Opinion
NO. CS-99-0270-EFS
November 2, 2002
ORDER GRANTING MOTION FOR AN ORDER SUBSTITUTING THE CLASS REPRESENTATIVE
BEFORE THE COURT, without oral argument, is Plaintiff's Motion for An Order Substituting Class Representative, (Ct. Rec. 96). The named Plaintiff, class member Loraine Connor, is now deceased. On May 1, 2002, issued an Order approving a new notice to the class. (Ct. Rec. 95.) That notice advised the class that
The class representative has recently passed away. It is necessary for another class member (one or more of you) to substitute for Ms. Connor, intervene and assume the duties of the class representative. If you are willing to do so, please contact class counsel, Michael D. Kinkley or O. Randolph Bragg, their addresses are listed below. If a substitute class representative is not found, this case will be de-certified (i.e. no longer brought as a class on your behalf) and Ms. Connor's Claim may be dismissed.
Ct. Rec. 95 Att. A at 1-2.) After that Notice was distributed, Lisa K. Heller, a class member, indicated her willingness to substitute into the case. The Plaintiffs thereafter filed the current motion, (Ct. Rec. 96), seeking that result. Defendant Automated Accounts, after receiving two extensions of time to file a response, (Ct. Recs. 104, 109), has objected to the proposed substitution, (Ct. Rec. 110).
Automated Accounts appears to agree that it Ms. Heller can satisfy the requirements of Federal Rule of Civil Procedure 23(a), she may be substituted in as the class representative. To so qualify, Ms. Heller must meet the prerequisites of typicality, commonality, and adequacy of representation. See Fed.R.Civ.P. 23(a). Automated has not disputed the prerequisite of commonality, instead focusing its attack on typicality and adequacy of representation.
To certify a class action, as the Court has already done here the Court must also find numerosity. However, that requirement has no application to an individual named plaintiff's suitability.
1. Typicality
The claims of the representative party must be typical of the claims of the class. See Fed.R.Civ.P. 23(a)(3). "The test of typicality `is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct.'" Hanon, 976 F.2d at 508 (quoting Schwartz v. Harp, 108 F.R.D. 279, 282 (C.D. Cal. 1985)). However, class certification "should not be granted if `there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.'" Hanon, 976 F.2d at 508 (quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990)).
Automated asserts that Ms. Heller's claims are atypical for two reasons. First, Automated Accounts notes that Ms. Heller may have tendered the checks to Money Tree Inc. at a point when she knew there were insufficient funds to cover them. Such potential fraud or conversion allegedly provides Automated Accounts with a unique defense because "[n]o court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act." Messett v. Cowell, 194 Wn. 646, 651-65 (1938), superseded by statute on other grounds, as stated in City of Olympia v. Palzer, 107 Wn.2d 225 (1986). However, courts have held there is no "fraud exception" to the FDCPA, it being irrelevant whether class members might have intended that their checks would be dishonored. See Keele v. Wexler, 149 F.3d 589, 595-96 (7th Cir. 1998). Accordingly, Automated Accounts can assert no fraud defense, unique or otherwise, to Ms. Heller's claim.
Second, Automated Accounts alleges that because Ms. Heller suffered no actual damages she cannot represent class members who did. Class representatives who suffer only statutory damages may represent class members who suffer actual damages. See Keele, 149 F.3d at 593, 595 (holding that in receiving debt collection letters that allegedly violated the FDCPA, the class representative and class members suffered the same injury, though their recoverable damages might differ, and that the class representative met the typicality requirement though she sought statutory and actual damages for the class, but she herself could recover only statutory damages). It is therefore appropriate for Ms. Heller to seek both statutory and actual damages on behalf of the class members.
2. Adequacy of Representation The prerequisite of adequacy of representation requires the named plaintiff to fairly and adequately protect the interests of the class. See Fed.R.Civ.P. 23(a)(4). That in turn consists of two requirements: (1) that the named plaintiff's counsel is qualified, experienced, and generally able to conduct the proposed litigation, and (2) that the named plaintiff has no interest antagonistic to those of the class. See Securities Exch. Comm'n v. Drexel Burnham Lambert Group, Inc., 960 F.2d 285, 291 (2d Cir. 1992).
Automated's reiterated arguments relating to the defense of fraud and lack of actual damages are similarly rejected as challenges to Ms. Heller's adequacy. Automated's assertion that Ms. Heller is inadequate because she cannot afford to prosecute this case as a class action overlooks the fact of representation pursuant to Washington Rule of Professional Conduct 1.8(e)(2). That rule allows counsel in a class action to advance the costs of litigation to the client, with repayment contingent on the outcome of the matter. As that is precisely what has occurred here, Ms. Heller's ability to pay the entire costs of litigation is irrelevant. See South Carolina Nat'l Bank v. Stone, 139 F.R.D. 325, 329 (D.S.C. 1991); Rivera v. Fair Chevrolet Geo P'ship 165 F.R.D. 361, 365 (D. Conn. 1996). Further, Ms. Heller has agreed to be responsible for her pro rata share of costs, which is all that may be required of her, were Washington Rule of Professional Conduct 1.8(e)(2) not to exist. See Rand v. Monsanto Co., 926 F.2d 596, 599 (7th Cir. 1991); South Carolina Nat'l Bank v. Stone, 139 F.R.D. at 329 (D.S.C. 1991); Rivera v. Fair Chevrolet Geo P'ship 165 F.R.D. at 365 (D. Conn. 1996). Finally, the Court does not view Automated's complaints about the conduct of class counsel a sufficient reason to deny the present motion. Defense counsel also had missed numerous dates before the Court amended the scheduling order.
Finding that Ms. Heller meets the requirements of of Federal Rule of Civil Procedure 23(a), the Court grants the motion and permits the substitution of Ms. Heller for Ms. Connor.
IT IS HEREBY ORDERED:
1. Plaintiff's Motion for An Order Substituting Class Representative, (Ct. Rec. 96), is GRANTED, in all of its subparts and alternatives.
2. Plaintiff's Motion for Extension of Time to File Reply Brief, (Ct. Rec. 112), is GRANTED.
3. All papers filed in this action shall hereinafter use the caption "LISA K. HELLER, on behalf of herself and all others similarly situated, v. AUTOMATED ACCOUNTS, INC."
4. Pursuant to this Court's prior amended scheduling order, all dispositive motions shall be FILED AND SERVED no later than December 16, 2002. A Response to a dispositive motion shall be filed and served within 21 days after service of the motion. The Reply of the moving party shall be filed and served 5 days after service of the Response. No supplemental responses or supplemental replies to any dispositive motion may be filed unless the Court grants a motion to file such documents. Contrary to the local rules, dispositive motions shall be noted for hearing at least 45 days after the date of filing.
5. All other dates in this Court's prior scheduling order remain in full effect.
IT IS SO ORDERED. The District Court Executive is directed to enter this Order and copies to counsel.