a $125 program fee.
In September 2000, Liles filed this class action suit against ACCS in the United States District Court for the Southern District of Iowa. Her complаint alleged that the bad check restitution programs run by ACCS violate the Fair Debt Collection Practices Act (“FDCPA“),
After the filing of the joint motion for preliminary approval of settlemеnt and conditional certification of a nationwide class, Elena Del Campo and Lydia Rosario sought to intervene. The court granted the motion and allowed them to conduct extensive discovery. Five months later, the court held an оral hearing on the motions for conditional class certification and preliminary settlement approval. At the hearing the parties proposed a settlement to be paid out of the ACCS insurance policy.
Preliminary discovery and settlement negotiations revealed that the ACCS insurance policy was the only known asset available for settlement of these claims. The insurance policy is a wasting policy, and the value of the policy diminishes as funds are paid оut. Although the policy originally had a $2 million limit, it has been drawn on to pay ACCS defense costs in this and related litigation. Ongoing defense costs will continue to deplete the policy, and continued litigation threatens to drain the fund completely. The рroposed settlement includes notification to the estimated 800,000 class members and indicates that each would have to file a claim in order to participate in the settlement award. It also broadly releases all potentiаl state and federal claims against ACCS and the prosecutors involved in the programs.
The intervenors oppose the proposed settlement and conditional nationwide class certification. They argue that the class certifiсation did not meet the requirements of Federal Rules of Civil Procedure 23(a) and 23(b) and that the proposed settlement was not fair, adequate, or reasonable given the different state law claims available to various class members. Primаrily to preserve the settlement fund, the court granted preliminary approval of the class settlement, conditionally certified the class, enjoined all related litigation, and set a court date for approval of a plan fоr class notification.
The intervenors petitioned for permission to appeal the district court class certification and later filed an appeal of the order enjoining related litigation. After these filings, Liles moved the district court to set aside the settlement, to decertify the class, to vacate its orders, and to dismiss the appeals. The court held a hearing on the motion to set aside the settlement and subsequently denied all the pending motions, stating that it had granted сonditional approval of the settlement because it was fair, adequate, reasonable, and in the best interests of all the parties involved.
Intervenors claim that the district court erred in granting the conditional class certification and in enjoining related litigation. They request permission for an interlocutory appeal of the conditional class certification and seek decertification аnd reversal of the order enjoining related litigation.
A court of appeals may permit an appeal from an order granting or denying class action certification if taken in a timely manner.
We conclude that an interlocutory appeal would be premature in this case. Several steps remain before the district court finally approves class certification and any settlement. To permit an appеal at this stage would unnecessarily delay the resolution of the litigation and further jeopardize the limited assets available for resolving the claims. Permission for an interlocutory appeal of the conditional class certificatiоn should therefore be denied.
We review an order enjoining related litigation for abuse of discretion. United States v. New York Tel. Co., 434 U.S. 159, 164 (1977). The All Writs Act provides that federal courts “may issue all writs necessary or appropriate in aid of their respective jurisdictions.”
The district court enjoined proceedings in related litigation to preserve the settlement fund, to eliminate the risk of inconsistent or varying adjudications that would deplete the fund, to avoid confusion among the class members, and to save scarce judiciаl resources. The court acted within its discretion in issuing the injunction because enjoining related litigation was necessary to ensure the enforceability
Accordingly, permission for an intеrlocutory appeal of the conditional class certification is denied, and the district court‘s injunction of related litigation is affirmed.