The opinion of the court was delivered by: WAYNE ANDERSEN, District Judge
MEMORANDUM. OPINION AND ORDER
Plaintiff Georgia Redd brings a class action lawsuit against
defendant Arrow Financial Services, LLC ("Arrow") for violations of the
Fair Debt Collection Practices Act, 15 U.S.C. § I692e, 1692e(2),
1692e(8), and 1692e(10), relating to its alleged illegal practices in
connection with the collection of certain debts that are more than seven
years old. This matter is before the Court on Ms. Redd's motion for class
certification. For the reasons stated below, the motion for class
certification is granted.
For the purposes of a motion to certify a class, the allegations in the
complaint are presumed to be true. Johns v. DeLeonardis,
145 F.R.D. 480, 482 (N.D. Ill. 1992). According to Ms. Redd's amended
complaint, she is a consumer who defaulted on a retail installment
contract for the purchase of a car in 1990. Sometime after the purchase
of the car, Ms. Redd failed to make the scheduled payments, the car was
repossessed and the debt was charged off. Defendant Arrow is a limited
liability company that acts as a collection agency and purchases consumer
debts at a portion of the face value for the opportunity to enforce the
debts against the consumers.
On approximately October 18, 2002, Arrow sent Ms. Redd a letter
informing her that her debt had been sent to a debt collection agency.
The outstanding balance on the account was $9,887.41. The letter offered
to settle the past due account for 45 percent of the full balance if the
repayment was made in one payment by November 20, 2002. Relevant to the
claim at issue here, the letter stated: "Upon receipt of the settlement
amount and clearance of funds, the appropriate credit bureaus will be
notified that this account has been settled." Ms. Redd alleges, and
defendant Arrow admitted in response to requests for admission, that the
letter she received was a standard form letter and that there are "more
than 500(a) natural persons (except those with addresses in Maine), (b)
who were sent a letter in the form represented by exhibit A to the
Amended Complaint by Arrow Financial Services, LLC, (c) with respect to a
debt charged off? years or more prior to the date of the letter, (d)
which was sent on or after a date one year prior to the filing of this
action." (Def.'s Resp. to Pl.'s Req. for Admis., ¶ 16).
Based on the statement cited above, Ms. Redd claims that Arrow has
violated the FDCPA, 15 U.S.C. § 1692e, which prohibits debt
collectors from making false or misleading representations to consumers,
because pursuant to the Fair Credit Reporting Act ("FCRA"), "no consumer
reporting agency may make any consumer report containing., accounts
placed for collection or charged to profit and loss which antedate the
report by more than seven years." 15 U.S.C. § 1681c(a)(4). Given that the
age of the debt was greater than seven years old, Ms. Redd claims that
Arrow's reference to a consumer's credit report in the letter it sent is
misleading because it tells an unsophisticated consumer that, absent a
payment, Arrow could have the debt appear on the consumer's credit report
as an unpaid delinquent debt. Ms. Redd proposes a class consisting of
"(a) all natural persons (except those with Maine addresses), (b) who
were sent a
letter in the form represented by Exhibit A by Arrow Financial
Services, LLC, (c) with respect to a debt charged off? years or more
prior to the date of the letter, (d) which letter was sent on or after
February 21, 2002 (one year prior to the filing of this action)." (pl.'s
Mot. for Cl. Cert., at 1). We have a companion case Stewart Maxwell
v. Arrow Financial Services, LLC, Case No. 03 C 1995, in which a
Maine plaintiff is pursuing similar claims under the Maine Fair Debt
Collection Practices Act.
Motions for class certification must meet the requirements set under
Rule 23 of the Federal Rules of Civil Procedure. Rule 23 establishes two
main requirements for class certification. First, the action must satisfy
all four elements of Rule 23(a): numerosiry, commonality, typicality and
adequacy of representation. Amchem Prods., Inc. v. Windsor,
521 U.S. 591, 613 (1997); Harriston v. Chicago Tribune Co.,
992 F.2d 697, 703 (7th Cir. 1993). Second, the proposed class must satisfy
at least one of the three provisions under Rule 23(b). Ms. Redd seeks
certification under Rule 23(b)(3), which requires a plaintiff to
demonstrate that common questions of law or fact predominate over any
questions affecting only individual class members and that a class action
is a superior method of adjudicating the controversy.
As previously stated, for purposes of a motion to certify a class, the
allegations in the complaint are presumed true. Johns,
145 F.R.D. at 482. The court does not reach die merits of the complaint or
weigh evidence. Risen v. Carlisle & Jacquelin,
417 U.S. 156, 177-78 (1974); Koch v. Stanard, 962 F.2d 605, 607 (7th Cir.
1992). The burden is on the party seeking class certification to
demonstrate that the requirements of Rule 23 are satisfied. Gen. Tel.
Co. of S.W. v. Falcon, 457U.S. 147, 161 (1982); Trotter v.
Klincar, 748 F.2d 1177, 1184 (7th Cir.
1984). Failure on the part of the movant to satisfy any one of the
requirements of Rule 23(a) or (b) precludes class certification.
Patterson v. Gen. Motors Corp., 631 F.2d 476, 480 (7th Cir.
1980). The court has broad discretion in ruling on a motion for class
certification. Retired Chicago Police Ass'n v. Chicago,
7 F.3d 584, 596 (7th Cir. 1993). We now consider each element of the
Rule 23 requirements in turn.
A. Requirements of Federal Rules of Civil Procedure 23(a)
Rule 23(a)(1) requires that the class must be "so numerous that joinder
of all members is impracticable." Fed.R.Civ.P. 23(a)(1). Because there is
no mystical number at which the numerosity requirement is established,
courts have found this element satisfied when the putative class consists
of as few as 10 to 40 members. See, e.g., Markham v. White,
171 F.R.D. 217, 221 (N.D. Ill. 1997) (35 40 class members);
Hendricks Robinson v. Excel Corp., 164 F.R.D. 667, 671
(C.D. Ill. 1996) (38 class members). Although the plaintiff need not
allege the exact number or identity of the class members, the plaintiff
ordinarily "must show some evidence or reasonable estimate of the number
of class members." Long v. Thorton Township High Sch. Dist.,
82 F.R.D. 186, 189 (N.D. Ill. 1979). In determining whether the claimed class
contains a sufficient number of members, the court is permitted to "make
common sense assumptions in order to find support for numerosity."
Cannon v. Nationwide Acceptance Corp., 1997 WL 139472, at *2
(N.D. Ill. March 25, 1997) (quoting Evans v. U.S. Pipe &
Foundry, 696 F.2d 295, 930 (11th Cir. 1983)).
This Court previously has found that it is reasonable to assume the
number of potential class members satisfies the numerosity requirement
when the defendant allegedly used "preprinted, standardized debt
collection letters in attempting to collect on the [allegedly
delinquent] debt." Hamid v. Blatt, Hasenmilkr, Leibsker, Moore
& Pellettieri, et al., 2001 WL 1543516, at *3 (N.D. Ill., Nov.
30, 2001), citmg Peters v. AT& T, 179 F.R.D, 564, 567-68
(N.D. Ill. 1998) ("Based on these facts it is reasonable to infer that
many individuals received the form collection letter and that joinder
of all the individuals would be impracticable."). Whether the numerosity
requirement is met in this case is complicated, however, by certain
exceptions to the seven year reporting limitation under specific sections
of the FCRA, 15 U.S.C. § 1681c(b)(1)-(3). Pursuant to the FCRA, "no
consumer reporting agency may make any consumer report containing . . .
accounts placed for collection or charged to profit and loss which
antedate the report by more than seven years." 15 U.S.C. § 1681 c(a)(4).
However, creditors may report the satisfaction of a debt when it is more
than seven years old if: (1) the debtor applied for credit in an amount
exceeding $150,000; (2) the debtor applied for life insurance in an
amount exceeding $150,000; or (3) the debtor applied for employment for a
job with a salary exceeding $75,000. 15 U.S.C. § 1681c(b)(1)-(3).
Arrow argues that class certification is not merited in part because
Ms. Redd has prematurely moved to certify a class without knowing how
many potential members would be subject to these exceptions to the seven
year reporting limitation. However, in response to a request for
admission, Arrow admitted that it sent the standard letter to more than
500 individuals outside of the state of Maine regarding a debt that was
more than seven years old. This admission creates a strong basis to find
that the numerosity requirement has been met by Ms. Redd. In addition,
when identifying the potential class, the class definition can take ...