FDCPA Lawsuit Overturned Due to Class Cert. Problems

Four Classes in an unfair debt collection class action lawsuit were overturned due to Class requirement difficulties. The Eighth Circuit claimed that the district court did not follow proper procedures for Class definition. The class action lawsuits accusing Credit Management Services Inc. of violating the Fair Debt Collection Practices Act will be put on hold.

The FDCPA class action lawsuit allegedly failed to meet Class requirements on grounds of commonality, superiority, and predominance. The Eighth Circuit’s decision suggested that had the panel responsible for certifying the class in this FDCPA lawsuit done their job properly, the plaintiffs may have been able to redefine their Class earlier.

The ruling panel determined that “the court did not conduct a ‘rigorous analysis’ of what plaintiffs must prove to prevail on their facial invalidity theories.”

FDCPA Class Action Lawsuit Flaws

The district court decided that the driving argument was whether or not Credit Management Services sent prospective Class Members the standard form which violated FDCPA guidelines. The problem comes down to the timing.

Several FDCPA class action lawsuits have involved letters sent to plaintiffs before a lawsuit was filed against the debtor. This Credit Management Services FDCPA class action lawsuit was investigating letters sent to plaintiffs after the lawsuit was filed.

Even if the lawsuits against Credit Management Services filed by the plaintiffs fell through, they were not necessarily “false and misleading,” according to the panel’s opinion.

“In the class certification context, these complexities … are highly relevant to a rigorous analysis of the well-traveled Rule 23 inquiries into commonality, typicality, adequate representation of the class, predominance, and superiority,” according to the panel.

Class Definition

Rule 23 determines how a Class may be certified. There are four qualifications that must be met according to the panel’s decision:

• The Class is so numerous that joinder of all members is impracticable
• There are questions of law or fact common to the Class
• The claims or defenses of the representative parties are typical of the claims or defenses of the Class
• The representative parties will fairly and adequately protect the interests of the Class.

This FDCPA class action lawsuit failed to meet these requirements, according to the panel.

This unfair debt collection class lawsuit was filed against Credit Management Services as well as four in-house attorneys. Four Classes were involved in the allegations concerning unfair debt collection practices.

These proposed Classes were “persons who received a county court collection complaint or discovery requests seeking to collect a debt ‘for persona, family, or household purposes,” or had had such a collection action pending,” according to the panel.

Thousands of Nebraska residents sought to be a part of the Class, all alleging that Credit Management Services was guilty of unfair debt collection practices.

Credit Management Services appealed the FDCPA class action lawsuit, and the federal district court responsible for the original Class decisions was reprimanded. Whether or not the the Class definition will change to better follow Class definition stipulations is unknown.

Join a Free Unfair Debt Collection Class Action Lawsuit Investigation

If a lender or debt collector engaged in unfair debt collection practices, you may have a legal claim and could be owed compensation for violations of the Fair Debt Collection Practices Act (FDCPA).

Get a Free Case Evaluation Now

DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.