Rodriguez v. Your First Choice, LLC
| Decision Date | 25 October 2017 |
| Docket Number | Case No. 2:16-cv-02447-APG-CWH |
| Parties | IRMA RODRIGUEZ, Plaintiff, v. YOUR FIRST CHOICE, LLC d/b/a FIRST CHOICE PAYDAY LOAN, Defendant. |
| Court | U.S. District Court — District of Nevada |
ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Plaintiff Irma Rodriguez obtained a payday loan from defendant Your First Choice, LLC (First Choice). She defaulted on the loan, and First Choice attempted to collect on the debt. In response to these attempts, Rodriguez sued First Choice for alleged violations of Nevada's debt collection practices statute. Rodriguez learned as part of discovery that First Choice obtained her credit report after it answered the initial complaint. Rodriguez then filed an amended complaint, alleging First Choice violated the Fair Credit Reporting Act (FCRA).
First Choice moves to dismiss or for summary judgment. Because both parties rely on discovery responses in addition to the pleadings, I treat the motion as one for summary judgment. First Choice argues that it cannot be held liable for its debt collection practices because it is not covered by the federal Fair Debt Collections Practices Act (FDCPA), which is incorporated into the Nevada statute. First Choice also argues that Rodriguez consented to First Choice obtaining her credit report, which it did for a statutorily permissible purpose. Alternatively, First Choice contends Rodriguez does not have standing to bring the FCRA claim because she has not sufficiently pleaded an injury in fact.
Rodriguez responds that the Nevada debt collection practices statute applies to businesses such as First Choice even if they could not be held liable under the FDCPA. As to the FCRA claim, Rodriguez argues that once her complaint in this case was filed, First Choice no longer had her consent or authorization to obtain her credit report. She also argues that the report was obtained for use in this litigation, which is not a permissible purpose under FCRA. Finally, she argues that the violation of FCRA's limitation on permissible purposes for obtaining a credit report and the invasion of her privacy are concrete injuries sufficient for Article III standing.
I deny First Choice's motion for summary judgment. First Choice has failed to show that as a matter of law it cannot be liable under the Nevada debt collection practices statute, which applies to a business like First Choice even if it would not be liable under the FDCPA. With respect to the FCRA claim, there is a genuine dispute whether First Choice obtained Rodriguez's credit report for a statutorily permissible purpose. While First Choice has shown Rodriguez consented to a credit check, it has not shown as a matter of law that this consent authorized it to obtain her credit report for an impermissible purpose. Finally, Rodriguez has alleged a sufficiently concrete injury—the violation of her legally protected interest in the privacy of her credit information—to meet the requirements for Article III standing.
Rodriguez obtained a payday loan from First Choice. ECF No. 21 at 4-5.1 First Choice is licensed in Nevada as a business engaged in "Deferred Deposit Loans, High-interest loans, Title Loans and Check-Cashing." Id. at 3. As part of her loan application, Rodriguez signed a document titled "Consumer Credit Disclosure - Promissory Note." ECF No. 22, Ex. A, Ex. B. This document included a "Credit Reporting" provision stating "You agree that we may make inquiries concerning your credit history and standing . . . ." Id., Ex. B. After Rodriguez defaulted on the loan, First Choice attempted to collect the debt, calling her multiple times and sending representatives to her home. ECF No. 26, Ex. 1.
On October 20, 2016, Rodriguez filed suit, alleging First Choice's collection activities violated Nevada Revised Statutes § 604A.415. ECF No. 1. On January 13, 2017, First Choice answered. ECF No. 9. As part of the discovery that followed, First Choice disclosed a copy of a TransUnion credit report for Rodriguez dated January 18, 2017. See ECF No. 26, Ex. 2.Thereafter, Rodriguez filed an amended complaint to add a claim alleging that by obtaining this report without a permissible purpose, First Choice violated FCRA. First Choice now moves for summary judgment on both claims.
Summary judgment is appropriate if the pleadings, discovery responses, and affidavits demonstrate "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000). I view the evidence and draw reasonable inferences in the light most favorable to the non-moving party. James River Ins. Co. v. Herbert Schenck, P.C., 523 F.3d 915, 920 (9th Cir. 2008).
Nevada Revised Statutes § 604A.415 states that A licensee is defined in the statute as "any person who has been issued one or more licenses to operate a check-cashing service, deferred loan deposit service, high-interest loan service, or title loan service . . . ." Nev. Rev. Stat. § 604A.075.
The FDCPA regulates debt collection practices by debt collectors, 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 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. § 1692a(6). The term does not include "any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor" or "any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . concerns a debt which was originated by such person." Id. § 1692a(6)(A), (F).
First Choice argues that (1) it is a creditor and not a debt collector, and (2) it is attempting to collect a debt it originated. Therefore, First Choice contends, it cannot be liable under the FDCPA. However, as Rodriguez points out, the Nevada statute specifically covers licensees "even if the licensee is not otherwise subject to" the FDCPA. Nev. Rev. Stat. § 604A.415; cf. Iorio v. Check City P'ship, Supreme Court of Nevada Case Nos. 64180, 64365, 2015 WL 3489309, at *1 n.2 (). First Choice has not argued that it is not a licensee under Nevada law, nor has it offered any reason why the Nevada statute does not apply to it. Therefore, First Choice has not shown that it is entitled to judgment as a matter of law on this claim.
I deny First Choice's motion for summary judgment as to the claim under § 604A.415. I decline to consider First Choice's argument, raised for the first time in its reply brief, that even if the statute does apply, its practices were not abusive under the FDCPA or the state statute. See Vazquez v. Rackauckas, 734 F.3d 1025, 1054 (9th Cir. 2013) ().
First Choice argues that it had a permissible purpose for obtaining the report under 15 U.S.C. § 1681b(a)(3)(A), which allows consumer reporting agencies to furnish a consumerreport "[t]o a person which it has reason to believe . . . intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the . . . collection of an account of" the consumer. First Choice contends that it obtained Rodriguez's report for account collection, a permissible purpose under the statute.
Additionally, First Choice argues that Rodriguez consented to its obtaining her credit report when she obtained her loan. Because the consent provision has no time limitation and Rodriguez's account is still open, First Choice contends her consent applies to the credit pull at issue and thus there was no unauthorized disclosure of Rodriguez's report nor an invasion of her privacy. Furthermore, First Choice argues that Rodriguez did not suffer a concrete injury in fact, as required for Article III standing.
Rodriguez responds that First Choice violated FCRA by obtaining her credit report to use in this litigation, an impermissible purpose. She also argues that after her initial complaint in this case was filed she "had no account or business transaction" with First Choice so any prior consent was no longer valid. ECF No. 26 at 12. Thus, she contends, this impermissible credit pull was an invasion of her privacy.
Section 1681b(a) of FCRA states that in general, "any consumer reporting agency may furnish a...
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