The Wisconsin Supreme Court’s decision in Gudex v. Franklin Collection Service, Inc. (2026 WI 6) quietly rewrites the playbook for class actions under the Wisconsin Consumer Act (WCA) and gives defendants an effective way to shut down damages class actions before they ever get off the ground.
In 2021, debt collector Franklin Collection sent Heather Gudex a collection letter that referenced a “case number” and, in her view, implied she was about to get sued, even though no lawsuit had been filed. She met with a lawyer because the letter’s language was confusing and she feared imminent litigation.
Gudex filed a putative class action under both the WCA and the Fair Debt Collection Practices Act (FDCPA), initially seeking class-wide injunctive relief under the WCA and statutory damages under the FDCPA. She later shifted gears and decided to seek monetary damages for a class under the WCA, sent Franklin the pre-suit notice and demand required by Wis. Stat. § 426.110(4)(a), and moved to amend her complaint accordingly.
Franklin responded with what it believed was a complete fix:
- Actual damages to Gudex
- The maximum $1,000 WCA statutory penalty
- A promise not to send any more letters with the challenged “confusing” language
In other words, Franklin attempted to resolve the issue and modify its practices moving forward. However, Gudex declined the offer and proceeded with class certification, seeking damages on behalf of the entire putative class. Franklin then argued that its offer was an “appropriate remedy” under Wis. Stat. § 426.110(4)(c) and therefore barred Gudex from maintaining a damages class action under the WCA. The statute provides that, with certain exceptions, “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 circuit court sided with Gudex, certified the class, and held that any “appropriate remedy” had to be appropriate for the whole class, not just for Gudex. The Court of Appeals affirmed. The Wisconsin Supreme Court reversed.
The Supreme Court zeroed in on the text and structure of § 426.110, which governs WCA class actions. Subsection (1) lets a “customer affected by a violation” bring a civil action on behalf of themselves and similarly situated persons. Subsections (2) and (3) define which conduct can support a class action. Subsection (4) sets out the process and conditions for a WCA class action, including the notice and demand requirement in (4)(a) and (4)(b). The fight centered on § 426.110(4)(c) and the phrase “such party.” The court held that:
“Such party” means the party that sent the pre-suit notice, here, Gudex, not the entire putative class.
If an appropriate remedy (including actual damages and possibly penalties) is given, or agreed to be given to that party within the statutory timeframe, no action for damages may be maintained under this section. Put simply: If the defendant promptly makes the named plaintiff whole under § 426.110(4)(c), a WCA damages class action cannot be maintained, even if no relief is offered to the rest of the putative class.
The court emphasized that the statutory structure creates a “window of time” to remedy the injuries of the individual who would be class representative “prior to and apart from class action proceedings.” It framed §§ 426.110(4)(a)-(c) as a mandatory process designed to give defendants a chance to “make a prospective party plaintiff whole and avoid the class action altogether.”
Gudex argued that allowing defendants to “pick off” the named plaintiff undermines the WCA’s purpose of enabling small-dollar consumers to aggregate claims through class actions. The majority acknowledged those concerns but ultimately stuck to the text: the legislature chose language that prioritizes swift individual resolution over preserving damages class actions at all costs. Policy arguments, the court said, cannot override that structure.
Justice Dallet’s concurrence stressed that the decision “is not a get out of class certification free card.” She highlighted that: § 426.110(4)(c) only bars damages claims under § 426.110(1), not injunctive class relief, which is addressed separately in § 426.110(4)(e). Circuit courts must still apply the class certification factors in Wis. Stat. § 803.08 (not § 803.03) when deciding whether to certify a class, and an individual settlement is only one factor among many.
Justice Crawford’s dissent warned that the majority’s reading effectively “guts the WCA’s class action remedies” by allowing defendants to resolve damages with a single named plaintiff instead of providing class-wide relief. In her view, this interpretation undermines the WCA’s consumer protection mission by making it easy to extinguish class damages claims one plaintiff at a time.
For businesses and financial institutions facing WCA exposure, Gudex is a big deal. There is now a clear statutory path to avoid WCA damages class actions: promptly offer an “appropriate remedy” (including actual damages and up to the $1,000 penalty) to the named plaintiff after receiving the statutory notice. The decision incentivizes fast, targeted one-on-one resolutions and may significantly reduce the leverage of plaintiffs’ counsel in small-dollar WCA class cases.
At the same time, defendants must still navigate potential claims for injunctive relief, FDCPA claims, and class certification issues under § 803.08, which the Supreme Court left for the lower courts to sort out on remand.
If you regularly send collection letters, billing notices, or other consumer communications in Wisconsin, Gudex is a signal to tighten your templates and to be ready to move quickly if a WCA notice and demand lands on your desk.
For questions or guidance on how this decision may impact your organization, please reach out to your GRSM attorney, an author of this legal alert, or a member of GRSM’s Class Action Defense team.