Del Campo v. Kennedy, No. C 01-21151 JW.

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
Writing for the CourtJames Ware
Citation491 F.Supp.2d 891
PartiesElena DEL CAMPO, et al., Plaintiffs, v. George KENNEDY, et al., Defendants.
Docket NumberNo. C 01-21151 JW.
Decision Date05 December 2006
491 F.Supp.2d 891
Elena DEL CAMPO, et al., Plaintiffs,
v.
George KENNEDY, et al., Defendants.
No. C 01-21151 JW.
United States District Court, N.D. California, San Jose Division.
December 5, 2006.

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Paul Axons of Friday Harbor, WA, Deepak Gupta of Public Citizen in Washington, DC, Ronald Wilcox of San Jose, and O. Randolph Bragg, Horwitz, Horwitz & Associates, Ltd., Chicago, IL, for Plaintiff.

Charles D. Jenkins and Charles F. Perkins of San Francisco, for Defendant.

GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS TO DISMISS; GRANTING PLAINTIFFS' MOTION FOR LEAVE TO FILE AMENDED CONSOLIDATED COMPLAINT

JAMES WARE, District Judge.


I. INTRODUCTION

In 1985, the California Legislature created a misdemeanor diversion program to address the growing problem of accused bad check writers inundating the state's criminal courts. Cal. Pen.Code § 1001.60 et seq. The diversion program is intended to provide a feasible alternative to criminal prosecution by offering bad check writers a chance to pay their debts and clear the incident reports against them without risking criminal prosecution. Santa Clara County adopted the program, and District Attorney George Kennedy ("District Attorney") subsequently contracted with American Corrective Counseling Services, Inc. ("ACCS") to run the Santa Clara County Bad Check Restitution Program ("Bad Checks Program").

Plaintiffs bring this class action alleging, inter alia, that Defendants engaged in a pattern of behavior in implementing the diversion program that violate their due process under the Fourteenth Amendment, 42 U.S.C. § 1983, and the California Constitution, the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, as well as other related state statutory and tort laws.

Presently before the Court are three separate motions to dismiss: 1) Defendants' Motion to Dismiss pursuant to Fed. R. Civ. Pro. 12(b)(6) (See Docket Item No. 200); 2) Defendant American Corrective Counseling Services, Inc.'s Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(1) (See Docket Item No. 211); and 3) Individual Defendants' Motion to Dismiss Plaintiffs' Consolidated Complaint pursuant to Fed. R. Civ. Pro. 12(b)(6) (See Docket Item No. 214). The Court conducted a hearing on July 10, 2006. Based on the papers filed to date and oral arguments of counsel, the Court GRANTS in part and DENIES in part Defendants' motions.

On October 10, 2006, Plaintiffs also filed a Motion for Leave to File Amended Consolidated Complaint Adding Representation

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Plaintiff. (See Docket Item No. 249.) Defendants have filed a statement of nonopposition to the motion. (See Docket Item No. 259.) The Court found it appropriate to take the motion under submission without oral argument. See Civ. L.R. 7-1(b). In light of the Court's ruling with respect to the Defendants' motions to dismiss, the Court GRANTS Plaintiffs leave to file an Amended Consolidated Complaint.

II. BACKGROUND

Plaintiffs are Elena del Campo ("del Campo"), Ashorina Medina ("Medina"), Miriam R. Campos and Lisa Johnston (collectively, "Plaintiffs"). Defendants are: American Corrective Counseling Services, Inc. ("ACCS"), Don R. Mealing ("Mealing")1, Lynn Hasney ("Hasney")2, Bruce D. Raye ("Raye")3, Mr. Green, R.D. Davis, Mr. Kramer, Mrs. Lopez,4 (collectively "Individual Defendants"), Inc. Fundamentals ("Fundamentals"), Fundamental Performance Strategies ("Strategies"), Fulfillment Unlimited ("Fulfillment"), ACCS Administration ("ACCS Admin."), Inc., (collectively "ACCS Defendants") and George Kennedy in his official capacity as the Santa Clara County District Attorney ("District Attorney") (all defendants collectively "Defendants").

A. Basic Allegations

Plaintiffs allege the following:

Defendants engaged in a pattern of behavior in implementing the diversion program that violate Plaintiffs' constitutional and statutory rights. This pattern begins when bounced checks are referred to Defendants from various retail merchants For collection. (Consolidated Complaint, hereafter, "Compl." ¶¶ 69-70, Docket Item No. 196.) The merchants originally refer checks to the District Attorney, who then decides whether or not the check writer should be referred to the diversion program. Upon referral, ACCS Defendants instruct the merchants not to communicate with Plaintiffs. ACCS Defendants also send Plaintiffs a letter purporting to be from the Santa Clara District Attorney's Bad Check Restitution Program. The letter explains that Plaintiffs can avoid criminal prosecution for allegedly violating California Penal Code 476(a) by enrolling in the optional Bad Checks Program, without any admissions of guilt. (Compl. ¶¶ 72-73; Ex. 1.) The letter also instructs Plaintiffs to make checks out to the Bad Checks Program, listing fees currently owed from their bounced check, an administration fee of $35, and the diversion program fee. (Compl. ¶¶ 36, 45, 50, 56, 59; Exs. 1, 4, 6, 8, 9, 11 & 12.)

After receiving the letter, Plaintiffs either 1) tendered payments toward satisfying the original dishonored check, 2) tendered payments for the original check and the administration fee, or 3) did not send in any payment at all. (Compl. ¶¶ 34-68.) ACCS Defendants kept a portion of any payments tendered and informed the merchant that Plaintiffs tendered less than the full amount of the bounced check. As a result, Plaintiffs have not satisfied their debts to the merchants. Id. In all instances,

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Plaintiffs had no intentions of participating in the Bad Checks Program, never indicated such intentions, and never completed the Bad Check Program Enrollment Form. Id.

Plaintiffs were subsequently sent additional letters from ACCS Defendants. The letters: 1) indicated that Plaintiffs have failed to respond to the previous letters; 2) reiterated that Plaintiffs had the option of enrolling in the Bad Checks Program and paying the balance of their "cases;" and 3) warned them that failure to comply could result in the District Attorney filing a criminal complaint. In all cases, Plaintiffs have not paid the full amounts ACCS Defendants claim they owe, nor have any of the Plaintiffs been prosecuted for writing bad checks. Id.

Plaintiffs allege eight claims: violation of 1) Due Process under the Fourteenth Amendment, 42 U.S.C. § 1983 ("§ 1983"), 2) Due Process under the California Constitution, Article I, Section 7 ("Art. I, § 7"), 3) California Constitution, Article I, Section 1, 4) Fair Debt Collection Practices Act, 15 U.S.C. § 1692 ("FDCPA"), 5) California Unfair Business Practices Act, Cal. Bus. & Prof.Code §§ 17200 et seq. ("§ 17200") and for 6) conversion, 7) fraudulent misrepresentation, and 8) negligent misrepresentation.

B. Procedural History

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 § 1983 and Art. I, § 7. Plaintiff del Campo also alleged violations of the FDCPA and § 1700. Upon Defendants' motion, the Court dismissed del Campo's § 1983 and Art. I, § 7 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 § 1983 and Art. I § 7. On February 1, 2006, the Court consolidated Plaintiffs' cases into the present action. (Order Granting. Motion to Consolidate Case, Docket Item No. 161.)

Before the Court are three separate motions to dismiss. All Defendants move to dismiss Plaintiffs' allegations that they violated § 1983 and Art. I, § 7. Defendants Mealing, Hasney, Fundamentals, Strategies, and Fulfillment ("Individual Defendants") move to dismiss all eight of Plaintiffs' causes of action. ACCS also filed a separate motion to dismiss all eight of Plaintiffs' claims against them on jurisdictional grounds.

III. STANDARDS

A. Dismissal Pursuant to 12(b)(1)

Rule 12(b)(1) of the Federal Rules of Civil Procedure provides for a motion to dismiss for lack of subject matter. It is a fundamental precept that federal courts are courts of limited jurisdiction. Limits upon federal jurisdiction must not be disregarded or evaded. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978). A Rule 12(b)(1) motion may be either facial, where the inquiry is confined to the allegations in the complaint, or factual, where the court is permitted to look beyond the complaint to extrinsic evidence. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir.2004). The plaintiff has the burden to establish that subject matter jurisdiction is proper. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); In re Ford Motor Co., 264 F.3d 952, 957 (9th Cir.2001). This burden, at the pleading stage, must be met by pleading sufficient allegations to show a proper

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basis for the court to assert subject matter jurisdiction over the action. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); Fed.R.Civ.P. 8(a)(1).

B. Dismissal Pursuant to 12(b)(6)

A complaint may be dismissed for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A claim may be dismissed as a matter of law for "(1) lack of a cognizable legal theory or (2) insufficient facts under a cognizable legal theory." Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). "A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The court "must presume all factual allegations of the complaint to be true and...

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19 practice notes
  • Schwarm v. Craighead, No. CIV. 05-01304 WBS GGH.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • May 5, 2008
    ...chance to pay their debts and clear the incident reports against them without risking criminal prosecution." del Campo v. Kennedy, 491 F.Supp.2d 891, 895 (N.D.Cal.2006). After a county authorizes and a district attorney creates a bad check diversion program, the BCDA permits the distri......
  • Breazeale v. Victim Servs., Inc., Nos. 15-16549
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 27, 2017
    ...prosecutions of accused bad check writers eventually "inundat[ed] the state’s criminal courts." del Campo v. Kennedy , 491 F.Supp.2d 891, 895 (N.D. Cal. 2006), aff'd , 517 F.3d 1070 (9th Cir. 2008). In response, California in 1985 passed Cal. Penal Code § 1001.60 et seq. , authori......
  • Robinson v. Managed Accounts Receivables Corp., Case No. CV 09-01996 DDP (JCx).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • August 4, 2009
    ...518 F.3d 433, 435-38 (6th Cir.2008); see, e.g., Schwarm, 552 F.Supp.2d at 1070-72 (E.D.Cal.2008) (Shubb, J.); del Campo v. Kennedy, 491 F.Supp.2d 891, 904 (N.D.Cal.2006) (Ware, J.); Newman v. Checkrite Cal., 912 F.Supp. 1354, 1372 (E.D.Cal.1995) (Karlton, J.); Brumbelow v. Law Offices of Be......
  • Campo v. Am. Corrective Counseling Serv. Inc. ., No. C 01-21151 JW.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • June 3, 2010
    ...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 Sec......
  • Request a trial to view additional results
19 cases
  • Schwarm v. Craighead, No. CIV. 05-01304 WBS GGH.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • May 5, 2008
    ...chance to pay their debts and clear the incident reports against them without risking criminal prosecution." del Campo v. Kennedy, 491 F.Supp.2d 891, 895 (N.D.Cal.2006). After a county authorizes and a district attorney creates a bad check diversion program, the BCDA permits the distri......
  • Breazeale v. Victim Servs., Inc., Nos. 15-16549
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 27, 2017
    ...prosecutions of accused bad check writers eventually "inundat[ed] the state’s criminal courts." del Campo v. Kennedy , 491 F.Supp.2d 891, 895 (N.D. Cal. 2006), aff'd , 517 F.3d 1070 (9th Cir. 2008). In response, California in 1985 passed Cal. Penal Code § 1001.60 et seq. , authori......
  • Robinson v. Managed Accounts Receivables Corp., Case No. CV 09-01996 DDP (JCx).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • August 4, 2009
    ...518 F.3d 433, 435-38 (6th Cir.2008); see, e.g., Schwarm, 552 F.Supp.2d at 1070-72 (E.D.Cal.2008) (Shubb, J.); del Campo v. Kennedy, 491 F.Supp.2d 891, 904 (N.D.Cal.2006) (Ware, J.); Newman v. Checkrite Cal., 912 F.Supp. 1354, 1372 (E.D.Cal.1995) (Karlton, J.); Brumbelow v. Law Offices of Be......
  • Campo v. Am. Corrective Counseling Serv. Inc. ., No. C 01-21151 JW.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • June 3, 2010
    ...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 Sec......
  • Request a trial to view additional results

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