United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
Rebecca Grady Jennings, Judge
Anthony Elliott, individually and on behalf of all others
similarly situated (“Plaintiff”), brings this
action against Defendant LVNV Funding, LLC
(“LVNV”) seeking relief for alleged violations of
the Fair Debt Collection Practices Act (the
“FDCPA”). [DE 1]. Plaintiff and LVNV (the
“Settling Parties”) now file a Renewed Joint
Motion for Certification of Settlement Class and Preliminary
Approval of Class Action Settlement Agreement (the
“Renewed Motion”). [DE 30]. The matter is ripe.
For the reasons below, the Renewed Motion is GRANTED.
Factual and Procedural History
“engaged in the business of purchasing debts from
creditors and collecting these debts.” [DE 1 at 2]. Mr.
Elliott filed a Class Action Complaint on behalf of himself
and two classes, arguing that LVNV has a “pattern and
practice” of collecting “court costs, processing
fees, and other collection expenses pursuant to judgments it
obtained against . . . Kentucky consumers . . . that it ha[s]
no right to collect under Kentucky law.” Id.
at 5. Mr. Elliott seeks relief related to LVNV's alleged
violations of the FDCPA as they apply to two classes of
people: (1) those people against whom LVNV had illegally
sought to collect court costs, and (2) those people against
whom LVNV had illegally tried to collect garnishment fees.
Id. at 5-6.
negotiating at arm's length for more than five months,
Mr. Elliott and LVNV filed a Joint Motion for Certification
of Settlement Class and Preliminary Approval of Class Action
Settlement Agreement (the “Joint Motion”),
requesting that the Court certify a “Prejudgment Court
Costs Class” and a “Judgment Lien Filing Fee and
Garnishment Fee Class.” [DE 22-2 at 107]; [DE 22 at
67-69]. As an exhibit, the Settling Parties attached a
proposed class action settlement agreement. [DE 22-1]. The
Settling Parties also attached a proposed notice of class
action Lawsuit and Proposed Settlement. [DE 22-5]. The Court
denied the Joint Motion without prejudice, finding that the
proposed settlement agreement was not fair, reasonable, and
adequate and that the proposed notice was inadequate. [DE 29
Settling Parties filed the Renewed Motion, [DE 30], attaching
a Revised Class Action Settlement Agreement (the
“Revised Settlement Agreement”), [DE 30-1], and
Revised Notice of Class Action Lawsuit and Proposed
Settlement (the “Revised Notice”), [DE 30-2].
Revised Settlement Agreement
Revised Settlement Agreement would create two classes:
“Class I: Prejudgment Court Costs Class” and
“Class II: Judgment Lien Filing Fee and Garnishment Fee
Class” (the “Prejudgment Class” and
“Post-Judgment Class, ” respectively). [DE 30-1
at 153-55]. Class I encompasses those against whom LVNV
sought to collect “prejudgment court costs . . .
without filing a bill of costs itemizing the prejudgment
court costs.” [Id. at 154]. Class II
encompasses those against whom LVNV tried to collect a
“post-judgment filing fee paid by LVNV to file a
‘Notice of Judgment Lien Upon Real Estate'”
and/or a “post-judgment garnishment fee.”
[Id. at 154-55].
settlement is calculated to refund class members for the
amount sought by LVNV:
The settlement agreement refunds all allegedly improper
amounts that LVNV sought or collected from the class members.
Additionally, LVNV will provide class members an additional
Thus, pursuant to the Settlement Agreement, no class member
will have paid more than Plaintiff alleges they should have
paid, and all class members will receive cash or credit
against their judgments. The settlement essentially removes
the amounts Plaintiff claims were improperly added to the
judgment balances and makes the class members whole.
[DE 22 at 78].
specifically, members of both classes would both receive an
amount equal to the “prejudgment court costs and/or
post-judgment fees” LVNV has collected, or sought to
collect, from them, either in the form of a credit to their
account with LVNV, or, if they no longer have an account with
LVNV, in cash. [DE 30-1 at 158-59]. Both classes would also
receive $75.00 in statutory damages. Id.
section entitled “Release, ” the Revised
Settlement Agreement provides that in exchange for the
above-detailed benefits, members of both Classes would
“forever release . . . LVNV and its Related
Parties from any and all claims and causes of
action, whether known or unknown, that were made or could
have been made in the Action arising out of or related in any
way to LVNV's efforts to collect on the Judgments,
including but not limited to those claims arising under the
FDCPA or any state statute or rule of procedure
(‘Released Claims').” [Id. at
Revised Notice contains a section entitled “What rights
are you giving up in this settlement?” [DE 30-2 at
177]. This section states that unless the recipient excludes
himself from the settlement, he will “give up [his]
right to sue or continue a lawsuit against LVNV over the
released claims.” [Id.]. The Revised Notice
defines the phrase “released claims” in the same
manner as the Revised Settlement Agreement. [Id.].
and LVNV have filed a Renewed Motion. Before the Court can
preliminarily approve the Revised Settlement Agreement, it
must preliminarily certify the class under 23(a) and (b) of
the Federal Rules of Civil Procedure, appoint class counsel,
and approve the class representative. Afterward, it must
determine whether the Revised Settlement Agreement is fair,
adequate, and reasonable. UAW v. GMC, 497 F.3d 615,
631 (6th Cir. 2007).
courts have “broad discretion in certifying class
actions, ” but “must exercise that discretion
within the framework of Rule 23.” Coleman v.
General Motors Acceptance Corp., 296 F.3d 443, 446 (6th
Cir. 2002) (citing Cross v. Nat'l Trust Life Ins.
Co., 553 F.2d 1026, 1029 (6th Cir. 1977)). “The
party seeking the class certification bears the burden of
proof.” In re Am. Med. Sys., Inc., 75 F.3d
1069, 1079 (6th Cir. 1996). Rule 23(a) imposes requirements
of numerosity, commonality, typicality, and adequacy of
representation, and a district court must conduct “a
rigorous analysis” to ensure that “the
prerequisites of Rule23(a) have been satisfied.”
Fed.R.Civ.P. 23(a); Gen. Tel. Co. v. Falcon, 457
U.S. 147, 161 (1982). Certification is inappropriate if a
class fails to satisfy any of the four Rule 23(a)
prerequisites. Ball v. Union Carbide Corp., 385 F.3d
713, 727 (6th Cir. 2004). The Rule 23 prerequisites are not
relaxed in the settlement context, and courts should apply
the Rule 23 analysis independent of a “fairness”
analysis. Amchem Products, Inc. v. Windsor, 521 U.S.
591, 620-22 (1997). Together with the Rule 23(a)
prerequisites, the moving parties “must demonstrate
that the class fits under one of the three subdivisions of
Rule 23(b).” Fed.R.Civ.P. 23(b); Coleman, 296 F.3d at
ruling on a motion for class certification, courts do not
examine the merits of the plaintiffs' underlying claims.
See Eisen v. Carlisle & Jacquelin, 417 U.S. 156,
177 (1974). “A Rule 23 determination is wholly
procedural and has nothing to do with whether a plaintiff
will ultimately prevail on the substantive merits of its
claim.” Little Caesar Enter., Inc. v. Smith,
172 F.R.D. 236, 241 (E.D. Mich. 1997). Courts also assume
that the substantive allegations of the complaint are true
and that cognizable claims are stated. See Eisen,
417 U.S. at 178. “Nonetheless, the Court must undertake
an analysis of the issues and the nature of required proof at
trial to determine whether the matters in dispute and the
nature of plaintiffs' proofs are principally individual
in nature or are susceptible of common proof equally
applicable to all class members.” Little Caesar, 172
F.R.D. at 241. “[W]hen a court is in doubt as to
whether to certify a class action, it should err in favor of
allowing a class.” Id. (citing Eisenberg
v. Gagnon, 766 F.2d 770, 785 (3d Cir. 1985); Horton
v. Goose Creek Independent School Dist., 690 F.2d 470,
487 (5th Cir. 1982); Esplin v. Hirschi, 402 F.2d 94,
101 (10th Cir. 1968)).
first requirement for class certification is that “the
class be so numerous that joinder of all members is
impracticable.” Fed.R.Civ.P. 23(a)(1). “There is
no strict numerical test for determining impracticability of
joinder.” In re Am. Med. Sys. Inc., 75 F.3d at
1079. “There is no automatic cut-off point at which the
No. of plaintiffs makes joinder impractical, thereby making a
class-action suit the only viable alternative. However, sheer
No. of potential litigants in a class, especially if it is
more than several hundred, can be the only factor needed to
satisfy Rule 23(a)(1).” Bacon v. Honda of Am. Mfg.,
Inc., 370 F.3d 565, 570 (6th Cir. 2004) (internal
Settling Parties have represented that “the proposed
settlement classes collectively includes [sic] over 400
distinct class members. [DE 22 at 74]. Given this, the Court
finds that the numerosity requirement of Rule 23(a)(1) is
met. See e.g., Taber v. McCracken Cty., No.
5:06-CV-144-R, 2008 WL 5101684, at *3 (W.D. Ky. Nov. 26,
2008) (finding the numerosity prerequisite met when the
putative class numbered 54).
second Rule 23(a) prerequisite for class certification is
that “there are questions of law or fact common to the
class.” Fed.R.Civ.P. 23(a)(2). “Although Rule
23(a)(2) speaks of ‘questions' in the plural . . .
there need only be one question common to the class.”
Sprague v. Gen. Motors Corp., 133 F.3d 388, 397 (6th
Cir. 1998). “It is not every common question that will
suffice, however; at a sufficiently abstract level of
generalization, almost any set of claims can be said to
display commonality.” Id. What the Court must
look for “is a common issue the resolution of which
will advance the litigation.” Id.
putative classes share a common question of law: LVNV's
liability to the members of Class I would turn on whether
seeking to collect prejudgment court costs without filing a
bill of costs itemizing the prejudgment court costs in
Kentucky violates the FDCPA, while LVNV's liability to
the members of Class II would turn on whether collecting a
post-judgment filing fee to file a Notice of Judgment Lien
Upon Real Estate or a post-judgment garnishment fee in
Kentucky violates the FDCPA. The commonality requirement set
forth in Rule 23(a)(2) is therefore met.
23(a)(3) requires that “the claims or defenses of the
representative parties are typical of the claims or defenses
of the class.” This typicality prerequisite
“determines whether a sufficient relationship exists
between the injury to the named plaintiff and the conduct
affecting the class, so that the court may properly attribute
a collective nature to the challenged conduct.”
Sprague, 133 F.3d at 399 (citing In re Am. Med.
Sys., 75 F.3d at 1082). “A claim is typical if
‘it arises from the same event or practice or course of
conduct that gives rise to the claims of other class members,
and if his or her claims are based on the same legal
theory.'” Beattie v. CenturyTel, Inc., 511
F.3d 554, 561 (6th Cir. 2007) (quoting In re Am. Med.
Sys., 75 F.3d at 1082). “[F]or the district court
to conclude that the typicality requirement is satisfied,
‘a representative's claim need not always involve
the same facts or law, provided there is a common element of
fact or law.'” Id. (quoting Senter v.
Gen. Motors Corp., 532 F.2d 511, 525 n.31 (6th Cir.
1976)). On the other hand, a claim, if proven, is not typical
if it would only prove the named plaintiff's claim. See
Sprague, 133 F.3d at 399.
claims and injuries alleged by Mr. Elliott typify those
experienced by the settlement classes. If LVNV illegally
sought prejudgment court costs and post-judgment lien filing
fees and garnishment fees, Mr. Elliott and the members of the
settlement classes suffered nearly identical injuries-the
only substantial difference would be the difference in
amounts sought by LVNV, if any. The typicality requirement
set forth in Rule 23(a)(3) is therefore met.
Adequacy of Representation
fourth requirement for class certification is that “the
representative parties will fairly and adequately protect the
interests of the class.” Fed.R.Civ.P. 23(a)(4).
“There are two criteria for determining whether the
representation of the class will be adequate: 1) The
representative must have common interests with unnamed
members of the class, and 2) it must appear that the
representatives will vigorously prosecute the interests of
the class through qualified counsel.” Senter, 532 F.2d
at 524-25. “The adequacy inquiry under Rule 23(a)(4)
serves to uncover conflicts of interest between the named
parties and the class they seek to represent. A class
representative must be part of the class and possess the same
interest and suffer the same injury as the class
members.” Amchem, 521 U.S. at 625-26; see also Cross,
553 F.2d at 1031 (Rule 23(a)(4) tests “the experience
and ability of counsel for the plaintiffs and whether there
is any antagonism between the interests of the plaintiffs and
other members of the class they seek to represent.”).
injuries alleged by Mr. Elliott are substantially the same as
the injuries accruing to the classes-Mr. Elliott alleges that
LVNV sought to collect prejudgment court costs from him
without filing a bill of costs itemizing the prejudgment
court costs, making him a member of Class I, and that LVNV
tried to collect a post-judgment garnishment fee from him,
making him a member of Class II. [DE 1 at 3-4]. For these
reasons, Mr. Elliott, as the named representative, shares
common interests with the unnamed members of the settlement
classes and can be appointed as class representative.
the second prong of Rule 23(a)(4), the Court must also look
to the adequacy of the representative plaintiff's
representation “to determine whether class counsel are
qualified, experienced and generally able to conduct the
litigation.” Stout v. J.D. Byrider, 228 F.3d
709, 717 (6th Cir. 2000). A plaintiff's choice of counsel
“should negatively impact our determination of adequacy
at this early stage only if the proposed lead counsel is
‘so deficient as to demonstrate that it will not fairly
and adequately represent the interests of the
class.'” In re Vicuron Pharms., Inc. Sec.
Litig., 225 F.R.D. 508, 511-12 (E.D. Pa. 2004), (quoting
In re Cendant Corp. Litig., 264 F.3d 201, 266 (3d
Cir. 2001)). And while experience prosecuting class action
suits is a factor to be weighed when determining the adequacy
of class counsel, it is not dispositive. See Wells v.
Allstate Ins. Co., 210 F.R.D. 1, 11 (D.D.C. 2002)
(finding that class counsel “meet the basic standard
for adequacy of counsel” despite having “no prior
experience in prosecuting class action lawsuits”).
for Mr. Elliott have litigated over three-hundred
consumer-rights cases, many which have involved the FDCPA,
including nine cases involving the alleged violations of the
FDCPA at issue here. [DE 22-2 at 107, 109]. While counsel for
Mr. Elliot do not appear to be experienced with class-action
suits specifically,  they appear qualified to represent the
interests adequately of the settlement classes. The adequacy
requirement set forth in Rule 23(a)(4) is therefore met.
with satisfying the requirements of Rule 23(a),
“parties seeking class certification must show that the
action is maintainable under Rule 23(b)(1), (2), or
(3).” Amchem, 521 U.S. at 614. The Settling
Parties assert that the proposed class satisfies the
requirements of Rule 23(b)(3).
satisfying Rule 23(a), a class action may be maintained if
“the court finds that questions of law or fact common
to the 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).
The Rule 23(b)(3) predominance requirement parallels the Rule
23(a)(2) commonality requirement in “that both require
that common questions exist, but subdivision (b)(3) contains
the more stringent requirement that common issues
‘predominate' over individual issues.” In
re Am. Med. Sys., Inc., 75 F.3d at 1084. A district
court must determine whether the questions common to the
class are “at the heart of the litigation.”
Powers v. Hamilton Cty. Pub. Def. Com'n, 501
F.3d 592, 619 (6th Cir. 2007). “The predominance
requirement is satisfied unless it is clear that individual
issues will overwhelm the common questions and render the
class action valueless.” In re Cardizem CD
Antitrust Litig., 200 F.R.D. 297, 307 (E.D. Mich. 2001).
“Common questions need only predominate: they need not
be dispositive of the litigation.” Id.
class action is the superior method of adjudicating the
controversy. Common questions of law and fact predominate
over any potential individual issues. The issues here turn on
whether LVNV violated Kentucky consumer-protection laws, and
thereby violated the FDCPA. Whether LVNV violated these laws
by seeking to collect prejudgment court costs and post-
judgment fees is a question that is common to all class
members. The proof that Mr. Elliott would have to produce in
order to substantiate his allegations would be similar in
kind to the proof required of the other class members-that
LVNV sought to collect the costs and fees in question.
class action represents a superior means of fairly and
efficiently adjudicating this case. The amount of damages
incurred by individual class members likely cannot justify
pursuing individual actions, making a class action a valuable
tool for all class members. See Pfaff v. Whole Foods Mkt.
Grp. Inc., No. 1:09-CV-02954, 2010 WL 3834240, at *7
(N.D. Ohio Sept. 29, 2010) (“[T]he most compelling
rationale for finding superiority in a class action is the
existence of a ‘negative value suit,' . . . one in
which the costs of enforcement in an individual action would
exceed the expected individual recovery.”). The Court
thus finds that the common questions in this case are not
overshadowed by the individual issues, and that certification
of a settlement class is appropriate. The commonality and
superiority requirements of Rule 23(b)(3) are satisfied.
considered the requirements of Rule 23(a) and Rule 23(b)(3)
and finding them to be satisfied, the proposed class defined
in the settlement agreement is certified for settlement
Appointment of Class Counsel
Standard “[A] court that certifies a class must appoint
class counsel.” Fed.R.Civ.P. 23(g). In making that
determination, the Court must consider:
(i) the work counsel has done in identifying or investigating
potential claims in the action; (ii) counsel's experience
in handling class actions, other complex litigation, and the
types of claims asserted in the action; (iii) counsel's
knowledge of the applicable law; and (iv) the resources that
counsel will commit to representing the class.
Fed. R. Civ. P. 23(g)(a).