March 4, 2026 – The Wisconsin Consumer Act (WCA) allowed the defendant to remedy the claim with the individual plaintiff, preventing a class action lawsuit, a 6-1 majority of the Wisconsin Supreme Court decided in Gudex v. Franklin Collection Service, Inc., 2026 WI 6.

Reversing the Milwaukee County Circuit Court, Justice Brian K. Hagedorn for the majority wrote, “when a customer brings a class action for damages under” Wis. Stat. section 426.110(4), Wis. Stat. section 426.110(4)(c) “requires an appropriate remedy be given or agreed to be given to the party bringing suit, not to the putative class.”

A concurrence written by Justice Rebecca Frank Dallet and joined by Chief Justice Jill J. Karofsky and Justice Janet C. Protasiewicz clarified that the statutory provision “is not a get-out-of-class-certification-free card.”

Based on the WCA’s stated purposes in section 421.102, Justice Susan M. Crawford dissented.

“Allowing a defendant to avoid a consumer class action for damages by ‘picking off’ the representative plaintiff defeats the class action mechanism under the WCA,” which “undermin[es] the WCA’s purpose of ‘protect[ing] customers from unfair, deceptive, false, misleading and unconscionable practices.’”

Confusion Followed by Litigation

Heather Gudex received a letter from Franklin Collection Service, Inc., which Gudex’s creditor hired to collect a debt.

With warnings to “CONTACT YOUR ATTORNEY REGARDING OUR POTENTIAL REMEDIES, AND YOUR DEFENSES,” and that “no attorney has personally reviewed your account,” the letter “confused” Gudex.

She was afraid she was going to be sued, contacted a lawyer and “filed a putative class action for damages against Franklin.”

Her lawsuit sought class-wide statutory damages under the federal Fair Debt Collection Practices Act (FDCPA) and injunctive relief under the WCA, although she ultimately elected monetary damages.

As the WCA requires, Gudex sent Franklin a notice and demand for monetary damages.

Franklin responded with “an appropriate remedy” under Wis. Stat. section 426.110(4)(c) “of actual damages and the WCA’s maximum statutory penalty of $1,000.”

Franklin also promised that it would stop using the confusing language on its debt collection letters, backed by a “voluntary stipulation with Gudex.”

This remedy, Franklin believed, resolved the WCA case and ended the potential class action lawsuit.

Gudex rejected the offer and moved for class certification. Franklin countered that its offer was “an appropriate remedy” that ended the case.

The circuit court granted Gudex’s motion, concluding that the remedy had to “be appropriate to the whole class” to preserve the WCA’s “purpose of allowing class actions.”

Franklin appealed the class certification order. The Wisconsin Court of Appeals, District 1, affirmed the circuit court.

‘Window of Time to Remedy’

The WCA permits a “consumer affected by a violation” to bring a lawsuit both individually and for “all persons similarly situated.”

At least 30 days before a class action may begin, “any party must” both notify the alleged WCA violator and demand correction or remedy, the majority emphasized.

“Thus, we see right from the beginning a legislatively created window of time to remedy the injuries to a ‘party’ – a ‘customer affected by the violation’ who wishes to file a class action for damages – prior to and apart from class action proceedings,” the majority summarized.

The disputed statute, Wis. Stat. section 426.110(4)(c), says that “no action for damages may be maintained under this section if an appropriate remedy, which shall include actual damages and may include penalties, is given, or agreed to be given within a reasonable time to such party within 30 days after receipt of such notice.”

The initial language “no action for damages may be maintained” meant a class action for damages could not continue if the defendant gives or promises an “appropriate remedy,” the majority said.

The “30 days” term set a specific limitation for action based on the initial notification to the defendant, the majority continued.

“This makes sense since the party providing the notice must do so at least 30 days prior to commencing the litigation.”

For further clarification, the majority determined that “such party” refers to “‘any party’ … seeking to commence a lawsuit and who must send pre-litigation notice.”

In this case, Gudex is the party, Franklin the defendant. Gudex cannot maintain a class action, the majority held, “if Franklin gave or agreed to give an appropriate remedy” to Gudex – “and Gudex alone.”

These terms shouldn’t be confused with Wis. Stat. section 426.110(4)(d), which provides throughout the litigation another means to end a class action for damages, the majority explained.

The two statutes offer contrast. The latter’s use of “such customers” recognizes the class, compared with “such party” at issue here.

“The text does not contain an unrestrained endorsement of class actions,” the majority summarized.

“A better view of the statutory policy choice is that the legislature chose to incentivize making an affected customer whole as quickly as possible, while still preserving access to the class action lawsuit if the customer does not receive an appropriate remedy.”

Even with these limitations, a class action for injunctive relief may still proceed under Wis. Stat. Section 426.110(4)(e), both the majority and concurrence explained.

‘Procedurally Improper’

Franklin’s affirmative defense of an “appropriate remedy” doesn’t fit against a class certification motion, Justice Dallet’s concurrence explained.

It’s an attack on the merits, suitable for a motion to dismiss or summary judgment.

The circuit court must decide certification only on factors in Wis. Stat. section 803.08, the concurrence said. A plaintiff who receives a settlement may affect those factors, but not whether the claim is viable.

The circuit court here, the concurrence explained, should have ruled Franklin’s defense “procedurally improper” in a class certification hearing, but it didn’t do that.

“Under that unique circumstance, I agree with the majority’s decision to reverse the circuit court’s grant of class certification,” Justice Dallet concluded.

‘Guts the WCA’s Class Action Remedies’

The WCA states that it “shall be liberally construed and applied to promote their underlying purposes and policies,” Justice Crawford’s dissent begins.

Among those purposes, the WCA is meant “[t]o protect customers against unfair, deceptive, false, misleading and unconscionable practices by merchants,” and “[t]o coordinate” regulation of consumer credit consistent with policies underlying the federal Consumer Credit Protection Act.

The majority’s decision “conflicts with policies for class actions under FDCPA,” in which “an offer of individual relief to a representative plaintiff does not bar a class action.”

“The majority makes Wisconsin an outlier,” Justice Crawford noted, and it “violates [WCA’s] directive.”

“The purpose of the WCA is explicitly to provide protections for consumers,” providing relief “when it is inefficient and uneconomical to individually litigate claims,” Justice Crawford explained.

The ability “to obtain class-wide damages on claims” furthers that purpose, especially making recourse available “to unsophisticated consumers,” Justice Crawford said.

When a defendant can merely pay off the representative party – a “powerful, inexpensive, court-created tool for avoiding consumer class actions for damages,” Justice Crawford said, “it is hard to imagine how any consumer class action for damages will be maintained.”

“[B]y allowing defendants to evade class-wide liability under the WCA merely by paying damages to a single customer, the majority guts the WCA’s class action remedies.”

This article was originally published on the State Bar of Wisconsin’s Wisbar Court Review blog, which covers case decisions and other developments in the Wisconsin Supreme Court, the Wisconsin Court of Appeals, and the U.S. Court of Appeals for the Seventh Circuit. To contribute to this blog, contact Joe Forward.