Blair v. Equifax Check Services, Inc.

181 F.3d 832 (7th Cir. 1999)

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Nature of the Case

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Facts

Equifax Check Services, which supplies a check-verification service to merchants, also attempts to collect fees imposed on dishonored checks. After we held that checks create 'debts' within the meaning of the Fair Debt Collection Practices Act, many of Equifax's practices came under challenge. Beverly Blair and Letressa Wilbon filed suits contending that a letter that Equifax used violated § 1692g of the Act because it did not adequately inform the recipients that they had 30 days within which to demand that Equifax obtain a verification of the debt from the merchant. Blair sought to represent a class of shoppers at Champs, and Wilbon a class of persons who had shopped at T.J. Maxx. The suits were consolidated. After it became apparent that Equifax had sent the same letter to every person situated similarly to the plaintiffs, the district judge certified the case as a class action under Fed. R. Civ. P. 23(b)(3). The court also certified a subclass of persons who received a particular follow-up letter less than 30 days after Equifax sent the first. Because plaintiffs sought only statutory penalties, the difficulties of proving individual loss did not block class treatment. Equifax all but concedes that class certification was proper if the case is viewed in isolation, but it insists that what happened in another case requires a different outcome. On the same day judge certified the class in Blair, the plaintiffs in Crawford v. Equifax reached a settlement with Equifax. Crawford personally received $2,000, members of the Crawford class get no relief for the letters sent to them, Equifax agreed to donate $5,500 to Northwestern Law School's Legal Aid Clinic, and the lawyers for the class got a payday. None of the class members will receive individual notice, and none will be offered the opportunity to opt out. The theory behind this is that the class was certified under Fed. R. Civ. P. 23(b)(2), even though it began as an action seeking damages. All class members' claims for compensatory or statutory damages pass through the litigation unaffected and may be asserted elsewhere--but only in individual suits. The settlement forbids prosecution of any other case as a class action. Equifax contends that maintaining Blair as a class action creates at least a possibility of inconsistent outcomes. The Blair and Wilbon attorneys were invited to a settlement conference in Crawford and opposed the Crawford settlement as inadequate. They sought to intervene in Crawford so that they would be able to appeal from final approval of the settlement if their objections at the hearing under Rule 23(e) should be rejected. The motion to intervene was denied in that they should have learned of the action sooner. That decision was appealed. The judge concluded that the settlement in Crawford could not affect another pending suit because he deemed the Crawford settlement irrelevant. Equifax wants to appeal under Rule 23(f).