Judge Denies Certification, Defendants’ MSJ in FDCPA Class Action

A District Court judge in Washington has denied a plaintiff’s motion to certify a class while also denying motions for summary judgment from a number of defendants in a Fair Debt Collection Practices Act case stemming from a consent order between one of the defendants and the Consumer Financial Protection Bureau.

A copy of the ruling in the case of Hoffman v. Tranworld Systems et al. can be accessed by clicking here.

The CFPB fined Transworld $2.5 million back in 2017 for its role in filing collection lawsuits against individuals with unpaid student loans that the underlying trusts could not prove were owed and in which false and misleading affidavits were filed.

The plaintiffs in this case were each sued by the defendants for not paying their student loans. They allege the defendants filed fraudulent, deceptive, and misleading affidavits in order to obtain default judgments. The sought to include a class of anyone residing in Washington for which the defendant sought to collect a debt allegedly owned by one of six different trusts.

The first prong of certifying a class is the requirement that all potential class members have claims that depend on a common question, such that determining the truth of that question determines the validity of each claim all at once.

While the plaintiffs raised a number of questions to demonstrate commonality, Judge Thomas S. Zilly of the District Court for the Western District of Washington was unconvinced that any of them were sufficient to generate the same answers for each member of the class. For example, the question of whether Transworld employees filed false or misleading affidavits “cannot be resolved in one stroke” because the plaintiffs can not prove that “the documents Defendants used in every debt collection action suffered from the same alleged deficiencies,” Judge Zilly wrote.

With respect to the defendants’ summary judgment motions, Judge Zilly determined there were genuine issues of material fact regarding the alleged violations of the FDCPA and state law in Washington. “Attempts to collect debts with false affidavits and without the necessary documentation to prove the claims is unfair or unconscionable and involves false, deceptive, and/or misleading representations in violation of the FDCPA,” Judge Zilly wrote in denying the defendants’ motion for summary judgment.