Campo v. Am. Corrective Counseling Serv. Inc. .

• Decision Date: 03 June 2010
• Docket Number: No. C 01-21151 JW.,C 01-21151 JW.
• Parties: Elena DEL CAMPO, et al., Plaintiffs, v. AM. CORRECTIVE COUNSELING SERV., INC., et al., Defendants.
• Court: U.S. District Court — Northern District of California

718 F.Supp.2d 1116

Elena DEL CAMPO, et al., Plaintiffs,

v.AM. CORRECTIVE COUNSELING SERV., INC., et al., Defendants.

No. C 01-21151 JW.

United States District Court, N.D. California,Northern Division,

June 3, 2010.

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Deepak Gupta, Public Citizen Litigation Group, Washington, DC, Lester A. Perry, Salt Lake City, UT, Paul Arons, Sharon Kathleen Grace, Law Office of Paul Arons, Friday Harbor, WA, Ronald Wilcox, Attorney at Law, San Jose, CA, O. Randolph Bragg, Horwitz, Horwitz & Associates, Chicago, IL, for Plaintiffs.

David L. Hartsell, McGuirewoods LLP, Chicago, IL, Hugh Tabor Verano, Jr., Verano & Verano, San Juan Capistrano, CA, Peter Manfred Bransten, Landau & Berger LLP, San Francisco, CA, Eric Neil Landau, Jones Day, Irvine, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART THE PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT

JAMES WARE, District Judge.

I. INTRODUCTION

Plaintiffs ¹ bring this class action alleging, inter alia, that Defendants ² engaged in a pattern of behavior in implementing the Santa Clara County Bad Check Restitution Program (“Bad Checks Program”) that violates the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, the California Constitution article I, sections 1 and 7, and the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code §§ 17200 et seq.

Presently before the Court are the parties' Cross-Motions for Summary Judgment. ³ The Court conducted a hearing on March 22, 2010. ⁴ Based on the papers submitted to date and oral argument, the Court GRANTS in part and DENIES in part the parties' Cross-Motions.

II. BACKGROUND

Since the facts of this case are largely undisputed, the Court provides them as necessary in the discussion below. The Court reviews the case's procedural history to provide some context for these Motions.

This case is a consolidated case between del Campo v. Kennedy, Case No. 01-21151 JW and Medina v. Mealing, Case No. 03-2611 JW. In the original suit, Plaintiff del Campo filed a class action against the Defendants for violations of her Due Process rights pursuant to Section 1983 and the California Constitution article I, section 7. Plaintiff del Campo also alleged violations of the FDCPA and the California UCL. Upon Defendants' motion, the Court dismissed del Campo's Section 1983 and California Constitution causes of action with prejudice based on her failure to state a claim. In Medina v. Mealing, Plaintiff Medina also filed a class action against the Defendants for violations of Section 1983 and the California Constitution. On February 1, 2006, the Court consolidated Plaintiffs' cases into the present action. (Order Granting Motion to Consolidate Case, Docket Item No. 161.)

On December 5, 2006, 491 F.Supp.2d 891 (N.D.Cal.2006), the Court dismissed with prejudice all of Plaintiffs' federal claims for violations of their due process rights pursuant to Section 1983 and the California Constitution, and dismissing District Attorney George Kennedy from the case. ⁵ On December 22, 2006, Plaintiffs filed a Second Amended Complaint. ⁶

On December 3, 2008, 254 F.R.D. 585 (N.D.Cal.2008), the Court granted Plaintiffs' Motion for Class Certification. ⁷ The Court certified Plaintiffs' classes for injunctive and declaratory relief, restitution, and for statutory damages under Rule 23(b)(2) and actual damages under Rule 23(b)(3). The Court certified Plaintiffs' Umbrella Class, FDCPA Subclass, CUBPA Subclass, and Bank Records Subclass as follows:

(1) Umbrella Class: All persons to whom ACCS mailed at least one demand letter purporting to be from a district attorney's office in California, attempting to collect a dishonored check, which was not returned as undeliverable.

(2) FDCPA Subclass: All members of the Umbrella Class, from whom ACCS after December 11, 2000 attempted to collect, or collected money for a check written for personal, family, or household purposes.

(3) CUBPA Subclass: All members of the Umbrella Class from whom ACCS attempted to collect, or collected money, after December 11, 1997.

(4) Bank Records Subclass: All members of the Umbrella Class whose bank records ACCS obtained after December 11, 1999.

On February 9, 2010, the Court approved the parties' Second Amended Joint Submission of Class Notice Plan. (Docket Item No. 819.) On March 11, 2010, Plaintiffs filed a report informing the Court that notices were sent to 179,241 class members. (Docket Item No. 859.)

III. STANDARDS

Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). The purpose of summary judgment “is to isolate and dispose of factually unsupported claims or defenses.” Celotex v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying the evidence which it believes demonstrates the absence of a genuine issue of material fact.” Id. at 323, 106 S.Ct. 2548. The non-moving party must then identify specific facts “that might affect the outcome of the suit under the governing law,” thus establishing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e).

When evaluating a motion for summary judgment, the court views the evidence through the prism of the evidentiary standard of proof that would pertain at trial. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court draws all reasonable inferences in favor of the non-moving party, including questions of credibility and of the weight that particular evidence is accorded. See, e.g., Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520, 111 S.Ct. 2419, 115 L.Ed.2d 447 (1991). The court determines whether the non-moving party's “specific facts,” coupled with disputed background or contextual facts, are such that a reasonable jury might return a verdict for the non-moving party. T.W. Elec. Serv. v. Pac. Elec. Contractors, 809 F.2d 626, 631 (9th Cir.1987). In such a case, summary judgment is inappropriate. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. However, where a rational trier of fact could not find for the non-moving party based on the record as a whole, there is no “genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

Although the district court has discretion to consider materials in the court file not referenced in the opposing papers, it need not do so. See Carmen v. San Francisco Unified School District, 237 F.3d 1026, 1028-29 (9th Cir.2001). “The district court need not examine the entire file for evidence establishing a genuine issue of fact.” Id., at 1031. However, when the parties file cross-motions for summary judgment, the district court must consider all of the evidence submitted in support of both motions to evaluate whether a genuine issue of material fact exists precluding summary judgment for either party. The Fair Housing Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1135 (9th Cir.2001).

IV. DISCUSSION

A. Liability of Individual Defendants Under the FDCPA

Defendants move for summary judgment on the grounds that Defendants Mealing and Hasney cannot be held liable under the FDCPA because (1) the FDCPA did not apply to ACCS' activities as a private contractor implementing a bad check diversion program, ⁸ and (2) Defendants Mealing and Hasney were not debt collectors within the meaning of the FDCPA because they were removed from ACCS' day-to-day collection activities. ⁹ The Court addresses each of Defendants' contentions in turn. ¹⁰ Congress enacted the FDCPA to “eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). “Debt” is defined as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” 15 U.S.C. § 1692(a)(5). A “debt collector” is defined as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692(a)(6).

1. Effect of 2006 Amendment to FDCPA

Defendants contend that the 2006 Amendment to the FDCPA clarifies that private contractors like ACCS who meet specific conditions and act solely as the agents of the prosecuting attorney in administering bad check programs are exempt from liability under the statute. ¹¹

The Court has found in two prior Orders that ACCS was a private actor attempting to take action to collect a debt against private individuals in order to compensate third party creditors, and thus, was bound by the requirements of the FDCPA. ¹² Defendants contend that the Court's prior rulings in this regard are inapplicable to the present motions for summary judgment because the Court made its findings in the context of Rule 12(b) motions, and thus the Court was obligated to take the pleadings in the Complaint as true. ¹³ The Court finds, however, that its prior holding regarding the applicability of the FDCPA to ACCS' activities was a matter of law and undisputed fact, and is thus unaffected by the procedural posture of ...