United States District Court, W.D. Washington, Seattle
ORDER GRANTING MOTION TO CERTIFY CLASS
L. ROBART United States District Judge
the court is Plaintiff's Motion for Class Certification.
(Mot. (Dkt. # 11).) The court has reviewed Mr. Erickson's
motion, Defendant's (“Elliot Bay”) response
to the motion (Resp. (Dkt. # 13)), Mr. Erickson's reply
memorandum (Reply (Dkt. # 16)), Mr. Erickson's response
to the court's Order to Show Cause Regarding Standing
under Spokeo (Show Cause Order (Dkt. # 17); (Erickson
Supp. Br. (Dkt. # 19)), Elliot Bay's response to the
Order to Show Cause (Elliot Bay Supp. Br. (Dkt. # 18)), the
relevant portions of the record, and the applicable law.
Considering itself fully advised,  the court GRANTS Mr.
Erickson's motion for class certification.
Elliot Bay is a “collection agency” and
“debt collector” as defined by the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§ 1692a(6). In 2015, Elliot Bay attempted to collect a
debt from Plaintiff (and putative class representative), Mr.
Erickson on behalf of Family Health Care (“FHC”),
one of Elliot Bay's clients. (Compl. (Dkt. # 1),
¶¶ 15, 16; Resp. at 2.) Mr. Erickson alleges that
many of Elliot Bay's attempts to collect the debt
violated the FDCPA and two Washington consumer protection
statutes. (See generally Compl.)
March 17, 2015, in its first attempt to collect the debt,
Elliot Bay delivered a letter to Mr. Erickson:
NOT HAVING HEARD FROM YOU ON THIS ACCOUNT, LEGAL
ACTION IS NOW BEING CONSIDERED. TO AVOID PAYING
ADDITIONAL COURT CHARGES AS WELL AS THIS AMOUNT, IMMEDIATELY
SEND THE BALANCE IN FULL BY RETURN MAIL TO
THE ABOVE ADDRESS.
(Id. ¶ 21, Ex. A (emphasis in original).)
Elliot Bay admits that at least forty customers in addition
to Mr. Erickson received collection letters with identical
language. (Mot. Ex. B at 6 (attaching Mr. Erickson's
requests for admission and responses thereto).) In fact, the
collection letter contains standard language included in
letters to all of Elliot Bay's costumers “on all
types of accounts and on all types of amounts owed.”
(Id.) Although Mr. Erickson's two claims on
behalf of the class-Counts II and III-allege many other FDCPA
violations, Mr. Erickson seeks class certification solely on
the basis of the March 17, 2015, collection letter.
(See Mot. at 1, 7.) Mr. Erickson claims that the
collection letter violates the FDCPA by threatening
“additional court charges . . . [f]alsely representing
that if payment [is] not made in full that court charges
would automatically be added to the balance of the alleged
debt.” (Id. ¶¶ 26, 52, 53(e).)
12, 2015, Elliot Bay sent a second letter to Mr. Erickson
listing Mr. Erickson's alleged debt in the categories of
“Principal, ” “Interest, ” and
“Misc./CC.” (Id. ¶¶ 27-28;
Answer ¶¶ 27-28.) When Mr. Erickson's counsel
contacted Elliot Bay about the “Misc./CC” charge,
Mr. Erickson claims that Elliot Bay explained that the
charge, totaling $283.00, represented $200.00 in
attorney's fees and $83.00 in filing fees. (Id.
¶ 30.) According to Mr. Erickson, Elliot Bay had no
legal or contractual right to attorney's fees.
(Id. ¶ 31.)
5, 2015, Mr. Erickson notified Elliot Bay that he had
retained counsel and directed Elliot Bay not to contact him
and to address all future communications regarding the debt
to his attorney. (Id., ¶¶ 33-34 (citing
Exs. C, D).) Nevertheless, Mr. Erickson received a third
collection letter on September 10, 2015. (Compl. ¶ 37;
Answer ¶ 37.) This time, the collection letter listed
Mr. Erickson's debts as $120.00 in “Principal,
” $61.32 in “Interest, ” and $323.00 in
“Misc./CC.” (Compl. ¶ 39; Answer ¶ 39.)
Mr. Erickson believes Elliot Bay did not have a legal or
contractual right to charge $323.00 in “Misc./CC”
fees. (Compl. ¶ 40.) The third collection letter also
IF YOU PAY THE ACCOUNT IN FULL AND ASK FOR DELETION FROM YOUR
CREDIT FILE(S), WE WILL REQUEST DELETION ON YOUR BEHALF.
¶ 41; id. Ex. E (emphasis in original); Answer
¶ 41.) Mr. Erickson claims that the third collection
letter misleads by implying that Mr. Erickson could only
clear his credit report by asking Elliot Bay for deletion,
when there are other avenues for removing the debt from his
report. (Compl. ¶ 42.)
September 3, 2015, and January 19, 2016, Elliot Bay reported
Mr. Erickson's debt to a credit bureau. (Id.
¶ 35; Answer ¶ 35.) Mr. Erickson alleges that
Elliot Bay did not notify the credit bureau that his debt was
disputed, as required under the FDCPA. (Compl. ¶ 36.)
April 28, 2015, after six weeks of failed attempts to recover
payment, Elliot Bay filed a collection lawsuit against Mr.
Erickson in Snohomish County District Court. (Berggren Decl.
(Dkt. # 15) ¶ 6, Ex. A.) The collection lawsuit was
eventually dismissed after Elliot Bay made seven unsuccessful
attempts to serve Mr. Erickson. (Id. ¶¶
March 16, 2016, Mr. Erickson filed a putative class action
complaint alleging that Elliot Bay violated certain
provisions of the FDCPA as well as two Washington
statutes-the Washington Collection Agency Act (WCAA), RCW ch.
19.16, and the Washington Consumer Protection Act (CPA), RCW
ch. 19.86. (See generally Compl.)
Erickson asserts that the court has federal question
jurisdiction over the FDCPA claims and pendent jurisdiction
over the state law claims pursuant to 28 U.S.C. §
1367(a). (Compl. ¶ 2.)
March 3, 2017, the court ordered Mr. Erickson to show cause
why this action should not be dismissed for lack of subject
matter jurisdiction. (Show Cause Order.) The court was
concerned that Mr. Erickson failed to plead concrete harm, in
support of the injury-in-fact requirement of Article III
standing. (See id.) see also Spokeo, 136
S.Ct. 1540; Lujan v. Defenders of Wildlife, 504 U.S.
555, 560-61 (1992). Mr. Erickson submitted a memorandum in
response to the court's order arguing that federal
subject matter jurisdiction exists under Spokeo.
(See Erickson Supp. Br.) Elliot Bay also submitted a
memorandum, which contends there is no federal jurisdiction
because Mr. Erickson has solely alleged statutory violations,
without alleging concrete harm. (See Elliot Bay
deciding Mr. Erickson's motion for class certification,
the court first must be satisfied that Mr. Erickson has
standing to bring his claims. Nelsen v. King Cty.,
895 F.2d 1248, 1249-50 (9th Cir. 1990 (“Standing
‘is a jurisdictional element that must be satisfied
prior to class certification.'”) (quoting
LaDuke v. Nelson, 762 F.2d 1318, 1322 (9th Cir.
1985)). Accordingly, the court initially addresses standing
and then turns to the question of class certification.
III of the United States Constitution limits federal
jurisdiction to the resolution of cases and controversies.
See U.S. Const. art. III, § 2.
“[S]tanding is an essential and unchanging part of the
case-or-controversy requirement of Article III.”
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560
(1992). In the absence of standing, the court lacks subject
matter jurisdiction and the suit must be dismissed under
Federal Rule of Civil Procedure 12(b)(1). Cetacean Cmty.
v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004);
Fed.R.Civ.P. 12(b)(1). The “irreducible constitutional
minimum” of standing consists of three elements: (1)
the plaintiff must have suffered an injury in fact, (2) that
is fairly traceable to the challenged conduct of the
defendant, and (3) that is likely to be redressed by a
favorable judicial decision. Id. at 560-61;
Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000). With
respect to the first element, an injury in fact must be
“(a) concrete and particularized . . .; and (b) actual
or imminent, not conjectural or hypothetical.”
Lujan, 504 U.S. at 560 (internal citations and
quotations omitted). The party invoking federal jurisdiction
bears the burden of establishing standing. Id. at
561. Plaintiffs must plead or prove, with the requisite
“degree of evidence required at the successive stages
of the litigation, ” each element of standing.
Id. at 561.
Supreme Court recently revisited the principles of standing
and the injury-in-fact element in Spokeo, 136 S.Ct.
1540. Spokeo involved a class action lawsuit under
the Fair Credit Reporting Act (“FCRA”), 15 U.S.C.
§ 1681e, in which the plaintiff sued a company for
violating the FCRA's procedural requirements by allegedly
providing incorrect information about the plaintiff to the
company's users. Id. at 1545-46. The Ninth
Circuit held that the plaintiff's injury “satisfied
the injury-in-fact requirement of Article III” because
the defendant “violated [the plaintiff's] statutory
rights, not just the statutory rights of other people.”
Id. The Supreme Court reversed, finding that the
Ninth Circuit erred by focusing the injury-in-fact inquiry
solely on whether the plaintiff's injury was
particularized while omitting any analysis of concreteness.
Id. at 1550.
Supreme Court emphasized that to be concrete, an injury
“must be ‘de facto'; that is, it must
actually exist.” Id. at 1548. However,
“concrete” does not necessarily mean
“tangible.” Id. at 1549. An intangible
harm, such as the loss of one's right to free speech or
to religious practice, can constitute a concrete injury.
Id. (citing Pleasant Grove City v. Summum,
555 U.S. 460 (2009) (free speech); Church of Lukumi
Babalu Aye, Inc. v. Hialeah, 508 U.S. 520 (1993) (free
exercise)). Indeed, “Congress may ‘elevat[e] to
the status of legally cognizable injuries, de facto injuries
that were previously inadequate in law.'”
Id. (alteration in original) (quoting
Lujan, 504 U.S. at 578). Nevertheless, a plaintiff
does not “automatically satisf[y] the injury-in-fact
requirement whenever a statute grants a person a statutory
right and purports to authorize that person to sue to
vindicate that right.” Id. “Article III
standing requires a concrete injury even in the context of a
statutory violation.” Id. A plaintiff may not
“allege a bare procedural violation, divorced from any
concrete harm, and satisfy the injury-in-fact requirement of
Article III.” Id.
certain circumstances, “the risk of real harm”
can also be enough to satisfy the concreteness requirement.
Spokeo, 136 S.Ct. at 1543-44. For example, the
Supreme Court noted that harms associated with certain torts
can be difficult to prove or measure. Id. (citing
libel and slander as examples). Thus, the Court acknowledged
that in some circumstances the violation of a statutory
procedural right could constitute an injury in fact, and in
such cases, the plaintiff need not allege any additional harm
beyond the harm Congress had identified. Id. at
1549-50. In so ruling, the Supreme Court cited two prior
cases involving informational injuries. Id. (citing
Fed. Election Comm'n v. Akins, 524 U.S. 11,
20-25 (1998) (confirming that a group of voters'
“inability to obtain information” that Congress
had decided to make public was a sufficient injury in fact to
satisfy Article III); Pub. Citizen v. Dep't of
Justice, 491 U.S. 440, 449 (1989) (holding that two
advocacy organizations' failure to obtain information
subject to disclosure under the Federal Advisory Committee
Act “constitutes a sufficiently distinct injury to
provide standing to sue”)).
Mr. Erickson's Article III Standing
analyze whether the harm Mr. Erickson alleged is sufficiently
concrete, the court begins with the nature of the rights
conferred by the various provisions of Sections 1692 of the
FDCPA. “To determine whether an intangible
harm constitutes injury in fact, both history and the
judgment of Congress are instructive.” Spokeo,
136 S.Ct. at 1543. Congress enacted the FDCPA in order
“to eliminate abusive debt collection practices by debt
collectors.” 15 U.S.C. § 1692(e).
“‘The statute seeks ‘to protect consumers
from a host of unfair, harassing, and deceptive debt
collection practices.'” Jackson, 2016 WL
4942074, at *9 (quoting S. Rep. No. 95-382, at 1 (1977),
as reprinted in 1977 U.S.C.C.A.N. 1695).
“[T]he harms resulting from abusive debt collection
practices are closely related to harms that traditionally
provided a basis for relief in American and English courts,
such as fraud.” Id. (citing S. Dev. Co. v.
Silva, 125 U.S. 247, 250 (1888) (defining the legal
elements of a civil fraud); Pasley v. Freeman (1789)
100 Eng. Rep. 450 (K.B.) 450 (“A false affirmation,
made by the defendant with the intent to defraud the
plaintiff, whereby the plaintiff receives damage, is the
ground of an action upon the case in the nature of
deceit.”); Restatement (Second) of Torts § 525
(1977) (discussing fraudulent misrepresentation)).
under the FDCPA, consumers have a right to be free from debt
collector abuse, and the statute mandates various procedures
to accomplish this goal and decrease the risk of harm related
to these practices. In general, each of these procedures
helps to prevent abusive practices, but “this does not
mean their violation automatically amounts to the injury
identified by Congress in the statute.” Id.;
Spokeo, 136 S.Ct. at 1550 (“A violation of one
of [a federal statute's] procedural requirements may
result in no harm.”).
Erickson's federal claims are based on allegations that
Elliot Bay violated three provisions of the FDCPA, Sections
1692c, e-f. The court reviews each of Mr. Erickson's
FDCPA claims in turn.
Count I, Section 1692c
count one of his complaint, Mr. Erickson asserts a claim
under Section 1692c(a)(2) of the FDCPA, alleging that Elliot
Bay sent him a collection letter after he informed the
company that he was represented by an attorney. (Compl.
¶¶ 37-38.) Section 1692c(a)(2) “states that a
debt collector may not communicate with a consumer, in
connection with the collection of any debt, if the debt
collector knows that the consumer is represented by
counsel.” Bravo v. Midland Credit Mgmt., Inc.,
812 F.3d 599, 602 (7th Cir. 2016); 15 U.S.C. §
1692c(a)(2). “The rationale behind this rule is clear.
Unsophisticated consumers are easily bullied and misled.
Trained attorneys are not.” Guerrero v. RJM
Acquisitions LLC, 499 F.3d 926, 935 (9th Cir. 2007). Mr.
Erickson alleges that he received and read the collection
letter Elliot Bay sent after the company allegedly knew that
Mr. Erickson was represented. (Compl. ¶¶ 37-38.)
Consequently, Mr. Erickson encountered the very risk of harm
Congress sought to prevent with the enactment of Section
1692c. (Id.) As Mr. Erickson correctly notes,
violation of Section 1692c “harms the consumer by
interfering with the client-attorney relationship[, ]
undermining the attorney's authority as the
consumer's representative . . . and can result in the
inadvertent and uncounseled disclosure of information, to the
debtor's detriment.” (Erickson Supp. Br. at 7.)
Accordingly, the court finds that Mr. Erickson has plausibly
alleged a concrete injury under count one of his Complaint.
Counts II and III, Section 1692e-f
counts two and three, Mr. Erickson contends that Elliot Bay
violated Sections 1692e-f of the FDCPA by (1) making false
representations as to the amount of debt Mr. Erickson owed
(Compl. ¶¶ 53(a-b)), (2) communicating credit
information to credit bureaus while failing to communicate
that Mr. Erickson's debt was disputed (id.
¶ 53(d)), (3) falsely representing that if Mr. Erickson
did not pay in full, charges would automatically be added to
the balance of the alleged debt (id. ¶ 53(e)),
(4) falsely representing that Mr. Erickson could not request
deletion of the items on his credit card until he paid the
account in full (id. ¶ 53(f)), and (5) charging
$200.00 in attorney's fees and $323.00 in other fees that
“were not expressly permitted by the agreement creating
the debt or permitted by law” (id.
¶¶ 58-59). With the exception of the second