Jones v. Synergetic Commc'n, Inc., Case No. 18-cv-1860-BAS-RBB

• Decision Date: 20 November 2018
• Docket Number: Case No. 18-cv-1860-BAS-RBB
• Parties: STEPHEN JONES, Plaintiff, v. SYNERGETIC COMMUNICATION, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of California

STEPHEN JONES, Plaintiff, v. SYNERGETIC COMMUNICATION, INC., et al., Defendants.

Case No. 18-cv-1860-BAS-RBB

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

November 20, 2018

ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS IN THEIR ENTIRETY

[ECF Nos. 3, 5]

Before the Court are two motions to dismiss filed by Defendants Synergetic Communication, Inc. ("Synergetic") and Collecto, Inc. d/b/a EOS CCA ("EOS"). (ECF Nos. 3, 5.) Plaintiff Stephen Jones filed an untimely consolidated opposition. (ECF No. 8.)¹ Defendants have filed a timely consolidated reply in support ofdismissal. (ECF No. 9.) For the reasons herein, the Court grants Defendants' motions.

BACKGROUND

Plaintiff Stephen Jones is a California resident. (Compl. ¶ 7.) Prior to January 5, 2018, "an obligation was allegedly incurred to AT&T Mobility" ("AT&T") by Plaintiff. (Id. ¶¶ 22-24.) Plaintiff "could not pay the alleged debt, and it went into default." (Id. ¶ 25.) EOS "purchased the alleged debt" and "contracted with [] Synergetic to collect" it. (Id. ¶¶ 26-27.)

On January 5, 2018, Synergetic sent Plaintiff a letter. (Id. ¶ 29, Ex. A ("the Letter").) The Letter indicated that "[o]ur client, EOS Cca, has placed" the alleged debt "with our office for collection in the amount of $691.60." (Letter at 1.) The second paragraph notified Plaintiff how he could dispute the validity of the debt. The middle portion of the letter stated that the "Client has agreed to offer" a "settlement" of the debt for $276.64 the payment of which "must be received by" February 19, 2018. (Id.) The Letter continued that "upon receipt of the settlement, our client will report the account has been settled in full." (Id.) The final sentence of the Letter stated that "[t]he law limits how long you can be sued on a debt. Because of the age of your debt, the creditor listed on the debt will not sue you for it . . ." (Id.)

Plaintiff has filed a putative class action complaint on behalf of California consumers against alleged debt collectors Synergetic and EOS for alleged violations of the Federal Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.² (Compl. ¶ 5.) Plaintiff seeks damages, declaratory relief, and attorneys' fees. (Id. ¶ 6, id. at 15 (Prayer for Relief).)

LEGAL STANDARD

Federal Rule of Civil Procedure 8(a)(2) requires that a complaint set forth "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). For the purposes of such a motion, the court accepts as true the allegations in the complaint and construes those allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). To survive a Rule 12(b)(6) motion, a plaintiff is required to set forth "enough facts to state a claim for relief that is plausible on its face." Twombly, 550 U.S. at 570. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw reasonable inferences that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Factual allegations must be enough to raise a right to relief above the speculative level. Twombly, 550 U.S. at 556. The court need not accept as true legal conclusions pled in the guise of factual allegations. Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). Relatedly, a pleading is insufficient if it offers only "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 556 U. S. at 676. In ruling on a 12(b)(6) motion to dismiss, a court may consider materials properly submitted as part of the complaint. Lee v. City of L.A., 250 F.3d 668, 688-89 (9th Cir. 2001).

DISCUSSION

A. Federal Debt Collection Practices Act ("FDCPA") Claims

"The FDCPA comprehensively regulates the conduct of debt collectors, imposing affirmative obligations and broadly prohibiting abusive practices." Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1060-61 (9th Cir. 2011) (citing,inter alia, 15 U.S.C. § 1692(e)). The statute "is a strict liability statute that 'makes debt collectors liable for violations that are not knowing or intentional.'" Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1030 (9th Cir. 2010). Although the Federal Trade Commission is empowered to enforce the FDCPA, "Congress encouraged private enforcement by permitting aggrieved individuals to bring suit as private attorneys general." Gonzales, 660 F.3d at 1061 (citing Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008)). Because of the FDCPA's broad remedial nature, courts liberally construe the statute in favor of debtors. See Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1176 (9th Cir. 2006). "In the 9th Circuit, the court—and not the jury—determines whether a particular collection letter violates the FDCPA." Anderson v. Credit Collection Services, Inc., 322 F. Supp. 2d 1094, 1096 (S.D. Cal. 2004) (citing Swanson v. Southern Oregon Credit Services, Inc., 869 F.2d 1222, 1225-26 (9th Cir. 1988) and Terran v. Kaplan, 109 F.3d 1428, 1432 (9th Cir. 1997)).

Plaintiff asserts two FDCPA claims. (Compl. ¶¶ 42-46 (Section 1692e), id. ¶¶ 47-52 (Section 1692g).) "There are four elements to an FDCPA cause of action: (1) the plaintiff is a 'consumer' under 15 U.S.C. § 1692a(3); (2) the debt arises out of a transaction entered into for personal purposes; (3) the defendant is a 'debt collector' under 15 U.S.C. § 1692a(6); and (4) the defendant violated one of the provisions contained in 15 U.S.C. §§ 1692a-1692o." Wheeler v. Premiere Credit of N. Am., LLC, 80 F. Supp. 3d 1108, 1112 (S.D. Cal. 2015) (citing Turner v. Cook, 362 F.3d 1219, 1226-27 (9th Cir. 2004)); Gutierrez v. Wells Fargo Bank, No. C 08-5586 SI, 2009 WL 322915, at *2 (N.D. Cal. Feb. 9, 2009) (same). Synergetic and EOS move to dismiss on the ground that Plaintiff has failed to allege violations of Section 1692e and Section 1692g.³ The Court agrees with Defendants.

1. Alleged Section 1692e Violations

The FDCPA generally prohibits a debt collector from using "any false, deceptive, or misleading representation or means" in connection with the collection of a debt. 15 U.S.C. § 1692e. Section 1692e identifies a non-exhaustive list of conduct that violates the FDCPA, including "[t]he false representation of the character, amount, or legal status of any debt," id. § 1692e(2)(A), and "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer," id. § 1692e(10).

"An FDCPA plaintiff need not . . . have actually been misled or deceived by the debt collector's representation; instead, liability depends on whether the hypothetical 'least sophisticated debtor' likely would be misled." Tourgeman v. Collins Fin. Servs., Inc., 755 F.3d 1109, 1117-18 (9th Cir. 2014) (emphasis in original). "The standard is lower than simply examining whether particular language would deceive or mislead a reasonable debtor." Gonzales, 660 F.3d at 1061; Donohue, 592 F.3d at 1030; Caudillo v. Portfolio Recovery Associates, LLC, No. 12-CV-200-IEG (RBB), 2013 WL 4102155, at *2 (S.D. Cal. Aug. 13, 2013). This standard "'ensure[s] that the FDCPA protects all consumers, the gullible as well as the shrewd . . . the ignorant, the unthinking and the credulous.'" Clark, 460 F.3d at 1171 (citation omitted). Nevertheless, "[t]he FDCPA does not subject debt collectors to liability for 'bizarre,' 'idiosyncratic,' or 'peculiar' misinterpretations." Gonzales, 660 F.3d at 1061. Thus, an alleged debtor's '"interpretation of a collection noticecannot be bizarre or unreasonable." Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1027 (9th Cir. 2012); see also Davis v. Hollins Law, 832 F.3d 962, 964 (9th Cir. 2016) ("Courts 'have carefully preserved the concept of reasonableness' and have presumed that debtors have 'a basic level of understanding and willingness to read [the relevant documents] with care' in order to safeguard bill collectors from liability for consumers' 'bizarre or idiosyncratic interpretations of collection notices.'").

Plaintiff alleges violations of Sections 1692e(2)(A) and 1692e(10) based on: (1) an alleged misleading and deceptive representation about the nature of the statute of limitations applicable to Plaintiff's alleged debt because the Letter states that Defendants "will not sue" for a time-barred debt instead of stating "cannot sue;" (2) an alleged failure to disclose that any payment by Plaintiff of the settlement amount would result in a novation that would reset the statute of limitations applicable to the alleged debt; and (3) an alleged omission regarding Synergetic's purported rights to sue on the debt. (Compl. ¶¶ 42-46.) Synergetic and EOS move to dismiss the Section 1692e claim in its entirety on the ground that the Letter is not misleading or deceptive as a matter of law. The Court analyzes each alleged misrepresentation or omission by Defendants and explains why Plaintiff has failed to state a Section 1692e claim as to each.

a. Alleged "Will Not Sue" Misrepresentation

The first dispute the Court must resolve is whether Plaintiff's allegations regarding the use of "will not sue" as opposed to "cannot sue" plausibly states a claim that Defendants have violated the FDCPA by misrepresenting the legal status of a time-barred debt and seeking to collect a debt through such a misrepresentation. The Letter states that "[t]he law limits how long you can be sued on a debt. Because of the age of your debt, the creditor listed on the debt will not sue you for it and neither the...