Illinois District Court Denies Motion to Certify TCPA Class Action

In the consolidated cases Espejo v. Santander Consumer USA Inc., No. 11 C 8987, 2016 WL 6037625 (N.D. Ill. Oct. 14, 2016) and Levins v. Santander Consumer USA Inc., No. 12 C 9431, 2016 WL 6037 (N.D. Ill. Oct. 14, 2016), the U.S. District Court for the Northern District of Illinois denied Plaintiff Faye Levins' motion to certify a class pursuant Fed. R. Civ. P. 23(b)(3), finding that Levins failed to meet the prerequisites for class certification. While the court denied Levins' motion for class certification, it granted in part and denied in part Santander Consumer USA Inc.'s ("Santander") motion for summary judgment on Levins' Telephone Consumer Protection Act ("TCPA") claims.

The court first addressed Santander's motions for summary judgment. With respect to liability under the TCPA, the parties agreed that any potential liability turned on whether Santander obtained the plaintiffs' consent to call the cell numbers at issue. Levins claimed that Santander called her cell phone numbers, one of which was provided on her credit application. Finding the undisputed facts showed Santander obtained consent to call, the court easily granted Santander's motion for summary judgment as it related to the cell number provided on Levins' credit application. With respect to one of the remaining cell numbers, Levins pointed to Santander's activity notes and argued there was an "utter lack of clarity" on the issue of consent. Drawing all reasonable inferences in favor of Levins, the court determined that a question of fact remained as to whether Levins provided consent.

Turning to Levins' motion for class certification, the court noted that Fed. R. Civ. P. 23 required Levins to show (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation, as well as show "that the question of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy" pursuant to Fed. R. Civ. P. 23(b)(3).

Levins sought to certify a class of all individuals who were called on a cell number that was not provided at origination, was not provided orally or in writing before Santander's first call as reflected in Santander's records, and was not verified before being called as reflected in Santander's records. Levins' proposed subclass consisted of those individuals whose cell number was captured through calls made to Santander's IVR system by its identification as such in Santander's records. According to Levins, the class could be determined by analyzing Santander's records.

Finding that Levins could not have her cake and eat it too, the court first addressed the ascertainability and numerosity requirements, pointing out that Levins based her motion for class certification on Santander's activity notes, which were the very records she challenged as having an "utter lack of clarity" in her response to Santander's motion for summary judgment. Because Levins challenged the "content, clarity, accuracy, and completeness" of the records upon which her class certification was based, the court found that Levins' proposed class definition was unascertainable. Similarly, Levins could not identify a group of any individuals who met her class definition and attempted to rely on Santander's activity notes to determine class members. Levins argued that her proposed class was "fail-safe" because it was defined so that whether the person qualifies as a member depends on whether the person has a valid claim. The court, however, adopted Santander's argument that the class definition was improper because a class member would win or, by virtue of losing, be defined out of the class and not bound by the judgment. Because a determination of the class would also constitute a determination of liability, the court held that Levins' proposed class was impermissible.

The court then turned to the question of commonality, which requires a question of law or fact common to the class pursuant to Fed. R. Civ. P. 23(a)(2). Levins presented three proposed questions of law or fact common to the class. The court accepted Levins' first proposed question - whether Santander's dialing system falls within the definition of an ATDS - and found that it had the potential for class treatment. Levins' second proposed question asked only whether the class members suffered a violation of the same provision of law and was therefore an insufficient, "superficial" common question. The court said, however, that this "bottom-line liability question" did not raise jurisdictional concerns under Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016). The court concurred with cases which held that allegations of nuisance and invasion of privacy in TCPA actions were sufficient to state a concrete injury under Article III. While the alleged TCPA injury satisfied Article III, it did not satisfy the requirements of Rule 23.

Finally, the court dismissed Levins' third proposed question which asked whether Santander lacked consent to place the calls at issue. The third question, like Levins' proposed class, relied on an analysis of Santander's activity notes and records which rendered the class unascertainable. Further, this question would have already been resolved once the class was determined and, as a result, would no longer be a common question that united the class. Significantly, this question also raised individualized consent issues that would predominate in the litigation, and the court looked to other decisions wherein courts denied class certification of TCPA claims. To bolster this conclusion Santander produced evidence of its policies, which supported a finding that a significant percentage of the class members provided consent to be called. Because Levins' third question involved an analysis of Santander's activity notes to determine whether Santander obtained consent to call, it would inevitably raise factual disputes as illustrated by Levins' response in opposition to Santander's motion for summary judgment.

The court then analyzed the typicality and adequacy requirements and found that Levins would likely have a defense unique to her, rendering her an inadequate representative of the class. The court again pointed to Santander's activity notes and Levins' argument on summary judgment where she asserted they contained "many inconsistencies" which, in turn, prevented the court from determining whether she provided consent to be called. In fact, the court determined that Levins could not be a member of her proposed class to the extent it consisted only of those individuals who never provided consent to be called, because her activity notes suggested that she provided consent at some point during the loan servicing. Accordingly, the court determined that Levins failed to meet the adequacy and typicality requirements.

The court also held that Levins failed to meet the superiority requirement, citing the significant administrative burden involved with establishing the class which would require Santander to review several million sets of activity notes to determine, among other things, whether the number called was a cell number, whether the number was provided at origination, whether the loan was subject to an enforceable arbitration agreement, and whether the TCPA claim had been litigated or released. Additionally, the court acknowledged that the TCPA's statutory damages provision is a built-in incentive for plaintiffs to bring individual actions, which weighed against a finding of superiority. For all of these reasons, the court denied Levins' motion for class certification.

Levins illustrates the significant hurdles plaintiffs seeking to certify TCPA class actions face, considering in particular the fact that questions regarding consent are not always as clear-cut as plaintiffs would like them to be. Nonetheless, the Levins decision is significant in today's environment given the CFPB's push to encourage consumer class actions. At the same time, Levins follows the general trend of district courts to follow the pre-Spokeo TCPA standing cases, which hold that the TCPA creates a cognizable right and, therefore, any violation of that right is a "concrete injury in fact."

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