District Court (Cal.) Certifies Class Action in Douglass-type Glassine Window FDCPA Collection Envelope Case, Despite the Fact that $500,000 FDCPA Cap Would Limit Classmembers’ Recovery to Almost Nothing

In Datta v. Asset Recovery Solutions, LLC, 2016 WL 1070666, at *7-10 (N.D.Cal., 2016), Judge Koh rejected the argument that the FDCPA’s $500,000 cap prevented certification of an FDCPA/glassine window case.

. . . the Court observes that, as a general matter, courts routinely certify class actions where monetary recovery would be small. . . . Second, the efficacy of a single class action lawsuit to resolve the FDCPA and RFDCPA issues that Plaintiff has raised outweighs the possibility of a small class recovery. In this case, Defendant’s liability will turn on the legality of the allegedly defective standardized collection letter sent to approximately 10,000 class members. Rather than litigate 10,000 individual cases that raise the same questions of law and fact, class litigation would efficiently and consistently adjudicate the issue of Defendants’ liability under the FDCPA and the RFDCPA in a single action. Moreover, the FDCPA appears to specifically contemplate class actions for these sorts of situations. . . .Third, the mandatory notice and opt-out provisions under Rule 23(c)(2) can help protect the interests of the proposed class members should they wish to pursue individual claims. See Fed. R. Civ. P. 23(c)(2); Jacobson, 2015 WL 3523696, *9. Pursuant to Rule 23(c)(2)(B), each class member will be sent a notice that informs them of the claims at issue and the right to be excluded from the class. At that point, any prospective class member who is dissatisfied with the potential recovery may choose to opt out of the class and bring an individual lawsuit against Defendant under the FDCPA and RFDCPA.  Fourth, although the Ninth Circuit has not yet addressed de minimis recoveries in the FDCPA context, every district court within the Ninth Circuit has, when presented with this question, held that “the likelihood of a de minimis class recovery under the FDCPA is not a bar to class certification.” Jacobson, 2015 WL 3523696, *8. Indeed, as noted in Jacobson, district courts in this circuit have certified FDCPA class actions where the estimated recovery per class member ranged from $0.00000111 to $11.28. See, e.g., del Campo v. Am. Corrective Counseling Servs., Inc., 254 F.R.D. 585, 596 n.9 (N.D. Cal. 2008) ($0.00000111 per class member); Abels, 227 F.R.D. at 547 ($0.25 per class member); Bogner v. Masari Invs., LLC, 2010 WL 2595273, *2 (D. Ariz. June 24, 2010) ($11.28 per class member). Here, the estimated potential recovery—approximately $1.50—falls squarely within the range set forth in del Campo, Abels, and Bogner. . . Id. Numerous federal courts have followed Mace to hold that the possibility of a de minimis recovery does not automatically bar a class action. See, e.g., Kalish v. Karp & Kalamotousakis, LLP, 246 F.R.D. 461, 464 (S.D.N.Y. 2007) (certifying FDCPA class based on potential recovery of $2.50 per class member); Warcholek v. Med. Collections Sys., Inc., 241 F.R.D. 291, 295–96 (N.D. Ill. 2006) (certifying FDCPA class where defendant claimed negative net worth); Tripp v. Berman & Rabin, P.A., 310 F.R.D. 499, 508 (D. Kan. 2015) (certifying FDCPA class based on potential recovery of $2.63 per class member).  In opposition, Defendant cites two cases where district courts have decertified an FDCPA class after finding the potential class recovery to be too low—Fairbrun v. Sw. Credit Sys., L.P., 2008 WL 750550 (E.D.N.Y. Mar. 18, 2008), and Granisher v. Check Enf’t Unit, 209 F.R.D. 392 (W.D. Mich. 2002). Opp’n at 5 n.1. These cases are distinguishable for two reasons. First, Defendant has not filed a motion to decertify. Thus, these decertification cases are of little assistance in adjudicating the instant motion for class certification. Second, and more importantly, the potential recovery in these decertification cases—less than one cent in Fairbrun and approximately six cents in Granisher—is far less than the estimated potential recovery in the instant case. Here, on the other hand, each class member would receive at least $1.50, with the potential of a higher recovery if potential class members opt out. . . . In sum, for the reasons stated above, the Court finds that a class action in this case is well suited to address “the rights of groups of people who individually would be without effective strength to bring their opponents into court at all.” Amchem, 521 U.S. at 617. Accordingly, Plaintiff has sufficiently established superiority for purposes of Rule 23(b)(3).