Denicolo v. Viking Client Services, Inc.

Background

Ronald G. DeNicolo, Jr. brought this putative class action against Viking Client Services, LLC, doing business as Viking Billing Service, and The Hertz Corporation. Michael G. Fox was later added as a plaintiff. DeNicolo asserted claims against Viking under the federal Fair Debt Collection Practices Act, the Illinois Vehicle Code, and the federal declaratory-judgment statute. Fox asserted additional claims under California’s Rosenthal Fair Debt Collection Practices Act, California’s Unfair Competition Law, the California Consumer Remedies Act, and declaratory judgment.

Viking provides billing and collection services for Hertz. According to the opinion, Viking used an automated process for vehicle-damage claims assigned by Hertz. The first three letters in the process did not include the disclosures required by the federal and California debt-collection laws. If those letters did not produce payment, the account moved to another stage, where later letters identified Viking as a collection agency and included the required warnings. Plaintiffs argued that the initial standardized letters showed uniform violations affecting the proposed classes.

Class-certification standards

The plaintiffs had to satisfy Federal Rule of Civil Procedure 23(a)’s requirements of numerosity, commonality, typicality, and adequacy of representation. They also had to satisfy Rule 23(b)(3), which requires that common questions predominate over individual questions and that a class action be superior to other methods of resolving the dispute.

The court explained that class certification is not a decision on the ultimate merits. Merits questions may be considered only when relevant to whether the Rule 23 requirements are met.

Court’s analysis

The court found DeNicolo’s claims typical of the proposed class. Viking argued that DeNicolo’s alleged debt might not be a covered consumer debt because his employer reimbursed rental expenses. The court stated that Viking had not established that the debt was outside the federal law’s coverage and that Viking treated rental-car damage claims uniformly without determining whether the underlying rental was for business or personal purposes.

The court also found that common questions predominated. The central liability question was whether Viking’s uniform collection letters violated the federal and California debt-collection laws. The court concluded that determining whether an individual’s rental was a business transaction could be handled in identifying class members and did not outweigh the common liability questions. The court did not decide whether plaintiffs would ultimately prevail on their theory concerning letters sent more than 30 days after the alleged damage.

The court rejected Viking’s adequacy challenge based on DeNicolo’s friendship and neighborhood relationship with attorney Christopher Hack. The court found no evidence that the relationship created a conflict of interest, and noted that Hack was one of several attorneys from two firms representing the proposed class.

The court also rejected Viking’s argument that the proposed classes were too ill-defined for class treatment. It concluded that class treatment would promote efficient and consistent adjudication of liability based on Viking’s uniform letters.

Disposition

The court granted the motion for class certification. It certified the following classes, subject to further definition of their temporal scope:

The court appointed DeNicolo as class representative for the Illinois Resident and California Rental Classes, Fox as class representative for the California Resident Class, and Krislov & Associates, Ltd. and Andrus Anderson LLP as class counsel. The parties were ordered to meet and confer and submit a joint statement concerning applicable statute-of-limitations limits by April 12, 2021; the court stated that the temporal scope would be defined by further order. The opinion did not enter a final ruling on whether Viking violated the asserted laws.