Frances Macias et al v. Integrity Nationwide Investigations Inc et al, No. 2:2013cv00623 - Document 41 (C.D. Cal. 2013)
Court Description: ORDER Granting Defendant Integritys Motion to Dismiss 26 and Dismissing all Other Claims for Lack of Subject Matter Jurisdiction 17 and 28 are VACATED by Judge Dean D. Pregerson. (MD JS-6. Case Terminated). (lc). Modified on 5/17/2013 (lc).
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Frances Macias et al v. Integrity Nationwide Investigations Inc et al Doc. 41 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 FRANCES MACIAS; PAUL MACIAS, individually and on behalf of all others similarly situated, 13 Plaintiffs, 14 v. 15 16 17 18 INTEGRITY NATIONWIDE INVESTIGATIONS, INC.; WATER AND POWER COMMUNITY CREDIT UNION, Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 13-00623 DDP (SHx) Order Granting Defendant Integrity’s Motion to Dismiss and Dismissing all Other Claims for Lack of Subject Matter Jurisdiction Docket No. 26 19 20 21 I. Background Plaintiffs Frances Macias and Paul Macias, individually and on 22 behalf of all others similarly situated (collectively 23 “Plaintiffs”), have sued Defendant Integrity Nationwide 24 Investigations, Inc., (“Integrity”) under the Federal Debt 25 Collection Practices Act (“FDCPA”). 26 Complaint (“FAC”). 27 Power Community Credit Union (“Water and Power”) (collectively 28 “Defendants”) under California’s Rosenthal Fair Debt Collection See generally First Amended Plaintiffs have sued Integrity and Water and Dockets.Justia.com 1 Practices Act. 2 question jurisdiction and supplemental jurisdiction over the claims 3 in this case. 4 collector” within the meaning of the FDCPA, the Court dismisses the 5 FDCPA claim–the sole federal claim in this case. 6 no longer has federal question jurisdiction, and supplemental 7 jurisdiction over the remaining state law claims is now improper. 8 9 (Id.) Plaintiffs assert this Court has federal (FAC ¶ 8.) Because Integrity is not a “debt The Court, thus, Plaintiffs allegedly incurred a debt to Water and Power. ¶¶ 25-26.) (FAC Sometime before September 12, 2012, “Plaintiffs 10 allegedly fell behind in the payments allegedly owed on the alleged 11 debt.” 12 a letter to Plaintiffs, which they received a few days later, about 13 their alleged debt. 14 sent this letter, the FAC alleges that Plaintiff’s debt was 15 “assigned, placed, or otherwise transferred, to INTEGRITY for 16 collection.” 17 and Power’s agent when it sent this letter, which reads: 18 19 20 21 22 23 24 25 26 27 (FAC ¶ 28.) On or about September 12, 2012, Integrity sent (FAC ¶¶ 30-31.) (FAC ¶ 29.) By the time that Integrity Integrity was allegedly acting as Water FRANCES MACIAS & PAUL MACIAS RE: Loan [Redacted] Dear Member: Integrity Nationwide Investigations ("Integrity”) has been retained by Water & Power Community Credit Union to locate you and deliver this demand letter. Under California and Federal Law, Integrity is obligated to inform you that Water & Power Community Credit Union, on its own behalf, is attempting to collect a debt it alleges is owed by you. Any information obtained as a result of this correspondence will be used for the purposes of pursuing satisfaction of that debt. Water & Power Community Credit Union informs Integrity that you were granted a loan in good faith, and that you agreed to make monthly payments of $[redacted] until repaid. According to the records from Water & Power Community Credit Union, you have failed to make the agreed upon payments. 28 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 The following is additional information Integrity is obligated to provide to you. as the agent of Water & Power Community Credit Union: 1. The current amount due of the debt is $[redacted]: 2. The debt is owed by you to Water & Power Community Credit Union: 3. Unless you dispute the validity of this debt or any part thereof.[sic] within thirty (30) days after receipt of this notice, the debt will be assumed to be valid by Water & Power Community Credit Union: 4. If you contact Water & Power Community Credit Union, in writing, within thirty (30) days of receiving this notice and inform Water & Power Commun11y Credit Union that the debt or any portion thereof is disputed, Water & Power Community Credit Union will obtain verification of the debt, and a copy of that verification will be mailed to you by Water & Power Community Credit Union: and 5. Upon your written request, within thirty (30) days of receiving this notice, Water & Power Community Credit Union will provide you with the name and address of the original creditor, if different from the current creditor. Please contact Water & Power Community Credit Union’s Financial Assistance Department at 1-800-300-9728 ext. 1759 and ask for SUSAN VALENZUELA, for additional information. 16 17 Sincerely, Integrity Nationwide Investigations PI#25684 18 (FAC ¶ 30, Ex.1.) No other communication between Plaintiffs and 19 Integrity is alleged. (See generally id.) 20 The FAC alleges: 21 22 23 24 25 26 27 28 INTEGRITY uses an instrumentality of interstate commerce or the mails in a 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, and is therefore a debt collector as that phrase in defined by 15 U.S.C. § 1692a(6). . . . . INTEGRITY's Mission Statement, according to its website, states, "Integrity is the cornerstone of our business and the foundation upon building our success in the private investigation and debt collection industry." Additionally, the website states, “[i]f an investigator works with us, he or she is one of the best in the private investigation or 3 1 debt collection industry.” Thus, INTEGRITY advertises that it engages in debt collection. 2 (FAC ¶¶ 17, 22, 30.) 3 II. Legal Standard 4 A complaint will survive a motion to dismiss when it contains 5 “sufficient factual matter, accepted as true, to state a claim to 6 relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 7 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 8 570 (2007)). When considering a Rule 12(b)(6) motion, a court must 9 “accept as true all allegations of material fact and must construe 10 those facts in the light most favorable to the plaintiff.” Resnick 11 v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint 12 need not include “detailed factual allegations,” it must offer 13 “more than an unadorned, the-defendant-unlawfully-harmed-me 14 accusation.” Iqbal, 556 U.S. at 678. Conclusory allegations or 15 allegations that are no more than a statement of a legal conclusion 16 “are not entitled to the assumption of truth.” Id. at 679. In 17 other words, a pleading that merely offers “labels and 18 conclusions,” a “formulaic recitation of the elements,” or “naked 19 assertions” will not be sufficient to state a claim upon which 20 relief can be granted. Id. at 678 (citations and internal 21 quotation marks omitted). 22 “When there are well-pleaded factual allegations, a court should 23 assume their veracity and then determine whether they plausibly 24 give rise to an entitlement of relief.” Id. at 679. Plaintiffs 25 must allege “plausible grounds to infer” that their claims rise 26 “above the speculative level.” Twombly, 550 U.S. at 555-56. 27 “Determining whether a complaint states a plausible claim for 28 4 1 relief” is a “context-specific task that requires the reviewing 2 court to draw on its judicial experience and common sense.” 3 556 U.S. at 679. 4 III. Analysis 5 Iqbal, Integrity argues it is not a “debt collector” under the FDCPA. 6 “The FDCPA regulates the conduct of debt collectors.” 7 Trans Union LLC, No. CV-10-8038-PCT-NVW, 2010 WL 2104622, at * 8 8 (D. Ariz. May 25, 2010) (unpublished). 9 eliminate abusive debt collection practices by debt collectors, to Baker v. The FDCPA’s purpose is “to 10 insure that those debt collectors who refrain from using abusive 11 debt collection practices are not competitively disadvantaged, and 12 to promote consistent State action to protect consumers against 13 debt collection abuses.” 14 one “who uses any instrumentality of interstate commerce or the 15 mails in any business the principal purpose of which is the 16 collection of any debts, or who regularly collects or attempts to 17 collect, directly or indirectly, debts owed or due or asserted to 18 be owed or due another.” 19 debt collection is the principal purpose of a business or (2) a 20 business regularly attempts to collect debts, either directly or 21 indirectly, that business is not a debt collector. 22 Romine v. Diversified Collection Servs., Inc., 155 F.3d 1142, 1145 23 (9th Cir. 1998). 24 is a debt collector under the first prong, but it does argue the 25 second applies. 26 14, Docket No. 34.) 27 28 15 U.S.C. § 1692(e). Id. at § 1692(a)(6). A debt collector is Thus, unless (1) See id.; Plaintiffs’ brief does not argue that Integrity (See generally Plaintiff’s Opposition Brief at 7- In determining whether a business “regularly” collects debts, the Ninth Circuit has sought guidance from the following 5 1 legislative history of the FDCPA: “The requirement that debt 2 collection be done ‘regularly’ would exclude a person who collects 3 debt for another in an isolated instance, but would include those 4 who collect for others in the regular course of business.” 5 155 F.3d at 1146. 6 turn on whether a debt collector is collecting a debt that it is 7 due to it or whether the debt collector is assisting a debt owner 8 collect a debt. Romine, The terms “directly” and “indirectly” appear to See id. at 1146 n.2, 1146-47. 9 The Ninth Circuit has suggested that an entity engaged in 10 “mere information gathering or message delivery” is not a debt 11 collector. 12 dicta, that Western Union was engaged in more than such activities, 13 the Ninth Circuit in Romine emphasized the FDCPA’s purpose, which 14 “is to limit harassing, misleading, and fraudulent contacts and 15 communications with or about consumer debtors.” 16 Western Union sent telegrams to debtors that instructed them to 17 call in and provide their contact information in order to receive 18 their telegram message, which was a recording from a debt 19 collection agency. 20 sending the telegram deceptively created a sense or urgency. 21 at 149. 22 “revolutionary new collection service,” because the “urgency of the 23 Western Union name . . . helps stimulate . . . recoveries from 24 debtors who have not responded to previous collection attempts.” 25 Id. at 1147. 26 activities were “the type that the FDCPA was designed to deter.” 27 Id. at 1149. 28 Romine to determine a skip tracer, who was “in the business of See id. at 1149. In deciding, though possibly in Id. at 1144. Id. In Romine The Ninth Circuit concluded that Id. Indeed, Western Union marketed their service as a The Ninth Circuit found that Western Union’s At least one district court in this Circuit relied on 6 1 locating debtors to facilitate the collection of debts by 2 creditors,” was not a debt collector when it called a debtor asking 3 for her address and disclosed that the purpose of the call was debt 4 collection. 5 Baker, 2010 WL 2104622 at * 7, 9. In this case, nothing indicates that Integrity engaged in 6 anything beyond information gathering and message delivery. 7 Plaintiffs allege that Integrity markets itself as being “in the 8 private investigation or debt collection industry.” 9 However, one could be engaged in nothing more than information (FAC ¶ 22.) 10 gathering and message delivery and still take part in debt 11 collection industry without being a debt collector under the FDCPA. 12 See Romine, 155 F.3d at 1149; Baker, 2010 WL 2104622 at * 9. 13 Integrity’s letter to Plaintiffs, which consisted of the sole 14 alleged communication between the parties, states: “Integrity 15 Nationwide Investigations ("Integrity”) has been retained by Water 16 & Power Community Credit Union to locate you and deliver this 17 demand letter.” 18 Plaintiffs and Integrity indicate that Integrity’s role was to find 19 and deliver a message to Plaintiffs on behalf of Water and Power. 20 This language and the limited interactions between Moreover, the FAC does not allege Integrity committed abusive, 21 harassing, or deceptive activities–the type of activities that the 22 FDCPA was designed to prevent. 23 (listing examples of improper behavior). 24 Integrity’s sole communication with Plaintiffs, the letter, was 25 professional and respectful. 26 Compare FAC, with 15 U.S.C. § 1692d To the contrary, (See FAC Ex. 2.) Had Integrity tried to collect a debt it owned, its activities 27 might have gone beyond mere information gathering and message 28 delivery. Plaintiffs, indeed, allege that “the alleged debt was 7 1 assigned, placed, or otherwise transferred, to INTEGRITY for 2 collection” before Integrity sent Plaintiffs the letter 3 ¶¶ 29.) 4 allegations in and exhibits attached to the FAC. 5 the paragraph following the previously quoted language, the FAC 6 alleges that Integrity was acting as Water and Power’s agent when 7 it sent the letter to Plaintiffs. 8 Plaintiffs incorporate into the FAC as an exhibit, states that 9 “Water & Power . . . is attempting to collect a debt,” and the (See FAC This allegation is implausible in light of the rest of the (FAC ¶ 30.) For instance, in The letter, which 10 “debt is owed by you [Plaintiffs] to Water & Power.” 11 Another exhibit to the FAC, dated about one month after Integrity 12 sent its letter, is a letter from Water and Power to Plaintiffs 13 warning that Water and Power would take legal action against 14 Plaintiffs if they did not contact Water and Power about the 15 outstanding debt. 16 that Integrity owned Plaintiff’s debt. 17 to accept as true implausible allegations. 18 555-56. (FAC Ex. 1.) (FAC Ex. 2.) The FAC and its exhibits refute The Court is not required Twombly, 550 U.S. at 19 Finally, the FAC recites the FDCPA’s definition of “debt 20 collector” and alleges that Integrity meets the requirements. 21 Compare FAC ¶ 17, with 15 U.S.C. § 1692a(6). 22 recitation of the elements” of the 23 collector” is a conclusory allegation that the Court is not 24 required to accept as true. 25 reasons discussed, Plaintiffs do not allege that Integrity is a 26 “debt collector” within the meaning of the FDCPA.1 A “formulaic FDCPA’s definition of “debt See Iqbal, 556 U.S. at 678. For the 27 1 28 Plaintiffs’ contrary authority is inapposite. Plaintiff cites three (continued...) 8 1 IV. Conclusion 2 Plaintiffs’ FDCPA claim against Integrity is dismissed. In 3 deciding to dismiss another plaintiff’s FDCPA claims with 4 prejudice, a recent District of Arizona court held: “Though the 5 claims may theoretically be cured by alleging additional facts 6 indicating that [defendant’s] conduct exceeded the scope of mere 7 information gathering, allowing [plaintiff] to amend the Complaint 8 would be futile because none of her rather specific allegations 9 even remotely reflects conduct that goes beyond mere information 10 gathering.” 11 for Plaintiffs here, so the Court dismisses the FDCPA claim against 12 Integrity with prejudice. 13 /// 14 /// 15 /// Baker, 2010 WL 2104622 at * 9. The same could be said 16 17 18 19 20 21 22 23 24 25 26 27 28 1 (...continued) post-Romine cases from within this Circuit. Plaintiffs rely on Freeman v. ABC Legal Servs. Inc., 827 F. Supp. 2d 1065 (N.D. Cal. 2011), but that case involved allegations of deceptive and abusive actions. Id. (noting that Plaintiffs alleged that “Defendants have composed and sold false and misleading Proof of Service of Summons documents more than forty times in California in the year preceding the filing of her complaint.”) The second is Robinson v. Managed Accounts Receivables Corp., 654 F. Supp. 2d 1051 (C.D. Cal. 2009). That case involved a different issue, as it analyzed whether employees of an undisputed debt collector could be held “personally liable under the FDCPA for acts committed during the scope of employment.” Id. at 1057 n.2, 1059. Finally, Oei v. N. Star Capital Acquisitions, LLC, 486 F. Supp. 2d 1089, 1097-98 (C.D. Cal. 2006) does not analyze or cite Romine’s language suggesting that mere information gathering and message delivery will not qualify an entity as a debt collector. This language is important, as it was written in response to concerns that the case’s holding “would bring a host of service providers within the statute’s reach.” See Romine, 155 F.3d at 1149. Additionally, the issue in Oei was whether the defendants qualified for one of the FDCPA’s listed “debt collector” exceptions, not whether the defendants were engaged only in information gathering and message delivery. See Oei, 486 F. Supp. 2d at 109798. 9 1 Additionally, the action in its entirety is dismissed because 2 the Court declines to exercise supplemental jurisdiction over the 3 remaining claims. 4 28) are VACATED Accordingly, the remaining motions (NOS. 17 AND 5 6 IT IS SO ORDERED. 7 8 9 Dated: May 17, 2013 DEAN D. PREGERSON United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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