United States District Court, N.D. California
ORDER DISMISSING COMPLAINT WITH LEAVE TO AMEND RE:
DKT. NO. 20
William H. Orrick United States District Judge
Convergent Outsourcing, Inc. (“Convergent”) moves
for judgment on the pleadings in this action brought by
Plaintiff Sergio Castillo. Convergent argues that Castillo
has not met the injury in fact requirement for Article III
standing under Spokeo, Inc. v. Robins because
Castillo did not plead a concrete injury. Castillo responds
that Convergent's statutory violation of the Fair Debt
Collection Practices Act (“FDCPA”) is sufficient
to establish a concrete injury for the purposes of Article
III standing. While there is disagreement on that issue, in
his Opposition Castillo explains how the statutory violation
causes a concrete injury, asserting facts that would appear
indisputably to establish standing if added to the complaint.
And, contrary to Convergent's argument, Castillo
otherwise states a valid claim under the FDCPA. Accordingly,
I will GRANT Convergent's motion to allow Castillo to
allege the facts asserted in his Opposition so that this case
can proceed in an efficient fashion.
began debt collection activities on Castillo's T-Mobile
USA account and reported the debt to a credit reporting
agency. Compl. ¶ 7, 9, 11 (Dkt. No. 1). On August 1,
2016, Castillo sent a letter to Convergent disputing the
debt. Id. at ¶12. On November 11, 2016,
Castillo reviewed his October 2016 credit report and noticed
Convergent re-reported the debt without listing the debt as
“disputed by consumer.” Id. at ¶
March 23, 2017, Castillo filed his complaint for violations
of the FDCPA, 15 U.S.C. §§ 1692 et seq.,
and the Rosenthal Fair Debt Collections Act (“Rosenthal
Act”), Cal. Civ. Code §§ 1788 et.
seq. Dkt. No. 1. Convergent filed this motion for
judgment on the pleadings on May 23, 2017, arguing that
Castillo has not alleged a concrete injury sufficient to
establish standing, and fails to state claims under the FDCPA
and Rosenthal Act Mot. for J. on Pleadings
(“Mot.”)(Dkt. No. 20).
motion for judgment on the pleadings under Federal Rule of
Civil Procedure 12(c) utilizes the same standard as a motion
to dismiss for failure to state a claim under Federal Rule of
Civil Procedure 12(b)(6). Cafasso, United States ex rel.
v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 n.4
(9th Cir. 2011). Under both provisions, the court accepts the
facts alleged in the complaint as true and must determine
whether the facts entitle the plaintiff to a legal remedy.
Chavez v. United States, 683 F.3d 1102, 1108 (9th
Cir. 2012) (citation omitted). Either motion may be granted
only when it is clear that “no relief could be granted
under any set of facts that could be proven consistent with
the allegations.” McGlinchy v. Shull Chem.
Co., 845 F.2d 802, 810 (9th Cir. 1988) (citations
omitted). Dismissal may be based on either the lack of a
cognizable legal theory or absence of sufficient facts
alleged under a cognizable legal theory. Robertson v.
Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir.
plaintiff's complaint must allege facts to state a claim
for relief that is plausible on its face. See Ashcroft v.
Iqbal, 556 U.S. 662, 677 (2009). A claim has
“facial plausibility” when the party seeking
relief “pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. Although the
court must accept as true the well-pleaded facts in a
complaint, conclusory allegations of law and unwarranted
inferences will not defeat an otherwise proper Rule 12(b)(6)
motion. See Sprewell v. Golden State Warriors, 266
F.3d 979, 988 (9th Cir. 2001). “[A] plaintiff's
obligation to provide the ‘grounds' of his
‘entitle[ment] to relief' requires more than labels
and conclusions, and a formulaic recitation of the elements
of a cause of action will not do. Factual allegations must be
enough to raise a right to relief above the speculative
level.” See Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007) (citations and footnote omitted).
INJURY IN FACT
Article III standing, the plaintiff must allege facts that
satisfy three elements: (i) the plaintiff suffered an injury
in fact, (ii) that is fairly traceable to the challenged
conduct of the defendant, and (iii) that is likely to be
remedied by a favorable judicial decision. Spokeo, Inc.
v. Robins, 136 S.Ct. 1540, 1547 (2016). The injury in
fact requirement is the “first and foremost” of
the three elements. Id. To constitute injury in
fact, the plaintiff must demonstrate that the defendant
infringed on the plaintiff's legally protected interest
in a “concrete and particularized” manner that is
“actual or imminent, not ‘conjectural' or
‘hypothetical.'” Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992). A particularized
injury affects the plaintiff in a personal and individual
way, and a concrete injury “must actually exist.”
Spokeo, 136 S.Ct. at 1548. In the context of a
statutory violation, a plaintiff does not satisfy the injury
in fact requirement by alleging a “bare procedural
violation, divorced from any concrete harm.”
Id. at 1549. “This does not mean, however,
that the risk of real harm cannot satisfy the requirement of
concreteness.” Id. When “determining
whether an intangible harm constitutes injury in fact, both
history and the judgment of Congress play important
argues that Castillo did not satisfy the injury in fact
requirement because the complaint does not demonstrate any
concrete injuries suffered as a result of Covergent's
alleged statutory violation. Mot. at 5. “In order to
have Article III standing, as the Supreme Court's
decision in Spokeo clarified, [a plaintiff] needs to
do more than just point to a statutory violation, he needs to
show an actual injury.” Tourgeman v. Collins Fin.
Servs., Inc., 197 F.Supp.3d 1205, 1208 (S.D. Cal. 2016).
In the complaint, Castillo alleges statutory violations of
the FDCPA and Rosenthal Act, and claims that he “has
been damaged” as a result of those
violations. Compl. ¶ 14. And in his opposition,
he elaborates by indicating that his credit score lowered
when Convergent failed to properly note the disputed nature
of the debt when reporting it to the credit reporting
agencies. Oppo. at 4 (Dkt. No. 23).
argues that a “risk of harm” is sufficient to
establish a concrete injury, and supports his position with
cases. Oppo. at 5-10; see, e.g., Gomez v.
Portfolio Recovery Assocs., LLC, 2016 U.S. Dist. LEXIS
79647, at *11 (N.D. Ill. June 20, 2016)(concluding,
pre-Spokeo, that “[t]he Seventh Circuit has
clearly indicated that a plaintiff has the option under the
FDCPA to seek only statutory damages.”); Thomas v.
FTS USA, LLC, 193 F.Supp.3d 623, 630-33 (E.D. Va. June
30, 2016)(finding FCRA procedural violations sufficient to
constitute concrete injuries); Munoz v. Cal. Bus. Bureau,
Inc., 2016 U.S. Dist. LEXIS 151495, at *13 (E.D. Cal.
Nov. 1, 2016)(“The goal of the FDCPA is to protect
consumers from certain harmful practices; it logically
follows that those practices would themselves constitute a