United States District Court, W.D. Wisconsin
DANELL BEHRENS, individually and on behalf of all others similarly situated, Plaintiff,
LANDMARK CREDIT UNION and DOES 1-100, Defendants.
OPINION & ORDER
D. PETERSON DISTRICT JUDGE.
Danell Behrens filed a proposed class action alleging that
defendants, Landmark Credit Union and Does 1-100
(collectively “LCU”), charged LCU members
overdraft fees in violation of Regulation E of the Electronic
Fund Transfer Act (ETFA) and LCU's own overdraft program
contract. Now before the court is Behrens's unopposed
motion seeking preliminary approval for the parties'
proposed class action settlement. Dkt. 29. In her motion,
Behrens seeks conditional certification of the class,
approval of a proposed notice plan, appointment of a claims
administrator, and a hearing date for the final approval of
the settlement. The court will conditionally certify the
class and preliminarily approve the settlement pending a
final fairness hearing.
a Wisconsin-based credit union. During the six-year period
prior to the filing of this suit, Behrens and the proposed
class members all had checking accounts with LCU.
alleges that LCU wrongfully charged its customers overdraft
fees. An overdraft fee is charged to an account when there
are not sufficient funds in an account to cover a
transaction. There are two methods to determine if an account
has sufficient funds to cover a transaction: (1) the ledger,
or actual, balance method and (2) the available balance
method. LCU used the available balance method to assess its
difference between the two is that the actual balance
reflects all of the money in an account, whereas the
available balance reflects only the money not subject to a
hold due to pending transactions. Thus, the available balance
in an account may be less than the actual balance. So by
using the available balance method, LCU may assess an
overdraft fee even when a customer's actual balance shows
enough money to cover a transaction.
claims that this practice violates the terms of the contracts
governing LCU's overdraft program, and that it violates
Regulation E of the EFTA, see 12 C.F.R. §
1005.17, because LCU failed to properly disclose its
overdraft policy to customers.
brings her claims on behalf of herself and the entire class,
which is composed of two subclasses. The first, the
“Sufficient Funds” subclass, is tied to the
breach of contract claim and is defined as “those
members of Defendant who were assessed an Overdraft Fee
between February 9, 2011 and February 28, 2017 on any type of
payment transaction and at the time such fee was assessed,
the member had sufficient money in his or her ledger balance
to cover the transaction that resulted in the fee.”
Dkt. 37, at 6. The second, the “Regulation E”
subclass, is tied to the ETFA claim and is defined as
“those members of Defendant who were assessed an
Overdraft Fee for an ATM or non-recurring debit card payment
transaction for the first time between February 9, 2016 and
February 28, 2017.” Dkt. 37, at 6. Id.
Court has subject matter jurisdiction over Behrens' EFTA
claim under 28 U.S.C. § 1331 because it arises under
federal law, and the court may assert supplemental
jurisdiction over the breach of contract claim under 28
U.S.C. § 1367 because it is part of the same case or
settlement purposes only, Behrens moves the court to certify
the proposed class. The proposed class consists of “any
member of LCU who is in either of the two [sub]classes, the
Regulation E Class or the Sufficient Funds Class.” Dkt.
37, at 6.
23 gives the district courts ‘broad discretion to
determine whether certification of a class-action lawsuit is
appropriate.'” Arreola v. Godinez, 546
F.3d 788, 794 (7th Cir. 2008) (quoting Chavez v. Ill.
State Police, 251 F.3d 612, 629 (7th Cir. 2001)). Before
“[o]ne or more members of a class may sue or be sued as
representative parties on behalf of all members, ” the
proposed class must satisfy the Rule 23(a) prerequisites:
numerosity, commonality, typicality, and adequacy of
representation. Fed.R.Civ.P. 23(a). The proposed class must
also satisfy one subsection of Rule 23(b). Here, Behrens
argues that the proposed class satisfies Rule 23(b)(3). Rule
23(b)(3) permits class certification when “questions of
law or fact common to class members predominate over any
questions affecting only individual members, ” and when
a class action is “superior to other available methods
for fairly and efficiently adjudicating the
controversy.” And “[i]f the action proceeds under
Rule 23(b)(3), then each member of the class must receive
notice and an opportunity to opt out and litigate (or not) on
his own behalf.” Jefferson v. Ingersoll Int'l
Inc., 195 F.3d 894, 896 (7th Cir. 1999).
considering whether to preliminarily approve a class action
settlement and, in the process, to certify a Rule 23 class,
the court must rigorously examine whether the proposed class
satisfies the Rule 23 requirements, to mitigate the lack of
an adversarial relationship between the parties and to
identify potential conflicts of interest. See Redman v.
RadioShack Corp., 768 F.3d 622, 629 (7th Cir. 2014).
Thus, Behrens must go beyond the pleadings and adduce
evidence to satisfy Rule 23. Comcast Corp. v.
Behrend, 569 U.S. 27, 33 (2013). Because she does so,
the court will certify the proposed class.
23(a)(1) requires that the proposed class be so numerous that
joinder is impracticable. There is no explicit cut-off, but
the Seventh Circuit has deemed classes of 40 members to be
sufficient. See Swanson v. Am. Consumer Indus.,
Inc., 415 F.2d 1326, 1333 n.9 (7th Cir. 1969). Here,
Behrens has identified 14, 286 LCU members as belonging to
the Sufficient Funds subclass and 6, 020 LCU members as
belonging to the Regulation E class, for a total class
membership of 18, 062 persons. This number is large enough to
make joining all potential class members impracticable.
Behrens has satisfied the numerosity requirement.
Rule 23(a)(2), a class action must involve “questions
of law or fact common to the class” or, more
accurately, common answers to those questions. Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 349-50 (2011). Put
differently, a class satisfies the commonality requirement
when “determining the truth or falsity of [a] common
contention will resolve an issue that is central to the
validity of each claim.” Chi. Teachers Union, Local
No. 1 v. Bd. of Educ., 797 F.3d 426, 434 (7th Cir.
Behrens has identified several questions common to the class,
all of which would share common answers: (1) whether LCU
uniformly and systematically used the available balance
method instead of the actual balance method to assess an
overdraft fee on a transaction; (2) whether the operative
terms in the overdraft fee program contract, including the
method of balance calculation to be used in the assessment of
overdraft fees, were provided to all class members; and (3)
whether the terms of the overdraft fee program contract
mandated the use of the actual balance in the assessment of
determination of these issues, regardless of outcome, will
resolve the allegations of the entire class. Behrens
satisfies Rule 23(a)(2)'s commonality requirement.
Rule 23(a)(3), a class representative's claims must have
“the same essential characteristics” as the class
members' claims. Muro v. Target Corp., 580 F.3d
485, 492 (7th Cir. 2009) (quoting De La Fuente v.
Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir.
1983)). Behrens seeks appointment as the class
representative, contending that her claims are based on the
same questions of law and fact as the rest of the class.
Behrens is a member of the proposed class, she entered into
LCU's standardized overdraft program contract, and she