United States District Court, Southern District of Indiana, Terre Haute Division
Joshua B. Crissen, Plaintiff,
Vinod C. Gupta, Satyabala V. Gupta, Wiper Corporation, and Vivek V. Gupta, Defendants.
Hon. Jane Magnus-Stinson, Judge
Presently pending before the Court is Plaintiff Joshua Crissen’s Motion for Class Certification. [Filing No. 90.] For the foregoing reasons, the Court DENIES the motion.
A. The Parties
Plaintiff Joshua Crissen is an individual residing in Bloomfield, Indiana. [Filing No. 85 at 3.] Defendants Vinod Gupta and Satyabala Gupta are husband and wife, and reside in Boca Raton, Florida. [Filing No. 85 at 3.] Mr. and Mrs. Gupta are the only directors and officers of Wiper Corporation (“Wiper”), a Florida corporation. [Filing No. 85 at 3.] Mr. Crissen alleges that “[Wiper] or its nominees have participated in tax sales in Indiana from at least 2002 through the present.” [Filing No. 85 at 3.] Defendant Vivek Gupta is Vinod and Satyabala Gupta’s son and an attorney, and resides in Boca Raton, Florida as well. [Filing No. 85 at 4.] Mr. Crissen alleges that Vivek Gupta “participated in the operation or management of and performed activities necessary or helpful to Vinod’s and Wiper’s tax sale business in Indiana from at least 2002 through the present.” [Filing No. 85 at 4.]
B. The Tax Sale Process
Mr. Crissen describes the tax sale process in Indiana in the following way: In Indiana, when a real property owner fails to pay property taxes, the property can be sold at a tax sale to satisfy the delinquent taxes pursuant to Ind. Code § 6-1.1-24-1, et seq. [Filing No. 85 at 4.] The process begins when each county auditor publishes a list of delinquent real estate parcels in area newspapers, which gives notice that the county auditor and treasurer will apply for court judgments against delinquent real estate and for orders to sell those judgments at public auction. [Filing No. 85 at 4-5.] After the court issues the requested judgments and orders, the county auditor will send a notice of the sale by certified mail, return receipt requested, to the last address of the property owner on the date the tax sale list is certified (“Notice of Sale”). [Filing No. 85 at 5.]
At the tax sale, the county treasurer sells the real property, subject to a right of redemption, to the highest bidder at public auction. [Filing No. 85 at 5.] An Indiana statute provides the minimum price for which the real property can be sold (“Minimum Price”), factoring in the taxes due and owing, all penalties owed, costs incurred by the county due to the sale, unpaid costs due from any prior tax sales, and other reasonable expenses of collection. [Filing No. 85 at 5-6.] When the highest bid equals at least the Minimum Price, the purchaser receives a certificate of sale and acquires a lien against the property in the amount paid. [Filing No. 85 at 6.] When no bid equals at least the Minimum Price, the county executive receives a certificate of sale and acquires a lien in the amount of the Minimum Price. [Filing No. 85 at 6.] The county executive can then decide to sell its certificate of sale at a public auction to the highest bidder for an amount less than the Minimum Price. [Filing No. 85 at 6.] The purchaser of a certificate of sale must give notice (“Notice of Redemption”) by sending a copy of the Notice of Redemption by certified mail to the owner of record at the time of the sale and any person with a substantial property interest of public record in the real property. [Filing No. 85 at 6.] The Notice of Redemption must be sent no later than nine months after the date of the tax sale or ninety days after the date of the Commissioner’s Sale. [Filing No. 85 at 7.]
Any person may redeem real property sold at a tax sale or Commissioner’s Sale by paying the amount required for redemption before the expiration of the redemption period, which is one year after the date of sale. [Filing No. 85 at 7.] The amount of money required for redemption of the real property (“Redemption Amount”) is set by Indiana statute. [Filing No. 85 at 7.] If the property is certified before redemption, the attorneys’ fees and costs of giving notice (“Notify Costs”) and the costs of a title search or of examining and updating the abstract of title for the real property that were incurred and paid by the purchaser (“Title Costs”) are part of the Redemption Amount. [Filing No. 85 at 7.] The purchaser of a certificate of sale certifies that he or she incurred and paid the Notify Costs and the Title Costs by completing, signing, and providing the county auditor with a Certification. [Filing No. 85 at 7.] The Notice of Redemption must set forth the components of the Redemption Amount, including the amounts owed for Notify Costs and Title Costs. [Filing No. 85 at 8.]
C. Mr. Crissen’s Property
Mr. Crissen owns property in Greene County, Indiana (the “Property”). [Filing No. 85 at 9.] After property taxes on the Property became delinquent, the Greene County auditor and treasurer applied for a judgment against the Property and an order to sell the Property at public auction. [Filing No. 85 at 9.] On October 9, 2009, after the requested judgment and order were entered, the Greene County treasurer offered the Property for sale, subject to a right of redemption, for a Minimum Price of $2, 118.60. [Filing No. 85 at 9.] Vinod Gupta was the highest bidder with a bid of $8, 000, and he remitted payment to the Greene County Treasurer for $208, 281.27 to pay for the Property and several others that were offered for sale at the 2009 Greene County tax sale, and for which Vinod Gupta, Wiper, or one of their nominees was the highest bidder. [Filing No. 85 at 9.] Banco Popular North America (“Banco Popular”), with whom the Gupta Defendants had a financing arrangement, “funded the entire $208, 281.27 purchase price.” [Filing No. 85 at 9.] The Greene County auditor issued a certificate of sale (“Tax Sale Certificate”) for the Property to “Vinod C. Gupta c/o Banco Popular NA/Lien Holder” that same day. [Filing No. 85 at 9.] Banco Popular directed Vinod Gupta to deliver the Tax Sale Certificate to it, which Vinod Gupta did shortly after October 9, 2009. [Filing No. 85 at 9.]
On November 13, 2009, Vinod Gupta provided a signed Certification to the Greene County auditor certifying that he had incurred and paid $350 in Notify Costs and $150 in Title Costs relating to the Property. [Filing No. 85 at 10.] On February 8, 2010, the Property was redeemed by Mr. Crissen for a Redemption Amount of $3, 027.04. [Filing No. 85 at 10.] Shortly thereafter, the county auditor notified Vinod Gupta and/or Banco Popular of the redemption and requested that the original Tax Sale Certificate be returned to the county auditor before the Redemption Amount and Surplus would be remitted to Banco Popular. [Filing No. 85 at 10.] Shortly before February 17, 2010, Banco Popular returned the original Tax Sale Certificate to the county auditor. [Filing No. 85 at 10.] On February 17, 2010, the county auditor remitted the Redemption Amount of $3, 027.04 and the Surplus of $5, 881.40 to Banco Popular. [Filing No. 85 at 10.]
Mr. Crissen’s Claims
Mr. Crissen seeks to represent a class of:
All individuals and business entities who redeemed a tract or real property purchased at Indiana tax and/or Commissioner’s sales by Vinod, Satyabala, Vivek, Kislak, [Banco Popular] and/or Wiper (or by a nominee), where the redemption amounts were artificially inflated because Vinod, Satyabala, Vivek, Kislak, [Banco Popular] and/or Wiper certified to Indiana county auditors they had incurred and/or paid statutory notification and/or title costs which Defendants had not incurred or paid.
[Filing No. 85 at 16.]
Mr. Crissen asserts the following claims against Defendants: (1) Substantive Racketeering under Federal RICO, [Filing No. 85 at 18-20]; (2) Racketeering Conspiracy under Federal RICO, [Filing No. 85 at 20-21]; (3) Substantive Racketeering under Indiana RICO, [Filing No. 85 at 21-24]; (4) Racketeering Conspiracy under Indiana RICO, [Filing No. 85 at 24-25]; (5) Relief under the Indiana Crime Victims Act, [Filing No. 85 at 25-26]; (6) Fraud, [Filing No. 85 at 26-27]; (7) Money Had and Received, [Filing No. 85 at 28]; and (8) Unjust Enrichment, [Filing No. 85 at 28-29]. He seeks actual and punitive damages, and attorneys’ fees and costs. [Filing No. 85 at 29.]
Standard of Review
In deciding whether to certify a class, the Court may not blithely accept as true even the most well-pleaded allegations of the complaint, but must instead “make whatever factual and legal inquiries are necessary under Rule 23” to resolve contested issues. Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001); see Parko v. Shell Oil Co., 739 F.3d 1083, 1085 (7th Cir. 2014). Specifically, the Court must find that the putative class satisfies the four prerequisites set forth in Federal Rule of Civil Procedure 23(a). If the putative class does satisfy these prerequisites, the Court must additionally find that it satisfies the requirements set forth in Federal Rule of Civil Procedure 23(b), which vary depending upon which of three different types of classes is proposed.
Before addressing the Rule 23 factors, however, the Court must examine whether the proposed class members are sufficiently definite. To do so, “[t]he plaintiff must…show…that the class is indeed identifiable as a class.” Oshana v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006). When “there is no way to know or readily ascertain who is a member of the class, ” the class “lacks the definiteness required for class certification.” Jamie S. v. Milwaukee Public Schools, 668 F.3d 481, 495 (7th Cir. 2012). If the class as defined is sufficiently definite, the Court turns next to the Rule 23(a) factors.
It is the plaintiff’s burden to prove that an identifiable class exists that qualifies for certification under Rule 23(a). Oshana, 472 F.3d at 513. The four prerequisites under Rule 23(a) are: “(1) [that] the class is so numerous that joinder of all members is impracticable; (2) [that] there are questions of law or fact common to the class; (3) [that] the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) [that] the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a). Class certification is not appropriate unless the named plaintiff establishes all four prerequisites. Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012).
In addition to meeting the prerequisites of Rule 23(a), the proposed class must satisfy one of the conditions of Rule 23(b). Messner, 669 F.3d at 811; Oshana, 472 F.3d at 513. Under Rule 23(b), a class action that satisfies Rule 23(a) may be sustained if one of the following is true: “(1) prosecuting separate actions by or against individual class members would create a risk of: (A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or (B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests; (2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or (3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(1-3).
A. Rule 23(a)
1. Adequacy of Representation
The Court begins at the end of the Rule 23(a) analysis – adequacy of representation – because this factor so compellingly mandates denial of class certification here. The Court must determine whether “the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a)(4). This inquiry is composed of two parts: “the adequacy of the named plaintiff’s counsel, and the adequacy of representation provided in protecting the different, separate, and distinct interest[s] of the class members.” Retired Chicago Police Ass’n v. City of Chicago, 7 F.3d 584, 598 (7th Cir. 1993) (citation and quotation marks omitted).
a. Adequacy of Counsel
Mr. Crissen argues that his attorneys are “experienced litigators and will fairly and adequately represent the interests of the class.” [Filing No. 91 at 13.] He points to his counsel’s appointment as class counsel in a similar case in Illinois related to “the fraudulent certification of Notify Costs and Title Costs involving Indiana Tax Sales” – Bowen v. Groome, 3:11-cv-00139-GPM-SCW (S.D. Ill.) (the “Groome Action”). [Filing No. 91 at 13.] Mr. Crissen argues further that his attorneys have “already committed significant resources to representing the class and will continue to commit whatever resources are necessary to vindicate the rights of Plaintiff and the class.” [Filing No. 91 at 14.]
In response, Defendants argue that:
(1) this lawsuit was funded by and indirectly initiated by Barrett Rochman, who is not only the father of Mr. Crissen’s counsel Jesse Rochman, but also Vinod Gupta’s main business competitor as well as a long-standing client of Mr. Crissen’s counsel, all of which create a conflict of interest for counsel, [Filing No. 244 at 8-11; Filing No. 246 at 49-56];
(2) Mr. Crissen’s counsel have engaged in several acts of misconduct thus far in the litigation and have been disingenuous in ...