United States District Court, N.D. Illinois, Eastern Division
Mary T. Janetos, Erik King, Pamela Fujioka, Ignacio Bernave, Plaintiffs,
Fulton Friedman & Gullace, LLP, and Asset Acceptance, LLC, Defendants.
MEMORANDUM OPINION AND ORDER
M. Durkin, Judge
in this case alleged violations of the Fair Debt Collection
Practices Act (“FDCPA”) arising from confusing
language in form debt collection letters they received from
Defendant Fulton Friedman & Gullace
(“Fulton”). On appeal of entry of summary
judgment for defendants, the Seventh Circuit held that
Fulton's failure to make mandated disclosures violated
the FDCPA as a matter of law. Janetos v. Fulton Friedman
& Gullace, LLP, 825 F.3d 317, 319 (7th Cir. 2016).
The Seventh Circuit also held that Defendant Asset
Acceptance, LLC, as a debt collector, could not escape
liability for Fulton's actions taken on its behalf.
Id. Specifically, the court held that “A debt
collector should not be able to avoid liability for unlawful
debt collection practices simply by contracting with another
company to do what the law does not allow it to do directly .
. . [W]e think it is fair and consistent with the Act to
require a debt collector who is independently obliged to
comply with the Act to monitor the actions of those it
enlists to collect debts on its behalf.” Id.
at 325. The case was remanded for further proceedings
consistent with these rulings.
plaintiffs filed a motion for summary judgment on the measure
of class damages and Asset Acceptance filed a cross-motion on
the same issue. Both motions are fully briefed. For the
reasons that follow, the plaintiffs' motion is granted,
and Asset Acceptance's motion is denied.
civil liability provision of the FDCPA calls for actual and
statutory damages for individuals and named class members, as
well for attorney's fees and costs in the case of a
successful action to enforce liability. 15 U.S.C. §
1692k(a)(1), (a)(2)(A), (a)(2)(B)(i), (a)(3). It also permits
the recovery of additional damages for unnamed class members,
the proper measure of which the parties dispute in the
instant motions. The relevant portion of the Act states that
“any debt collector who fails to comply with any
provision of this subchapter with respect to any person is
liable . . . in the case of a class action . . . [for] such
amount as the court may allow for all [unnamed] class
members, without regard to a minimum individual recovery, not
to exceed the lesser of $500, 000 or 1 per centum of the net
worth of the debt collector.” 15 U.S.C. §
1692k(a)(2)(B)(ii). It is undisputed that Fulton's net
worth is $0 and that one percent of Asset Acceptance's
net worth exceeds $500, 000.
Acceptance relies on traditional tort rules regarding
vicariously liable parties to argue that its liability for
class damages is coextensive with, but no greater than
Fulton's liability under the statute, which is zero given
Fulton's insolvency. In support, Asset Acceptance directs
the Court to Section 13 of the Restatement (Third) of Torts,
which provides that “[a] person whose liability is
imputed based on the tortious acts of another is liable for
the entire share of . . . responsibility assigned to the
other.” Restatement (Third) of Torts: Vicarious Liab.
§ 13 (2000). Plaintiffs, on the other hand, argue that
all liable debt collectors must be held separately to the
penalties set forth in the statutory damages provision. Since
Asset Acceptance is liable debt collector, the plaintiffs
argue, the Court may award additional damages to unnamed
class members taking Asset Acceptance's net worth into
Court agrees with the plaintiffs for three reasons. First,
the FDCPA civil damages provision does not distinguish
between directly and vicariously liable debt collectors.
Rather, it applies unambiguously to “any debt
collector who fails to comply” with the Act. 15 U.S.C.
§ 1692k(a) (emphasis added). In recognition of the broad
applicability of this provision, district courts in this
circuit have permitted discovery on the net worth of multiple
debt collectors in a single class suit. See, e.g., Green
v. Monarch Recovery Mgmt., Inc., 997 F.Supp.2d 932, 934
(S.D. Ind. 2014) (permitting discovery of the net worth of
the “true owner” of the alleged debt, the
assignee of the debt for collection purposes, and a
contracted third-party debt collector); see also Nall v.
Allied Interstate, LLC., 2015 WL 6529233, at * 2 (S.D.
Ind. Oct. 27, 2015) (debt owner and debt collector);
Trevino v. ACB Am., Inc., 232 F.R.D. 612, (N.D. Cal.
2006) (same). They have done so on the basis that each debt
collector's net worth is relevant to determining the
appropriateness of class certification and enabling
meaningful settlement negotiations. See Id. (citing
authority); see also Tripp v. Berman & Rabin,
P.A., 310 F.R.D. 499, 507 (D. Kan. 2015) (considering
the defendants' combined net worth in determining whether
to certify the proposed class); Hartley v. Suburban
Radiologic Consultants, Ltd., 295 F.R.D. 357, 378 (D.
Minn. 2013) (same). Inherent in these decisions is the
understanding that any party found liable for
violating the Act is accountable for statutory
damages. In other words, courts seem to agree that
the civil damages provision in the FDCPA applies to all
offending parties, the nature of their respective roles the
in offense notwithstanding. The Seventh Circuit concluded
that as a debt collector, Asset Acceptance's failure to
ensure that Fulton adhered to the FDCPA-a law to which Asset
Acceptance is itself bound-was sufficient to impose
liability. If Asset Acceptance is liable for a violation of
the Act, it is accountable for class damages under §
the violation here is statutory, not tortious. Vicarious
liability in tort law is premised on ensuring that a
financially responsible principal will respond if its agent
harms a third party while acting on its behalf. The relative
fault or actual conduct of the principal is irrelevant under
this standard; liability is premised instead solely on the
relationship between the principal and its agent. The FDCPA,
quite differently, is premised on “eliminate[ing]
abusive debt collection practices by debt collectors”
and “protect[ing] consumers against debt collection
abuses.” 15 U.S.C. § 1692. To advance this
purpose, all debt collectors deemed responsible for a
violation of the Act, whether by sending a violative letter
or failing to monitor compliance, may be penalized. Asset
Acceptance's liability is not “imputed” from
Fulton's conduct in the common law sense. It derives from
a failure to supervise, making it culpable in and of itself.
See Janetos, 825 F.3d at 325 (“[W]e think it
is fair and consistent with the Act to require a debt
collector who is independently obliged to comply with the Act
to monitor the actions of those it enlists to collect debts
on its behalf.”).
if Asset Acceptance were permitted to hide behind
Fulton's insolvency, it would be encouraged to outsource
unethical debt collection practices to judgment-proof debt
collectors like Fulton. This, of course, would undermine the
purpose of the FDCPA. Another court opined in dicta that to
avoid creating incentives contrary to public policy and to
encourage debt collectors to monitor the activities of those
collecting debts on their behalf, “[i]t would seem
appropriate to apply the FDCPA's damages cap individually
to each relevant Defendant.” Green, 997
F.Supp.2d at 937. Asset Acceptance has expressed concern that
interpreting the statute this way would permit plaintiffs to
collect duplicative damages. The Court agrees with Asset
Acceptance (and the plaintiffs concede) that actual damages
may not be double collected. The question of additional
statutory damages, however, is a more complicated one, and
the Seventh Circuit has not addressed how the statutory cap
on class damages applies when multiple parties are found
liable in connection with the same violation. In this case,
however, given Fulton's insolvency, that issue is not
before the Court. Additional class damages assessed against
Fulton will be zero, and additional class damages assessed
Asset Acceptance will not exceed $500, 000. Accordingly, the
Plaintiffs will not double-collect. In consideration of the
purpose of the statute, then, the Court concludes that the
net worth of Asset Acceptance, a liable debt collector in its
own right, is relevant to a determination of class damages.
Of course, as Asset Acceptance correctly points out, there is
no guaranty that unnamed class members are entitled to
additional damages at all. In determining the amount of class
damages, courts must consider “the frequency and
persistence of noncompliance by the debt collector, the
nature of such noncompliance, the resources of the debt
collector, the number of persons adversely affected, and the
extent to which the debt collector's noncompliance was
intentional” in determining damages.” 16 U.S.C.
§ 1692k(b)(2). It may be that Asset Acceptance took
extraordinary measures to ensure Fulton's compliance with
the Act. If that is the case, an award of statutory damages
may be nominal if not entirely inappropriate. It may also be,
however, as the plaintiffs suggest, that Asset Acceptance
played a role in drafting or reviewing the violating letters.
Whatever the case, the amount of additional damages owed is
fact question, and one that will be answered by reference, in
part, to the net worth of Asset Acceptance.
these reasons, and for the reasons set forth orally at the
status hearing on December 13, 2016, Plaintiffs motion 
is granted and Defendant's motion  is denied.
 This understanding is also reflected
in McWilliams v. Advanced Recovery Systems, Inc.,
2016 WL 6208633, at *3 (S.D.Miss. Oct. 20, 2016), by the
preliminary approval of a proposed class settlement wherein
the defendant debt collectors agreed to contribute to a
common fund for class damages in an amount ...