Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01304/USCOURTS-caed-2_05-cv-01304-8/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

KRISTY SCHWARM, on behalf of

herself and others similarly

situated,

NO. CIV. S-05-1304 WBS GGH

Plaintiff,

v. ORDER RE: MOTION TO AMEND THE

CLASS CERTIFICATION ORDER

HENRY CRAIGEAD, et al., 

Defendants.

----oo0oo----

Plaintiff, on behalf of herself and others similarly

situated, moves to amend the class certification order to

formally add two plaintiffs, Josann Ancelet and Patricia Foronda,

as class representatives.

I. Factual and Procedural Background

Defendant District Attorney Technical Support, Ltd.

(“DATS”), d/b/a Computer Support Services, is a Nevada

corporation doing business in California. Defendant Henry

Craighead is the founder and chief executive officer of DATS. 

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Defendants were engaged in the business of collecting debts from

individuals who had previously proffered dishonored checks. 

Beginning in July 2004, plaintiff Kristy Schwarm began receiving

demand letters from a “check restitution/prosecution program”

managed by DATS, regarding two dishonored checks written by

plaintiff. The letters apparently sought to collect the amount

of the dishonored check, a bank charge, an administrative fee,

and a diversion fee, and threatened potential criminal

prosecution if the amounts were not paid. (Compl. ¶¶ 14-15.)

On June 29, 2005, Schwarm filed a complaint against

defendants, on behalf of herself and others similarly situated,

alleging violations of due process under the California and

United States Constitutions, violations of the Fair Debt

Collection Practices Act, 15 U.S.C. §§ 1692, et seq., fraudulent

misrepresentation, and negligent misrepresentation. (Compl.) 

Plaintiff contends that defendants, in conjunction with the

district attorneys of more than two dozen California counties and

under the color of state law, sought to collect on checks and

inappropriate collection fees from thousands of individuals such

as plaintiff, under the false threat of arrest and prosecution. 

(Compl. ¶ 1.)

On March 4, 2006, this court certified this as a class

action, for “[a]ll persons who wrote checks in California to whom

DATS mailed collection demands concerning dishonored checks, June

29, 2003,” and up until the date of that order. (March 4, 2006

Order.) The court named Kristy Schwarm as the representative of

the class. (Id.) Subsequently, on October 26, 2006, this court

granted plaintiff’s motion for leave to amend the complaint, to

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Schwarm sought to add Ancelet and Foronda as plaintiffs 1

because, unlike Schwarm, they both paid fees demanded by

defendants and thus had objectively verifiable damages. (Mot.

for Leave to Amend 5.)

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add class members Josann Ancelet and Patricia Foronda as

plaintiffs. (October 26, 2006 Order 4.) Schwarm now seeks to 1

add plaintiffs Ancelet and Foronda as class representatives.

Defendants do not oppose this motion 

II. Discussion

An order certifying a class “may be altered or amended

before final judgment.” Fed. R. Civ. P. 23(c)(1)(C). Thus,

“before entry of a final judgment on the merits, a district

court’s order respecting class status is not final or

irrevocable, but rather, it is inherently tentative.” Officers

for Justice v. Civil Serv. Comm’n of the City and County of San

Francisco, 688 F.2d 615, 633 (9th Cir. 1982).

In addition to the requirement of numerosity and

typicality, Fed. R. Civ. P. 23(a) permits a class action to be

maintained only if “the representative parties will fairly and

adequately protect the interests of the class.” Hanlon, 150 F.3d

at 1020; Fed. R. Civ. P. 23(a)(4). Adequate representation

requires the court to inquire into whether the named plaintiffs

and their counsel (1) have any conflicts of interest with other

class members and (2) will prosecute the action vigorously on

behalf of the class. Id. (citing Lerwill v. Inflight Motion

Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978)). 

Here, Ancelet and Foronda have interests similar to

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On July 9, 2004, plaintiff Ancelet wrote a personal 2

check which was subsequently dishonored. (Ancelet Decl. ¶ 2.) 

In October, 2004, she began receiving letters from defendants

accusing her of a crime and demanding various fees. (Id.) Upon

contacting defendants, Ancelet was told that if she did not pay

the check amount plus the fees in fifteen days, she would be

required to attend a financial management class. (Id.) After

several communications with defendants, Ancelet eventually paid

to defendants the check amount plus all fees demanded, including

a class fee. (Id.) 

On August 2, 2003, plaintiff Foronda wrote a personal

check which was subsequently dishonored. (Foronda Decl. ¶ 1.) 

In December, 2003, she received a letter accusing her of a crime

and demanding various fees, and stating that if she did not pay

the check amount plus the fees in fifteen days, she would be

required to attend a financial management class. (Id.) After

communications with defendants, in which she was threatened with

arrest if the fees were not paid, she paid the full check amount

plus all fees demanded. (Id. ¶ 2.)

Ancelet and Foronda have secured as counsel the same 3

attorneys representing Schwarm, who were noted approvingly by

this court to be competent counsel in its original order granting

class certification. (March 4, 2006 Order 14.)

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those of the other class members. Their claims arise out of 2

the same conduct as other class members, and they seek all

available relief on behalf of the class. See id. (noting that

heightened scrutiny may be necessary in “cases in which class

members may have claims of different strength”). Further, there

is no evidence of any potential conflict of interest, either with

other class members or their counsel. (Ancelet Decl. ¶ 9;

Foronda Decl. ¶ 9.) In addition, both Ancelet and Foronda

demonstrate an understanding of the nature of this action as well

as their rights and obligations as class representatives. 

(Ancelet Decl. ¶¶ 3-8; Foronda Decl. ¶¶ 3-8.) Finally, there is

every indication that Ancelet and Foronda, as well as their

counsel, will litigate this matter vigorously. Accordingly, 3

class members Ancelet and Foronda will adequately represent the

class.

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This court has previously found the remaining

requirements of Rule 23(a) and (b) to have been satisfied. 

Accordingly, because the requirements for class certification are

met by Ancelet and Foronda as class representatives the court

will amend its prior order.

IT IS THEREFORE ORDERED that plaintiff Kristy Schwarm’s

motion to amend this court’s March 4, 2006, class certification

order be, and the same hereby is, GRANTED. Named plaintiffs

Josann Ancelet and Patricia Foronda, along with previous class

representative Kristy Schwarm, shall represent the umbrella class

and all subclasses, with Paul Arons, O. Randolph Bragg, Scott

Shoblom, and Ronald Wilcox as class counsel.

DATED: May 25, 2007

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