“Meaningless” Relief Dooms A Class Action

Mayer Brown attorney Kevin Ranlett looks at a recent Second Circuit decision in a Fair Debt Collection Practices Act case. A debt collector was alleged to have run afoul of the FDCPA by sending out collection letters that provided an 800 number but didn’t specify any person at that number, a claim the author considers “dubious as best.” Nonetheless the defendant agreed to a class settlement which, had all 100,000 members of the class submitted claims, would have garnered each of them 16.5 cents. In agreeing with the district court’s rejection of the settlement, the Second Circuit added that the “meaningless amount” of relief confirmed that the the Rule 23(b)(3)’s superiority requirement was not met. The authors argue that generally speaking few large FDCPA classes merit certification, and that in this case consumers would have been better off mounting individual lawsuits or entering arbitration.