Consumer Finance Litigation

A federal court in Illinois recently denied a motion for class certification of a TCPA claim due to the predominance of individualized issues of proving whether the putative class members had consented to the defendant's phone calls. The case illustrates the point that defining a class to include only those debtors who had not provided their phone numbers to the original creditor in a transaction does not always eliminate the individualized nature of the issue of consent. In the case, Jamison v. First Credit Services, Inc., 2013 WL 1248306 (N.D. Ill. Mar. 28, 2013), the named plaintiff sought to certify a class of individuals who had financed the purchase of a Honda vehicle through American Honda Finance Corporation ("Honda Finance") and had been contacted by a debt collector, First Credit Services, Inc. ("FCS"), regarding that debt. The plaintiff claimed that FCS obtained the wireless numbers of many Honda customers via "skip-traces" and then used an automated dialing system to call these numbers. The proposed class consisted of those American customers to whose cellular phone number Honda Finance or FCS had placed a non-emergency phone call using an automated dialing system or an artificial or prerecorded voice within the past four years with respect to a debt allegedly owed to Honda Finance. The plaintiff further limited the class to those customers whose phone numbers had been obtained via skip trace methods and whose cellular telephone numbers do not appear in Honda's business records. After first finding that the named plaintiff was not an adequate class representative, the court found that the predominance requirement of Fed. R. Civ. P. 23(b)(3) was not satisfied by the proposed class. In doing so, the court focused on the issue of consent. The court explained that, under the TCPA, it is unlawful to use an autodialer to call wireless numbers without the prior express consent of the called party, and that express consent is considered given when a consumer gives a creditor a cell phone number during the transaction that resulted in the debt owed. Honda Finance provided an affidavit stating that, due to the setup of its internal database that is provided to debt collectors, it often does not provide a customer's phone number to the debt collector even though a customer may have provided the phone number to Honda Finance. This is because, while Honda Finance maintains a database which includes customers' cell phone numbers, if available, the separate database of information that is transferred to debt collectors does not have an entry field for cell phone numbers. Therefore, phone numbers that were obtained by FCS through skip-trace methods often already appeared in Honda's records - and, therefore, consent likely existed for those debtors. Honda attested that identifying whether a customer had provided consent would require a labor intensive review of the customer's account, as a cell phone number could appear in multiple entry fields for the account in Honda's database. The court found, therefore, that it would have to conduct a series of mini-trials on the issue of consent in order to determine the class population. Therefore, the plaintiff failed to meet his burden of proving that common questions of law and fact predominated over individual ones. Finally, the court also found that the class was not sufficiently ascertainable to be certified, because, in addition to the question of consent, the "called party" often would include individuals who were not the subscribers to the cell phone numbers at the time the calls were made. Because only those who are subscribers to the cell phone number at the time the call was made have standing under the TCPA, and the plaintiff had no solution for determining the identity of the called party, the class was not sufficiently ascertainable. Jamison shows that attempts to limit a proposed TCPA class to those customers whose phone numbers do not appear in the business records of the original creditor does not always resolve the issue of consent where features in the creditor's database could make those customers difficult to determine. Moreover, courts are wary to certify a class where the class itself is not ascertainable, despite the fact that whether a class is ascertainable is not an explicit requirement of Fed. R. Civ. P. 23. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.