United States District Court, S.D. California
ORDER (1) DENYING IN PART AND GRANTING IN PART
DEFENDANTS' MOTION TO DISMISS AND (2) DENYING
DEFENDANTS' MOTION TO STRIKE
Dana M. Sabraw United States District Judge.
before the Court are Defendants Zee Law Group, Tappan Zee,
and Kimberly Barrientos's motion to dismiss Plaintiff
Isaias Alvarado's Second Amended Complaint
(“SAC”) pursuant to Federal Rule of Civil
Procedure 12(b)(6), and motion to strike state law claims
pursuant to California Code of Civil Procedure § 425.16.
Plaintiff filed a response, and Defendants filed a reply. For
the reasons set forth below, Defendants' motion to
dismiss is granted in part and denied in part, and
Defendants' motion to strike is denied.
a member of the United States Navy, is currently stationed in
Japan. (SAC ¶¶ 18-19.) Plaintiff has been on active
duty since July 16, 1999 to the present. (Id. ¶
January 2005, Plaintiff purchased a 2004 Ford Explorer with a
loan secured from HSBC Auto Finance (“HSBC”).
(SAC ¶ 31.) In February 2007, when Plaintiff fell behind
on his payments, HSBC repossessed and sold the vehicle at an
auction for $15, 080.64. (Id. ¶¶ 32-33.)
The sale proceeds were not enough to satisfy the outstanding
balance. (Id. ¶ 33.)
HSBC assigned the deficiency balance to Glass Mountain
Capital (“Glass Mountain”) for collection. (SAC
¶ 37.) In April 2008, Plaintiff negotiated an agreement
with Glass Mountain to settle the alleged debt for a total of
$5, 600, consisting of an initial payment of $5, 000, and six
monthly payments of $100. (Id. ¶ 38.) Plaintiff
made all payments and believed the debt was resolved.
(Id. ¶ 39.) Glass Mountain, however, did not
close Plaintiff's account, nor did it credit the payments
to his account. (Id. ¶ 54.) Sometime
thereafter, Cascade Receivables Management, LLC
(“Cascade”) purchased Glass Mountain along with
all of its rights and liabilities. (Id. ¶ 42.)
Cascade likewise failed to close Plaintiff's account or
to account for the payments made. (Id. ¶ 43.)
later assigned the alleged debt to Collect Access, LLC
(“Collect”) for collection. (SAC ¶ 48.) Upon
acquisition of Plaintiff's account, Collect did not
conduct an investigation into the account to verify its
accuracy. (Id. ¶¶ 52-53.) Thereafter,
Collect retained Defendants to initiate a legal action
against Plaintiff to collect the alleged debt. (Id.
¶ 54.) On January 2, 2009, Collect filed a complaint
against Plaintiff in the Superior Court of California, San
Diego County, seeking to recover a deficiency balance of $15,
080.64, plus interest. (Id. ¶¶ 55-56.)
the state court action was pending, Plaintiff filed a
complaint against Defendants in this Court on May 18, 2016.
In the complaint, Plaintiff alleges the following five
grounds for relief: (1) violation of Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692
et seq., (2) violation of Rosenthal Fair Debt
Collection Practices Act (“RFDCPA”), Cal. Civ.
Code §§ 1788-1788.32, (3) violation of
Servicemembers Civil Relief Act (“SCRA”), 50 App.
U.S.C. §§ 501- 597b, (4) negligence, and (5)
negligence per se.
motion to dismiss pursuant to Rule 12(b)(6) of the Federal
Rules of Civil Procedure tests the legal sufficiency of the
claims asserted in the complaint. Fed.R.Civ.P. 12(b)(6);
Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001).
In deciding a motion to dismiss, all material factual
allegations of the complaint are accepted as true, as well as
all reasonable inferences to be drawn from them. Cahill
v. Liberty Mut. Ins. Co., 80 F.3d 336, 338 (9th Cir.
1996). However, a court need not accept all conclusory
allegations as true. Rather, it must “examine whether
conclusory allegations follow from the description of facts
as alleged by the plaintiff.” Holden v.
Hagopian, 978 F.2d 1115, 1121 (9th Cir. 1992) (citation
omitted); see Benson v. Ariz. State Bd. of Dental
Exam'rs, 673 F.2d 272, 275-76 (9th Cir. 1982) (court
need not accept conclusory legal assertions). A motion to
dismiss should be granted if a plaintiff's complaint
fails to contain “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Twombly, 550 U.S. at 556).
move to dismiss the SAC on the ground that all of
Plaintiff's claims are barred by Younger
abstention. Defendants argue abstention applies because
Plaintiff is attempting to circumvent the pending state
action by litigating in this Court. Plaintiff responds
abstention does not apply because “[t]he matters before
the San Diego Superior Court relate only to the adjudication
of the alleged debt, not whether Defendants violated federal
and state laws in their effort to collect on the alleged
debt.” (Opp'n to Mot. at 13.)
abstention requires a federal court to abstain from granting
injunctive or declaratory relief that would interfere with
pending state judicial proceedings. Younger v.
Harris, 401 U.S. 37, 40-41 (1971). Pursuant to
Younger, abstention is required when the following
four elements are satisfied: (1) “there is an ongoing
state judicial proceeding, ” (2) “those
proceedings implicate important state interests, ” (3)
“there is an adequate opportunity in the state
proceedings to raise constitutional challenges[, ]” and
(4) “[t]he requested relief must seek to enjoin-or have
the practical effect of enjoining-ongoing state
proceedings.” ReadyLink Healthcare, Inc. v. State
Comp. Ins. Fund, 754 F.3d 754, 758 (9th Cir. 2014)
(citations and internal quotations marks omitted).
Younger abstention, however, does not extend to
“all parallel state and federal proceedings” that
satisfy the four elements, even “where a party could
identify a plausibly important state interest.”
Sprint Commc'ns, Inc. v. Jacobs, 134 S.Ct. 584,
593 (2013). Rather, Younger abstention is limited to
“only three exceptional categories” of state
proceedings: (1) “state criminal prosecutions, ”
(2) “civil enforcement proceedings, ” and (3)
“civil proceedings involving certain orders that are
uniquely in furtherance of the state courts' ability to
perform their judicial functions.” Id. at 588
(quoting New Orleans Pub. Serv., Inc.
(“NOPSI”) v. Council of City of New Orleans,
491 U.S. 350, 367- 68 (1989)); see Potrero Hills
Landfill, Inc. v. Cty. of Solano, 657 F.3d 876, 882 (9th
Cir. 2011) (“Though recognizing ‘important state
interests' in a wide variety of civil proceedings,
neither we nor the Supreme Court has held Younger to
apply generally to ordinary civil litigation.”).
Defendants argue abstention is required because three of the
four Younger elements are satisfied. This is
insufficient to warrant abstention. The Ninth Circuit has
expressly held abstention under Younger is proper
“only if all four Younger requirements [are]
strictly satisfied.” AmerisourceBergen Corp. v.
Roden, 495 F.3d 1143, 1149 (9th Cir. 2007). Indeed, even
if the three Younger elements are satisfied,
abstention is not appropriate because the last
Younger element is not satisfied. Plaintiff does not
seek to enjoin the pending state action nor does the
requested relief have the practical effect of enjoining the
pending state action.
even if the Court were to find all four Younger
elements satisfied, abstention is not warranted because the
pending state action does not fall within any of the
“three exceptional categories” of cases
identified in Sprint and NOPSI. The pending
state action is certainly not a state criminal prosecution
nor is it a civil enforcement action. It also does not appear
to be a civil proceeding involving “orders that are
uniquely in furtherance of the state courts' ability to
perform their judicial functions.” NOPSI, 491
U.S. at 368; cf. Marshall v. Marshall, 547 U.S. 293
(2006) (prohibiting federal courts from adjudicating rights
that would interfere with the state probate court's
administration of a decedent's estate); Juidice v.
Vail, 430 U.S. 327, 336 n.12 (1977) (civil contempt
order); Pennzoil Co. v. Texaco Inc., 481 U.S. 1, 13
(1987) (requirement for the posting of bond pending appeal).
Therefore, Younger abstention does not apply to the
present action. Accordingly, Defendants' motion to
dismiss the SAC based on Younger abstention is
move to dismiss the FDCPA claim, contending they are immune
from civil liability pursuant to the
Noerr-Pennington doctrine. Specifically, Defendants
argue Plaintiff's “allegations against [them] are a
direct result of the judicial proceedings in the State
Action, which clearly constitute protected petitioning
activity under the Noerr-Pennington doctrine.”
(Mem. of P. & A. in Supp. of Mot. at 19.)
Noerr-Pennington doctrine derives from the Petition
Clause of the First Amendment, which protects an
individual's right to petition the government for redress
of grievances. Sosa v. DirecTV, 437 F.3d 923, 929
(9th Cir. 2006). The Noerr-Pennington doctrine
provides that “those who petition any department of the
government for redress are generally immune from statutory
liability for their petitioning conduct.” Id.
However, “the First Amendment does not shield lawyers
engaged in litigation from FDCPA liability.”
Hartman v. Great Seneca Fin. Corp., 569 F.3d 606,
616 (6th Cir. 2009) (citing Heintz v. Jenkins, 514
U.S. 291, 294 (1995)).
Supreme Court has held the FDCPA “applies to attorneys
who ‘regularly' engage in consumer-debt-collection
activity, even when that activity consists of
litigation.” Heintz, 514 U.S. at 299. Since
Heintz, many courts within the Ninth Circuit have
declined to apply the Noerr-Pennington doctrine to
cases similar to the present action. See,
e.g., Nyberg v. Portfolio Recovery Assocs.,
LLC, No. 3:15-CV-01175-PK, 2016 WL 3176585, at *8 (D.
Or. June 2, 2016) (“First Amendment does not confer a
right upon debt collectors to petition courts in a manner
that violates the FDCPA.”); Applewhite v. Anaya Law
Grp., No. EDCV1400385JGBSPX, 2015 WL 11438097, at *5
(C.D. Cal. June 15, 2015) (Noerr-Pennington doctrine
did not bar the FDCPA claim against a law firm acting as a
third-party debt collector); Truong v. Mountain Peaks
Fin. Servs., Inc., No. 3:12-CV-01681-WQH, 2013 WL
485763, at *7 (S.D. Cal. Feb. 5, 2013) (“neither the
Noerr-Pennington doctrine nor California Civil Code
§ 47(b) shield Defendant from civil liability under the
FDCPA.”); Gerber v. Citigroup, Inc., No. CIV
S07-0785WBSJFMPS, 2009 WL 248094, at *5 (E.D. Cal. Jan. 29,
2009) (Noerr-Pennington doctrine does not bar
actions against debt collector's attorneys under the
FDCPA); Irwin v. Mascott, 112 F.Supp.2d 937 (N.D.
Cal. 2000) (debt collector's attorneys were not immune
from civil liability under the FDCPA and the California
Unfair Business Practices Act by virtue of their
participation in administrative or judicial proceedings). In
light of these cases, the Court is unpersuaded by
Defendants' argument that the Noerr-Pennington
doctrine bars actions arising under the FDCPA.
further argues they are not debt collectors, and therefore,
they are “immune to FDCPA liability for [their]
litigation related communications in the State Action under
the Noerr-Pennington doctrine[.]” (Mem. of P.
& A. in Supp. of Mot. at 10.) In support, Defendant
relies on Satre v. Wells Fargo Bank, NA, 507 F.
App'x 655, 655 (9th Cir. 2013). In Satre, the
Ninth Circuit in a one page unpublished decision held that
“[t]he district court properly determined that
[defendant] is immune from FDCPA liability under the
Noerr-Pennington doctrine because [plaintiffs']
factual allegations in their amended complaint failed to
establish that [defendant], who was defending his client from
litigation initiated by the Satres, was a ‘debt
collector.'” Id. Contrary to the
plaintiffs in Satre, Plaintiff here has properly
alleged Defendants qualify as debt collectors under the
FDCPA. As indicated, “a lawyer who regularly tries to
obtain payment of consumer debts through legal proceedings
meets the [FDCPA's] definition of “debt
collector[.]” Heintz, 514 U.S. at 291. In the
SAC, Plaintiff has alleged “Defendants, each of them,
in the ordinary course of business, regularly, …
engage in debt collection as defined by California Civil Code
§ 1788.2(b), and therefore [are] debt collectors as that
term is defined by California Civil Code §
1788.2(c).” Therefore, the Noerr-Penning
doctrine does not shield Defendants from civil liability
under the FDCPA. Accordingly, Defendants' motion to
dismiss the FDCPA claim is denied.