UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
November 30, 2010
RASH CURTIS & ASSOCIATES, DEFENDANT.
The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge
MEMORANDUM AND ORDER
The present action arises from a telephone communication between Susan Lopez ("Plaintiff") and Rash Curtis & Associates ("Defendant"). Presently before the Court is Defendant's Motion to Dismiss Plaintiff's First Amended Complaint for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn1 For the reasons set forth below, Defendant's Motion to Dismiss will be granted.*fn2
Plaintiff is a consumer who incurred debt. At the time of the telephone communication giving rise to the instant litigation, Plaintiff alleges Defendant either owned the debt or was retained by the owner to collect the debt. Defendant is a debt collector who regularly engages in the business of debt collection.
On January 15, 2010, Defendant telephoned Plaintiff. During this conversation, Plaintiff alleges that Defendant threatened to sue Plaintiff if the debt was not paid, that it would add $10,000 of attorney fees to the debt, and that it would garnish Plaintiff's wages if the debt was not paid.
Plaintiff avers that Defendant had neither the intent nor ability to sue, to garnish wages, or add $10,000 in legal fees. Further, Plaintiff argues that Defendant falsely represented the character, amount, and/or legal status of the debt in violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.; and the California Rosenthal Fair Debt Collection Practices Act, California Civil Code § 1788.17 et seq, among other state causes of action.
Presently before the Court is Defendant's Motion to Dismiss Plaintiff's First Amended Complaint. The previous Motion to Dismiss the original Complaint was granted by this court for failure to state a claim. (ECF No. 13.)
On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Federal Rule of Civil Procedure 8(a)(2) requires only "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." Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99 (1957). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitlement to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (internal citations and quotations omitted). Factual allegations must be enough to raise a right to relief above the speculative level. Id. at 21 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004) ("The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action"). /// /// /// ///
If the court grants a motion to dismiss a complaint, it must then decide whether to grant leave to amend. The court should "freely give" leave to amend when there is no "undue delay, bad faith[,] dilatory motive on the part of the movant,...undue prejudice to the opposing party by virtue of...the amendment, [or] futility of the amendment...." Fed. R. Civ. P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).
A. Federal Claims
The two FDCPA provisions at issue in this case are 15 U.S.C. §§ 1692(e) and 1692(f). Section 1692(e)(2) prohibits "[t]he false representation of...the character, amount, or legal status of any debt," and the threat of an action that cannot legally be taken or is not actually intended. Section 1692(f) prohibits a debt collector from employing any "unfair or unconscionable means to collect or attempt to collect any debt." Whether the alleged conduct violates either of these provisions requires an objective analysis that considers whether "the least sophisticated debtor would likely be misled by [the] communication." Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1030 (9th Cir. 2010) (internal quotations omitted). /// ///
When determining whether a debt collector has violated the FDCPA provisions, "the court must apply a two-pronged test" evaluating (1) whether "the debt collector threatened legal action or arrest;" and (2) "whether the debt collector could legally take such action and had the intent to do so." Schwarm v. Craighead, 552 F. Supp. 2d 1056, 1077 (E.D. Cal. 2008). Threats to sue or of garnishment of wages are only proscribed if they are unlawful, meaning that the threatened action cannot be legally taken or is not intended to be taken. See 15 U.S.C. § 1692(e)(5). In the instant case, Plaintiff has not provided sufficient facts for the Court to determine whether Defendant's alleged threats were unlawful, let alone that Defendant had no intention of acting on them. The conclusory statement that Defendant lacked the ability and/or intent to pursue such actions after threatening to do so does not satisfy Rule 8(a)(2) pleading requirements.
Plaintiff's First Amended Complaint also does not contain adequate factual allegations to state a claim for violation of Section 1692(f). Plaintiff simply asserts that Defendant threatened to add attorney's fees if a suit commenced, and asserted Defendant was not legally able to do so. However, Plaintiff does not provide any facts demonstrating any such conduct violated the statute or otherwise infringed on her rights. Conclusory statements are not sufficient to survive a 12(b)(6) Motion to Dismiss. /// /// ///
Plaintiff's allegations appear to be no "more than labels and conclusions," which will not do. Ashcroft v. Iqbal, ---U.S.---, 129 S. Ct. 1937, 1949 (2009). The pleadings contained within the Plaintiff's First Amended Complaint are insufficient to raise a right to relief above the speculative level. Defendant's Motion to Dismiss Plaintiff's FDCPA claim is granted.
B. Plaintiff's Remaining Causes of Action
Plaintiff's federal claim presently dismissed, the Court declines to exercise supplemental jurisdiction over the remaining state cause of action. The Court need not address the merits of Defendant's Motion to Dismiss with respect to the remaining state law causes of action, as those issues are now moot.
Accordingly, for the forgoing reasons, Defendant's Motion to Dismiss is GRANTED with leave to amend. Plaintiff may file an amended complaint not later than twenty (20) days after the date this Memorandum and Order is filed electronically. /// /// /// /// /// ///
If no amended complaint is filed within said twenty (20)-day period, without further notice, Plaintiff's federal claims will be dismissed without leave to amend and the remaining state claims will be remanded to the state court forthwith.