United States District Court, D. New Jersey, Camden Vicinage Division
ALBERT GREGORY, on behalf of himself and all others similarly situated, Plaintiff,
McCABE, WEISBERG & CONWAY, P.C., Defendant.
MEMORANDUM OPINION AND ORDER
ANN MARIE DONIO, Magistrate Judge.
In this action, Plaintiff Albert Gregory (hereinafter, "Plaintiff"), a debtor, alleges that Defendant McCabe, Weisberg & Conway, P.C. (hereinafter, "Defendant") transmitted collection letters and/or notices to alleged New Jersey debtors in violation of the Fair Debt Collection Practices Act. The parties now ask the Court to conditionally certify a Federal Rule of Civil Procedure 23(b)(3) settlement class, to preliminarily approve a proposed class-wide settlement, and to authorize notice of the proposed settlement to class members. For the reasons that follow, the Court grants the joint motion.
Plaintiff Albert Gregory (hereinafter, "Plaintiff") filed the initial complaint in this action on November 17, 2013, on behalf of himself and all others similarly situated, against a debt collector, Defendant McCabe, Weisberg & Conway, P.C. (hereinafter, "Defendant"). (See Class Action Complaint and Demand for Jury Trial [Doc. No. 1].) In his complaint, Plaintiff alleges that Defendant's initial collection correspondence failed to set forth the amount of Plaintiff's debt, as required by the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p (hereinafter, "FDCPA"). (Id. at ¶¶ 35-37.) Plaintiff alleges that Defendant's practice with respect to all initial collection correspondence fails to provide debtors with written notice concerning the amount of the underlying debt in its initial written collection communications (or within five (5) days thereafter) in violation of the FDCPA. (Id. at ¶¶ 9, 21, 31-41.) See also 15 U.S.C. § 1692g(a)(1) ("Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing-(1) the amount of the debt[.]"). Plaintiff's complaint therefore seeks to proceed in this litigation as a class action pursuant to Federal Rule of Civil Procedure 23, on behalf of all New Jersey consumers and their successors "who have received collection letters and/or notices" from Defendant which violate the FDCPA by failing to provide the amount of the debt in accordance with 15 U.S.C. § 1692g(a)(1). (See Class Action Complaint and Demand for Jury Trial [Doc. No. 1], ¶ 10.)
Plaintiff entered into a settlement agreement and release with Defendant on January 16, 2013, which purports to fully resolve all class and individual claims set forth in Plaintiff's complaint. (See generally Exhibit 2 [Doc. No. 11], 1-10.) The settlement agreement defines the putative class as:
All New Jersey consumers, (numbering approximately three thousand), to whom the McCabe Firm sent Initial Correspondence designed to recover a debt, in the form substantially similar to the letter sent to the Class Representative, which letter did not state the amount of the debt. The Class is limited to those (i) who were mailed an Initial Correspondence during the period of time marked by the year preceding the date of the filing of the Complaint (i.e., November 17, 2012 through November 18, 2013); (ii) who did not receive a subsequent letter or notice from the McCabe Firm within 5 days of the Initial Correspondence that supplemented the Initial Correspondence by stating the amount of the consumer's debt; and (iii) who do not opt out of the proposed class Settlement.
(Settlement Agreement and General Release [Doc. No. 17-3], 1-2.) In the event the Court provisionally approves the parties' proposed settlement and authorizes the distribution of class notice concerning the litigation and proposed settlement, the settlement agreement provides a forty-five (45) day period in which class members possess the right to exclude themselves from the terms of the settlement through timely submission of an "Opt Out'" in accordance with the procedure to be approved by the Court. (Id. at 4.) Thereafter, the class members "forever release and discharge all claims" against Defendant which "in any way relate" to the facts giving rise to this action. (Id. at 5.) In consideration of this release, and without conceding liability, Defendant agrees to pay the aggregate sum of $4, 500, $1, 500 of which shall be segregated as Plaintiff's class representative payment, with the remainder payable pro rata in accordance with class members' timely claims. (Id. at 3.) The settlement agreement further contemplates an award of attorneys' fees and costs paid by Defendant in an amount "not to exceed the sum of $18, 000" in consideration of putative class counsel's class-related work. (Id. at 3.)
In the pending motion, the parties move: (i) for conditional certification of a Federal Rule of Civil Procedure 23(b)(3) class, (ii) for preliminary fairness approval of a proposed class-wide settlement, and (iii) for authorization to mail notice of the proposed settlement to class members. (See generally Br. [Doc. No. 11-3].)
Federal Rule of Civil Procedure 23(e) generally provides that, the "claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval." FED. R. CIV. P. 26(e). In the context of preliminary settlement approval, the Court must determine whether the proposed settlement demonstrates "obvious deficiencies" and whether "the settlement falls within the range of reason.'" Mylan Pharma., Inc. v. Warner Chilcott Pub. Ltd. Co., No. 12-3824, 2013 WL 631031, at *1 (E.D. Pa. Feb. 18, 2013) (quoting Gates v. Rohm & Haas Co., 248 F.R.D. 434, 438 (E.D. Pa. 2008) (quotations omitted); citing MANUAL FOR COMPLEX LITIGATION, § 21.632 (4th ed. 2009)). This preliminary determination requires the Court to consider: (1) whether the settlement negotiations took place at arm's length; (2) whether "sufficient discovery" supports the proposed settlement; (3) the breadth of the settlement proponents' experience and expertise in similar litigation; and (4) the quantity of proposed class objections, if any. See In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 785 (3d Cir. 1995) (noting that "an initial presumption of fairness" arises where a court finds the four (4) factors favor preliminary settlement approval). The Court must first find, however, that the proposed class "satisfies the requirements of [Federal Rule of Civil Procedure] 23, regardless [of] whether [the Court] certifies the class for trial or for settlement." In re Prudential Ins. Co. Am. Sales Practice Litig., 148 F.3d 283, 308 (3d Cir. 1998) (citing Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 621 (1997) ("The safeguards provided by the Rule 23(a) and (b) class-qualifying criteria, we emphasize, are not impractical impediments-shorn of utility-in the settlement class context."); In re Gen. Motors Corp., 55 F.3d at 799-800 ("In sum, a class is a class is a class, ' and a settlement class, if it is to qualify under Rule 23, must meet all of its requirements.")). The Court therefore turns to the class certification standards set forth by Federal Rule of Civil Procedure 23.
Federal Rule of Civil Procedure 23(a) generally permits lawsuits to proceed on a class basis. See generally FED. R. CIV. P. 23(a). Class actions, however, constitute "an exception to the usual rule'" that litigation be "conducted by and on behalf of the individual named parties only.'" Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 590 (3d Cir. 2012) (quoting Wal-Mart Stores v. Dukes, 131 S.Ct. 2541, 2550 (2011) (quotation marks omitted)). "[A] party seeking to maintain a class action must [therefore] affirmatively demonstrate his compliance'" with Federal Rule of Civil Procedure 23. Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013) (citations omitted). A plaintiff must accordingly establish the "currently and readily ascertainable" nature of the proposed settlement class based upon objective criteria. Marcus, 687 F.3d at 592-93 (citations omitted). "[E]very putative class action must satisfy the four requirements of Rule 23(a) and the requirements of either Rule 23(b)(1), (2), or (3)." Id . at 590 (citing FED. R. CIV. P. 23(a)-(b)). In accordance with Federal Rule of Civil Procedure 23(a), the proposed class must specifically demonstrate: "(1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation." In re Prudential, 148 F.3d at 308-09. In the event the action satisfies the criteria set forth in Federal Rule of Civil Procedure 23(a)(1)-(4), the proposed class must also fall within one of the three categories of class actions delineated in Federal Rule of Civil Procedure 23(b). See id. The parties in this instance seek to conditionally certify a settlement class pursuant to Federal Rule of Civil Procedure 23(b)(3). Under Rule 23(b)(3), the Court "must determine that common questions of law or fact predominate and that the class action mechanism" constitutes "the superior method for adjudicating the case." Id . at 309. "The party seeking certification bears the burden of establishing each element of Rule 23 by a preponderance of the evidence." Marcus, 687 F.3d at 591 (citing In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 307 (3d Cir. 2008)).
The parties' submissions propose the following definition for the putative class:
All New Jersey consumers, (numbering approximately three thousand), to whom the McCabe Firm sent Initial
Correspondence designed to recover a debt, in the form substantially similar to the letter sent to the Class Representative, which letter did not state the amount of the debt. The Class is limited to those (i) who were mailed an Initial Correspondence during the period of time marked by the year preceding the date of the filing of the Complaint (i.e., November 17, 2012 through November 18, 2013); (ii) who did not receive a subsequent letter or notice from the McCabe Firm within 5 days of the Initial Correspondence that supplemented the Initial Correspondence by stating the amount of the consumer's debt; and (iii) who do not opt out of the proposed class Settlement.
(Settlement Agreement and General Release [Doc. No. 17-3], 1-2.) Federal Rule of Civil Procedure 23's first requirement, ascertainability, entails a two-part inquiry: "[f]irst, the class must be defined with reference to objective criteria." Hayes, 725 F.3d at 355 (citing Marcus, 687 F.3d at 593). Plaintiff must then demonstrate that the proposed class definition provides "a reliable and administratively feasible mechanism for determining whether putative class members fall within" the scope of the proposed class. Hayes, 725 F.3d at 355 (citing Marcus, 687 F.3d at 593). Ascertainability therefore aims to ensure that the proposed class definition does not present administrative burdens "incongruous with the efficiencies expected in a class action." Marcus, 687 F.3d at 593. The proposed definition set forth in the parties' submissions rests upon objective, narrow criteria and sets forth a relevant temporal limitation. In addition, the parties assert that, "[t]he identities and most current addresses of all class members are known" and/or have been ascertained from Defendant's records. (See, e.g., Br. [Doc. No. 11-3], 18; Supp. Br. [Doc. No. 17], 7 (projecting that the proposed class consists of "3000 individuals").) The revised proposed class definition further encapsulates only those New Jersey consumers who received initial correspondence, but who did not receive within five (5) days thereafter FDCPA-compliant notices. (See generally Settlement Agreement and General Release [Doc. No. 17-3], 1-2.) Moreover, Defendant neither disputes the class definition nor the scope of proposed class claims. The Court therefore finds that the "ascertainable and bounded" proposed FDCPA class satisfies Federal Rule of Civil Procedure 23(a)'s preliminary considerations. Williams v. Pressler & Pressler, LLP, No. 11-7296, 2013 WL 5435068, at *6 (D.N.J. Sept. 27, 2013) (finding a proposed FDCPA class "satisfied the preliminary Rule 23(a) considerations" because of the "ascertainable and bounded" class definition proposed by plaintiffs). The Court therefore turns to the remaining requirements for conditional certification.
Numerosity requires that the nature of the class renders "impracticable" the joinder of all members. FED. R. CIV. P. 23(a)(1). However, Plaintiff need not demonstrate a "minimum number of members" in order "to proceed as a class action." Marcus, 687 F.3d at 595 (citing Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001)). Rather, "if the named plaintiff demonstrates that the potential number of plaintiffs exceeds 40, " such demonstration generally satisfies the numerosity requirement. Stewart, 275 F.3d at 226-227. A plaintiff must, however, "offer direct evidence of the exact number and identities of the class members" or "circumstantial evidence" sufficient to support a factual finding in favor of numerosity. Marcus, 687 F.3d at 596. "[M]ere speculation" fails to suffice. Id . Plaintiff asserts that the 3, 000 class members in this action renders "joinder impractical." (Br. [Doc. No. 11-3], 15; see also Supp. Br. [Doc. No. 17], 7.) This assertion clearly suffices to demonstrate ...