Reyes v. Netdeposit, LLC

The district court denied a motion to certify a class to sue Zions Bank and its payment-processor subsidiaries for alleged civil violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(c), (d). The complaint that the defendants conspired to conduct a fraudulent telemarketing scheme that caused unauthorized debits from bank accounts owned by Reyes and members of the proposed class. The court concluded that there were no issues common to the class and Reyes could therefore satisfy neither the commonality requirement of Federal Rule of Civil Procedure 23(a), nor the predominance requirement of Rule 23(b)(3). The court recognized Reyes’ theory of a sham enterprise, but focused on the fact that different sales pitches were used and different products were pitched. The Third Circuit vacated, reasoning that the district court did not adequately consider evidence of the structure of each of the alleged fraudulent schemes and related FTC investigations. If absolute conformity of conduct and harm were required for class certification, unscrupulous businesses could victimize consumers with impunity merely by tweaking the language in a telemarketing script to get access to personal information such as account numbers. View "Reyes v. Netdeposit, LLC" on Justia Law