This case, in which plaintiffs are proceeding pro se, was referred to the undersigned under Local Rule 302(c)(21), pursuant to 28 U.S.C. § 636(b)(1). Defendants Portfolio Acquisitions, LLC ("Portfolio") and NCC, a Division of Commonwealth Financial Systems, Inc. ("NCC") have each filed motions to dismiss, which were noticed for hearing on January 23, 2012. Dckt. Nos. 148, 149; see also Dckt. No. 151. For the reasons stated herein, the motions to dismiss will are denied.
On September 27, 2012, the assigned district judge adopted the undersigned findings and recommendations, and dismissed all claims in plaintiffs' second amended complaint except their claims against Portfolio and NCC for alleged violations of the federal Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA") and California's Rosenthal Fair Debt Collection Practices Act, California Civil Code section 1788 et seq. ("the RFDCPA" or "Rosenthal Act"), and a claim against Portfolio for breach of the settlement agreement by Portfolio. Dckt. Nos. 142, 140. The court also gave plaintiffs leave to file a third amended complaint, if plaintiffs elected to amend their claim against defendants Portfolio, NCC, and/or OSI Collection Services, Inc. ("OSI") for unfair business practices in violation of California Business and Professions Code section 17200 "(Section 17200"). Id.
On October 18, 2012, plaintiffs filed a third amended complaint. Dckt. No. 144. The third amended complaint restates plaintiffs' FDCPA and Rosenthal Act claims, their claim against Portfolio for breach of the settlement agreement, and their Section 17200 claim against Portfolio and NCC.*fn1 Third Am. Compl. ("TAC"), Dckt. No. 144.
NCC and Portfolio now seek dismissal of plaintiffs' Section 17200 claim.*fn2 Dckt. Nos. 148, 149. Plaintiffs oppose both motions. Dckt. Nos. 159, 160.
II. RULE 12(b)(6) MOTIONS TO DISMISS
To survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), a complaint must contain more than a "formulaic recitation of the elements of a cause of action"; it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "The pleading must contain something more . . . than . . . a statement of facts that merely creates a suspicion [of] a legally cognizable right of action." Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed. 2004)). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Dismissal is appropriate based either on the lack of cognizable legal theories or the lack of pleading sufficient facts to support cognizable legal theories. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
In considering a motion to dismiss, the court must accept as true the allegations of the complaint in question, Hospital Bldg. Co. v. Rex Hosp. Trs., 425 U.S. 738, 740 (1976), construe the pleading in the light most favorable to the party opposing the motion, and resolve all doubts in the pleader's favor. Jenkins v. McKeithen, 395 U.S. 411, 421, reh'g denied, 396 U.S. 869 (1969). The court will "'presume that general allegations embrace those specific facts that are necessary to support the claim.'" Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 256 (1994) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).
Pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972); Bretz v. Kelman, 773 F.2d 1026, 1027 n.1 (9th Cir. 1985). However, the court's liberal interpretation of a pro se litigant's pleading may not supply essential elements of a claim that are not plead. Pena v. Gardner, 976 F.2d 469, 471 (9th Cir. 1992); Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). Furthermore, "[t]he court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged." Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). Neither need the court accept unreasonable inferences, or unwarranted deductions of fact. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).
The court may consider facts established by exhibits attached to the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The court may also consider facts which may be judicially noticed, Mullis v. U.S. Bankr. Ct., 828 F.2d at 1388, and matters of public record, including pleadings, orders, and other papers filed with the court. Mack v. South Bay Beer Distribs., 798 F.2d 1279, 1282 (9th Cir. 1986). A pro se litigant is entitled to notice of the deficiencies in the complaint and an opportunity to amend, unless the complaint's deficiencies could not be cured by amendment. See Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987).
The only claim in the third amended complaint addressed by NCC and Portfolio's motion to dismiss is plaintiffs' claim for unfair business practices under Section 17200. Dckt. Nos. 148, 149. That claim asserts, among other things, that Portfolio's and NCC's alleged violations of the FDCPA and the Rosenthal Act, as well as Portfolio's breach of the settlement agreement, also amounted to unfair business practices under Section 17200. TAC ¶¶ 61, 62, 65. The complaint further specifically alleges that as a direct and proximate cause of that conduct, plaintiffs have suffered money damages exceeding $288,775.00. Id. ¶ 71.
Portfolio and NCC argue that this Section 17200 claim must be dismissed because plaintiffs have not adequately alleged "injury in fact and loss of money or property," and that plaintiffs' allegation that they suffered $288,775.00 is conclusory and speculative and is not connected causally to defendants' conduct. Dckt. No. 148-1 at 4-5; Dckt. No. 149-1 at 4-5. Plaintiffs disagree, arguing that their allegations ...