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Zimmermann v. Epstein Becker Inexperienced, P.C., C.A. NO. 09-cv-30194-MAP | Casetext Search + Citator



On November 10, 2009, Plaintiffs, individually and as putative class representatives, filed this criticism, purporting to implement a constructive religion ordered in a divide class motion, Zimmermann v. Cambridge Credit score Counseling Corp., Civil Motion No. 03-30261, and in search of class-based damages underneath the Credit score Restore Organizations Act ( “ CROA ” ), 15 U.S.C. §§ 1679 et seq. The case now comes earlier than this courtroom on Defendants ‘ motions to dismiss ( Dkt. Nos. 29, 36, 38, 43 ). As a result of the necessities of Fed.R.Civ.P. 23 haven’t been, nor could possibly be, glad to allow prosecution of this case as a category motion, and since Plaintiff can’t pursue this case as people, the motions shall be allowed.


In 2003, Plaintiffs Andrew and Kelly Zimmermann filed a criticism underneath the Credit score Restore Organizations Act, 15 U.S.C. § 1969 ( “ CROA ” ), towards a rely of defendants, none of whom is a defendant on this occasion. Zimmermann v. Cambridge Credit score Counseling Corp., Civil Motion No. 03-cv-30261 ( the “ CCCC Motion ” ). Lessons had been licensed on December 6, 2007 ( the CCCC Motion, Dkt. No. 231 ), and Plaintiffs finally obtained abstract judgment towards some defendants. finally, this courtroom awarded very substantial damages within the CCCC Motion litigation and imposed a constructive confidence ( the “ constructive Belief ” ) towards the belongings of defendants John and Richard Puccio in that encase. ( The CCCC Motion, Dkt. No. 420 at 5. ) On November 10, 2009, Plaintiffs Andrew and Kelly Zimmermann — purportedly on behalf of the lessons licensed within the earlier CCCC Motion, however with none feat at complaisance with Rule 23 — filed this lawsuit towards various attorneys and jurisprudence companies that allegedly offered authorized providers to the Puccios and entities related to them within the CCCC Motion. Defendants are Brian J. Davis, P.C. ; Brian J. Davis, Esq., P.C. ; Brian J. Davis, Esq. ; Spence Davis, L.L.P. ; Douglas D. Viviani, P.C. ; and Douglas D. Viviani, Esq. ( the “ Davis-Viviani Defendants ” ) ; Defendant Epstein Becker and Inexperienced, P.C. ( “ Defendant EBG ” ) ; Defendant Paul M. Kaplan, Esq. ( “ Defendant Kaplan ” ) ; and Defendant Sheppard, Mullin, Richter Hampton, L.L.P. ( “ Defendant Sheppard Mullin ” ). The top of the criticism identifies Plaintiffs as “ Andrew Zimmermann and Kelly Zimmermann, as class representatives for the certifiable [ CCCC Action ] Lessons. ” The physique of the cost identifies Plaintiffs as “ the appoint plaintiffs, licensed class representatives and members of the lessons licensed by this Courtroom within the [ CCCC Action ]. ” ( Dkt. No. 1, Compl. ¶ 14. ) Of their Omnibus Opposition to Defendants ‘ movement to Dismiss, Plaintiffs determine themselves as “ license classify representatives for the license lessons. ” ( Dkt. No. 46-4 at 49 n. 23. ) The courtroom understands Plaintiffs to be Andrew and Kelly Zimmermann, suing individually and on behalf of the CCCC Motion class.

Out of an abundance of warning, the courtroom has assumed, as Defendants have, that Plaintiffs are suing each as people and as class representatives. The cost itself is ambiguous. The cost alleges that every Defendant acquired monies, largely if not wholly as recompense for skilled providers rendered, from the Puccios and early defendants within the CCCC Motion, and that these funds are matter to the Constructive Belief entered within the earlier case. Plaintiffs now search to recuperate these funds for the Belief. The criticism in addition to expenses that the Davis-Viviani Defendants, Defendant EBG, and Defendant Kaplan violated the CROA. Defendants EBG and Kaplan allegedly violated the CROA by advising the CCCC Motion defendants “ in making statements of their promote promising credit score animate in violation of the CROA. ” ( Dkt. No. 1, Compl. ¶ 78. ) The Davis-Viviani Defendants allegedly violated the CROA “ for every of the lapp causes set away on this Courtroom ‘s [ CCCC Action ] compendious judgment choice and holy order. ” ( Dkt. No. 1, Compl. ¶ 61, referring to Zimmermann v. Cambridge Credit score Counseling Corp., 529 F. Supp. second 254 ( D. Mass. 2008 ) ). The criticism additional alleges that “ every member of [ the CCCC Action class ] has been injured because of [ Defendant ] EBG and/or [ Defendant ] Kaplan ‘s violations of CROA, ” and that sure unspecified members of the CCCC Motion class had been purchasers of the Davis-Viviani Defendants and had been injured because of the Davis-Viviani Defendants ‘ CROA violations. ( Dkt. No. 1, Compl. ¶¶ 69, 72, and 87. ) Plaintiffs search restitution for the alleged CROA violations “ in an quantity peer to the complete quantity of charges paid by members of the license [ CCCC Action ] Lessons to the [ CCCC Action ] defendants ” for all years of the attest class menstruation throughout which Defendants had been self-discipline to CROA or had been offering providers to the CCCC Motion defendants. ( Dkt. No. 1, Compl. ¶¶ 75 and 89. ) As famous, all Defendants have filed motions to dismiss all counts within the criticism. ( See, Dkt. Nos. 29, 36, 38, and 43. ) The courtroom heard oral argument on the 4 motions on June 7, 2010, and took the case underneath deliberation. Plaintiffs filed a Discover of Supplemental Authorities on June 14, 2010, to which Defendant EBG and the Davis-Viviani Defendants responded on June 15 and 16, respectively.


Defendants argue ( 1 ) that the CCCC Motion class lacks standing to prosecute this shell as a result of it has not been licensed on this motion and ( 2 ) that the person Plaintiffs, Andrew and Kelly Zimmermann, haven’t any knowable claims as people. The dialogue beneath will start with the category claims and transfer to the claims ( if any ) being introduced by the Zimmermanns individually. Defendants supply many different arguments in help of their motions to dismiss, however the infirmities mentioned on this memo are so obtrusive that it isn’t obligatory to debate different rationales for dismissal, nonetheless sturdy these could also be.

A. Claims by the CCCC Motion Class.

The evaluation of the motions to dismiss should start with fundamentals rationale.

Equity and due course of considerations make litigation by and towards named events the conventional rule and litigation by or towards a category the exception to the conventional rule. Rule 23 makes an attempt to stability judicial effectivity of litigation by or towards lessons towards equity and due course of considerations, and does so by offering procedures and safeguards designed to make sure honest and enough safety of the pursuits of absentee class members.

5 Moore ‘s Federal Apply — Civil § 23.02 ( 3d Ed. 2010 ). Due to the weird nature of sophistication actions, and the dangers they pose to plaintiffs and defendants alike, prosecution of a category motion calls for rigorous conformity with Rule 23. Courts have been accordingly fast to guard defendants who confront class claims with out a chance to problem documentation. See, e.g., In ra American Medical Sys., 75 F.3d 1069, 1086 ( sixth Cir. 1996 ). At a minimal, a plaintiff in search of to deliver a category declare should display that the Rule 23 ( a ) necessities are glad ; plaintiffs should present ( 1 ) numerousness, ( 2 ) commonalty, ( 3 ) typicality, and ( 4 ) sufficiency. Underneath rule 23 ( bacillus ), plaintiffs should in addition to present that ( 1 ) prosecuting separate actions would create the danger of inconsistent adjudications, ( 2 ) the celebration opposing the category acted or refused to behave on grounds that apply typically to the category, making injunctive or declarative stand-in enable to the course as an entire ; or ( 3 ) coarse questions of legislation or reality predominate.

On this case, though Plaintiffs search class-based reduction, they’ve failed even to allege that they fulfill the rule 23 necessities, not to mention display that they’ll. alternatively, they argue that the category certificates proceedings of the separate, prior CCCC Motion, involving wholly completely different defendants, had been ample to fulfill the precept 23 necessities for this subsequent go. No authority helps this disturb notion. Plaintiffs summon no precedent, and this woo is conscious of none, holding that the authentication in a single proceed might migrate to fulfill the precept 23 necessities in a unique continuing towards not like defendants. Plaintiffs analogize this case to In ra Trebol Motors Distrib. Corp., 220 B.R. 500, 502 ( B.A.P. 1st Cir. 1998 ), wherein the First Circuit dominated {that a} beforehand licensed class may file a proof of title in an adversarial chapter continuing. nonetheless, in that case the events to each actions had been similar. By allowing the beforehand licensed class to pursue a especial defendant out of business courtroom with out going via the authentication course of, the First Circuit merely prevented that defendant from re-litigating similar questions in two offprint boards. This rationale doesn’t exist on this case, the place these Defendants weren’t events to the unique course certificates proceedings. Trebol offers no authority for bypassing the in any other case relevant necessities of Rule 23. Plaintiffs additional argue {that a} licensed classify is analogous to an organization — i, that it has its personal freelancer authorized universe and will sue in federal courtroom in its personal proper. For this suggestion, Plaintiffs cite Sosna v. Iowa, 419 U.S. 393 ( 1975 ), and Enron Corp. Financial savings Plan and the Administrative Committee of Enron Corp. Financial savings Plan v. Hewitt Associates L.L.C., 07-cv-04081, 2008 U.S. Dist. LEXIS 68578 ( S.D. Tex., August 28, 2008 ). Neither of those instances help Plaintiffs ‘ argument. Enron concerned a lawsuit by an ERISA plan and the Plan ‘s administrative Committee, not by a beforehand licensed class. It’s consequently not relevant. Sosna concerned a problem to Iowa ‘s annual state residency prerequisite for submission of disassociate petitions. The Sosna Courtroom held that the named plaintiff ‘s problem didn’t change into moot when she finally met the residency requirement as a result of the separate authorized standing of the category saved the residency matter alive. Sosna, 516 U.S. at 399. nonetheless, nothing in Sosna would counsel that the documentation of a category in a single case provides give beginning to a corporation-like freelancer entity with the roving right to sue different defendants with out giving these defendants any of the safeguards built-in in Rule 23. final, Plaintiffs argue that, regardless of its superficial look, this occasion will not be actually an autonomous lawsuit however merely an enforcement motion. It’s right that, within the context of an enforcement navy motion, a courtroom might in sure circumstances train accent jurisdiction over non-parties. See, e.g., U.S.I. Props. Corp. v. MD Constr. Co., 230 F.3d 489, 497 ( 1st Cir. 2000 ) ( “ Federal courts have expressly acknowledged their capability to train authorized energy over new events in auxiliary proceedings the place the proceedings involved property underneath the manipulate of the union courts because of an present judgment. ” ) Plaintiffs right here argue that the Plaintiff classify obtained an order in its want establishing the constructive religion, that the courtroom consequently has authorized energy to implement this order, and that enforcement authorized energy permits the category to deliver a freestanding declare towards these Defendants to acquire damages pursuant to this order. The argumentation is unpersuasive for a number of causes. first, The potential for accent jurisdiction over these Defendants ( even assuming it exists ) doesn’t excuse Plaintiffs from conformity with the dominion 23 necessities. The truth that the situations set forth in Rule 23 ( a ) and ( bacillus ) had been glad in a earlier case doesn’t by any means set up that they’ve been, and even that they could possibly be, glad on this lawsuit. Second, even leaving apart the issues underneath Rule 23, accent enforcement jurisdiction doesn’t lengthen to instances that “ elevate an autonomous controversy with a contemporary celebration ” or to “ an pure course of primarily based on newly grounds. ” Id. 230 F.3d at 497-98. Of their CROA claims ( Counts 2 and three ), Plaintiffs allege impartial acts of wrongdoing by third base events. To succeed on these counts, Plaintiffs must make uncooked factual showings that the especial Defendants violated the CROA. The claims subsequently have an mugwump factual foundation and lie outdoors the oscilloscope of accent enforcement jurisdiction. lastly, with esteem to the constructive belief declare ( Depend 1 ), the courtroom notes that accent authorized energy is a “ judicial creation ” that exists “ to allow a courtroom to serve efficiently, that’s, to handle its proceedings, vindicate its authority, and effectuate its decrees. ” Id., 230 F.3d at 496 ( citing Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 380 ( 1994 ) ). On this casing, a Receiver has been appointed to implement the constructive confidence and to defend the rights of the CCCC Motion course as a creditor. Allowing the certify class to deliver actions towards non-parties within the title of enforcement authorized energy would lengthen the vary of the documentation fee past what is critical to implement the courtroom ‘s fee of constructive belief. The analogy of accent authorized energy weighs towards, not in favor of, Plaintiffs. Ultimately, this criticism rests on an unprecedented and quite startle premise : {that a} class licensed in a single motion might by itself institute an impartial lawsuit towards not like events, by no means present these new events any alternative to problem the propriety of the category carry via mechanism, and expose these new defendants to the hazard of a large class-based harm award. moreover, plaintiff class members, equally properly as Defendants, face attainable bias, since they haven’t any alternative to choose out of a category treatment if they like to pursue their very own mugwump claims. The probably misuse of the category motion device if Plaintiffs ‘ speculation had been accepted is exceeding. It merely can’t be permitted.

B. Claims by Particular person Plaintiffs Andrew and Kelly Zimmermann

With esteem to Depend 1, particular person Plaintiffs Andrew and Kelly Zimmermann lack the authority to implement the order of constructive belief. The speed entered on behalf of the whole class, and a Receiver was appointed to defend the category ‘s rights as a creditor. individual Plaintiffs within the CCCC Motion haven’t any standing to implement the order. The courtroom will subsequently dissolve Depend 1. With respect to Counts 2 and three, the criticism fails to fulfill the necessities of Rule 8 ( a ) ( 2 ). “ The pleading normal Rule 8 broadcasts doesn’t require ` element factual allegations, ‘ nevertheless it calls for greater than an unadorned, the-defendant-unlawfully-harmed-me accusation.. .. A plead that gives ` labels and conclusions ‘ or ` a formulaic recitation of the weather of a marketing campaign of motion won’t do. ‘ ” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 ( U.S. 2009 ) ( quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544 ( 2007 ) ). The ailment doesn’t tied allege that both Plaintiff was a buyer of the Davis-Viviani Defendants ; the allegations towards Defendants EBG and Kaplan are informal statements to the impact that Plaintiffs suffered worth as a result of Defendants violated the CROA. With out some supporting details relating to the character of Plaintiffs ‘ particular person harm and its relationship to the precise Defendants ‘ CROA violations, the courtroom should dismiss Counts 2 and three.


For the explanations acknowledged above, the Motions to Dismiss ( Dkt. Nos. 29, 36, 38, 43 ) are hereby ALLOWED. The shop clerk will enter opinion for Defendants. This shell might these days be closed. It’s so Ordered.

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