United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
Rosenthal Chief United States District Judge
Alexander filed this suit alleging that Convergent
Outsourcing sent her multiple debt-collection letters after
the statute of limitations for the collection of the debt had
expired. (Docket Entry No. 1). The letters included the
“total balance” of the outstanding debt, as well
as a “settlement offer” amount that was
substantially less than the total amount owed. The
debt-collection letters did not disclose that Alexander was
not obligated to make a partial payment, or any payment,
because the statute of limitations on a debt-collection
action had expired. Nor did the letter disclose that if
Alexander had made a partial payment, that would revive the
statute of limitations.
September 8, 2016, the Fifth Circuit Court of Appeals issued
its opinion in Daugherty v. Convergent Outsourcing,
Inc., 836 F.3d 507 (5th Cir. 2016). The opinion held
that a debt-collection letter from Convergent Outsourcing
with identical language violates the Fair Debt Collection
Practices Act. (Id.) (citing 15 U.S.C. §§
1692e, 1692e(2)(A), 1692f). Alexander seeks to certify a
class of all individuals in Texas who received a
debt-collection letter with the same or similar language and
that sought to collect a consumer debt after the statute of
limitations had expired.
Outsourcing moves to stay. (Docket Entry No. 15). A nearly
identical case was filed first in the United States District
Court for the District of Colorado and is close to a
nationwide settlement on a class-wide basis. Ross v.
Convergent Outsourcing, Inc., et al, Case No:
1:16-cv-00825. In Ross, the plaintiff initially only
asserted class claims on behalf of all individuals in
Colorado. Ross v. Convergent Outsourcing, Inc., et
al, Case No: 1:16-cv-825, Docket Entry Nos. 1, 33. To
facilitate a potential nationwide class settlement, the
plaintiff filed a second amended complaint including
nationwide class allegations on March 28, 2017. Id.,
Docket Entry No. 51. The parties filed a joint motion for
conditional certification of the nationwide class and for
preliminary approval of the class settlement on April 14,
2017. Id., Docket Entry No. 56.
district court has the inherent power to stay cases to
control its docket and promote efficient use of judicial
resources. See Ambraco, Inc. v. Bossclip B.V., 570
F.3d 233, 243 (5th Cir. 2009) (citing Landis v. N. Am.
Co., 299 U.S. 248, 254-55 (1936)); Ventura v.
David's Bridal, 248 F.3d 1139, 1139 n.2 (5th Cir.
2001). In determining whether a stay is appropriate pending
the resolution of another case, a district court must
consider various competing interests, including: (1)
potential prejudice to plaintiffs from a brief stay; (2)
hardship to defendants if the stay is denied; and (3)
judicial efficiency in terms of the simplifying or
complicating of issues, proof, and questions of law which
could be expected to result from a stay. Coker v. Select
Energy Servs., LLC, 161 F.Supp.3d 492, 495 (S.D. Tex.
2015) (citing Trahan v. BP, CIV.A. H-10-3198, 2010
WL 4065602, at *1 (S.D. Tex. Oct. 15, 2010)).
does not dispute that Ross is nearly identical to
this suit. On March 1, 2017, before the second amended
complaint or joint motion for class certification and
settlement was filed in Ross, Alexander indicated at
the initial conference that should nationwide certification
occur in Ross, that case and class would
“subsume” this Texas case and proposed class.
(Docket Entry No. 23 at 4). In her response opposing the
stay, Alexander changes course. The Ross class is
defined to include those receiving debt-collection letters
from Convergent Outsourcing from April 12, 2015 to April 12,
2016. Alexander seeks to include debt-collection letters sent
from November 9, 2015 onward. (Docket Entry No. 26). She
contends that despite the overlap of the two class periods, a
“substantial percentage” of the putative Texas
class members in this case will not be precluded from
asserting claims even if the Colorado court approved the
nationwide class certification and settlement in
Ross. But Convergent Outsourcing has produced the
proposed nationwide settlement agreement in Ross
that will include those individuals who were sent
debt-collection letters between April 12, 2015 to the date
the settlement agreement will be executed as class members;
the settlement agreement, if approved, will in fact subsume
Alexander's proposed class and claims. (Docket Entry No.
28 at 3; Docket Entry No. 56 at 3). Judicial efficiency and
economy are not served by duplicative classes.
also argues this case should not be stayed because the
district court in Ross is unlikely to approve the
nationwide class or settlement because it is unfair. But
Alexander has not seen the settlement paperwork. (Docket
Entry No. 26 at 11). The Colorado district court has not yet
ruled. Proceeding in this Texas case will require determining
the effect of the forthcoming rulings on the nationwide class
certification and settlement approval in Ross. This
factor weighs in favor of a short stay, pending the Colorado
will Alexander be prejudiced by a short stay. If the court in
the Colorado case certifies a nationwide settlement class,
presumably Alexander can opt-out and pursue an individual
claim, or seek to represent others in Texas who opt-out.
Alexander argues that Convergent Outsourcing will lose so
much of its net worth in the nationwide settlement, that even
if some or all of this case proceeds after Ross is
resolved, there will be nothing left. Again, this is
speculation. As Convergent Outsourcing notes, it has been in
business for 60 years and has been involved in other
litigation during that time. There is no evidence now that
the Ross settlement will break the bank.
court agrees with Alexander that an indefinite or lengthy
stay is unnecessary. See Wedgeworth v. Fibreboard Corp.,
706 F.2d 541, 545 (5th Cir. 1983) (citing
McKnight v. Blanchard, 667 F.2d 477, 479 (5th Cir.1982)
(“Before granting a stay pending the resolution of
another case, the court must carefully consider the time
reasonably expected for resolution of the ‘other case,
' in light of the principle that ‘stay orders will
be reversed when they are found to be immoderate or of an
indefinite duration.'”). In similar cases involving
parallel actions, courts have stayed suits for 60 days in
light of “advanced settlement negotiations” in
separate class actions filed in other districts. See In
re JPMorgan Chase LPI Hazard Litig., Civ. No.
C-11-03058, 2013 WL 3829271, at *5 (N.D. Cal. July 23, 2013);
Jaffe v. Morgan Stanley DW, Inc., Civ. No. C06-3903,
2007 WL 163196, at *1 (N.D. Cal. Jan. 19, 2007). The court
follows this guidance and concludes that a 60-day stay in the
proceedings is appropriate.
Outsourcing's motion to stay the proceedings is granted.
(Docket Entry No. 15). This case is stayed for 60 days;
outstanding deadlines are continued for that period. A ...