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Lovelace v. LVNV Funding, LLC

United States District Court, W.D. Missouri, Western Division

July 13, 2016

Dearest Nathaniel Lovelace, Plaintiff,
LVNV Funding, LLC, Defendant.

          Dearest Nathaniel Lovelace, Plaintiff, represented by Sander C. Sowers, Lear & Werts, LLP, Terry Lee Lawson, Lawson Law Center LLC & Todd C. Werts, Lear & Werts, LLP.

          LVNV Funding, LLC, Defendant, represented by David M. Schultz, Hinshaw & Culbertson, Terese A. Drew, Hinshaw & Culbertson & Vitaly Libman, Hinshaw & Culbertson.


          HOWARD F. SACHS, District Judge.

         This is an action brought under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq.

         Plaintiff Nathaniel Lovelace used his Sears Department Store Credit Card to purchase goods from Sears. Lovelace did not make the required payments on his credit card account. Defendant LVNV purchased defaulted accounts for the purpose of collecting unpaid balances, and included was Lovelace's Sears account. LVNV sued on the account and Lovelace now asserts that it violated the Fair Debt Collection Practices Act because the debt was time-barred.

         Specifically, Lovelace's position is that in determining whether the debt was within the statute of limitation period, LVNV used Missouri's five-year general statute of limitations for credit card debt when it should have used the four-year statute of limitations contained in the Uniform Commercial Code for the breach of contract for sale. Lovelace goes on to argue that class action certification is appropriate for debts that LVNV attempted to collect in states where the statute of limitations for the credit card debt is longer than the four-year statute of limitations contained in the UCC for suits alleging "breach of any contract for sale." UCC, § 2-725. Lovelace has identified ten states which fit this profile and up to 76 potential class members. Pending before the Court is Plaintiff's Motion for Class Certification.[1] (Doc. 30). Lovelace defines the proposed class as:

All individuals against whom LVNV filed a lawsuit in the states of Hawaii, Illinois, Indiana, Michigan, Montana, Missouri, Ohio, South Dakota, Utah and Washington, for the collection of alleged consumer debts, arising from the use of a Sears department store card more than four years after the accrual of the statute of limitation on that claim, under Article II, § 725 of the Uniform Commercial Code during the time period of October 10, 2012, to the present.

         Class actions are governed by Federal Rule of Civil Procedure 23 which is "designed to further procedural fairness and efficiency." Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., 559 U.S. 393, 402 (2010). Rule 23 (c)(1)(A) requires 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." Under Federal Rule 23(a) the proposed class must first satisfy the requirements of numerosity, commonality, typicality, and fair and adequate representation. Second, the proposed class must meet at least one of the three requirements of Rule 23(b). Barfield v. Sho-Me Power Elec. Coop, 2013 WL 3872181 (W.D. Mo.).

         In deciding a motion for class certification, the court conducts a "limited preliminary inquiry" that looks behind pleadings only so far as to determine whether, given the factual setting of the case, the plaintiffs general allegations are true, common evidence could suffice to make out a prima facie case for the class. Janson v., Inc., 271 F.R.D. 506, 509-10 (W.D. Mo. 2010). Plaintiffs bear the burden of demonstrating Rule 23's requirements are satisfied. Coleman v. Watt, 40 F.3d 255, 258 (8th Cir 1994). The Court is required to conduct a "rigorous analysis" that entails looking behind the pleading and ascertaining the nature of Plaintiffs' claims as well as the nature of the evidence. The Court is not permitted to resolve the merits, but "frequently that rigorous analysis' will entail some overlap with the merits of the plaintiffs' underlying claims." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011).

         Lovelace argues that he has satisfied the numerosity, commonality, typicality, and fair and adequate representation requirements or Rule 23(a). Lovelace also contends that he has satisfied the Rule 23(b)(3) requirement that common questions of law or fact predominate over questions affecting only individual members and that a class action would be superior to other available methods of adjudicating the controversy. Defendants' briefing specifically challenges numerosity and commonality.

         Lovelace begins his analysis by saying that Rule 23's numerosity requirement is easily satisfied because he has identified at least 76 consumers who were sued by LVNV on a Sears Card debt more than four years after their last payment, and another 102 consumers for whom additional information will be reviewed to determine whether they fit the class definition. Plaintiff believes that the proposed class meets the commonality requirement because the question of whether the UCC's four-year statute of limitations applies to the Sears card debts is a common question that links the class members. LVNV responds that none of the Rule 23 requirements are satisfied and that the proposed class would include consumers who would be collaterally attacking a state court judgment in federal court and this would be precluded by the Rooker-Feldman doctrine and the doctrine of res judicata.

         The analysis of numerosity and commonality often overlap and for the purpose of this Order, the two will be analyzed together. The Supreme Court in Wal-Mart Stores, Inc., 131 S.Ct. at 2551, addressed the issue of commonality:

Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury. This does not mean merely that they have all suffered a violation of the same provision of law.... Their claims must depend upon a common contention... that is capable of class wide resolution - which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.

         The Eighth Circuit has held that commonality required an issue (1) linking the class members (2) that was substantially related to the litigation's resolution. DeBoer v. ...

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