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Flecha v. Medicredit, Inc.

United States Court of Appeals, Fifth Circuit

January 8, 2020

NINA FLECHA, on behalf of herself and all others similarly situated, Plaintiff - Appellee
v.
MEDICREDIT, INCORPORATED; FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Defendants - Appellants

          Appeal from the United States District Court for the Western District of Texas

          Before JONES, HO, and OLDHAM, Circuit Judges.

          JAMES C. HO, CIRCUIT JUDGE:

         As the Supreme Court has repeatedly reminded us, "the class action is 'an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.'" Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-1 (1979)). As Rule 23 of the Federal Rules of Civil Procedure makes clear, multiple conditions must be met before a district court may certify a class. The putative class certified here failed to satisfy several of those conditions, including commonality, typicality, and predominance. In addition, the putative class presents substantial questions of Article III standing. Accordingly, we reverse the class certification order and remand for further proceedings.

         I.

         Nina Flecha neglected to pay for the medical care she received from Seton Medical Center Hays. To help Seton collect on that debt, Medicredit, Inc., a voluntary debt collection service provider, sent Flecha a series of collection letters-including the one at the heart of this suit. That letter stated:

Your seriously delinquent Seton Medical Center Hays account remains unpaid despite past requests for payment.
At this time, a determination must be made with our client as to the disposition of your account. Your failure to cooperate in satisfying this debt indicates voluntary resolution is doubtful. However, if it is now your desire to clear your account, you need to promptly remit the balance in full.

         The letter concluded: "To discuss payment arrangements call our office."

         Flecha never contacted Medicredit. But she did contact Seton and ask if she was eligible for any debt repayment programs. Seton informed her that she could enter into a payment plan if she made an upfront payment-one Flecha could not afford. Over the course of these conversations, Flecha claims she was given the impression that Seton would sue her to collect her debt.

         In response to both the letter from Medicredit and her subsequent conversations with Seton, Flecha brought this suit under the Fair Debt Collection Practices Act (FDCPA) against Medicredit (as well as its surety bondholder, Fidelity and Deposit Company of Maryland). Flecha alleged that Medicredit's letter made a false threat of legal action against her, in violation of the FDCPA, because Seton in fact never intended to sue her over her unpaid medical debt.

         Flecha sought class certification. She argued that everyone who received the same letter from Medicredit was likewise falsely threatened with legal action that Seton never actually intended to bring, and that everyone was accordingly entitled to statutory damages under the FDCPA. Both Flecha and Medicredit also filed cross-motions for summary judgment.

         The district court denied summary judgment. It concluded that questions of fact remained about (1) whether an unsophisticated consumer would construe the Medicredit letter to threaten legal action, and (2) whether Seton intended to take legal action against Flecha.

         After disposing of the summary judgment motions, the district court then granted Flecha's motion for class certification and appointed her class representative. The court defined the class as all Texans who had received the same letter from Medicredit that Flecha received:

[A]ll persons in Texas from whom Medicredit attempted to collect and who received a form collection letter from Medicredit containing these statements:
Your seriously delinquent Seton Medical Center Hays account remains unpaid despite past requests for payment.
At this time, a determination must be made with our client as to the disposition of your account. Your failure to cooperate in satisfying this debt indicates voluntary resolution is doubtful. However, if it is now your desire to clear your account, you need to promptly remit the balance in full.

         Flecha estimates that at least 7, 650 people in Texas received such a letter.

         We granted Medicredit's motion for leave to appeal the class ...


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