Hopper v. Credit Associates, LLC

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

TARA S. HOPPER,

Plaintiff,

v. Civil Action 2:20-cv-522

Judge Edmund A. Sargus, Jr.

Magistrate Judge Chelsey M. Vascura

CREDIT ASSOCIATES, LLC, et al.,

Defendants.

REPORT AND RECOMMENDATION

Plaintiff, Tara S. Hopper, commenced this putative class action against Defendants,

Credit Associates, LLC (“Credit Associates”) and Trans Union, LLC (“Trans Union”), for

violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 (“FCRA”), alleging that Credit

Associates obtained Plaintiff’s credit-related information from Trans Union without a

permissible purpose and used it to send her multiple mailings without making a firm offer of

credit as required by the FCRA. Ms. Hopper passed away on June 30, 2021. (ECF No. 91.) On

August 30, 2021, “Plaintiff” filed a Motion for Leave to File Third Amended Complaint to

Substitute Tara Hopper’s Estate and to Join Steven Smith as an Additional Plaintiff and Putative

Representative. (“Motion,” ECF No. 92.) Both Defendants filed a Memorandum in Opposition

(ECF Nos. 99–100), and “Plaintiff” filed a Reply (ECF No. 105). For the following reasons the

Motion (ECF No. 92) is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

Plaintiff, Tara S. Hopper, commenced this putative FCRA class action on January 30,

2020. (ECF No. 1.) Since that time, Ms. Hopper twice amended her Complaint. The Second

Amended Complaint (“SAC,” ECF No. 33), which was filed on July 20, 2020, and is currently

the operative pleading, asserts claims against Credit Associates under 15 U.S.C. § 1681q for

obtaining consumer information under false pretenses, as well as claims against both Defendants

for willful and negligent FCRA violations under 15 U.S.C. §§ 1681n and 1681o. (SAC ¶¶ 69–

99.) The SAC seeks (1) a declaratory judgment that Defendants violated the FCRA, (2) statutory

damages under the FCRA, (3) punitive damages for FCRA violations, and (4) costs and

reasonable attorney’s fees under the FCRA. (SAC 19–20, ECF No. 33.)

The parties also vigorously dispute personal jurisdiction and subject-matter jurisdiction;

Defendant Credit Associates’ Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(1)

for lack of standing, filed on April 28, 2021, remains pending. (ECF No. 79.)

On April 15, 2021, the Court entered a Preliminary Pretrial Order setting various

deadlines. (ECF No. 78.) Of particular relevance to the present motion, the deadline for motions

addressing the parties or pleadings was August 16, 2021. (Id. at 1.) Any motion for class

certification under Federal Rule of Civil Procedure 23 was set at October 18, 2021. (Id.) The

Court also established discovery and dispositive motions deadlines of September 15, 2022, and

October 15, 2022, respectively. (Id. at 3–4.)

On July 13, 2021, Ms. Hopper’s counsel reported to the Court via email, copying

Defendants’ counsel, that Ms. Hopper had died. (Email, ECF No. 100-1.) On August 2, 2021,

Ms. Hopper’s counsel filed a Suggestion of Death, giving notice that Ms. Hopper had died on

June 30, 2021, and attaching a copy of Ms. Hopper’s death certificate. (ECF No. 91.) On

August 30, 2021, Ms. Hopper’s counsel filed the present motion, titled “Plaintiff’s Motion for

Leave to File Third Amended Complaint to Substitute Tara Hopper’s Estate and to Join Steven

Smith as an Additional Plaintiff and Putative Representative.” (ECF No. 92.) In addition to

seeking the substitution of Ms. Hopper’s Estate as Plaintiff, the Motion also seeks to file a Third

Amended Complaint (“TAC”), which would (1) join an additional named Plaintiff and putative

class representative, Steven Smith; (2) correct an error in Defendant Trans Union’s name in the

case caption; (3) withdraw claims for negligent violation of the FCRA; and (4) make other

“simplifying and clarifying edits” to other allegations. (Mot. 3, ECF No. 92.) Defendants do not

oppose the correction of Trans Union’s name or the withdrawal of Plaintiff’s negligence claims,

but Defendants oppose the remaining portions of the Motion.

Although the Motion seeks to make all of these changes under a pleading amendment

framework, the Motion in substance seeks several different types of relief: (1) substitution of the

Estate for Ms. Hopper under Federal Rule of Civil Procedure 25; (2) amendment of the SAC

under Federal Rules of Civil Procedure 15 and 16; and (3) joinder of Mr. Smith as a plaintiff

under Federal Rule of Civil Procedure 20. The undersigned will consider each in turn.

II. SUBSTITUTION UNDER RULE 25

Federal Rule of Civil Procedure 25(a)(1), which governs substitutions following the death

of a party, provides as follows:

If a party dies and the claim is not extinguished, the court may order substitution of

the proper party. A motion for substitution may be made by any party or by the

decedent’s successor or representative. If the motion is not made within 90 days

after service of a statement noting the death, the action by or against the decedent

must be dismissed.

Fed. R. Civ. P. 25(a)(1). Although the Motion does not reference Rule 25 by name, the Estate

seeks substitution following a party’s death, which is expressly provided for by Rule 25, and

both Defendants make their arguments against substitution based on Rule 25.

A. Procedural Criteria

The Court must consider both procedural and substantive criteria under Rule 25 before

granting substitution. Credit Associates argues that the Estate’s Motion is procedurally deficient

because the Suggestion of Death was filed by Hopper’s counsel, and not by a representative of

the deceased party. (Credit Assocs.’ Opp’n 4, ECF No. 99.) Nor did the Suggestion of Death

identify Hopper’s successor or representative; nor was it served on Hopper’s successors or

representatives. (Id. at 5.) Credit Associates also contends the Motion itself was impermissibly

filed by Hopper’s counsel and was not served on the Estate. (Id.)

The Court agrees that the Suggestion of Death filed by Hopper’s counsel on August 2,

2021, did not qualify as a “statement noting the death” under Rule 25(a)(1) because it was filed

by Hopper’s counsel, did not identify Hopper’s successor or representative, and did not serve her

successor or representative. See Long v. Time Ins. Co., No. 2:06-cv-701, 2008 WL 3200844, at

*1 (S.D. Ohio Aug. 7, 2008). However, a “statement noting the death” is not a prerequisite to

filing a motion for substitution under Rule 25(a). See Fed. R. Civ. P. 25(a) advisory committee’s

note to 1963 amendment (“A motion to substitute may be made by any party or by the

representative of the deceased party without awaiting the suggestion of death. Indeed, the

motion will usually be so made. If a party or the representative of the deceased party desires to

limit the time within which another may make the motion, he may do so by suggesting the death

upon the record.”) (emphasis added). The Motion is therefore not precluded by the absence of a

prior compliant statement noting death.

Moreover, although the Motion is purportedly filed on behalf of “Plaintiff”—i.e., the late

Tara Hopper—this is obviously impossible as the motion was filed two months after her death.

The Motion makes clear that the administrator of Ms. Hopper’s estate, Micki Cowell (“the

Estate”), has retained the same counsel who represented Ms. Hopper prior to her death. (Mot. 3,

ECF No. 92.) The Motion also attaches an August 23, 2021 “Entry Appointing Fiduciary;

Letters of Authority” filed in the Pickaway County, Ohio Probate Court naming Micki Cowell as

administrator of Ms. Hopper’s Estate. (ECF No. 92, PAGEID #791.) Accordingly, the Motion

is in substance made on behalf of the Estate who is seeking to substitute as Plaintiff in Ms.

Hopper’s place (and, as a result, service on the Estate was unnecessary). To deny the Motion on

the technical grounds advanced by Credit Associates would elevate form over substance and

undermine the general proposition that courts prefer to decide cases on their merits. See, e.g.,

Thacker v. City of Columbus, 328 F.3d 244, 252 (6th Cir. 2003); Leak v. Lexington Ins. Co., 641

F. Supp. 2d 671, 674 (S.D. Ohio 2009).

B. Substantive Criteria

Aside from Rule 25’s procedural criteria, the Estate may not substitute as Plaintiff for

Ms. Hopper’s claims unless those claims survive her death. See Fed. R. Civ. P. 25(a)(1) (“If a

party dies and the claim is not extinguished, the court may order substitution of the proper

party.”) (emphasis added). All of Ms. Hopper’s claims arise under the FCRA, and therefore the

Court must determine whether claims under the FCRA survive the death of a plaintiff. This

precise question was decided in Beaudry v. TeleCheck Servs., Inc., No. 3:07-0842, 2016 WL

11398115 (M.D. Tenn. Sept. 29, 2016). In that case, the court held that, under federal common

law, “[t]he survivability of these claims depends on whether the recovery sought is deemed

‘penal’ or ‘remedial.’” Id. at 12 (citing U.S. v. NEC Corp., 11 F.3d 136, 137 (11th Cir. 1993)).

“It is well-established that actions that are penal in nature do not survive a plaintiff’s death, while

remedial actions do.” Id. (citing Smith v. Dep’t of Human Servs., 876 F.2d 832, 834-35 (10th

Cir. 1989) and Schreiber v. Sharpless, 110 U.S. 76, 80 (1884)). After noting the FCRA’s “dual

purpose” of both redressing individual wrongs and preventing practices that would harm the

general public, the Beaudry court concluded that the FCRA’s statutory damages provisions are

remedial, whereas its punitive damages provisions are obviously penal. Id. at *12 (noting

§ 1681n(a)(1)(A)’s provision for statutory damages in the alternative to actual damages, and

§ 1691n(a)(2)’s separate provision for punitive damages, both of which weigh in favor of

interpreting statutory damages as remedial). The undersigned finds the Beaudry court’s analysis

persuasive and similarly concludes that Ms. Hopper’s claims for statutory damages under the

FCRA survive her death, but her claims for punitive damages do not.

As to Ms. Hopper’s remaining claims: her claims for attorney’s fees and costs cannot be

reasonably construed as anything other than remedial; the intention of fee shifting provisions

such as that contained in 15 U.S.C. § 1681n(a)(3) are to compensate the plaintiff for acting as a

“private attorney general” to vindicate national policy. See Bryant v. TRW, Inc., 689 F.2d 72, 79

(6th Cir. 1982). This claim therefore survives. Finally, Ms. Hopper’s claims for declaratory

judgment were rendered moot by her death. See Immel v. Lumpkin, 408 F. App’x 920, 921 (6th

Cir. 2010) (requests for injunctive and declaratory relief are moot upon death of plaintiff because

she no longer has a “cognizable interest in the outcome”).

In sum, it is RECOMMENDED that Ms. Hopper’s claims for punitive damages and

declaratory judgment be DISMISSED because they were extinguished by her death and that the

Estate be SUBSTITUTED as Plaintiff for Ms. Hopper’s remaining claims for statutory damages

and attorney’s fees and costs under the FCRA.

III. AMENDMENT OF THE COMPLAINT UNDER RULES 15 AND 16

A district court is required to enter a scheduling order, which limits the time “to join

other parties, amend the pleadings, complete discovery, and file motions.” Fed. R. Civ. P.

16(b)(3)(A). When, as in the instant case, a party misses a scheduling order’s deadlines and

seeks a modification of those deadlines, the party must first demonstrate good cause. See Fed. R.

Civ. P. 16(b)(4); Andretti v. Borla Performance Indus., Inc., 426 F.3d 824, 830 (6th Cir. 2005).

“The primary measure of Rule 16’s ‘good cause’ standard is the moving party’s diligence in

attempting to meet the case management order’s requirements.” Inge v. Rock Fin. Corp., 281

F.3d 613, 625 (6th Cir. 2002) (quotation omitted) (citing cases); see also Leary v. Daeschner,

349 F.3d 888, 906 (6th Cir. 2003) (“[A] court choosing to modify the schedule upon a showing

of good cause, may do so only if it cannot reasonably be met despite the diligence of the party

seeking the extension.” (quotation omitted)). “Another important consideration . . . is whether

the opposing party will suffer prejudice by virtue of the amendment.” Leary, 349 F.3d at 906

(citing Inge, 281 F.3d at 625).

If the Rule 16 standard is satisfied, the Court must also evaluate the party’s request to

amend the pleadings under Rule 15. Under Federal Rule of Civil Procedure 15(a)(2), the Court

should “freely give leave” for a party to amend its pleading “when justice so requires.” Fed. R.

Civ. P. 15(a)(2). “The thrust of Rule 15 is to reinforce the principle that cases should be tried on

their merits rather than the technicalities of pleadings.” Teft v. Seward, 689 F.2d 637, 639 (6th

Cir. 1982) (citations omitted); Oleson v. United States, 27 F. App’x 566, 569 (6th Cir. 2001)

(internal quotations omitted) (noting that courts interpret the language in Rule 15(a) as

conveying “a liberal policy of permitting amendments to ensure the determination of claims on

their merits”). “Nevertheless, leave to amend ‘should be denied if the amendment is brought in

bad faith, for dilatory purposes, results in undue delay or prejudice to the opposing party, or

would be futile.’” Carson v. U.S. Office of Special Counsel, 633 F.3d 487, 495 (6th Cir. 2011)

(quoting Crawford v. Roane, 53 F.3d 750, 753 (6th Cir. 1995)). A court may deny a motion for

leave to amend for futility if the amendment could not withstand a motion to dismiss. Riverview

Health Inst. LLC v. Med. Mut. of Ohio, 601 F.3d 505, 512 (6th Cir. 2010); Midkiff v. Adams

Cnty. Reg’l Water Dist., 409 F.3d 758, 767 (6th Cir. 2005).

Here, the deadline for motions to amend the pleadings passed on August 16, 2021

(Preliminary Pretrial Order 1, ECF No. 78), but the Estate did not file its Motion for leave to file

the TAC until August 30, 2021. (ECF No. 92.) The Estate represents that the parties informally

agreed to extend the deadline until August 30, 2021. (Mot. 1, ECF No. 92.) Defendants do not

dispute the existence of this agreement; however, deadlines established by the Court cannot be

extended by stipulation. Nevertheless, the undersigned finds that the Estate did not exhibit

undue delay in waiting a mere fourteen days after the deadline to seek its pleading amendment.

Further, the undersigned can discern no prejudice that Defendants would suffer as a result of the

amendment, given that the current case schedule deadlines for discovery and dispositive motions

are not until September and October 2022, respectively. Cf. Miller v. Admin. Office of Courts,

448 F.3d 887, 898 (6th Cir. 2006) (“Because the discovery deadline had already passed and the

deadline for filing dispositive motions . . . was imminent, the defendants would have been

prejudiced if a further amendment had been permitted by the district court.”). As a result, the

undersigned finds good cause to modify the case schedule under Rule 16, and, for the same

reasons, finds that “justice so requires” the Estate be permitted to amend its pleading under Rule

15.

Yet not all of the Estate’s requested changes to the Complaint fall within the purview of

Rules 15 and 16. Namely, the Estate’s request to join Mr. Smith as an additional Plaintiff is

more appropriately analyzed under the joinder framework of Rule 20. Accordingly, to the extent

the Court adopts the undersigned’s findings that Ms. Hopper’s claims survive her death and that

the Estate is properly substituted as Plaintiff, it is RECOMMENDED that, pursuant to Rules 15

and 16, the Estate be permitted to amend its Complaint to (1) correct an error in Defendant Trans

Union’s name in the case caption; (2) withdraw claims for negligent violation of the FCRA; and

(3) make other “simplifying and clarifying edits” to other allegations. (Mot. 3, ECF No. 92.)

IV. JOINDER UNDER RULE 20

Federal Rule of Civil Procedure 20 provides that persons may join in one action as

plaintiffs if:

(A) they assert any right to relief jointly, severally, or in the alternative with respect

to or arising out of the same transaction, occurrence, or series of transactions or

occurrences; and

(B) any question of law or fact common to all plaintiffs will arise in the action.

Fed. R. Civ. P. 20(a)(1). District courts have discretion in deciding whether to permit joinder

under Rule 20, McCormick v. Mays, 124 F.R.D. 164, 167 (S.D. Ohio 1988), but the United States

Supreme Court has stated that “joinder of claims, parties and remedies is strongly encouraged.”

United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 724 (1966). See also Brown v.

Worthington Steel, Inc., 211 F.R.D. 320, 324–25 (S.D. Ohio 2002) (“Courts liberally permit

joinder under Rule 20(a).”). Consistent with this principle, the United States Court of Appeals

for the Sixth Circuit has given the terms “transaction” and “occurrence” a broad interpretation.

Lasa Per L’Industria Del Marmo Societa Per Azioni v. Alexander, 414 F.2d 143, 147 (6th Cir.

1969). Courts in this District have found the “same transaction or occurrence” criterion is met

when the two claims are likely to involve overlapping proof and duplicative testimony. See

Evans v. Midland Funding LLC, 574 F. Supp. 2d 808, 811–12 (S.D. Ohio 2008) (quoting Wright,

Miller & Kane, 7 Fed. Pract. & Proc., Civ. 3rd § 1653 at 411–12 (2001).

The undersigned finds that the Estate and Mr. Smith have met the requirements for

joinder. Their claims arise out of the same transaction or occurrence because the Estate and Mr.

Smith both allege the same course of conduct by Defendants (obtaining their credit information

for an improper purpose), which resulted in both Ms. Hopper and Mr. Smith receiving an

identical mailing from Credit Associates within a three-month period. The content of these

mailings, as well as the purpose for which Credit Associates obtained Ms. Hopper’s and Mr.

Smith’s credit information in order to issue these mailings, are at the heart of both the Estate’s

and Mr. Smith’s claims. Both claims are therefore likely to involve overlapping proof and

duplicative testimony. See, e.g., Scott v. Fairbanks Cap. Corp., 284 F. Supp. 2d 880, 888–89

(S.D. Ohio 2003) (finding same transaction or occurrence when both plaintiffs “were both

subjected to the same types of fees and the same actionable collection activities”); Evans, 574 F.

Supp. 2d at 811 (finding same transaction or occurrence where the defendant law firm “filed

substantially similar complaints” against plaintiffs). Similarly, both claims involve common

questions of law or fact—for instance, whether the language of the mailers received by Ms.

Hopper and Mr. Smith constitute a firm offer of credit under the FCRA. See, e.g., Evans, 574 F.

Supp. 2d at 811 (finding common a common question of law to be “whether a complaint for

money loaned arising from an unpaid credit card debt violates the FDCPA”).

Defendants do not meaningfully address the Rule 20 requirements, insisting only that Mr.

Smith cannot be joined because none of Ms. Hopper’s claims survive her death, that the Estate’s

counsel is attempting to improperly use Rule 20 to substitute Mr. Smith as putative class

representative, and that Mr. Smith’s claims for the purpose of acting as a class representative are

time-barred. Yet the undersigned has already determined that at least some of Ms. Hopper’s

claims survive her death. And at this stage, the undersigned recommends joinder only of Mr.

Smith’s individual claims and expresses no opinion regarding Mr. Smith’s suitability to represent

any class that might be certified. Indeed, Ms. Hopper was never certified as a class

representative, and only her surviving individual claims are currently before the Court; it is

therefore impossible for Mr. Smith to “substitute” for Ms. Hopper as class representative at this

time. Further, Mr. Smith’s suitability as a class representative is more appropriately addressed in

the context of a motion for class certification. Similarly, any arguments that Mr. Smith’s claims

are futile are more appropriately addressed in the context of a motion to dismiss under Rule

12(b)(6). See Durthaler v. Accounts Receivable Mgmt., Inc., 2:10-cv-1068, 2011 WL 5008552,

at *4 (S.D. Ohio Oct. 20, 2011) (because Magistrate Judges cannot by statute ordinarily rule on a

motion to dismiss, the better course is to permit amendment and allow opposing parties to

challenge the allegedly futile amendment through a motion to dismiss).

In sum, it is RECOMMENDED that Mr. Smith be joined as a Plaintiff in this action.

V. DISPOSITION

For the foregoing reasons, it is RECOMMENDED that the Motion (ECF No. 92) be

GRANTED IN PART AND DENIED IN PART. Specifically, it is RECOMMENDED that

Ms. Hopper’s claims for punitive damages and declaratory judgment be DISMISSED because

they were extinguished by her death, and that the Estate be SUBSTITUTED as Plaintiff for Ms.

Hopper’s remaining claims for statutory damages and attorney’s fees and costs under the FCRA.

It is FURTHER RECOMMENDED that the Estate be permitted to amend its Complaint to

(1) correct an error in Defendant Trans Union’s name in the case caption; (2) withdraw claims

for negligent violation of the FCRA; and (3) make other “simplifying and clarifying edits” to

other allegations. It is FURTHER RECOMMENDED that Mr. Smith be joined as a Plaintiff in

this action. As a result, it is FURTHER RECOMMENDED that the Clerk be DIRECTED to

file the proposed Third Amended Complaint, attached to “Plaintiff’s” Motion as Exhibit 2 (ECF

No. 92, PAGEID #792–815).

PROCEDURE ON OBJECTIONS

If any party objects to this Report and Recommendation, that party may, within fourteen

(14) days of the date of this Report, file and serve on all parties written objections to those specific

proposed findings or recommendations to which objection is made, together with supporting

authority for the objection(s). A Judge of this Court shall make a de novo determination of those

portions of the Report or specified proposed findings or recommendations to which objection is

made. Upon proper objections, a Judge of this Court may accept, reject, or modify, in whole or in

part, the findings or recommendations made herein, may receive further evidence or may recommit

this matter to the Magistrate Judge with instructions. 28 U.S.C. § 636(b)(1).

The parties are specifically advised that failure to object to the Report and

Recommendation will result in a waiver of the right to have the District Judge review the Report

and Recommendation de novo, and also operates as a waiver of the right to appeal the decision of

the District Court adopting the Report and Recommendation. See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

/s/ Chelsey M. Vascura

CHELSEY M. VASCURA

UNITED STATES MAGISTRATE JUDGE