A District Court judge in Louisiana has granted class certification in a lawsuit involving alleged violations of the Fair Debt Collection Practices Act. The case centers on attempts to recover overpayments from a grant program established to aid homeowners affected by Hurricanes Katrina and Rita. This development follows a ruling from the Court of Appeals for the Fifth Circuit that overturned the lower court’s dismissal of the lawsuit.
The case revolves around grants distributed to homeowners in Louisiana following the devastation of Hurricanes Katrina and Rita. The Road Home Program, administered by the Louisiana Office of Community Development (OCD) and the Louisiana Recovery Authority, aimed to provide financial aid for home repair and rebuilding. The plaintiff received a grant of $33,392.68 from the state of Louisiana to rebuild her home after the hurricanes. Under the terms of the grant, she agreed to repay any funds if she received additional money from her insurance or the Federal Emergency Management Agency (FEMA). The plaintiff was later contacted by the defendant, which identified itself as a debt collector, to repay an alleged overpayment of $4,600. The plaintiff disputed this claim, leading to a legal battle over whether such repayment demands constituted a “debt” under the FDCPA.
Following the appellate court’s ruling, the plaintiffs renewed their motion for class certification. The court’s decision to certify the class is based on the commonality of the legal and factual issues faced by all class members. The certified class is divided into three subclasses:
- Subclass 2: This subclass includes individuals who received a collection letter more than ten years after signing their grant agreement or after the state was notified of their alleged duplicate payments. The court found that the common issue of whether the letters misrepresented the judicial enforceability of the debts predominates over individual issues.
- Subclass 3: This subclass consists of individuals who received a collection letter stating that they “may also be responsible for attorney fees,” but did not receive duplicate payments after signing their grant agreements. The court determined that the central issue of whether the letters misrepresented the availability of attorney’s fees is common to all subclass members.
- Subclass 4: This subclass includes individuals who received a promissory note obligating them to repay alleged grant overpayments without advising that signing the note would revive any expired statute of limitations. The court found that the common issue of whether the promissory notes misrepresented the judicial enforceability of the debts predominates over individual issues.