Class Action

Class Action Defense Cases– Stewart v. Cheek & Zeehandelar: Ohio Federal Court Certifies (b)(2) Class Action But Refuses To Certify (b)(3) Class Action Of FDCPA Class Action Claims Against Law Firm Debt Collector

By Michael J. Hassen

FDCPA Class Action Claims Certified as a (b)(2) Class after Modification of Class Definition but (b)(3) Class Lacked Predominance as Mini-Hearings would be Required to Establish Damages for each Class Member Ohio Federal Holds

Plaintiffs filed a class action against Cheek & Zeehandelar (an Ohio-based law firm that litigates debt collection actions) and two of its attorneys alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and Ohio's Consumer Sales Practices Act (CSPA); specifically, the class action complaint alleged that defendant “seeks to garnish or attach the property of Ohio consumers who have defaulted on credit and loan agreements, without having first investigated the nature of the debtors' property to determine if it is legally exempt from garnishment or attachment.” Stewart v. Cheek & Zeehandelar, LLP, 252 F.R.D. 387, 388-89 (S.D. Ohio 2008). Plaintiffs moved the district court to certify the litigation as a class action: the class action certification motion sought a Rule 23(b)(2) class for declaratory and injunctive relief, and a Rule 23(b)(3) sub-class for monetary damages. Id., at 389. . Id. The district court granted plaintiffs’ motion to certify the Rule 23(b)(2) class, but denied class action treatment as to the Rule 23(b)(2) sub-class.

Ohio law permits a judgment creditor to garnish property based on an affidavit stating “that the person named in the affidavit as the garnishee may have property, other than personal earnings, of the judgment debtor that is not exempt under” Ohio or federal law. Stewart, at 389. According to the class action, defendants execute such affidavits for the purpose of attaching property without conducting a proper investigation. Defendants, by contrast, testified to procedures they had in place to ensure that the affidavits were accurate, though the person who executed the affidavits “never personally contacted the debtors to determine whether their property or funds were exempt, nor did he contact the debtors' banks, or conduct debtors' examinations.” Id., at 389-90. Moreover, defendants testified that they did not being sending out discovery “to ascertain the status of their property or funds” until after the class action lawsuit had been filed, id., at 390.

Full post as published by Class Action Defense Blog on December 10, 2008 (boomark / email).