United States District Court, N.D. Illinois, Eastern Division
THOMAS QUINN and THERESA QUINN, individually and on behalf of a class of similarly situated persons, Plaintiffs,
SPECIALIZED LOAN SERVICING, LLC, Defendant.
MEMORANDUM OPINION AND ORDER
E. Bucklo, United States District Judge
Thomas and Theresa Quinn (“the plaintiffs, ”
“the Quinns”) have brought this suit,
individually and on behalf of a purported class, against
Specialized Loan Servicing, LLC (“SLS”) for
violations of the Fair Debt Collection Practices Act
(“FDCPA, ” “the Act”), 15 U.S.C.
§ 1692 et seq. Presently before me is SLS's
motion to bifurcate class and merits discovery. For the
reasons below, the motion is denied.
stated, the plaintiffs' amended complaint alleges that
after they defaulted on their mortgage loan, SLS began
contacting them in an attempt to collect payment. Among other
things, the plaintiffs claim that SLS sent “field
inspectors” to their home for the ostensible purpose of
determining whether the property was still inhabited. In
several instances, inspectors visited the home while the
plaintiffs were away and left a door hanger at the residence
containing the following message: “AT THE REQUEST OF
SPECIALIZED LOAN SERVICE, AN INDEPENDENT FIELD INSPECTOR
CALLED ON YOU TODAY. PLEASE CONTACT SPECIALIZED LOAN
SERVICING AT 1-800-306-6062.” Am. Compl. ¶ 39.
According to the plaintiffs, they called the number expecting
to speak with a representative about home inspections and
instead were connected to SLS's collections
department. The plaintiffs maintain that this
constituted a violation of § 1692e of the Act, which
prohibits the use of false, deceptive, or misleading
representations in attempting to collect a debt. In addition,
the plaintiffs separately claim that SLS violated §
1692c(a)(2) of the FDCPA by communicating with them directly
despite its awareness that they were represented by counsel.
denies that calling the phone number listed on the door
hangers connected consumers directly to SLS's collections
department. It claims to have evidence clearly showing that
after dialing the number, the phone prompts gave callers the
option of speaking with representatives regarding other
issues. According to SLS, this defeats the plaintiffs'
FDCPA claims because it refutes the plaintiffs'
contention that the door hangers constituted communications
made “in connection with the collection of any
debt” as required by the statute. SLS also claims to
have definitive evidence that it was expressly authorized by
plaintiffs' counsel to communicate with plaintiffs
directly, thereby defeating their § 1692c(a)(2) claim.
SLS argues that if it is allowed to conduct limited discovery
into these issues, it will be able to obtain summary judgment
on plaintiffs' individual claims and make it unnecessary
to engage in any further merits or class discovery.
provides that “[a]t an early practicable time after a
person sues or is sued as a class representative, the court
must determine by order whether to certify the action as a
class action.” Fed.R.Civ.P. 23(c)(1)(a). It is well
settled that the issue of certification should generally be
resolved prior to addressing the merits of the
plaintiff's claims. See, e.g., Bell v. PNC
Bank, Nat. Ass'n, 800 F.3d 360, 376 (7th Cir. 2015)
(“[T]he default rule is that a court may not resolve
merits questions at the class certification stage.”);
Thomas v. City of Peoria, 580 F.3d 633, 635 (7th
Cir. 2009) (“First ruling on the merits of the federal
claims, and then denying class certification on the basis of
that ruling, puts the cart before the horse, as we have
emphasized in previous cases.”); Joseph M. McLaughlin,
McLaughlin on Class Actions § 3:12 (13th ed.
2016) (“It is axiomatic that at the class certification
stage a court may not resolve substantial, disputed factual
issues concerning the merits unless those issues also are
relevant to a Rule 23 determination.”).
sure, where merits and certification issues are inextricably
linked, a preliminary inquiry into the merits may be
necessary. In such cases, however, “Rule 23 grants
courts no license to engage in free-ranging merits inquiries
at the certification stage.” Amgen Inc. v.
Connecticut Ret. Plans & Trust Funds, 133 S.Ct.
1184, 1194-95 (2013). Rather, “[m]erits questions may
be considered to the extent -- but only to the extent -- that
they are relevant to determining whether the Rule 23
prerequisites for class certification are satisfied.”
Id. at 1195. (citations and quotation marks
omitted); see also Manual for Complex Litigation
§ 21.14 (“At [the precertification] stage, the
court should not decide or even attempt to predict the weight
or outcome of the underlying claims and defenses.... A
preliminary inquiry into the merits may be required to decide
whether the claims and defenses can be presented and resolved
on a class-wide basis.”).
SLS does not argue that its proposed merits discovery is
necessary for addressing Rule 23's certification
requirements. Rather, SLS contends that preliminary discovery
on the merits of the plaintiffs' claims will make it
unnecessary to inquire into certification issues at all. In
support of its position that such precertification merits
discovery is permissible, SLS relies on a handful of cases
from the Northern District of Indiana in which magistrate
judges have bifurcated merits and class discovery and have
permitted merits discovery to proceed first. See
Brittingham v. Cerasimo, Inc., No.
2:08-CV-216TLSPRC, 2008 WL 5156645, at *1 (N.D. Ind. Dec. 8,
2008); Stavroff v. Midland Credit Mgmt. Inc., No.
3:05-CV-127 AS, 2005 WL 6329149, at *1 (N.D. Ind. June 8,
2005); Sheets v. Nat'l Action Fin. Servs., 2005
U.S. Dist. LEXIS 8439 (N.D. Ind. May 9, 2005). These decisions
opine that, in light of the 2003 amendments to Rule 23 --
which changed the language requiring the district court to
decide the issue of certification “as soon as
practicable” to the requirement that certification be
decided “[a]t an early practicable time” -- it is
no longer necessary to decide the issue of certification
before addressing the merits. In reaching this conclusion,
each of the decisions places significant weight on the
comment in the Advisory Committee's notes accompanying
the 2003 amendment that “[t]he party opposing the class
may prefer to win dismissal or summary judgment as to the
individual plaintiffs without certification and without
binding the class that might have been certified.”
Fed.R.Civ.P. 23(c)(1)(a) advisory committee's note.
the reasoning of these cases unpersuasive. As an initial
matter, I disagree with these decisions' reading of the
Advisory Committee's notes. In the passage quoted above,
the Advisory Committee merely states that the certification
decision may be delayed until after a defendant has filed a
dispositive motion on the named plaintiff's claims. That
is not what SLS seeks to do with the instant motion. (Indeed,
SLS has already had the opportunity to file a Rule 12(b)(6)
motion to dismiss. See Quinn v. Specialized Loan
Servicing, LLC, No. 16 C 2021, 2016 WL 4264967, at *1
(N.D. Ill. Aug. 11, 2016)). Rather, SLS argues that it is
entitled to engage in precertification discovery for the
purpose of challenging the merits of the plaintiffs'
claims before the court addresses issues of class
certification. Nothing in the Advisory Committee's notes
supports such precertification discovery. On the contrary,
the Advisory Committee's notes make clear that any
initial merits discovery should be confined to issues bearing
Although an evaluation of the probable outcome on the merits
is not properly part of the certification decision, discovery
in aid of the certification decision often includes
information required to identify the nature of the issues
that actually will be presented at trial. In this sense it is
appropriate to conduct controlled discovery into the
“merits, ” limited to those aspects relevant to
making the certification decision on an informed basis.
Civ. P. 23(c)(1) advisory committee's note.
deeper problem with the reasoning underlying the
Sheets line of cases is that it has no limiting
principle. Taken to its logical conclusion, the logic of
these decisions suggests that courts should routinely allow
precertification merits discovery, given the possibility that
it might render certification issues moot. Supreme Court and
Seventh Circuit cases decided after Sheets,
Stavroff, and Bettingham make clear that
the 2003 amendments to Rule 23 did not disturb the general
rule that the merits are to be addressed only after the issue
of certification has been addressed. See, e.g.,
Amgen, 133 S.Ct. at 1194-95; Bell, 800 F.3d
at 376; Thomas, 706 F.3d at 849.
even if the free-ranging precertification merits discovery it
seeks were permissible, I am not convinced that bifurcation
would contribute to a more efficient resolution of this suit.
Among other things, bifurcating discovery may give rise to
disputes over whether a particular discovery request relates
to the merits or to class certification. See, e.g.,
True Health Chiropractic Inc. v. McKesson Corp., No.
13-CV-02219-JST, 2015 WL 273188, at *2 (N.D. Cal. Jan. 20,
2015) (denying motion to bifurcate class and merits discovery
in part on the ground that “bifurcation could raise a
slew of ...