Montano et al v. First Light Federal Credit Union

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW MEXICO
In re:
RALPH MONTANO and
ELSIE M. MONTANO,
Debtors. 	No. 7-04-17866 SL
RALPH MONTANO and
ELSIE MONTANO,
Plaintiffs,
v. 	ADV. No. 07-1026 S
FIRST LIGHT FEDERAL CREDIT UNION,
Defendant.
MEMORANDUM OPINION ON CLASS CERTIFICATION
This matter is before the Court on Plaintiffs’ Motion for
Class Certification (doc 21) and Memorandum in Support thereof
(doc 22), First Light Federal Credit Union’s (“First Light”)
response (doc 27) and Plaintiffs’ Reply (doc 30). 	For the
following reasons, the Court grants Plaintiffs’ Motion for Class
Certification. 	This is a core proceeding.
HISTORY OF THE CASE
Plaintiffs filed their original complaint on February 19,
2007 (doc 1). 	Defendant First Light Federal Credit Union (First
Light) filed its answer March 30, 2007 (doc 4). 	Plaintiffs filed
a motion to amend, to include other plaintiffs and to have the
case certified as a class action (doc 5). 	The matter then came
before the Court for a pretrial conference on April 9, 2007, at
which time the Court asked for briefs solely on the issue of
subject matter jurisdiction over the proposed parties to the
amended complaint. 	See Order Resulting from Initial Pretrial
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 1 of 19

Page -2-
Conference (doc 7). 	First Light filed a response to the Motion
to Amend (doc 10), and Plaintiffs replied (doc 11). 	The Court
issued a Memorandum Opinion on September 10, 2007, finding that
Plaintiffs should be granted leave to file an amended complaint
provided the proposed class was restricted to members who
received their bankruptcy discharges from the District of New
Mexico. 	(Doc 16). 	The Court then entered a First Scheduling
Order on September 26, 2007, ordering Plaintiffs to amend their
complaint within 15 days, appointing R. “Trey” Arvizu, III
interim counsel for the putative class pending certification,
limiting discovery to the issues of class identification,
certification, maintenance and appointment of class counsel,
restricting the scope of discovery to certain persons and fixing
a deadline of December 17, 2007 for filing a Motion for Class
Certification and Motion for Appointment of Class Counsel. 	(Doc
18).
Plaintiffs filed their first amended complaint on October 1,
2007 (doc 19), and a Motion for Class Certification on October
12, 2007 (doc 21) with a Memorandum in Support (doc 22). 	First
Light answered the first amended complaint on October 16, 2007
(doc 23). 	On November 5, 2007, the Court conducted a continued
initial pretrial conference and orally ruled that before
addressing other issues, the Court would decide whether the
action should be certified as a class action. 	See Order
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 2 of 19

Page -3-
Resulting from Initial Pretrial Conference, doc 25. 	That Order
also directed First Light to respond to the Motion to Certify and
Plaintiff to reply. 	The Order also stated:
The parties have agreed, at this point, that there is
no need for an evidentiary hearing and the Court may
render its decision based on the briefs filed in this
adversary proceeding. 	If either party later determines
an evidentiary hearing is necessary, that party will
contact the other party, and then they both will
contact the Court for a hearing on the matter.
First Light responded to the Motion for Class Certification on
December 3, 2007 (doc 27). 	Plaintiffs replied to the response on
January 8, 2008 (doc 30).
The Court then scheduled a status conference for March 24,
2008 at which it asked for further briefs on the merits of the
case. 	Plaintiffs filed a Motion for Reconsideration (doc 33), on
which the Court issued a Memorandum Opinion (doc 37) and Order
Granting Reconsideration (doc 38), which rescinded the
requirement for further briefing. 	The case is now ripe for
decision on class certification.
PLAINTIFFS’ CLAIMS AND REQUEST FOR RELIEF
Plaintiffs allege that First Light incorrectly reports debts
discharged in bankruptcy on debtors’ credit reports in an attempt
to collect them. 	They also allege that in many instances when
debtors have contacted First Light in an effort to clear up the
negative reporting, First Light has refused to correct the
information and instead indicated that the problem can only be
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 3 of 19

1In an earlier Memorandum Opinion, doc 16, this Court opined
that any class in this case needed to consist only of members who
received their bankruptcy discharges from the District of New
Mexico.
Page -4-
cleared up if the debt is paid. 	Plaintiffs claim that First
Light has violated and is violating the Bankruptcy Code’s
discharge injunction, 11 U.S.C. § 524. 	Plaintiffs now seek class
certification to create a class 1 of similarly situated plaintiffs
pursuant to Federal Rules of Civil Procedure 23(a) and 23(b).
Plaintiffs request the following relief:
1. 	An order certifying the class and appointing Plaintiffs to
represent the class and plaintiffs’ attorney to be class
counsel;
2. 	An order permanently enjoining First Light from continuing
to incorrectly report discharged debts on credit reports;
3. 	An order requiring First Light to correct all incorrect
information currently in existence;
4. 	A declaration that First Light violated the Court’s
discharge orders;
5. 	A declaration that First Light’s violations were willful,
intentional, and malicious in nature;
6. 	An award to Plaintiffs of all actual damages incurred
including attorneys’ fees, costs, and expenses incurred;
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 4 of 19

Page -5-
7. 	An award to Plaintiffs of punitive damages to the extent
necessary to prevent this type of conduct by Defendant and
by other creditors that appear before this Court; and
8. 	Any further relief deemed necessary by the Court.
DISCUSSION OF CLASS ACTION REQUIREMENTS
Rule 23 of the Federal Rules of Civil Procedure outlines a
two-step process for determining whether class certification is
appropriate. 	First, Rule 23(a) lists four conjunctive
prerequisites for any class:
(1) the class is so numerous that joinder of all
members is impracticable, (2) there are questions of
law or fact common to the class, (3) the claims or
defenses of the representative parties are typical of
the claims or defenses of the class, and (4) the
representative parties will fairly and adequately
protect the interests of the class.
Fed.R.Civ.P. 23(a). 	These elements are referred to as
numerosity, commonality, typicality and adequacy of
representation. 	Trevizo v. Adams, 455 F.3d 1155, 1161-62 (10 th
Cir. 2006). 	“A party seeking class certification must show
‘under a strict burden of proof’ that all four requirements are
clearly met.” 	Id. at 1162 (quoting Reed v. Bowen, 849 F.2d 1307,
1309 (10 th Cir. 1988)). 	And, the trial court must engage in its
own “rigorous analysis” of whether “the prerequisites of Rule
23(a) have been satisfied.” 	Shook v. El Paso County, 386 F.3d
963, 968 (10 th Cir. 2004), cert. denied, 544 U.S. 978
(2005)(citing Gen. Tel. Co. of the S.W. v. Falcon, 457 U.S. 147,
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 5 of 19

Page -6-
161 (1982)). 	In doing so, the trial court also must accept the
substantive allegations of the complaint as true. 	Id.
(Citations omitted.) 	When ruling on a class action certification
motion, the Court takes the substantive allegations of the
complaint as true and can also consider extrinsic evidence
submitted by the parties. 	Blackie v. Barrack, 524 F.2d 891, 901
(9 th Cir. 1975), cert. denied, 429 U.S. 816 (1976).
Second, assuming the requirements of subdivision (a) are
satisfied, the party seeking class certification must also
demonstrate that the action is maintainable by falling within one
of the three kinds of actions permitted under Rule 23(b). See
Fed.R.Civ.P. 23(b); Shook, 386 F.3d at 968. 	Specifically, the
plaintiffs must show that their claim is proper under Rule
23(b)(1), (b)(2) or (b)(3).
An action is maintainable under Rule 23(b)(1) when there is
either a risk of prejudice from separate actions establishing
incompatible standards of conduct or the judgment in an
individual lawsuit might adversely impact other class members.
Fed.R.Civ.P. 23(b)(1). 	Plaintiffs do not seek certification
under Rule 23(b)(1).
An action is maintainable under Rule 23(b)(2) when the
defendant “has acted or refused to act on grounds generally
applicable to the class, thereby making appropriate final
injunctive relief or corresponding declaratory relief with
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 6 of 19

Page -7-
respect to the class as a whole.” 	Fed.R.Civ.P. 23(b)(2). 	Rule
23(b)(2) actions are common when injunctive or declaratory relief
is the primary relief sought. 	Thomas v. Baca, 231 F.R.D. 397,
399 (C.D. Cal. 2005). 	Recovery of damages is generally not
available in a Rule 23(b)(2) class action. 	Id. 	Money damages
may be available, however, where the claim for money damages is
secondary to the primary claim for injunctive or declaratory
relief. 	Molski v. Gleich, 318 F.3d 937, 947 (9 th Cir. 2003); 7AA
Wright, Miller and Kane, Fed. Prac. & Proc. Civ. 3d § 1775
(hereafter, “FPP Civ. 3d”)(A suit predominantly seeking money
damages does not qualify under Rule 23(b)(2). 	Certification
under Rule 23(b)(2) may be allowed in actions involving some
damages as long as they are “incidental.”)
An action is maintainable under Rule 23(b)(3) if questions
of law or fact common to the class predominate over questions
affecting the individual members, and the court determines that a
class action is superior to other methods available for
adjudicating the controversy. 	Fed.R.Civ.P. 23(b)(3). 	Recovery
of damages is available under Rule 23(b)(3). 	Thomas, 231 F.R.D.
at 399. 	If a class is certified under Rule 23(b)(3), all absent
class members must be notified of the action and informed of
their right to opt out of the litigation. 	Id.
ANALYSIS
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 7 of 19

2The Court is aware, however, that there is a split of
authority on whether erroneous credit reporting can be a
violation of the discharge injunction. 	Compare, e.g., Mahoney v.
Washington Mutual, Inc. (In re Mahoney), 368 B.R. 579 (Bankr.
W.D. Tex. 2007)(not a violation) with, e.g., Russell v. Chase
Bank USA, NA (In re Russell), 378 B.R. 735 (Bankr. E.D. N.Y.
2007)(can be a violation).
Page -8-
Plaintiffs seek certification of their class action under
Rule 23(b)(2) and (b)(3). 	First Light’s first argument against
class certification is that debtors can update their own credit
reports, so there have been no damages, and therefore no basis
for class certification. 	Doc 27, pages 2-4. 	This is essentially
a Rule 12(b)(6) claim. 	“When considering a motion for class
certification, the court must not address the merits of the
case.” 	Smith v. Aon Corp., 238 F.R.D. 609, 614 (N.D. Ill. 2006).
“In determining the propriety of a class action, the question is
not whether the plaintiff or plaintiffs have stated a cause of
action or will prevail on the merits, but rather whether the
requirements of Rule 23 are met.” Eisen v. Carlisle & Jacquelin,
417 U.S. 156, 178 (1974). 	Therefore, this first argument must
fail 2.
First Light’s second argument against certification is that
the Bankruptcy Court lacks jurisdiction because no benefit inures
to the estate. 	Doc 27, pages 5-6. 	But, a creditor that attempts
collection of a discharged debt is in contempt of the bankruptcy
court that issued the discharge, and that court can impose
sanctions under § 105 of the bankruptcy Code. 	Schott v. WyHy
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 8 of 19

Page -9-
Federal Credit Union (In re Schott), 282 B.R. 1, 5-6 (10 th Cir.
B.A.P. 2002). 	A court always has jurisdiction to enforce its own
orders. 	Cox v. Zale Delaware, Inc., 239 F.3d 910, 917 (7 th Cir.
2001). 	And, contempt proceedings arising out of a core matter
(such as discharge) are themselves core matters. 	Mountain States
Credit Union v. Skinner (In re Skinner), 917 F.2d 444, 448 (10 th
Cir. 1990).
First Light’s third argument is that because the relief
sought is contempt, it must be brought by motion in each specific
bankruptcy case, not by adversary proceeding. 	Doc 27, pages 6-7.
This argument is based on Mogg v. Midwest Collection Services (In
re Mogg), 2007 WL 2608501 (Bankr. S.D. Ill. 2007). 	In Mogg, the
Bankruptcy Court did find that Plaintiffs’ only remedy for a
discharge violation was a contempt proceeding brought in the
bankruptcy case as a contested matter and that an adversary
proceeding was improper. 	Id. at *3. 	It also found that “Midwest
did not violate the discharge injunction.” 	Id. at 4. 	Therefore,
one cannot know the real reason why the bankruptcy court
dismissed the adversary proceeding.
On the other hand, there are cases that focus on the fact
that a matter was filed as an adversary proceeding instead of a
contested matter and find that it was not improper. 	See In re
Dunmore, 262 B.R. 85, 87 n. 1 (Bankr. N.D. Cal. 2001):
As an aside, the court notes that an adversary
proceeding is a more formal procedural framework than a
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 9 of 19

Page -10-
contested matter, with more stringent rules of evidence
applicable. 	While some courts have voided results in
contested matters when the dispute should have been
litigated as an adversary proceeding, e.g. In re Lyons,
995 F.2d 923 (9th Cir. 1993), the court is not aware of
any case which has voided a judgment in an adversary
proceeding because it should have been litigated as a
contested matter. 	As this court noted in Practical
Bankruptcy Procedure (Shepard's/McGraw-Hill 1993), §
10.03: “Bringing a dispute before the court as an
adversary proceeding which does not fall within one of
the [provisions of FRBP 7001] is not per se improper,
in that no one can complain if they are given more than
the minimum required for procedural fairness.”
See also Wagner v. Piper Industries, Inc. (In re Wagner), 87 B.R.
612, 619 (Bankr. C.D. Cal. 1988):
Defendants' last argument in support of their
motion to dismiss is that debtors' claims for relief
are based on contempt and they, therefore, should have
been brought this action as a motion and not as an
adversary proceeding.
This argument is not persuasive. An adversary
proceeding provides the parties with more, not less,
procedural protections than what are available in a
contested matter by way of motion. 	While a request for
a finding of contempt may be brought by motion, neither
the Bankruptcy Code or Rules mandates it. 	Defendants'
procedural argument is denied.
The Court agrees with the reasoning of the latter two cases
and finds that even if a motion for contempt is the normal way to
pursue discharge violations, that it is acceptable to proceed by
adversary proceeding as well.
First Light’s final argument is that Plaintiffs do not meet
the specific elements of Rule 23(a) or (b). 	Doc 27, pages 7-13.
Each element will be addressed in turn.
I. 	Rule 23(a)
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 10 of 19

Page -11-
A. 	Numerosity
Plaintiffs allege that the class is sufficiently numerous
because 3,192 individual credit union members from Texas and New
Mexico have filed bankruptcy since 1997. 	Plaintiffs estimate
that over 1000 are from New Mexico and therefore potential class
members. 	Under Rule 23(a) the class must be “so numerous that
joinder of all members is impracticable.” 	Fed.R.Civ.P. 23(a)(1).
In determining whether the litigation is properly
certified as a class action, the issue is merely
whether the representative plaintiff has demonstrated
the probability of the existence of a sufficient number
of persons similarly inclined and similarly situated to
render the class action device the appropriate
mechanism for obtaining judicial determination of the
rights alleged. 	Dawes v. Philadelphia Gas Commission,
421 F.Supp. 806, 813 (E.D. Pa. 1976). 	In so doing, the
Court is entitled to make common sense assumptions in
order to support a finding of numerosity. 	Patrykus v.
Gomilla, 121 F.R.D. 357, 360 (N.D. Ill. 1988); Snider
v. Upjohn Co., 115 F.R.D. 536, 539 (E.D. Pa. 1987).
Finally, where the numerosity question is a close one,
the trial court should find that numerosity exists,
since the court has the option to decertify the class
later pursuant to Rule 23(c)(1). 	Rodger v. Electronic
Data Systems Corp., 160 F.R.D. [532] at 537 [(E.D. N.C.
1995)].
Stewart v. Associates Consumer Discount Co., 183 F.R.D. 189, 193
(E.D. Pa. 1998). 	And, some cases presume numerosity when a
certain number of members are known. 	See, e.g., Talbott v. GC
Services Ltd. Partnership, 191 F.R.D. 99, 102 (W.D. Va. 2000)
(presuming 25 members is numerous); Dujanovic v. MortgageAmerica,
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 11 of 19

Page -12-
Inc., 185 F.R.D. 660, 666 (N.D. Ala. 1999)(presuming 40 members
is numerous).
Plaintiff’s allegations show that the potential class is “so
numerous that joinder of all members is impracticable.”
Therefore, Rule 23's numerosity requirement is satisfied.
B. 	Commonality
A class has sufficient commonality when “there are questions
of law or fact common to the class.” 	Fed.R.Civ.P. 23(a)(2).
Rule 23(a)(2) does not require that all questions of
law or fact raised in the litigation be common. 	There
need be only a single issue common to all members of
the class. 	Therefore, when the party opposing the
class has engaged in some course of conduct that
affects a group of persons and gives rise to a cause of
action, one or more of the elements of that cause of
action will be common to all of the persons affected.
H. Newberg, Class Actions s 1110a, at 180-81 (1977); 3B
Moore's Federal Practice P 23.06-1, at 23-173 (2d ed.
1979); Wright & Miller, Federal Practice & Procedure:
Civil s 1763, at 603-04 (1972).
Edmonson v. Simon, 86 F.R.D. 375, 380 (N.D. Ill. 1980).
In this case, First Light allegedly committed the same
conduct with respect to all class members, i.e., knowingly
misreporting the credit status of debts in an attempt to collect
them post-discharge. 	Based on these allegations of standardized
conduct, the Court concludes that common questions exist as to
whether First Light’s conduct was contumacious. 	Therefore, Rule
23's commonality requirement is satisfied.
C. 	Typicality
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 12 of 19

Page -13-
The class representatives’ claims must be typical of the
class. 	Fed.R.Civ.P. 23(a)(3). 	“A plaintiff’s claim is typical
if it arises from the same event or practice or course of conduct
that gives rise to the claims of other class members and his or
her claims are based on the same legal theory.” 	Keele v. Wexler,
149 F.3d 589, 595 (7 th Cir. 1998)(citation omitted). 	In this
case, the named Plaintiffs’ claims are identical to those of the
class. 	Therefore Rule 23's typicality requirement is satisfied.
D. 	Adequacy
Rule 23(a)(4) requires that the representative parties will
fairly and adequately protect the interests of the class.
Fed.R.Civ.P. 23(a)(4). 	“Resolution of two questions determines
legal adequacy: (1) do the named plaintiffs and their counsel
have any conflicts of interest with other class members and (2)
will the named plaintiffs and their counsel prosecute the action
vigorously on behalf of the class?” 	Hanlon v. Chrysler Corp.,
150 F.3d 1011, 1020 (9 th Cir. 1998)(citing Lerwill v. Inflight
Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir.1978)). 	See
also Stewart, 183 F.R.D. at 196 (Same.) 	As to the first
question, Plaintiffs allege that there is no conflict or
antagonism whatsoever between Plaintiffs and the potential class
members. 	Doc 22, p. 13. 	As to the vigorous prosecution element,
the Court has no basis for finding that Plaintiff’s counsel will
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 13 of 19

3Incidentally, the cases state that the burden of proving
inadequate representation is with the defendants. 	See Stewart,
183 F.R.D. at 196; Cichonski v. American Inventors Corp., 1995 WL
657107 at *6 n. 4 (E.D. Pa. 1995); Dujanovic v. MortgageAmerica,
Inc., 185 F.R.D. 660, 668 (N.D. Ala. 1999).
Page -14-
not prosecute the action with vigor 3, particularly if counsel’s
advocacy so far is any guide to the future. 	Nevertheless, since
the Court has previously requested that Plaintiffs’ counsel file
a Motion to Employ Class Counsel under Rule 23(g), First Light
may raise this issue again in connection with that motion.
II. 	Rule 23(b)
To be certified, a class must also satisfy the requirements
of one of the three subsections of Rule 23(b). 	Plaintiffs
request certification under Rule 23(b)(2) and 23(b)(3)
A. 	Rule 23(b)(2)
A class may be certified under Rule 23(b)(2) if “the party
opposing the class has acted or refused to act on grounds
generally applicable to the class, thereby making appropriate
final injunctive relief or corresponding declaratory relief with
respect to the class as a whole.” 	Fed.R.Civ.P. 23(b)(2).
Plaintiffs allege that First Light acted with the same behavior
for all class members, i.e., incorrectly reporting credit data
and then intentionally refusing to correct it. 	The relief
requested by Plaintiffs includes an injunction permanently
enjoining First Light from incorrectly reporting discharged debts
on credit reports; an injunction requiring First Light to correct
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 14 of 19

Page -15-
all incorrect information currently in existence; a declaration
that First Light violated the Court’s discharge orders; and a
declaration that First Light’s violations were willful,
intentional, and malicious in nature. 	This type of injunctive
and declaratory relief is readily available in a Rule 23(b)(2)
class action. 	Accordingly, the Court will certify a class under
Rule 23(b)(2) on the issues of injunctive relief and declaratory
relief.
B. 	Rule 23(b)(3)
Plaintiffs seek to certify their damage claims under Rule
23(b)(3). 	When a class of plaintiffs is pursuing a damages
remedy, Rule 23(b)(3) is applicable. 	7AA FPP Civ. 3d § 1782.
Rule 23(b)(3) certification requires a determination that
“questions of law or fact common to the members of the class
predominate over any questions affecting only individual members,
and that a class action is superior to other methods for the fair
and efficient adjudication of the controversy.” 	Fed.R.Civ.P.
23(b)(3). 	“When common questions represent a significant aspect
of the case and they can be resolved for all members of the class
in a single adjudication, there is a clear justification for
handling the dispute on a representative rather than on an
individual basis.” 	7AA FPP Civ. 3d § 1778. 	See also Hanlon, 150
F.3d at 1022 (same); Talbott, 191 F.R.D. at 106 (Rule 23(b)(3) is
normally satisfied where there is an essential common factual
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 15 of 19

Page -16-
link such as a standardized practice). 	(Citation omitted.)
“This is true even though the nature and amount of damages may
differ among class members.” 	Id. 	(Citation omitted.) 	And,
generally, the damages to be awarded to each plaintiff will have
to be tried separately. 	7AA FPP Civ. 3d § 1782.
In this case there is a common question that can be resolved
for all members of the class in a single adjudication, that is,
whether First Light’s credit reporting habits amount to an
intentional violation of the discharge injunction. 	Plaintiffs
therefore meet the first half of Rule 23(b)(3).
As to the superiority of a class action for this case,
efficiency is the “primary focus” to determine if a class action
is the superior method to resolve a controversy. 	Id. (Citation
omitted.) 	There is a great potential savings for the court
system if the issue in this case could be decided once rather
than hundreds or thousands of times. 	Also, it is proper for the
Court to consider the inability of the poor or uninformed to
enforce their rights, and the improbability that large numbers of
class members would possess the initiative to litigate
individually. 	Id. (Quotation omitted.) 	The class proposed in
this case consists of bankruptcy debtors, who usually are poor
and have difficulty enforcing their rights. 	The Court finds that
Plaintiffs have met the second half of Rule 23(b)(3).
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 16 of 19

Page -17-
Rule 23(b)(3) also lists other matters pertinent to findings
under rule 23(b)(3). 	First, the interest of members of the class
in individually controlling the prosecution of separate actions:
the Court is unaware of any pending actions other than this one.
Second, the extent and nature of any litigation concerning the
controversy already commenced by or against members of the class:
again, the Court is unaware of any other pending actions. 	Third,
the desirability or undesirability of concentrating the
litigation of the claims in this particular forum: as mentioned
above, contempt proceedings arising from core bankruptcy matters
are also core bankruptcy matters. 	Therefore, the Bankruptcy
Court is in fact the proper forum for dealing with this class
action. 	Fourth, the difficulties likely to be encountered in the
management of a class action: the Court sees none, other than
managing a trial schedule for the damages phase of the action.
THE CLASSES
Class 1 should consist of the Rule 23(b)(2) class that seeks
injunctive and declaratory relief; that is, all persons that,
since January 1, 1997, have received a discharge under Title 11
of the United States Bankruptcy Code from the United States
Bankruptcy Court for the District of New Mexico, that scheduled
First Light Federal Credit Union or Fort Bliss Federal Credit
Union (its predecessor) as a creditor on his or her bankruptcy
schedules or who, in fact, owed a debt to either First Light
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 17 of 19

Page -18-
Federal Credit Union or Fort Bliss Federal Credit Union on the
date they filed their bankruptcy petition, whether they listed
First Light Federal Credit Union or Fort Bliss Federal Credit
Union on their bankruptcy schedules or not.
Class 2 should consist of the Rule 23(b)(3) class that seeks
actual and/or punitive damages in addition to the relief sought
by Class 1; that is, all persons that, since January 1, 1997,
have received a discharge under Title 11 of the United States
Bankruptcy Code from the United States Bankruptcy Court for the
District of New Mexico, that scheduled First Light Federal Credit
Union or Fort Bliss Federal Credit Union (its predecessor) as a
creditor on his or her bankruptcy schedules or who, in fact, owed
a debt to either First Light Federal Credit Union or Fort Bliss
Federal Credit Union on the date they filed their bankruptcy
petition, whether they listed First Light Federal Credit Union or
Fort Bliss Federal Credit Union on their bankruptcy schedules or
not, and, who claims he or she was damaged by an alleged
incorrect reporting to the national credit reporting agencies of
the status of their debt or induced by either credit union to
repay a dischargeable or discharged debt in exchange for
correction of the credit reporting information.
CONCLUSION
The Plaintiffs have established the requirements of Federal
Rule of Civil Procedure 23(a) and (b) such that this action can
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 18 of 19

Page -19-
proceed as a class action. 	This class action shall have two
classes: one under Fed.R.Civ.P. 23(b)(2) that seeks injunctive
and declaratory relief (Class 1), and one under Fed.R.Civ.P.
23(b)(3) that seeks damages and punitive damages (Class 2). 	The
Court will enter an Order under Fed.R.Civ.P. 23(c) certifying the
class action, defining the classes and the class claims, and
continue the appointment of interim counsel to act on behalf of
the class (pending the outcome of a forthcoming Motion to Employ
Class Counsel under Fed.R.Civ.P. 23(g)). 	The Order will also
direct appropriate notice to Class 1 and direct the best notice
practicable under the circumstances to Class 2.
Honorable James S. Starzynski
United States Bankruptcy Judge
Date Entered on Docket: 	October 15, 2008
copies to:
R Trey Arvizu, III
PO Box 1479
Las Cruces, NM 88004-1479
Kelly Albers
Law Office of Kelly P. Albers, P.C.,
650 Montana Ave Ste D
Las Cruces, NM 88001-4294
R Thomas Dawe
Lewis and Roca Jontz Dawe, LLP
PO Box 1027
201 Third Street, NW Suite 1950
Albuquerque, NM 87103-1027
Case 07-01026-t Doc 39 Filed 10/15/08 Entered 10/15/08 15:45:19 Page 19 of 19