The U.S. District Court for the Northern District of California recently certified a class in a debt collection suit and in doing so, appears to have broadened prior legal interpretation of what constitutes a class under Federal Rule of Civil Procedure 23 (“Rule 23”) — i.e., that the class must be identifiable and ascertainable.
In Gold v. Midland Credit Mgmt., Inc., et al, plaintiff Gold used her HSBC Bank credit card to pay for a number of products and services for personal and household use. HSBC later transferred Gold’s debt account, along with others, to Midland Credit for collection. Midland sent Gold several collection letters with the following verbiage:
“We can help you reduce your past balance with HSBC Bank Nevada, N.A. and get your finances back on track.”
“Your credit report will be updated with each payment made, and once you’ve completed your agreed-upon payments to settle the account, your credit report will be updated as ‘Paid in Full’!”
“Having a good credit report is important . . . We can help you get your finances back on track.”
Gold contends that the notices were misleading because they implied that HSBC still owned the debt she had incurred and that Midland could influence HSBC’s reporting to credit bureaus. Gold alleges that the Midland letters violated the federal Fair Debt Collection Practices Act and California’s Rosenthal Act.
Gold sought hybrid class certification under Rule 23(b)(2) and (b)(3) for all California addresses that received the same letters from Midland in its attempt to collect on debts originally owned by HSBC for purchases used primarily for personal or household purposes. She argued that the class could be ascertained by an examination of HSBC and Midland records to determine whether the letters were sent to an individual or a business and the class could be further narrowed by sending notices to potential class members asking them to certify their purchases were for personal or household use.
Although Midland argued that Gold’s solution was unworkable and that enabling potential class members to “self-Identify” would deprive defendants of their right to challenge the validity of class members’ claims, which could be inaccurate or potentially fraudulent, the Court found that “identifying the class is sufficiently administratively feasible such that Plaintiff has met her burden of demonstrating that the class is ascertainable.”
While the Court did certify FDCPA classes under Rule 23(b)(3), it declined to create hybrid classes by also certifying under Rule 23(b)(2).
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