Reyes v. Bca Fin. Servs., Inc.

ESTRELLITA REYES, Plaintiff, v. BCA FINANCIAL SERVICES, INC., Defendant.

CASE NO. 16-24077-CIV-GOODMAN

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION

June 26, 2018

[CONSENT CASE]

OMNIBUS ORDER ON MOTION TO CERTIFY CLASS AND DAUBERT MOTIONS

Plaintiff Estrellita Reyes,¹ individually and on behalf of others similarly situated, has sued Defendant BCA Financial Services, Inc. for allegedly violating the Telephone Consumer Protection Act (the "TCPA"). The TCPA prohibits, among other things, the use of an "automatic telephone dialing system" ("ATDS") or an artificial or prerecorded voice to call a person's cellphone absent an emergency or prior express consent. 47 U.S.C. § 227(b)(1)(A)(iii). Each TCPA violation results in damages of not less than $500, which may be trebled for willful or knowing violations. § 227(b)(3)(B)-(C).

BCA collects debts for healthcare companies. It does so using a "predictive dialer" maintained by Noble Systems. The phone numbers BCA calls using the Noblepredictive dialer are fed into the Noble system from a separate collections software called "FACS." FACS is loaded with phone numbers supplied by BCA's healthcare clients, which received the numbers from the patients.

At times, BCA would also accompany some calls with an "interactive voice response" ("IVR"). The IVR is an artificial or prerecorded voice that prompted the person called to indicate, by pressing certain buttons, whether BCA had called the right person. It went something like: "If this is Jane Doe, press 1; 'if this is a wrong number,' press 2." [ECF No. 86-1, p. 6].

When a call recipient pressed "2" (for wrong number), the FACS system automatically generated a "B" flag in the call records next to that phone number. Similar, if a call recipient received a call from a live agent and indicated that the agent had called the wrong number, then the agent selected a "WN" code within the Noble system to show that this is a wrong number. BCA would not call those numbers again.

Reyes claims that BCA, while trying to collect debts owed by certain persons, used an ATDS to call her cellphone and those of many other potential class members. But the persons called, including her, were not the intended recipients of the calls, and therefore did not consent to be called. Stated simply, Reyes contends that BCA automatically dialed many wrong cellphone numbers, without consent or an emergency purpose, in violation of the TCPA.

Reyes now moves to certify the class under Federal Rule of Civil Procedure 23.[ECF No. 59]. The proposed class definition in the motion was as follows:

All persons and entities throughout the United States (1) to whom BCA Financial Services, Inc. placed more than one call, (2) directed to a number assigned to a cellular telephone service, but not assigned to the intended recipient of BCA Financial Services, Inc.'s calls, (3) by using computer assisted dialing technology manufactured or designed by Noble, (4) from September 23, 2012 through September 23, 2016.

[ECF No. 59]. BCA filed an opposition response, and Reyes filed a reply. [ECF Nos. 82; 94].

The parties then filed supplementary memoranda following the Court's discovery rulings. [ECF Nos. 112; 116-17]. In her supplemental brief, Reyes noted that the "more than one call" limitation in her proposed class definition is no longer necessary because the TCPA no longer contains a "one-call safe harbor." [ECF No. 112, p. 4 n.4]. And Reyes also stated in that brief, for the first time, that "this Court can properly certify a class of all persons to whom Defendant delivered a prerecorded message from April through September 2016." [ECF No. 112, p. 6].

BCA opposes class certification on several grounds. First, BCA argues that the proposed class is not readily ascertainable because the process of identifying class members is not "administratively feasible." As part of this argument, BCA challenges the opinion of Reyes' class-administration expert, Anya Verkhovskaya. BCA also presents its own rebuttal expert, Jan Kostyun, to discredit Verkhovskaya's opinion.

Second, BCA argues that Reyes has not established the predominance prong of class certification. BCA submits that many issues require individual proof and are thusnot susceptible to class treatment, such as (a) which called parties gave consent and (b) whether a called number belonged to a cellphone at the time.

Third, BCA argues that Reyes has not established the superiority prong of class certification. According to BCA, a class action is not superior to individual claims in this case because the potential class members have not suffered real damages, but BCA could be bankrupted if exposed to a multi-million dollar judgment.

Fourth, BCA argues that Reyes has defined an impermissible "fail-safe" class because being a class member automatically entitles that member to relief. And in addition, BCA objects to Reyes amending her class definition to include any claims arising from the use of an artificial or prerecorded voice, because that claim was not alleged in the complaint and likewise was not raised in the class-certification motion.

Finally, the parties seek to Daubertize² the other side's expert -- an informal term lawyers sometimes use when referring to efforts designed to exclude the other side from offering expert-witness testimony at trial. In this case, the Daubert motions concern the class-certification motion, and, in particular, the experts' opinions on how potential class members are identified and how cellphone data is discerned.

For the reasons outlined below, the Court denies without prejudice the motion to strike Verkhovskaya's expert testimony, grants in part and denies in part the motion to certify class, and denies as moot the motion to strike Kostyun's expert testimony.

First, the Court finds that Verkhovskaya's opinion testimony is admissible under Daubert for the purpose for class-certification purposes. But this ruling does not preclude BCA from challenging any opinion Verkhovskaya may give at trial.

Second, the Court finds that the proposed class is ascertainable and administratively feasible and that the proposed class meets the requirements of Rule 23(b)(3). The Court also rejects the argument that the class definition creates an impermissible fail-safe class. Moreover, the Court will amend the class definition to remove the no-longer-viable "more than one call" limitation.

The Court, however, denies the motion to certify class to the extent that it includes claims arising from the use of a prerecorded or artificial voice. Reyes did not plead that claim in the Complaint, she never amended the Complaint to add that claim, and that claim was not raised as a basis for class certification in the class-certification motion, even though it could have been.

Third, given the ruling on class certification, the Court need not rule on the admissibility of Kostyun's expert testimony, which, for all practical purposes, is a rebuttal to Verkhovskaya's expert testimony (and furthers the effort to strike Verkhovskaya's opinions). But Reyes may seek to challenge Kostyun's expert testimony at trial.³

I. Background

A. Procedural History

Reyes filed a class-action Complaint against BCA for allegedly violating the TCPA. [ECF No. 1, p. 9].⁴ Reyes claimed that BCA "violated 47 U.S.C. § 227(b)(1)(A)(iii) by using an automatic telephone dialing system to place non-emergency calls to Plaintiff's cellular telephone number, absent prior express consent." [ECF No. 1, p. 9 ¶ 74]. Reyes also alleged that BCA used an ATDS to call many potential class members. [ECF No. 1, pp. 6-9].

In her Complaint, she proposed the following TCPA class:

All persons and entities throughout the United States (1) to whom BCA Financial Services, Inc., placed, or caused to be placed, calls (2) directed to a number assigned to a cellular telephone service, (3) by using an automatic telephone dialing system or an artificial or prerecorded voice, (4) within the four years preceding the date of this complaint, (5) absent prior express consent—in that the called party was not the intended recipient.

[ECF No. 1, p. 6 ¶ 44].

Reyes then moved to certify her TCPA class. [ECF No. 59]. In her motion, Reyes amended her proposed class definition to read as follows:

All persons and entities throughout the United States (1) to whom BCA Financial Services, Inc. placed more than one call, (2) directed to a number assigned to a cellular telephone service, but not assigned to the intendedrecipient of BCA Financial Services, Inc.'s calls, (3) by using computer assisted dialing technology manufactured or designed by Noble, (4) from September 23, 2012 through September 23, 2016.

[ECF No. 59].

BCA filed an opposition response to class certification, and Reyes filed a reply. [ECF Nos. 82; 94]. The parties also filed cross-Daubert motions, and those motions were fully briefed. [ECF Nos. 88; 90; 97-100]. Then, following a series of discovery rulings concerning BCA's call records, the parties filed supplemental briefing on class certification. [ECF Nos. 112; 116-17].

In addition, Reyes moved for summary judgment on her individual TCPA claim. [ECF No. 86]. She presented three issues to the Court: (1) whether the Noble predictive dialer used by BCA meets the definition of an ATDS; (2) whether Reyes is entitled to treble damages; and (3) whether Reyes could raise claims for TCPA violations involving an artificial or prerecorded voice where those claims were not pled in the Complaint.

Because it concerned several threshold issues, the Court took up the summary judgment motion first, granting it in part and denying it in part. [ECF No. 124]. First, the Court granted summary judgment in Reyes' favor on the ATDS issue, finding that the Noble predictive dialer, as BCA used it, qualifies as an ATDS under the TCPA. Second, the Court denied summary judgment to Reyes on the treble-damages issue because, at least at the summary-judgment stage, the Court could not...