A class action against Portfolio Recovery Associates (PRA) was certified on February 5th of this year by Plaintiffs Nicola Magee and James Peterson for violations of the Fair Debt Collection Practices Act (FDCPA), and included approximately 400,000 people. Specifically, Magee and Peterson allege that PRA sent letters demanding payment of time-barred debt without disclosing that the debt was time-barred, and threatened to credit report the debt after a time that the debt could no longer be reported.

During the process of discovery, Plaintiffs learned that PRA had since modified and sent new notices to those affected, clarifying that the debt at issue is time-barred.

As a result, the Plaintiffs have since filed a Motion to modify the class definitions to include only those who actually paid in response to the collection letters, those who have not received a subsequent letter from PRA informing them that the debt is time-barred or no longer can be reported on their credit report, and those who have filed a lawsuit. PRA filed a Motion to oppose the modification, as well as a Motion to Decertify the Classes. On October 8, 2015 the U.S. District Court for the Northern District of Illinois granted Plaintiffs’ Motion and denied PRA’s Motion.

PRA offered several arguments to support their opposing Motion, all of which were rejected by the Court:

  • They argued that the class should be decertified because the potential monetary would be de minimis. The Plaintiffs argued, however, that the modification would increase the amount paid to each member [of the smaller group], which counters this claim.
  • They suggested that Plaintiff’s counsel is inadequate, as they are attempting to “abandon” class members. Plaintiffs argued that the revised notice itself represents the most substantial part of the relief they would likely receive if they remained in the class, therefore those original class members have indeed been well-served.
  • They argued that changing the class definition would injure both PRA and potential class members, as the modification would impact the FDCPA claims of any member removed from the class. PRA noted that the Plaintiffs’ claim stopped the statute of limitation period for three years; an amended complaint instead of a motion to modify the class would have caused more of the claimants’ debts to now be time-barred. The Court rejected this argument, claiming that PRA offered insufficient explanation.
  • They argued that narrowing the class to those who made a payment as a result of an allegedly deceptive letter would require an individualized determination for each person’s motives. In other words, it’s unclear whether they made payment because they were deceived, or because of other reasons. Citing two previous cases, the Court held that “the fact that damages are not identical across all class members should not preclude class certification,” and “the need for individual damages determinations at [a] later stage of the litigation does not itself justify the denial of class certification.”

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