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JOHNSON v. CRA SEC. SYS.

February 5, 1997

FRANKIE JANE JOHNSON, Plaintiff,
v.
CRA SECURITY SYSTEMS, Defendant.



The opinion of the court was delivered by: ILLSTON

 On January 31, 1997, defendant CRA Security Systems' motion to dismiss for failure to state a claim came on regularly for hearing. Having considered the arguments of counsel and the papers submitted, the Court hereby DENIES defendant's motion to dismiss.

 BACKGROUND

 The complaint in this case alleges that on September 25, 1995, defendant CRA Security Systems, acting on behalf of Loehmann's, Inc., sent plaintiff Frankie Jane Johnson three letters indicating that checks written on her checking account had been returned to Loehmann's marked "Closed Account." On October 2, 1995, in response to CRA's letters, Johnson informed CRA that the checks had been stolen and forged. Johnson included a copy of the police report that she filed after a box of her checks had been stolen from her mailbox. *fn1"

 On September 24, 1996, Johnson filed this action alleging violation of the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 ("FDCPA"); California's Robbins-Rosenthal Fair Debt Collection Practices Act, Civil Code § 1788; and California Business and Professions Code § 17200. Johnson claims that CRA engaged in unfair, unlawful and deceptive business practices and seeks money damages, an injunction against future violations of the FDCPA, and restitution to affected members of the general public.

 On November 18, 1996, CRA filed this motion to dismiss for failure to state a claim under the FDCPA.

 LEGAL STANDARD

 Failure of the plaintiff to state a federal claim is generally not a jurisdictional defect. The attack goes to the merits of the claim and therefore the appropriate challenge is under Rule 12(b)(6) for failure to state a claim upon which relief can be granted not a lack of subject matter jurisdiction. Roberts v. Corrothers, 812 F.2d 1173, 1178 (9th Cir. 1987).

 A motion to dismiss will be denied unless it appears that the plaintiff can prove no set of facts which would entitle him or her to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957); Fidelity Financial Corp. v. Federal Home Loan Bank of San Francisco, 792 F.2d 1432, 1435 (9th Cir. 1986), cert. denied, 479 U.S. 1064, 93 L. Ed. 2d 998, 107 S. Ct. 949 (1987). All material allegations in the complaint will be taken as true and construed in the light most favorable to the plaintiff. NL Industries, Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). Although the court is generally confined to consideration of the allegations in the pleadings, when the complaint is accompanied by attached documents, such documents are deemed part of the complaint and may be considered in evaluating the merits of a Rule 12(b)(6) motion. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir.), cert. denied sub. nom. Wyoming Community Dev. Auth. v. Durning, 484 U.S. 944, 98 L. Ed. 2d 358, 108 S. Ct. 330 (1987).

 DISCUSSION

 The FDCPA is a sub-section of the Consumer Credit Protection Act of 1969, more commonly known as the Truth in Lending Act, 15 U.S.C. § 1601 et seq. The FDCPA was passed in 1977 in order to regulate debt collection practices. In this motion, defendant CRA argues that a returned check is not a "debt" for purposes of the FDCPA and that plaintiff therefore has not stated a claim under the Act.

 This is a question about which there is some dispute. This Court finds, based on the plain language of the statutes, their legislative history and various Federal Trade Commission guidelines, that dishonored checks are "debts" within the meaning of the Act. This interpretation appears to be consistent with the majority view.

 Debt is defined by the FDCPA 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 ...

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