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Wheeler v. Midland Funding LLC

United States District Court, N.D. Illinois, Eastern Division

April 24, 2018

KEVIN WHEELER, on behalf of himself and a putative class of others similarly situated, Plaintiff,


          Hon. Virginia M. Kendall Judge

         Plaintiff Kevin Wheeler (“Wheeler”) seeks to certify a class under the Fair Debt Collection Practices ACT (“FDCPA”). (Dkt. No. 62.) The Defendants, Midland Funding LLC, Midland Credit Management, Inc. (“MCM”), and Encore Capital Group, Inc., oppose certification as improper arguing Wheeler lacks standing to assert his FDCPA claims and has failed to meet the requirements of Federal Rule of Civil Procedure 23 (“Rule 23”). (Dkt. No. 71.) Because Wheeler has standing to sue and satisfies the requirements of Rule 23, the Court grants his Renewed Motion for Class Certification with a modified class definition. [62.]


         Sometime in 2015, Wheeler noticed that MCM was pulling his credit report. (Dkt. No. 1, at ¶ 33.) Wheeler called and MCM stated it was attempting to collect an alleged credit card balance and offered Wheeler a 40% discount to settle that debt. (Id. ¶¶ 33-35, 38.) Subsequently, on October 4, 2015, Wheeler noticed that MCM had pulled his credit report again. (Id. ¶ 40.) So Wheeler again contacted MCM and a representative directed him with an account number to obtain information about his debt from MCM's website. (Id.) MCM's website indicated: (1) that Wheeler's last payment on the debt was on September 18, 2009; (2) that the original creditor had given up on being repaid as of April 30, 2010; (3) a settlement offer whereby plaintiff would save 40%; and (4) notice that MCM was not obligated to renew its settlement offer. (Id. ¶¶ 44-45; Ex. B). The website did not indicate that the statute of limitations on Wheeler's debt had expired. (Id. ¶ 48.)

         Because Illinois' statute of limitations on his credit card debt had expired, Wheeler asserts that his debt could not be forcibly collected and that Defendants violated the FDCPA and related rules because they failed to inform him of that fact. (Id. ¶¶ 46, 58-61.) He also alleged that the Defendants regularly attempt to collect debts from other debtors where the statute of limitations on the debt has expired. (Id. ¶48.) As a result, Wheeler's now seeks to certify and represent a class of individuals who received similar treatment allegedly in violation of the FDCPA.


         A party seeking to maintain a class action must affirmatively demonstrate compliance with Rule 23 through evidentiary proof. Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013); Szabo v. Bridgeport Machs., 249 F.3d 672, 675 (7th Cir. 2001). Specifically, a plaintiff must satisfy all requirements of Fed.R.Civ.P. 23(a) and fall within at least one of the categories identified in Rule 23(b). Arreola v. Godinez, 546 F.3d 788, 794 (7th Cir. 2008). This requires the court's rigorous analysis of compliance with the Rule 23 elements in order to ensure that a plaintiff's case is not a “weak candidate for class treatment.” Thorogood v. Sears, Roebuck & Co., 547 F.3d 742, 746-47 (7th Cir. 2008); Wal-Mart Stores v. Dukes, 564 U.S. 338, 350 (2011). Recognizing the broad discretion to determine whether class certification is appropriate, a district court's ruling will only be overturned for abuse of discretion. Arreola, 546 F.3d at 794; Harriston v. Chi. Tribune Co., 992 F.2d 697, 703 (7th Cir. 1993).


         Wheeler seeks to certify the following class:

(a) all individuals with Illinois addresses (b) who accessed the MCM web site (c) and were offered a settlement or discount (d) on a credit card debt on which the last payment had been made more than five-years prior to the accessing (e) where the date of access was on or after a date one year prior to the filing of this action and on or before a date 21 days after the filing of this action.

(Dkt. No. 62, at 1.)

         The Defendants lodge the following objections to class certification: (1) Wheeler lacks standing because he suffered no actual harm, (Dkt. No. 71, at 7-9); (2) Wheeler fails to establish the commonality and predominance elements of Rule 23, (Id. at 9-14); (3) Wheeler's claims do not meet the typicality and adequacy elements under Rule 23, (Id. at 14-15); and (4) the class claims are not superior to any potential individual claims, (Id. at 15).

         I. Standing

         The Defendants return to the issue of standing, an issue resolved by the Court in its denial of the Motion to Dismiss, arguing that the Plaintiff cannot show injury in fact because he suffered no actual harm as a result of the alleged FDCPA violation. See (Dkt. Nos. 60; 71, at 7-9). Because it is a threshold inquiry, standing may be examined at “successive stages of litigation.” Diedrich v. Ocwen Loan Serv'ing, 839 F.3d 583, 588 (7th Cir. 2016). A plaintiff seeking to certify a class under Rule 23 must show that he has standing and that his proposed class is ascertainable. Spokeo v. Robins, 136 S.Ct. 1540, 1547 n.6 (2016); Jamie S. v. Milwaukee Pub. Sch., 668 F.3d 481, 493 (7th Cir. 2012). It is an “antecedent legal issue” a court must resolve before proceeding to evaluate the Rule 23 factors. Payton v. County of Kane, 308 F.3d 673, 676 (7th Cir. 2002).

         As a starting point, the Court's opinion denying the Motion to Dismiss for lack of standing remains correct and the reasoning sound for the reasons therein. In its renewed attack on standing the Defendants cite to Groshek v. Time Warner Cable and a case from the Sixth Circuit for the propositions that Congress does not define the boundaries of Article III standing, and further that standing does not exist where a Plaintiff fails to show “any appreciable risk of harm” beyond a “bare procedural violation” of the statute. 865 F.3d 884, 887 ...

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