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Wheeler v. American Profit Recovery, Inc.

United States District Court, E.D. Missouri, Eastern Division

January 3, 2017

EVAN WHEELER, Plaintiff,
v.
AMERICAN PROFIT RECOVERY, INC. et al, Defendants.

          MEMORANDUM AND ORDER

          RONNIE L. WHITE UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiffs Motion for Rule 23 Class Certification (ECF No. 43). The parties fully briefed the motion, and on October 5, 2016, the Court held a hearing and took the motion under submission. The motion is now ready for disposition.

         I. BACKGROUND

         This case stems from a series of collection letters sent to Plaintiff by Defendant American Profit Recovery, Inc. ("APR") regarding a debt Plaintiff owed to Defendant Anheuser-Busch Employees' Credit Union ("A-B Credit Union"). The letters identified APR as the collection agency obtained by A-B Credit Union to collect the debt; provided APR's address and phone number for correspondence purposes; set forth the balance owed and other required disclosures; and requested that Plaintiff arrange to resolve the debt. (Pl.'s Mot. for Class Cert. Ex. 5, ECF No. 43-5) According to the agreement, there are two tiers pertaining to the collection process. APR charges a rate of $11.99 per Tier I account, and APR sends a total of 5 letters before placing the account into Tier II. With regard to Tier II, APR receives 38% of the amounts recovered under that tier. (Pl.'s Ex. 4, ECF No. 43-4)

         In his Amended Complaint, Plaintiff brings an action for statutory damages on behalf of a putative class for violations of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. ("FDCPA"). (Pl.'s First Amended Complaint ("FAC"), ECF No. 20) Plaintiff alleges that he received letters from APR purporting to collect a debt for A-B Credit Union. However, when he called APR to inquire about the debt, he allegedly was informed that that APR was unable to answer any questions regarding the circumstances of his debt. Instead, APR directed Plaintiff to call A-B Credit Union because the account was being handled by A-B Credit Union, and APR was not involved in the collection process. (Id. at ¶¶ 15-17) Plaintiff called from his attorney's office using his attorney's cell phone, and during the call Plaintiff did not dispute the debt, attempt to make a payment, or otherwise ask for any specific information from APR. (Defs.' Ex. B, Wheeler Dep. pp. 76-80, ECF No. 49-2; Pl.'s Ex. 12, ECF No. 43-11) Subsequent to this discussion, Plaintiff received another letter from APR indicating that Plaintiffs failure to resolve the delinquent account would result in the account being sent to the Tier II collection division. (FAC ¶ 20)

         Plaintiff contends that APR furnished the collection letter knowing that said letter would create the false believe in Plaintiff and the putative class that APR was participating in the debt collection when such was not true. (Id. at ¶ 21) This alleged scheme, known as "flat-rating" is prohibited by 15 U.S.C. § 1692j, which makes it "unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating." 15 U.S.C. § 1692j(a). Specifically, Plaintiff alleges that the letters created a false impression that someone other than A-B Credit Union was taking part in the collections process; falsely represented the character and legal status of the debts; used deceptive means to collect debts; and used a name other than the true name of the debt collector's business. (FAC ¶ 43)

         In his motion for class certification, Plaintiff asserts that APR does not set up a Trust account for Tier I payments and does not accept Tier I payments. Instead, debtors are instructed to directly pay A-B Credit Union. He further asserts that the Tier I letters are automatically generated by APR's computer system, and APR does not review the accounts, only the format, before transmitting the letters to the printing company. Further, APR has no authority to negotiate debts on behalf of A-B Credit Union. Plaintiff claims that he received five Tier I letters from APR (Nos. '101, '201, '301, '401, and '501) from APR regarding the balance he owed to A-B Credit Union.

         Plaintiff maintains that this case is properly brought as a class action and proposes the following class:

All consumers who were sent both Tier 1 '101 and '201 letters by APR regarding AB Credit Union accounts during the time period of February 2, 2014 to May 20, 2016.

         Plaintiff contends that the Tier I process was uniformly applied to all the accounts, so whether such process constitutes impermissible "flat-rating" is a question common to all class members.

         Thus, Plaintiff asserts that the proposed class satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure and requests that this Court certify the class.

         II. CLASS ACTION STANDARD

         Under the Federal Rules of Procedure:

One or more members of a class may sue or be sued as representative parties on behalf of all members only if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the ...

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