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Marcotte v. General Electric Capital Services

April 20, 2010

PHILLIP MARCOTTE, PLAINTIFF,
v.
GENERAL ELECTRIC CAPITAL SERVICES, INC., DEFENDANT.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING MOTION FOR JUDGMENT ON THE PLEADINGS

Defendant GE Money Bank, FSB ("GEMB") has filed a Motion for Judgment on the Pleadings [Doc. 54]. Plaintiff has also filed an Ex-Parte Motion to Amend the Scheduling Order [Doc. 60]. For the following reasons, the Court GRANTS Defendant's Motion for Judgment on the Pleadings and DENIES as moot Plaintiff's Ex-Parte Motion..

I. BACKGROUND*fn1

Plaintiff allegedly owes Defendants*fn2 a consumer debt. In early 2008, Plaintiff retained the Doan Law Firm to help him resolve his debts and file for bankruptcy. The Doan Firm sent Defendants a letter in January 2008, telling Defendants that the firm represented Plaintiff and to send all future communications to the firm. But in April and May of 2008, Defendants sent Plaintiff two billing statements. Plaintiff claims that by sending these two statements, Defendants violated the California Rosenthal Fair Debt Collection Practices Act ("CFDCPA"), which prohibits certain communications by creditors to debtors represented by counsel.

II. LEGAL STANDARD

The same standard governs both Rule 12(c) motions for judgment on the pleadings and Rule 12(b)(6) motions to dismiss. Dworkin v. Hustler Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). When reviewing a motion to dismiss, the allegations of material fact in plaintiff's complaint are taken as true and construed in the light most favorable to the plaintiff. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). But only factual allegations must be accepted as true-not legal conclusions. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Although detailed factual allegations are not required, the factual allegations "must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. Furthermore, "only a complaint that states a plausible claim for relief survives a motion to dismiss." Iqbal, 129 S.Ct. at 1949.

III. DISCUSSION

A. The Court Has Jurisdiction Over This Suit

Although neither party has raised this issue, the Court sua sponte addresses whether it has subject-matter jurisdiction to hear this dispute and holds that it does. The Court raises the issue because this is a diversity action and Plaintiff, in his First Amended Complaint, states that the amount in controversy is $12,514.00. This is well below the $75,000 amount in controversy required by 28 U.S.C. § 1332(a). But because this case was initially filed in state court and later removed by Defendant, "jurisdiction must be analyzed on the basis of the pleadings filed at the time of removal without reference to subsequent amendments." Sparta Surgical Corp. v. Nat'l Ass'n of Securities Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998) (citing Pfeiffer v. Hartford Fire Ins. Co., 929 F.2d 1484, 1488 (10th Cir. 1991)). Here, at the time of removal the complaint demanded $79,154.00, plus attorney fees and costs. Thus, the Court is satisfied it has jurisdiction over this case.

B. Billing Statements Are Exempted From Liability Under the CFDCPA

Plaintiff alleges three causes of action based on Defendants' mailing of two billing statements to Plaintiff. The three causes of action arise under the CFDCPA, California Civil Code § 1788.17. Section 1788.17 incorporates by reference certain provisions of the Fair Debt Collection Practices Act ("FDCPA"), a federal law which, like the CFDCPA, also regulates debt collectors. The three federal provisions that Plaintiff references-15 U.S.C. §§ 1692b(6), 1692c(a)(2), and 1692c(c)-generally prohibit any communications from a debt collector once the debt collector knows the consumer has an attorney or once the consumer requests in writing that the debt collector cease communications.

GEMB argues that all three causes of action fail to state a claim. GEMB first argues that the two billing statements it sent to Plaintiff should be carved out from the general prohibition against communicating with a represented debtor. For support, GEMB points to § 1788.14(c) of the CFDCPA, which prohibits any communications-except for "statements of account"-from a debt collector to a represented debtor. Cal. Civ. Code § 1788.14(c) ("No debt collector shall . . . [i]nitiat[e] communications, other than statements of account, with the debtor with regard to the consumer debt, when the debt collector has been previously notified in writing by the debtor's attorney that the debtor is represented by such attorney . . . .") (emphasis added). Section 1788.14(c) thus carves out billing statements from the list of prohibited communications and explicitly permits debt collectors to send "statements of account." Id.

But Plaintiff here does not proceed under § 1788.14(c). Instead, Plaintiff proceeds under § 1788.17 of the CFDCPA. This section incorporates by reference parallel federal provisions of the Fair Debt Collection Practices Act ("FDCPA"), which also prohibit certain communications by debt collectors to represented debtors. Cal. Civ. Code § 1788.17 ("[E]very debt collector . . . shall comply with the provisions of Sections 1692b to 1692j" of Title 15 of the United States Code.). But those incorporated federal provisions prohibit all communications from debt collectors; they do not carve out billing statements. See 15 U.S.C. §§ 1692b(6), 1692c(a)(2), 1692c(c). Thus, § 1788.14(c) of the state statute permits debt collectors to send billing statements, while § 1788.17 and the related federal provisions do not. Based on this inconsistency, GEMB argues that the Court should harmonize these provisions by applying the exception for billing statements to both sections.

GEMB has a good explanation for why billing statements are exempted under one provision but not the other. The Truth In Lending Act ("TILA") governs credit-card companies like Defendants here. TILA requires all credit-card companies to send out monthly billing statements. 15 U.S.C. ยง 1637(b). And although another federal law, the FDCPA, prohibits debt collectors from sending billing statements to represented ...


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