Wright v. GreenSky Management Company, LLC

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 20-cv-62441-BLOOM/Valle

ALEXISS WRIGHT,

an individual, on behalf of herself and others

similarly situated,

Plaintiff,

v.

GREENSKY MANAGEMENT COMPANY, LLC,

GREENSKY, INC., GREENSKY HOLDINGS, LLC,

and GREENSKY, LLC,

Defendants.

____________________________________________/

ORDER ON MOTION FOR CLASS CERTIFICATION

THIS CAUSE is before the Court upon Plaintiff Jerrick Buck’s (Plaintiff) Motion for Class

Certification, ECF No. [142] (“Motion for Class Certification”)1. Defendants, GREENSKY

MANAGEMENT COMPANY, LLC, GREENSKY, INC., GREENSKY HOLDINGS, LLC,

and GREENSKY, LLC, (“Defendants”) filed a Response in Opposition, ECF No. [154]

(“Response”)2, to which Plaintiff filed a Reply, ECF No. [161] (“Reply”)3. The Court has carefully

reviewed the Motion, the record in this case, the applicable law, and is otherwise fully advised.

For the reasons set forth below, the Motion for Class Certification is denied.

I. BACKGROUND

1 An unredacted version of the Motion for Class Certification was filed at ECF No. [143]. The same

pagination appears in both the redacted and unredacted version. The Court cites to the redacted version

throughout this Order.

2 An unredacted version of the Response was filed at ECF No. [155-1]. The same pagination appears in

both the redacted and unredacted version. The Court cites to the redacted version throughout this Order.

3 An unredacted version of the Reply was filed at ECF No. [162-1]. The same pagination appears in both

the redacted and unredacted version. The Court cites to the redacted version throughout this Order.

On July 17, 2020, Alexiss Wright initiated this class action against Defendants in the

Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. See ECF No.

[1-2] at 5-37. Defendants removed the case to this Court, alleging jurisdiction under the Class

Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). ECF No. [1] (“Notice”). Thereafter, on

December 16, 2020, Wright filed a First Amended Class Action Complaint, ECF No. [12]

(“Complaint”), adding Jerrick Buck, Yvonne Buck, and Maria C. Poza (“Poza”) as named

Plaintiffs. Upon joint stipulations filed with the Court, Plaintiffs Maria C. Poza’s and Alexis

Wright’s claims against Defendants were dismissed with prejudice, ECF No. [135], and the claims

brought by Jerrick Buck and Yvonne Buck4 proceeded against Defendants. Id. The Complaint

asserts the following three counts against Defendants: Count I – Violations of Florida’s Loan

Broker Law (“FLBL”) (Fla. Stat. § 687.14, et seq.); Count II – Violations of Florida’s Credit

Service Organizations Act (“CSOA”) (Fla. Stat. § 817.7001, et seq.); and Count III – Injunctive

Relief. See generally ECF No. [12]. On October 27, 2021, Defendants’ Motion to Dismiss was

granted and the Court dismissed Plaintiff’s claim for injunctive relief with prejudice. See ECF No.

[56].

According to the Complaint, Defendants are financial technology companies that allow

various types of merchants to apply for point-of-sale loans on behalf of their customers through

Defendants’ mobile application that streamlines the entire lending process. See ECF No. [12]

¶¶ 25, 30. Defendants fund these loans through partnerships with lending institutions that serve as

the lenders. See id. ¶ 27. Defendants orchestrate the loan origination process from the initial loan

application through funding; after brokering the loan, Defendants act as the loan servicer. See id.

4 On November 21, 2022, the parties entered a joint stipulation requesting Yvonne Buck be dismissed

from the case with prejudice. ECF No. [185]. The Court approved, and Yvonne Buck’s claims were

dismissed with prejudice.

¶ ¶ 35, 87.

In July 2016, Plaintiff purchased a solar system financed by a $25,000.00 Greensky loan.

Id. ¶¶ 118, 119, 123. Unbeknownst to Plaintiff, Greensky took a transaction fee5 of approximately

13% of the principal. Id. ¶¶ 124, 126. Plaintiff repaid the loan entirely within the first year and

unknowingly paid some or all of the undisclosed transaction fee. Id. ¶¶ 127, 128.

The claims asserted in the Complaint are premised on the allegation that Defendants

concealed the nature and amount of the transaction fees charged to consumers and failed to comply

with loan broker disclosure requirements, in violation of the FLBL. Id. ¶¶ 148-50. The Complaint

alleges that Defendants acted as a credit service organization (“CSO”) without a surety bond,

accepted valuable consideration for referring customers to lenders who were offering substantially

the same loan terms to the public, and made false or misleading statements in violation of the

CSOA. Id. ¶¶ 161-65, 167-68.

On September 19, 2022, Plaintiff Jerrick Buck filed the instant Motion seeking class

certification pursuant to Fed. R. Civ. P. 23(a) and 23(b)(3). ECF No. [142]. Plaintiff proposes the

following class:

CLASS: “All persons in Florida who, between July 17, 2016, and the present,

secured a GreenSky Consumer Program loan with a principal amount of at least

$1,000, on which GreenSky collected a transaction fee.”6

Id. at 6

5 The Parties interchangeably use the terms “merchant fee” and “transaction fee” to refer to the fees

charged by Defendants to merchants. For consistency, the Court uses the term “transaction fee” unless

directly quoting from a party’s filing.

6 Specifically excluded from the class are: “(1) GreenSky and its subsidiaries and affiliates; (2) the

judge(s) to whom this case is assigned and any immediate family members thereof; (3) anyone who has

previously settled these claims with GreenSky; and (4) anyone who has initiated arbitration proceedings

or had arbitration proceedings initiated by GreenSky per the terms of their GreenSky loan agreement.”

ECF No. [142] at 6, n.1.

Defendants respond that Plaintiff’s proposed class does not meet the requirements of Fed.

R. Civ. P. 23(a) and 23(b)(3) because (1) Plaintiff does not satisfy the commonality requirement;

(2) Plaintiff does not satisfy the typicality requirement; (3) Plaintiff does not satisfy Rule 23(a)(4)’s

adequacy of representation standard; (4) individual issues predominate; and (5) Plaintiff has not

met his burden of showing superiority of the class device. See generally ECF No. [154]. Plaintiff

replies that Defendants fail to rebut the showing of commonality and predominance, Defendants’

reliance on unidentified arbitration clauses is unavailing, and Plaintiff’s claims are typical of the

Class and requests that the Court reject attacks on Plaintiff’s adequacy. See generally ECF No.

[161].

II. LEGAL STANDARD

A. Class Certification

District courts have broad discretion in deciding whether to certify a class. See Washington

v. Brown & Williamson Tobacco Corp., 959 F.2d 1566, 1569 (11th Cir. 1992). To certify a class

action, the putative class must satisfy “the four requirements listed in Rule 23(a), and the

requirements listed in any of Rule 23(b)(1), (2), or (3).” Karhu v. Vital Pharm., Inc., 621 F. App’x

945, 946 (11th Cir. 2015) (citing Little v. T-Mobile USA, Inc., 691 F.3d 1302, 1304 (11th Cir.

2012)); see also Fitzpatrick v. General Mills, Inc., 635 F.3d 1279, 1282 (11th Cir. 2011) (“[T]he

putative class must meet each of the four requirements specified in [Rule] 23(a), as well as at least

one of the three requirements set forth in [Rule] 23(b).”); Rutstein v. Avis Rent-A-Car Sys., Inc.,

211 F.3d 1228, 1233 (11th Cir. 2000) (“A class action may be maintained only when it satisfies

all of the requirements of Fed. R. Civ. P. 23(a) and at least one of the alternative requirements of

Rule 23(b).”)(quoting Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999, 1005 (11th Cir. 1997)).

“Under Rule 23(a), every putative class first must satisfy the prerequisites of numerosity,

commonality, typicality, and adequacy of representation.” Vega v. T-Mobile USA, Inc., 564 F.3d

1256, 1265 (11th Cir. 2009) (quoting Fed. R. Civ. P. 23(a); Valley Drug Co. v. Geneva Pharms.,

Inc., 350 F.3d 1181, 1187-88 (11th Cir. 2003)) (internal quotation marks omitted). Next, under

Rule 23(b)(3), class certification is appropriate if:

(3) the court finds that the questions of law or fact common to class members

predominate over any questions affecting only individual members, and that a

class action is superior to other available methods for fairly and efficiently

adjudicating the controversy. The matters pertinent to these findings include:

(A) the class members’ interests in individually controlling the prosecution or

defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy already

begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims

in the particular forum; and

(D) the likely difficulties in managing a class action.

Fed. R. Civ. P. 23(b)(3).

“The burden of establishing these requirements is on the plaintiff who seeks to certify the

suit as a class action.” Heaven v. Trust Co. Bank, 118 F.3d 735, 737 (11th Cir. 1997); see also

Rutstein, 211 F.3d at 1233. The moving party “must affirmatively demonstrate his compliance”

with the class certification requirements. Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013)

(quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011)). That is, “a party must not

only be prepared to prove that there are in fact sufficiently numerous parties, common questions

of law or fact, typicality of claims or defenses, and adequacy of representation, as required by Rule

23(a) [but also] satisfy through evidentiary proof at least one of the provisions of Rule 23(b).” Id.

(emphasis in original). “A district court must conduct a rigorous analysis of the Rule 23

prerequisites before certifying a class.” Vega, 564 F.3d at 1266 (quoting Castano v. Am. Tobacco

Co., 84 F.3d 734, 740 (5th Cir. 1996)).

III. DISCUSSION

As noted above, Plaintiff seeks class certification pursuant to Fed. R. Civ. P. 23(a) and

23(b)(3). ECF No. [142]. Defendants respond that Plaintiff’s proposed class does not meet the

requirements of Fed. R. Civ. P. 23(a) and 23(b)(3) because (1) Plaintiff does not satisfy the

commonality requirement; (2) Plaintiff does not satisfy the typicality requirement; (3) Plaintiff

does not satisfy Rule 23(a)(4)’s adequacy of representation standard; (4) individual issues

predominate; and (5) Plaintiff has not met his burden of showing superiority of the class device.

See generally ECF No. [154]. Plaintiff replies that Defendants fail to rebut the showing of

commonality and predominance, Defendants’ reliance on unidentified arbitration clauses is

unavailing, Plaintiff’s claims are typical of the Class, and the Court should reject attacks on

Plaintiff’s adequacy. See generally ECF No. [161].

The Court addresses the requirements for class certification under Fed. R. Civ. P. 23(a) and

23(b)(3).

A. Rule 23(a)

Under Rule 23(a), Plaintiffs are required to demonstrate each of the four factors for class

certification: numerosity, commonality, typicality, and adequacy. Vega, 564 F.3d at 1265.

Although Defendants do not dispute numerosity, the Court addresses each of the four factors.

i. Numerosity

Under the first prong of Rule 23(a), a plaintiff must demonstrate that the class is “so

numerous that joinder of all members is impracticable.” Ruderman v. Washington Nat’l Ins. Co.,

263 F.R.D. 670, 678 (S.D. Fla. 2010) (quoting Fed. R. Civ. P. 23(a)(1)). “The focus of the

numerosity inquiry is not whether the number of proposed class members is ‘too few’ to satisfy

the Rule, but ‘whether joinder of proposed class members is impractical.’” Id. at 678-79 (quoting

Armstead v. Pingree, 629 F. Supp. 273, 279 (M.D. Fla. 1986)). Generally, less than twenty-one

(21) class members is inadequate to satisfy the numerosity requirement, but more than forty (40)

is adequate. Id. (quoting Cheney v. Cyberguard Corp., 213 F.R.D. 484, 490 (S.D. Fla. 2003).

Plaintiff contends that the numerosity requirement is met since Defendants’ loan data lists

over 100,000 loans in the relevant period, indicating that there could be at least as many class

members who meet the criteria laid out in the class definition. ECF No. [142] at 15. Defendants

do not challenge the numerosity requirement, and the Court finds that the class is sufficiently

numerous to make joinder of all proposed class members impractical.

ii. Commonality

The commonality requirement of Rule 23(a)(2) requires that there be “questions of law or

fact common to the class.” Fed. R. Civ. P. 23(a)(2); Williams v. Mohawk Indus., Inc., 568 F.3d

1350, 1355 (11th Cir. 2009) (“Under the Rule 23(a)(2) commonality requirement, a class action

must involve issues that are susceptible to class-wide proof.”) (quoting Murray v. Auslander, 244

F.3d 807, 811 (11th Cir. 2001)). In Wal–Mart Stores, Inc. v. Dukes, the Supreme Court held that

commonality requires that the claim of the putative class “must be of such a nature that it is capable

of classwide resolution—which means that determination of its truth or falsity will resolve an issue

that is central to the validity of each one of the claims in one stroke.” Dukes, at 350. “What matters

to class certification . . . is not the raising of common questions—even in droves—but, rather the

capacity of a classwide proceeding to generate common answers apt to drive the resolution of the

litigation.” Id. (citation and internal quotation marks omitted; emphasis in original).

Plaintiff argues that the proposed class shares the same controlling questions of law and

fact. See ECF No. [142] at 15-16. Plaintiff contends that because the proposed class is comprised

of members who entered into substantially identical loan agreements, subject to the same improper

undisclosed fees due to Defendants’ uniform course of conduct, the class members seek to resolve

the common question of whether Defendants’ uniform practice was unlawful. Id. Defendants

respond that there is no commonality because (1) some loan agreements require arbitration and

others do not; (2) analogous cases demonstrate that proposing a question of whether an alleged

practice or policy was illegal does not satisfy the requirement of commonality; and (3) Plaintiff’s

reliance on expert study is insufficient to establish that class wide injury can be proven by common

proof. See ECF No. [154] at 7-12. The Court addresses each of these challenges to the commonality

prong.

a. Arbitration Clauses

Plaintiff contends that all class members entered into substantially identical loan

agreements, giving rise to the common question of the legality of failing to disclose transaction

fees and incentive payments in those loan agreements. ECF No. [142] at 15. Defendants argue that

there is no commonality because some loan agreements require arbitration and others do not. Id.

at 8. In support, Defendants cite district court cases from Maryland, Kentucky, and California

holding that where some contracts contain arbitration clauses and others do not, there is not

sufficient commonality to certify all of the contract holders into one class. See Spotswood v. Hertz

Corp., 2019 WL 498822, *11 (D. Md. Feb. 7, 2019); Johnson v. BLC Lexington, SNF, 2020 WL

3578342, at *5, *6 (E.D. Ky. July 1, 2020); Tan v. Grubhub, Inc., 15-CV-05128-JSC, 2016 WL

4721439, at *4 (N.D. Cal. July 19, 2016), aff'd sub nom. Lawson v. Grubhub, Inc., 13 F.4th 908

(9th Cir. 2021). Plaintiff replies that Defendants have not presented satisfactory evidence of

arbitration provisions and, in any event, an arbitration provision in some class members’ loan

agreements would not defeat class certification. Plaintiff cites to multiple district court cases from

this Circuit where the courts found it appropriate to create a subclass of contract holders whose

contracts contain arbitration provisions rather than to deny certification outright. Rosen v. J.M.

Auto, 270 F.R.D. 675, 683 (S.D. Fla. 2009) (“… that some of the class members claims may be

affected by arbitration agreements does not make class certification inappropriate. We find that it

would be more appropriate to create a subclass rather than deny certification outright.”); Cardenas

v. Toyota Motor, 2021 WL 6926418, at *22 (S.D. Fla. Aug. 12, 2021) (“[E]ven if the arbitration

is ultimately problematic for claims administration purposes, I concur that those with arbitration

agreements could either be broken into a subclass or excluded.”); Gregory v. Preferred Fin., 2013

WL 6632322, at *8 (M.D. Ga. Dec. 17, 2013)(holding that the fact that some putative class

members may be subject to the defense of a valid arbitration agreement does not preclude class

certification); Herman v. Seaworld Parks & Entm't, Inc., 320 F.R.D. 271, 288-289 (M.D. Fla.

2017) (holding that the argument that some class members claims may be affected by arbitration

agreements does not make certification inappropriate, and reserving “the right to consider creating

a subclass or decertifying a portion of the class at a later time if necessary.”).

Consistent with the cases cited from district courts in this Circuit, the Court finds that the

issue raised regarding the existence of arbitration clauses in some loan agreements is resolved by

creating a subclass of loan agreement holders whose contracts contain arbitration provisions rather

than denying certification. The Court therefore finds that it would be appropriate to create a

subclass of borrowers, meeting the specified class criteria, whose loan agreements contain

arbitration clauses.

b. Common Question of Practice or Policy

Plaintiff contends that the legality of the uniform practices by Defendants, which affected

all class members, poses a common question for all class members, thus satisfying Rule 23(a)(2).

ECF No. [143] at 15. Defendants respond that case law demonstrates that a common question is

insufficient where a Plaintiff purports to show commonality through a supposed policy. ECF No.

[154] at 10. Defendants contend that regardless of the alleged policy it had with its merchants

concerning transaction fees, the trier of fact must answer the specific question of how each

merchant actually treated such fees. Id. at 10-11. Plaintiff replies that the case law does not weigh

against either commonality or predominance in this case because the case law cited by Defendants

is distinguishable. ECF No. [161] at 5-6. Plaintiff also provides additional citations in his Reply to

support his position that Defendants’ consistent policy and training practices raise common

questions of legality for all class members. Id. at 4.

As an initial matter, Plaintiff contends the parties agree that Defendants maintained a

consistent training policy in which it trained contractors to pass on the cost of fees to homeowners.

Id. at 4. However, the parties do not appear to agree on that point. In their Response, Defendants

represent that they instruct merchants that “they are strictly prohibited from surcharging or

otherwise ‘passing through’ to their customers any or all of their merchant fee they pay on a

particular loan” and instead instruct the merchants “to treat the merchant fee as overhead. What

they decide to do with their overhead expense is up to them.” ECF No. [154] at 4-5. Defendants

do contend that they consistently included these instructions in the contracts with merchants using

their services. Id. Plaintiff relies on Krukever v. TD Ameritrade, 328 F.R.D. 649, 660 (S.D. Fla.

2018) for the proposition that an across-the-board policy is susceptible to common proof. In

Krukever, the plaintiffs sought certification of a class to prosecute a claim that the defendant

uniformly implemented and applied an unwritten policy to the accounts of each and every potential

class member, in breach of the implied covenant of good faith and fair dealing. Id. at 655-56.

Although the court denied class certification, it found that the defendant’s across-the-board policy

of liquidating all unsecured accounts was susceptible to common proof. Id. However, Krukever is

distinguishable because here, Defendants’ policy of charging a transaction fee directly affected the

merchants, and it was left to the merchants to determine what, if any, portion of that fee would be

passed through to the borrower. See ECF No. [154] at 4. Here, unlike Krukever, Plaintiff has not

provided evidence that each borrower was actually affected by Defendants’ policy.

Plaintiff claims that class members will prove their claims through common evidence

consisting of Defendants’ internal emails and training materials that reflect Defendants coaching

merchants to recoup the cost of transaction fees by charging higher project costs to homeowners,

and statements from Defendants’ executives that “contractors need to ‘build … fees [in] to the cost

of the job.’” see ECF No. [161] at 4-5. The Court is not convinced that the evidence alluded to is

sufficient to demonstrate that each putative class member actually incurred a portion of the

transaction fee charged to their merchant. Class members would each need to demonstrate that

they incurred a portion of the transaction fee before the Court could consider the question of a

statutory violation common to all class members.

Plaintiff attempts to switch the burden of demonstrating commonality by arguing that

Defendants have not provided any evidence that some class members paid no fees. See ECF No.

[161] at 8. Plaintiff cites Mohamed v. Am. Motor Co., LLC, 320 F.R.D. 301, 316 (S.D. Fla. 2017),

where the Court found that “bare assertions” about potentially individualized issues of consent

“cannot defeat certification under Rule 23.” Id. In that case, the Court had determined that there

was a common course of conduct that affected all potential class members. When that defendant

challenged class certification by arguing that some members of the class provided prior consent,

the Court pointed out that Defendant’s bare assertion was without merit and would not bar class

certification. Id. at 316. Here, the Court has not determined that Plaintiff has demonstrated that all

class members were affected by a common policy and declines to look to Defendant to disprove

what Plaintiff has not yet adequately proven.

Defendants first rely on Alhassid v. Bank of Am., N.A., 307 F.R.D. 684 (S.D. Fla. 2015) to

support their proposition that the case law does not lend itself to a finding of commonality. There,

this Court stated that, although the “commonality element is generally satisfied when a plaintiff

alleges that defendants have engaged in a standardized course of conduct that affects all class

members,” plaintiff’s “claim that [defendant] deviated or departed from internal policies to which

it generally adhered” was not sufficient and individual evidence was required to show that the

“internal policies and procedures were not followed in a particular instance.” Id. at 697 (internal

quotation marks and citations omitted). Plaintiff argues that Alhassid is distinguishable because

the plaintiffs in that case did not challenge a class-wide policy, but departures from it, whereas

here, Plaintiff challenges Defendants’ policy and neither party has submitted any evidence of

deviations from that policy. ECF No. [161] at 5-6. Although the Court agrees with Plaintiff that

this case deals with adherence rather than deviation from a policy, the fact that the challenged

policy applied directly to the merchants, not the borrowers, leads the Court to determine, as it did

in Alhassid, that individualized evidence is necessary to determine which potential class members

were affected by the policy.

Next, Defendants cite Alvarez v. Loancare LLC, 20-21837-CIV, 2021 WL 184547 (S.D.

Fla. Jan. 19, 2021), where the Court found that a common question of whether the defendant’s

practice of charging a processing fee not authorized by contract or existing law was illegal was not

sufficient to bind the class’s members in part because the contention of illegality was unsupported

by Florida law. Id. at *13. The Court noted that the “common contention may have glued together

the classes’ members.” Id. (emphasis in original). Plaintiff successfully distinguishes Alvarez

arguing that there, plaintiffs were missing a key component of a law prohibiting the conduct, where

Plaintiff has articulated two Florida statues Defendants’ policy violated. For the reasons already

addressed, there still remains the question of which putative class were actually affected by

Defendants’ violation of those statutes.

Defendants then cite MSP Recovery Claims, Series LLC v. Ace Am. Ins. Co., 341 F.R.D.

636 (S.D. Fla. 2022), where the Court found that whether the defendant insurer had reimbursement

liability to class members was a question common to all class members, but its answer would

require individual rather than class-wide proof. Id. at 648. The Court found that the commonality

requirement had not been met. Id. Plaintiff seeks to distinguish MSP arguing that here they seek

to prove their claims with common proof about how the Defendants charged the fees. As discussed

above, the Court agrees with Defendants that this case is not susceptible to proof by common

evidence for all class members because Defendants’ alleged policy still left the choice to the

merchants about what portion of the transaction fee to pass on to the borrowers.

c. Common Proof

Plaintiff argues that he has “developed common proof regarding [Defendants’] practices

when it comes to charging fees on its loans, characterizing those fees, and providing (or failing to

provide) disclosures about those fees. ECF No. [142] at 19. Plaintiff indicates that he intends to

rely on Defendants’ standard loan agreement, and Defendants’ documents, discovery responses,

and deposition testimony evidencing Defendants’ consistent efforts to keep transaction fees hidden

from borrowers. Id. at 20-21. Plaintiff is not specific about how these sources will prove that all

class members were affected by Defendants’ common practices.

To demonstrate common proof of injury, Plaintiff retained Dr. Michael A. Williams7, an

expert in analyzing the impact of unfair and anti-competitive conduct. Dr. Williams conducted a

7 The Court is aware that Defendants have submitted a Daubert Motion challenging the admissibility of

Dr. Williams’s expert report. See ECF No. [157]. At this juncture, however, the Court need not decide the

Daubert issue since, even assuming the admissibility of Plaintiff’s expert, class certification is due to be

denied. See Bouton v. Ocean Properties, Ltd, 322 F.R.D. 683, 697, n.9 (S.D. Fla. 2017)

multivariate regression analysis which concludes that the common pass-through rate to class

members is 37.0% with a 95% confidence interval ranging from 31.8% to 42.3%. Id. at 23-25;

ECF No. [143-5] at 26. Dr. Williams opines that homeowners who finance projects through

Defendants pay inflated project costs equal to 37% of the transaction fee associated with their loan.

See ECF Nos. [142] at 11; [143-5].

Defendants respond that Plaintiff fails to submit any proof that Defendants’ merchant

actually passed through any part of its transaction fee to Plaintiff and no proof exists demonstrating

the same for other merchants who worked with other potential class members. ECF No. [154] at

9-10 (emphasis in original). Defendants argue that it is “preposterous to opine that hundreds of

merchants treated 197,000 individual merchant fees the same way” such that each class member

would be entitled to 37% of their merchant’s transaction fee, as suggested by Plaintiff’s expert. Id.

Defendants draw analogies between the instant matter and Dukes, where the Supreme Court held

that regression analyses submitted by experts were insufficient to establish that plaintiffs’ theory

of liability could be proven on a class wide basis. 564 U.S. at 356-357.

In Dukes, the Supreme Court held that statistical evidence consisting primarily of

regression analyses was insufficient to establish that a plaintiff’s theory of employment

discrimination on the basis of a discriminatory policy, noting that “information about disparities

at the regional and national level does not establish the existence of disparities at individual

stores….” Id. at 357.

Plaintiff replies that Dukes is not relevant here because Plaintiff is not using Dr. Williams

to prove Defendants’ liability, but only damages. ECF No. [161] at 5. Plaintiff contends further

that Dr. Williams’s testimony regarding damages satisfies the Supreme Court’s ruling in Comcast

Corp. v. Behrend, where analyzing an antitrust case, the Supreme Court held that damages must

be calculated in a manner that reflects the theory of liability. 569 U.S. at 37-38.

While Dr. Williams’s opinion would comport with the Supreme Court’s requirements if it

were offered solely to demonstrate common damages8, it is evident that Plaintiff intends to use

that opinion to prove injury as well. It is a necessary element of Plaintiff’s claims to demonstrate

that some part of the undisclosed transaction fee was actually incurred by the borrower. Plaintiff

intends to meet this burden via Dr. Williams’s expert opinion that class members incurred 37% of

the transaction fee associated with their loans rather than presenting evidence of how each

merchant treated the transaction fee for each borrower. See ECF No. [161] at 6-9.

Plaintiff points out that the record demonstrates evidence of class-wide pass-through of

Defendants’ fees and argues that Dr. Williams used a well-accepted methodology for calculating

pass-through costs, so there is “no sound basis for attacking Dr. Williams’s conclusion that

Defendants’ fees are passed on to class members at a common rate. Id. Plaintiff cites In re

Disposable Contact Lens Antitrust, 329 F.R.D. 336 (M.D. Fla. 2018), where the Court found that

Dr. Williams’s “before and after” “but for” regression analysis was sufficient to meet Plaintiff’s

burden of establishing predominance of impact of the alleged conduct, noting that “courts have

accepted this regression analysis in antitrust class actions.” Id. at 421. Plaintiff cites to other cases

where Dr. Williams’s regression analyses have been deemed sufficient, and those class actions are

also antitrust cases. In re Terazosin Hydrochloride, 220 F.R.D. 672, 699 (S.D. Fla. 2004); Olean

Wholesale Grocery v. Bumble Bee Foods, 31 F.4th 651, 683 (9th Cir. 2022).

8 Plaintiff also argues that “individualized damages calculations are insufficient to foreclose …

certification” ECF No. [161] at 3 (quoting Carriuolo v. Gen. Motors Co., 823 F.3d 977 (11th Cir. 2016)).

The Court certainly notes binding authority dictating that where there is a core liability question common

to each class member, the need for individualized damage calculations does not necessarily preclude class

certification. Here, however, the Court finds that there are individualized questions of liability precluding

certification.

This case is distinguishable from an antitrust class action because the nature of an antitrust

violation is a scheme that affects an entire market. It is therefore simpler to demonstrate impact

and damages using a regressive analysis in an antitrust case because an entire market is affected

by the complained of scheme. Plaintiff has not alleged a common scheme between merchants, only

that Defendants encouraged merchants to treat the transaction fees like they would any other

overhead. See ECF No. [161] at 4.

The Court did not find any cases in this Circuit, since the Supreme Court’s decision in

Dukes, outside of the Antitrust (or anti-competitive)9 context where plaintiffs were deemed to have

met their burden at the class certification stage by use of an expert’s regressive analysis. In one

case denying certification, a Racketeer Influenced and Corrupt Organizations Act (“RICO”) case,

that court noted that plaintiff “cites no case under the civil RICO statute where the court has

approved the calculation of expectancy-type, benefit of the bargain damages using either a

benchmark overcharge method or regression analysis, and the Court declines Plaintiff's invitation

to blaze such a new trail.” Roberts v. The Scott Fetzer Co., 4:07-CV-80 (CDL), 2010 WL 3937312,

at *11 (M.D. Ga. Sept. 30, 2010). This Court also declines to extend the application of regression

analyses in this context.

The Court therefore agrees with Defendants. It would be impossible to adequately ascertain

whether the potential class of borrowers were each affected in the same or a similar manner by

Defendants’ policies. This is particularly so since here, as in Dukes, an intermediary had discretion

that ultimately affected the outcome. See Dukes, at 357. The Court does not find the multivariate

9 The Court notes that outside of Antitrust law, it identified one case where the court certified a class

where defendants allegedly engaged in captive-supply agreements to affect fed-cattle prices, in violation

of the Packers and Stockyard Act. Pickett v. IBP, Inc., CIV. 96-A-1103-N, 2001 WL 34886460 (M.D.

Ala. Dec. 26, 2001). However, that claim is similar to an Antitrust action since it deals with the violation

of a statute intended to prevent market-affecting schemes.

regression analysis sufficient to establish common proof that all class members were impacted by

Defendants’ transaction fees. Absent Dr. Williams’s opinion, the Court remains unconvinced that

the documentary and testimonial evidence Plaintiff asserts they will rely upon as common proof

is sufficient to demonstrate that each potential class member actually incurred some part of the

transaction fee charged to their merchant. Each merchant was left to decide whether, and in what

portion, to pass the transaction fee onto the borrower which raises individual questions of fact

important to deciding the viability of each class member’s claims.

Accordingly, the Court finds that Plaintiff has not demonstrated commonality sufficient to

warrant class certification.

iii. Typicality

The typicality prong of Rule 23(a) requires that “the claims or defenses of the

representative parties are typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3).

“[T]he typicality requirement is permissive; representative claims are ‘typical’ if they are

reasonably co-extensive with those of absent class members; they need not be substantially

identical.” In re Checking Account Overdraft, 275 F.R.D. 666, 674 (S.D. Fla. 2011) (citing Brown

v. SCI Funeral Servs. of Fla., Inc., 212 F.R.D. 602, 605 (S.D. Fla. 2003)). To demonstrate

typicality, the plaintiff must generally show that a “sufficient nexus exists between the legal claims

of the named class representatives and those of individual class members to warrant class

certification.” Piazza v. Ebsco Indus., Inc., 273 F.3d 1341, 1346 (11th Cir. 2001) (citing

Washington, 959 F.2d at 1569 n.8). Stated differently, “[t]he claim of a class representative is

typical if ‘the claims or defenses of the class and the class representative arise from the same event

or pattern or practice and are based on the same legal theory.’” Williams, 568 F.3d at 1356-57

(quoting Kornberg v. Carnival Cruise Lines, Inc., 741 F.2d 1332, 1337 (11th Cir. 1984). “If proof

of the representatives’ claims would not necessarily prove all the proposed class members’ claims,

the representatives’ claims are not typical of the proposed members’ claims.” Conigliaro v.

Norwegian Cruise Line Ltd., No. 05-21584-CIV, 2006 WL 7346844, at *7 (S.D. Fla. Sept. 1, 2006)

(quoting Brooks v. S. Bell Tel. & Tel. Co., 133 F.R.D. 54, 58 (S.D. Fla. 1990)).

Plaintiff contends that he meets Rule 23(a)’s typicality requirement because “his individual

claims are reasonably co-extensive with those of absent class members” since all arise from the

same event, pattern, or practice and are based on the same legal theory. ECF No. [142] at 16 (citing

A&M Gerber Chiropractic LLC v. GEICO Gen. Ins. Co., 321 F.R.D. 688, 698 (S.D. Fla. 2017)).

Defendants counter that (1) the named Plaintiff’s claims are not typical of the claims of class

members whose contracts contain arbitration clauses; and (2) the “resolution of Plaintiff’s

individual claim will not apply to any other putative class member.” ECF No. [154] at 12-14. The

Court considers each of Defendants’ arguments.

a. Arbitration Clauses

Plaintiff contends that because Defendants “committed the same wrongful acts against

Plaintiff and all members of the class, Plaintiff’s claims are typical.” ECF No. [142] at 16. For

many of the same reasons Defendants argue that arbitration clauses in some of the loan agreements

preclude a finding of commonality, Defendants now argue that the presence of arbitration clauses

in some but not all of the proposed class members arbitration agreements “dooms any finding of

typicality here.” See ECF No. [154] at 12. Plaintiff similarly responds that even if there was proof

of arbitration clauses in some of the loan agreements, arbitration clauses do not defeat class

certification in this Circuit. See ECF No. [161] at 9-11. The Eleventh Circuit has held that an

arbitration clause, not present in the class representative’s contract, but present for many class

members does not render the class representative atypical where there is a sufficient nexus between

the claims of the class representative and all class members. In re Checking Account Overdraft

Litigation, 20-13367, 2022 WL 472057, at *5 (11th Cir. Feb. 16, 2022). The Court is therefore not

persuaded by Defendants’ argument that the presence of arbitration clauses in other class

member’s loan agreements precludes a finding of typicality.

b. Resolution of Plaintiff’s Claim

Plaintiff asserts that this case challenges Defendants’ “standardized practice of brokering

loans and collecting undisclosed fees – in contravention of Florida law – at the expense of the

borrowers.” ECF No. [142] at 16. As a challenge to a standardized practice, the resolution of

Plaintiff’s claim would be applicable to the resolution of the claims of all class members.

Defendants respond that the evidence needed to prove Plaintiff’s claims will not prove any other

individual’s claim. ECF No. [154] at 12. Specifically, Defendants assert that to prove his claim,

Plaintiff would be required to prove that his contractor, the merchant who helped Plaintiff secure

the loan through Defendants, actually passed some or all of the transaction fee to Plaintiff. Id. at

12-13. Defendants assert that the Court cannot simply assume that what Plaintiff’s contractor did

is proof that “each of the hundreds of other disparate Florida merchants in the GreenSky Program

over a six-year period representing nearly 200,000 individualized transactions” acted the same

way. Id. at 13. Plaintiff replies that because there is no indication that Defendants’ practices

changed over time, the same proof supports Plaintiff’s and all other class members’ claims equally.

ECF No. [161] at 11. Plaintiff further contends that Defendants did not rebut the common evidence

advanced by Plaintiff that supports Plaintiff’s and every other class member’s claims. Id.

The Court agrees with Plaintiff that the same claims and defenses are common to Plaintiff

and all class members. All class members’ claims are therefore brought under the same legal

theory. “Although this legal theory may ultimately not be sustained by the evidence, it is typical

of the class…” and therefore meets the relatively low bar necessary to establish typicality. See

Williams, 568 F.3d at 1357.

iv. Adequacy

Rule 23(a)(4) requires a showing that “the representative parties will fairly and adequately

protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). “The adequacy-of-representation

requirement ‘encompasses two separate inquiries; (1) whether any substantial conflicts of interest

exist between the representatives and the class; and (2) whether the representatives will adequately

prosecute the action.’” Busby v. JRHBW Realty, Inc., 513 F.3d 1314, 1323 (11th Cir. 2008)

(quoting Valley Drug Co. v. Geneva Pharm., Inc., 350 F.3d 1181, 1189 (11th Cir. 2003)); see also

Fabricant v. Sears Roebuck, 202 F.R.D. 310, 314-15 (S.D. Fla. 2001) (“Rule 23(a)(4)’s adequacy

requirement has two components: (1) the class representative has no interests antagonistic to the

class; and (2) class counsel possesses the competence to undertake the litigation.”); Kirkpatrick v.

J.C. Bradford & Co., 827 F.2d 718, 727 (11th Cir. 1987). (“The inquiry into whether named

plaintiffs will represent the potential class with sufficient vigor to satisfy the adequacy requirement

of Rule 23(a)(4) most often has been described to involve questions of whether plaintiffs’ counsel

is qualified, experienced, and generally able to conduct the proposed litigation and of whether

plaintiffs have interests antagonistic to those of the rest of the class.”).

Plaintiff contends that no conflict exists, that his interests and those of his counsel are

aligned with those of the class, and that he and his counsel will continue to litigate this action

vigorously on behalf of the class. ECF No. [142] at 16-17. Defendants respond that (1) Plaintiff is

not adequate to represent individuals who agreed to arbitrate; (2) Plaintiff cannot fulfill the role of

class representative because he does not understand the facts of the case and is relying on his

counsel; and (3) Plaintiff is inadequate as he cannot seek injunctive relief because he has already

paid off his loan. ECF No [154] at 14-17. Defendants do not challenge the adequacy of Plaintiff’s

counsel.

a. Arbitration Clauses

Plaintiff and Defendants raise the same arguments regarding the presence of arbitration

provisions in some, but not all, class member’s loan agreements. For the reasons discussed above,

the Court finds that Plaintiff is adequate to represent individuals who agreed to arbitrate.

b. Insufficient Participation and Awareness

Plaintiff indicates that Plaintiff has sat for deposition, responded to discovery, and

diligently participated in the prosecution of this action. Defendants respond that Plaintiff

demonstrates “insufficient participation in and awareness of the litigation” to serve as class

representative. ECF No. [154] at 14-16. To support their contention, Defendants excerpt and

paraphrase multiple portions of Plaintiff’s deposition demonstrating that Plaintiff never read the

entirety of his loan agreement, did not read the entire Complaint before it was filed, does not know

the class definition, and is completely relying on his counsel to make decisions in the case. Id. at

15. Defendants provide citations to multiple cases, including one from this Court, that determined

plaintiff’s knowledge of and participation in the case were so lacking they each effectively

abdicated all decision making to counsel. See Butterworth v. Quick & Reilly, 171 F.R.D.319, 323

(M.D. Fla. 1997); Vision Const. Ent. Inc. v. Argos Ready Mix LLC, 2019 WL 11075886, *13 (N.D.

Fla. Nov. 7, 2019); A Aventura Chiro. Care Ctr, Inc. v. BB Franchising LLC, 2015 WL 11051056,

*4 (S.D. Fla. Aug. 26, 2015); Alhassid, 307 F.R.D. at 700.

Plaintiff replies that a class representative does not need to have a firm or sophisticated

understanding of the legal and factual bases for the case. ECF No. [161] at 12 (citing Muzuco v.

Re$ubmitIt, LLC, 297 F.R.D. 504, 517 (S.D. Fla. 2013)). Plaintiff contends that he satisfies the

adequacy standard, having “devoted considerable time to this case, reviewing the complaint,

responding to discovery, and sitting for a 6-hour deposition.” Plaintiff also contends that he

“understands the scope of the class” and “understands his role as a representative.” Id.

The Court agrees with Plaintiff. Although it is evident from the deposition transcript that

Plaintiff is unfamiliar with the nature of his claims, the record reveals that Plaintiff is playing an

active role in the litigation. That Plaintiff is not well-versed on the intricacies of his case is not

dispositive, but whether he has ceded all decisions to his counsel is. Here, because Plaintiff has

offered personal knowledge of the facts underlying his claim and participated in the discovery

process, the Court does not find that he is inadequate to represent the class because of insufficient

participation and awareness. See Muzuco, at 517.

c. Injunctive Relief

Plaintiff articulates that he, like every other member of the class, unknowingly paid a

higher cost due to Defendants’ fees and now seeks to remedy the harm by recouping those fees for

himself and everyone similarly situated. ECF No. [143] at 17. Defendants argue that Plaintiff’s

inability to seek injunctive relief renders him inadequate. ECF No. [154] at 16. Count III of the

First Amended Complaint requests injunctive relief. ECF No. [12] at 34-35. On October 27, 2021,

the Court dismissed Plaintiff’s claim for injunctive relief with prejudice. See ECF No. [56].

Defendants cite Kelecseny v. Chevron, U.S.A., Inc., 262 F.R.D. 660 (S.D. Fla. 2009), where the

Court explained that because the Plaintiff did not have standing to bring a claim for injunctive

relief and the class members did, he was not an adequate class representative. Id. at 680-681.

Plaintiff responds that the Court dismissed the claim for injunctive relief for all Plaintiffs and

therefore the operative Complaint does not seek injunctive relief for any member of the class. ECF

No. [161] at 12, n. 3. The Court’s Order dismissing Plaintiff’s claim for injunctive relief

specifically stated that because Plaintiffs “do not have standing to pursue injunctive relief, they

cannot represent a class seeking injunctive relief under Rule 23(b)(2), and their class allegations

on this claim must be dismissed as well.” ECF No. [56]. Accordingly, the Court agrees with

Plaintiff that there is no longer a claim for injunctive relief. Therefore, Defendant’s argument is

unavailing on this point.

B. Rule 23(b)(3)

Even were the Court to find that Plaintiff satisfied all of the elements of Rule 23(a), Plaintiff

fails to satisfy Rule 23(b)(3). To obtain class certification, Plaintiff must satisfy one of the three

requirements enumerated in Rule 23(b). See Fed. R. Civ. P. 23(b). Plaintiff seeks to certify the

class under Rule 23(b)(3), see ECF No. [142] at 8, which requires the Court to find that “questions

of law or fact common to class members predominate over any questions affecting only individual

members, and that a class action is superior to other available methods for fairly and efficiently

adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).

“That common questions of law or fact predominate over individualized questions means

that ‘the issues in the class action that are subject to generalized proof, and thus applicable to the

class as a whole, must predominate over those issues that are subject only to individualized proof.’”

Terazosin Hydrochloride, 220 F.R.D. at 694 (quoting Kerr v. City of West Palm Beach, 875 F.2d

1546, 1558 (11th Cir.1989)). “The predominance inquiry focuses on ‘the legal or factual questions

that qualify each class member's case as a genuine controversy,’ and is ‘far more demanding’ than

Rule 23(a)'s commonality requirement.” Jackson, 130 F.3d at 1005 (quoting Amchem Prods., Inc.

v. Windsor, 521 U.S. 591, 623–24, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)).

Plaintiff argues that common questions predominate, and that common evidence will prove

the claims of the class members. ECF No. [142] at 17-25. Defendants respond that common

evidence is insufficient, and damages issues are individualized. ECF No. [154] at 17. Defendants

contend that for the same reason commonality is lacking, individual evidence predominates.

Specifically, Defendants argue that the supposedly “hidden” transaction fee was prominently

disclosed in Plaintiff’s loan agreement and there is no evidence to suggest that every one of

hundreds of merchants surcharged in whole or in part that transaction fee to the borrowers who

would fall within the class definition as potential plaintiffs. ECF No. [154] at 17-18. Plaintiff

replies that Defendants acknowledge that they collected fees on all loans and that the factual

question of adequacy of disclosures goes to the merits of the case and not certification. ECF No.

[161] at 3.

Plaintiff’s failure to establish predominance mirrors his failure to establish commonality.

The basic problem with the class action mechanism here is that only individualized evidence as to

each borrower could prove that a particular borrower entered into a loan agreement with an

undisclosed or hidden transaction fee, and/or that the particular borrower was forced to incur some

portion of the hidden transaction fee in order to succeed on the merits. That factual context is not

one in which common questions predominate.

Accordingly, Plaintiff has failed to meet his burden of satisfying the requirements of Rule

23(b)(3). Plaintiff does not seek class certification under Rule 23(b)(1) or (2). Therefore, class

certification is not warranted, and the Court need not go further. See Karhu, 621 F. App’x at 946

(requiring the plaintiff to satisfy the requirements of Rule 23(b)(1), (2), or (3) for class

certification).

Case No. 20-cv-62441-BLOOM/Valle

C. Request for Hearing

As a final matter, Plaintiff requests a hearing. See ECF No. [142] at 26. Given the Court’s

analysis above, the Court does not find a hearing to be necessary to address the issues presented.

As such, the Court denies Plaintiff's request for a hearing.

IV. CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED that Plaintiffs Motion for Class

Certification, ECF Nos. [142] and [143], are DENIED.

DONE AND ORDERED in Chambers at Miami, Florida, on November 28, 2022.

UNITED STATES DISTRICT JUDGE

Copies to:

Counsel of Record

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