United States District Court, W.D. Wisconsin
MEREDITH D. DAWSON, individually and on behalf of all others similarly situated, Plaintiff,
GREAT LAKES EDUCATIONAL LOAN SERVICES, INC., GREAT LAKES HIGHER EDUCATION CORPORATION, JILL LEITL, DAVID LENTZ, and MICHAEL WALKER, Defendants.
OPINION AND ORDER
D. PETERSON, DISTRICT JUDGE
Meredith Dawson is proceeding on behalf of a class on claims
that two affiliated student loan servicing companies and
three company officials fraudulently and negligently inflated
the amount owed on student loans, in violation of both the
Racketeer Influenced and Corrupt Organizations Act and state
law. Defendants' motion for summary judgment is fully
briefed, but Dawson has more recently filed a motion that
complicates the resolution of the merits of her claims.
Specifically, Dawson alleges that defendants failed to
disclose the identities and contact information of thousands
of class members, who haven't received notice of this
case. Dawson asks the court to compel defendants to provide
the requested information, find defendants in civil contempt,
and award sanctions under Federal Rule of Civil Procedure 37.
See Dkt. 280.
their opposition brief, defendants represent that they have
now provided Dawson's class administrator with the names
and contact information of all the individuals in dispute.
Dkt. 285, at 19. Dawson doesn't dispute that
representation in her reply brief, so I will assume that
Dawson's motion to compel is moot. The remaining
questions are whether defendants should be sanctioned and
what implications the delay in identifying these class
members has on the case schedule.
court concludes that Dawson is entitled to sanctions because
defendants violated a clear court order to provide contact
information for all class members and because defendants
don't have a good reason for later denying a request for
admission aimed at determining whether defendants had
provided that information. And because of the significant
delay caused by the need to conduct another round of class
notice, the current schedule is no longer feasible. The court
will strike the deadlines and set new ones if necessary,
after resolving the motion for summary judgment.
is one other motion before the court, which is Dawson's
unopposed motion to appoint additional class counsel. Dkt.
269. Because the court is persuaded that appointment is
appropriate under Federal Rule of Civil Procedure 23(g)(1),
the court will grant the motion.
is seeking sanctions against defendants on two grounds.
First, Dawson says that the court should find defendants in
civil contempt because they failed to comply with the
court's order to provide contact information for all the
class members in this case. Second, Dawson says that
sanctions are appropriate under Rule 37(c)(2) because
defendants had no basis for denying a request for admission
about who received class notice. For relief, Dawson asks for:
(1) the cost of providing notice to the recently identified
class members; and (2) attorney fees and expenses incurred in
disproving defendants' denial to the request for
must show the following things by clear and convincing
evidence to obtain a finding of civil contempt against
defendants: (1) defendants violated an “unambiguous
command” in a court order; (2) defendants'
violation was significant, meaning that defendants did not
substantially comply with the order; and (3) defendants
failed to make a reasonable and diligent effort to comply.
Ohr ex rel. Nat'l Labor Relations Bd. v. Latino Exp.,
Inc., 776 F.3d 469, 474 (7th Cir. 2015).
contends that defendants violated the court's orders
granting class certification and directing defendants to
provide contact information for the class. In the
certification order, the court certified a class of
individuals who received student loans from defendants and
then received what is called “B-9 forbearance”
status, which means that the borrower's payment
obligations were suspended while they were in that
status. The class claims rest on the view that
defendants violated the law when they capitalized interest on
the loans at the end of the forbearance period. After
certifying the class, the court ordered defendants to produce
contact information for all the class members. Dkt. 197, at
contends that defendants violated the court's orders by
failing to provide the class administrator with the contact
information of more than 7, 000 individuals who fall within
the class. Specifically, Dawson points to individuals whose
interest was capitalized as the result of “procedural
and programming” errors. The class certification order
includes three subclasses, one of which was individuals whose
interest was capitalized as a result of procedural or
programming errors. Dkt. 171, at 24.
don't deny that they failed to provide the class
administrator with contact information for the individuals
described above, which the court will refer to as the omitted
borrowers. But defendants contend that it wasn't clear
whether such individuals were included in the class, for two
reasons. Defendants' first argument relies on the last
requirement of the class definition, which limits the class
to those who “had any amount of accrued interest
capitalized at the end of the administrative forbearance
period.” Defendants argue that the omitted borrowers do
not meet that requirement because, at the time the court
issued the class definition, defendants had
“fix[ed]” the programming errors, so the omitted
borrowers “did not have ‘any amount of accrued
interest capitalized' on their student-loan
accounts.” Dkt. 285, at 14.
argument has no merit. As an initial matter, the class
included “[a]ll persons who, between January 1,
2006 and the present . . . had any amount of
accrued interest capitalized at the end of the administrative
forbearance period.” Dkt, 171, at 24 (emphasis added).
The certification order didn't grant defendants
permission to exclude individuals from the class if, in
defendants' own judgment, defendants had remedied the
harm at some later time. And if the broad class definition
left any room for doubt, the subclasses described in the
order-which included individuals subjected to programming
errors-made it clear that the omitted borrowers were part of
the class. In fact, the court expressly considered and
rejected defendants' arguments that a class shouldn't
be certified because defendants had “already granted
borrowers account credits to correct programming
errors.” Dkt. 171, at 16. The court reasoned that, even
if defendants had remedied the programming errors, that would
not moot these borrowers' RICO claims (which allow for
treble damages), and any arguments about the merits of a RICO
claim belonged in a dispositive motion, not a motion for
class certification. Id. at 18. Thus, there is
simply no basis for reading the class certification order as
excluding the omitted borrowers from the class.
second argument relies on Judge Crabb's order that denied
Dawson's first motion for class certification. Dkt. 85.
Specifically, defendants point out that Judge Crabb declined
to certify a class of borrowers who had been subjected to
programming errors because their claims were “too far
removed from the claims plaintiff alleged.”
Id. at 9. But defendants have failed to explain why
they believe the order denying Dawson's first motion for
class certification has any bearing on the scope of the case.
Judge Crabb denied the class certification motion without
prejudice and gave Dawson an opportunity to try again.
Shortly thereafter, the case was reassigned to this court,
which held an oral argument on Dawson's renewed motion
for class certification. Dkt. 147. Ultimately, the court
concluded that certification of the class and subclasses
described above was appropriate. And the court considered and
expressly rejected defendants' arguments about excluding
the omitted borrowers from the class. Defendants haven't
cited any principle regarding the law of the case that would
have required this court to adopt Judge Crabb's previous
conclusion or that would have incorporated preliminary
rulings into a court's later order on class
certification. And even if there were such a rule, defendants
don't explain why, if they believed the court's order
was inconsistent with a previous order, they didn't ask
for reconsideration, instead of simply disregarding the order
certifying a subclass related to the programming errors. Even
now, defendants don't ask for reconsideration; instead,
they have raised the white flag by providing plaintiffs with
the contact information of the omitted borrowers.
court concludes that defendants clearly violated an
unambiguous court order when they failed to provide contact
information for the omitted borrowers. That violation was
significant because it prevented thousands of class members
from receiving notice.
offer two reasons why they believe they made “a
reasonable and diligent effort to comply” the
court's order: (1) they provided contact information for
129, 000 other class members; and (2) they provided the
contact information of the ...