District Court (Fla) Says Distinction Between Putative Classmember Debtors Who Paid and Those Who Didn’t In Response to Dunning Letter Destroys FRCP 23 “Predominance”

In Gomes v. Portfolio Recovery Assocs., LLC, No. 18-21872-CIV, 2019 U.S. Dist. LEXIS 32116 (S.D. Fla. Feb. 28, 2019), Judge Altonaga denied class certification in an FDCPA class action.

Defendant asserts the damages component of the case will require examination of individualized issues. According to Defendant, Plaintiff and each class member will necessarily have the burden of proving Defendant’s collection letters proximately caused each one to make a payment to the Defendant. (See Resp. 11 (citing McMahon v. LVNV Funding, LLC, 301 F. Supp. 3d 866, 881 (N.D. Ill. 2018) (Under section 1692k, the “plaintiff and the class members must prove that the actual damages they seek were sustained . . . as a result of defendant[‘s] fail[ure] to comply with the FDCPA” (first alteration added; second alteration in original))); see also Goodin v. Bank of Am., N.A., 114 F. Supp. 3d 1197, 1211 (M.D. Fla. 2015) (“In determining what actual damages are appropriate . . . the Court has only considered those damages caused by the Bank’s FDCPA and FCCPA violations, and not any distress caused by other aspects of the Bank’s improper servicing of the Goodins’ account.” (alteration added)). Defendant is correct in pointing out that proof regarding causation will necessarily include, from the Defendant at least, individualized considerations of whether each class member made a payment after receiving a collection letter, and if so, whether the payment was made as a result of the letter. (See Resp. 11). In McMahon, 301 F. Supp. 3d at 881, in addressing cross-motions for summary judgment, the court noted the possibility of a class member making a payment after receiving a debt collection letter but not because he or she actually read the letter; in such case, the class member cannot obtain actual damages based on an FDCPA violation. In contrast, a class member who seeks only statutory damages — such as Plaintiff — need not show he or she was confused or deceived by Defendant’s collection letters. See, e.g., Harper v. Better Business Servs., Inc., 961 F.2d 1561, 1563 (11th Cir. 1992). In defending claims for actual damages sustained by class members — but not sustained by Plaintiff, who was not deceived and made no payment — Defendant will want to explore whether the class member read the collection letter prior to sending payment, whether payment was made for another reason such as a moral reckoning, and how much time passed between the class member’s receipt of the letter and the date payment was made. (See Resp. 11). Each of these defensive issues will require individualized proof not capable of being resolved with evidence common to the putative class Plaintiff proposes. . . It is apparent certifying Plaintiff’s proposed class, that includes members seeking only statutory damages and members seeking actual damages, will not “achieve economies of time, effort, and expense” or promote “uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615, 117 S. Ct. 2231, 138 L. Ed. 2d 689 (1997). Admittedly, “individual damage calculations generally do not defeat a finding that common issues predominate.” Brown, 817 F.3d at 1239 (quotation marks and citation omitted). A class action may be maintained despite the need to prove individual damages. See id. (citing cases). Yet, “individual damages defeat predominance if computing them will be . . . fact-specific,” “where the burden on the court system would be simply intolerable,” and where “they are accompanied by significant individualized [*23]  questions going to liability.” Id. at 1240 (internal quotation marks and citations omitted). As already explained, individual issues permeate the claims of putative class members seeking the recovery of actual damages, both as to the nature and content of Defendant’s communications with each, as well as liability to the extent Defendant is entitled to probe questions addressing causation with each such member. Plaintiff states “[t]his Court has found that the predominance prong of Rule 23(b)(3) is satisfied in actions like this” (Mot. 18 (alteration added)), while citing to an FDCPA class certification decision from another judge in this District in a case that did not involve actual damages. (See id. (citing Sharf v. Fin. Asset Resolution, LLC, 295 F.R.D. 664 (S.D. Fla. 2014))). In apparent recognition of the challenge posed by certification of a hybrid class consisting of members seeking statutory damages as well as others seeking actual damages, in his Reply, for the first time, Plaintiff proposes the Court allow the trial to proceed as to liability and statutory damages first, and then decertify the action and require members to file individual actions to recover actual damages or require such class members to submit their claims to a special master. (See Reply 7). But arguments [*24]  raised for the first time in a reply memorandum are not properly before the Court. See Herring v. Sec’y, Dep. of Corr., 397 F.3d 1338, 1342 (11th Cir. 2005) (citations omitted); Butler v. Cleburne Cnty. Comm’n, No. 1:10-cv-2561-PWG, 2012 U.S. Dist. LEXIS 82534, 2012 WL 2357740, at *6 (N.D. Ala. Jan. 17, 2012) (“[T]he court generally does not consider issues or arguments raised for the first [time] in a reply, for to do so deprives the non-movant of a fair opportunity to respond.” (alterations added; citations omitted)). The Court, having engaged in the required “qualitative assessment” of the claimed common versus individual matters, Brown, 817 F.3d at 1235 (internal quotation marks and citations omitted), is not satisfied Plaintiff has established “questions of law or fact common to 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).