United States District Court, N.D. California
ORDER DENYING DEFENDANT THE RESOLUTION LAW GROUP
APC'S MOTION TO STRIKE DOCKET NO. 14
M. CHEN United States District Judge.
Flor Maria Byrne sues Defendants Crown Asset Management, LLC
(“Crown Asset), the Resolution Law Group APC
(“TRG”), and Reid Steinfeld for suing her to
collect a debt in Contra Costa County Superior Court, even
though she resides in San Mateo County and incurred the debt
there. Defendant TRG has moved to strike Plaintiff's
request for trebling of statutory damages, arguing that they
are unavailable as a matter of law. Plaintiff did not file a
timely opposition. The Court determines this matter is
appropriate for resolution without oral argument and,
see Local Civ. R. 7-1(b), for the reasons below,
DENIES Defendant TRG's motion.
FACTUAL AND PROCEDURAL BACKGROUND
Byrne is a senior citizen and retiree who lives in San Mateo,
California. Compl. ¶¶ 1, 6. She has lived there
continuously for approximately 25 years. Id.¶
12. “Some years ago” she entered into a credit
card agreement with Walmart-Synchrony Bank in San Mateo
County (“Walmart Account”). Id. At some
point, the Walmart Account was sold to Defendant Crown Asset
Management (“Crown Asset”). Id. ¶
13. Crown Asset retained Defendants The Resolution Law Group
APC (“TRG”) and Reid Steinfeld to sue Ms. Byrne
in connection with the Walmart Account. Id. ¶
sued Ms. Byrne in Contra Costa County in November 2016.
Id. ¶ 17. Ms. Byrne alleges that “none of
the defendants had any basis to believe that [she] had
entered into the underlying contract (if any) in Contra Costa
County.” Id.¶ 14. Rather, they did so
“intentionally” “[i]n order to obtain a
speedy and uncontested judgment.” Id. ¶
17. Defendants obtained a default on June 8, 2017.
Id. ¶ 19. Plaintiff alleges that Defendant
Steinfeld “has a history of filing collection suits
against consumers in improper counties, ” including two
San Mateo County residents who were sued in Shasta County in
May 2014. Id. ¶¶ 15-16.
Defendants obtained a default in Contra Costa County, Ms.
Byrne wrote to Defendants on June 30, 2017 requesting they
set aside the default because she was a San Mateo County
resident and informing them that she was “a senior
citizen and that she would suffer hardship if forced to
defend the case in Contra Costa County.” Id.
¶ 20. Defendants refused on July 13, 2017 and instead
asked her how much she was willing to pay. Id.
¶ 21. Defendants allegedly took no further action to
investigate Ms. Byrne's claim she did not incur the debt
in, or live in, Contra Costa County. Id.
Byrne brings claims against Defendants under the Federal Fair
Debt Collection Practices Act, 15 U.S.C. § 1692 et
seq., and California's Rosenthal Act, Cal. Civ. Code
§ 1788 et seq., for unlawfully suing her
“in a county other than the county where she lived when
the action was filed and other than the county where she
entered into the underlying contract” in violation of
15 U.S.C. §§ 1692i(a)(2), and Cal. Civ. Code
§§ 1788.17 (incorporating requirements of 15 U.S.C.
§ 1692i(a)(2)) and 1788.15(b). Compl. ¶¶ 25, 29.
addition to actual and statutory damages, Plaintiff requests
treble damages pursuant to California Civil Code §
3345-the focus of Defendant TRG's Rule 12(f) motion to
strike. Defendant TRG argues that the request should be
stricken because such damages are not available here as a
matter of law. A motion to strike, however, is not the
appropriate procedural vehicle when challenging the legal
availability of a particular remedy; the Court therefore
construes Defendant TRG's request as a motion to dismiss
under Rule 12(b)(6). See Whittlestone, Inc. v.
Handi-Craft Co., 618 F.3d 970, 974-75 (9th Cir. 2010)
(holding that “Rule 12(f) does not authorize district
courts to strike claims for damages on the ground that such
claims are precluded as a matter of law”).
TRG argues that Section 3345 only authorizes trebling of
punitive damages, and therefore the request should
be interpreted as a “de facto” demand for
punitive damages, which are unavailable under the FDCPA and
the Rosenthal Act. See, e.g., Varnado
v. Midland Funding LLC, 43 F.Sup.3d 985, 993 (N.D. Cal.
2014); Sanchez v. Client Servs., Inc., 520 F.Supp.2d
1149, 1163-64 (N.D. Cal. 2007). Defendant TRG, however,
misconstrues Section 3345. Section 3345 permits trebling as
Whenever a trier of fact is authorized by a statute to impose
either a fine, or a civil penalty or other penalty, or any
other remedy the purpose or effect of which is to punish or
deter, and the amount of the fine, penalty, or other remedy
is subject to the trier of fact's discretion, the trier
of fact shall consider all of the following factors, in
addition to determining the amount of the fine, civil penalty
or other penalty, or other remedy in an amount up to three
times greater than authorized by the statute, or, where the
statute does not authorize a specific amount, up to three
times greater than the amount the trier of fact would impose
in the absence of that affirmative finding[.]
Id.§ 3345(b). Though Section 3345 clearly
permits trebling of punitive damages, it also
permits trebling “[w]henever” a statute
authorizes “either a fine, or a civil
penalty or other penalty, or any other remedy the
purpose or effect of which is to punish or deter . . .
.” Cal. Civ. Code § 3345(b) (emphasis added). The
key question is whether “the statute under which
recovery is sought permits a remedy that is in the nature of
a penalty.” Clark v. Sup. Ct., 50 Cal.4th 605,
614 (2010) (holding that Section 3345 permits trebling
“only if the statute under which recovery is sought
permits a remedy that is in the nature of a penalty”).
If it is a penalty, then trebling under Section 3345 is
both the FDCPA and Rosenthal Act permit the recovery of
statutory penalties and fines (other than damages).
See 15 U.S.C. §§ 1692k(a)(2)(A),
1692k(b)(1) (authorizing a penalty up to $1, 000); Cal. Civ.
Code § 1788.30(b) (permitting “a penalty”
between $100 and $1, 000 for any “willful and
knowing violat[ion]” of the Rosenthal Act). The Ninth
Circuit has recognized that “[s]tatutory damages under
the FDCPA are intended to deter violations by imposing a cost
on the defendant even if his misconduct imposed no cost on
the plaintiff.” Gonzales v. Arrow Financial Servs.,
LLC, 660 F.3d 1055, 1067 (9th Cir. 2011) (quotation
omitted). It also specifically noted that comparable damages
under California's Rosenthal Act “increase
deterrence, thus affording greater protections to consumers
and operating consistently with the FDCPA.”
Id. Such statutory damages therefore have “the
purpose or effect . . . to punish or deter.” Cal. Civ.
Code § 3345(b). Trebling under Section 3345 is thus
permitted. Cf. Clark, 50 Cal.4th at 614. Defendant
TRG is wrong that they are unavailable as a matter of law.
TRG also argues that Plaintiff fails to state a claim for a
statutory penalty under California Civil Code Section
1788.30(b), which permits a penalty from $100-$1, 000
whenever a debt collector “willfully and knowingly
violates” any provision of the Rosenthal Act. Cal. Civ.
Code § 1788.30(b). Defendants claim that Plaintiff only
makes a “cursory and summary reference in paragraph
31” that they unlawfully sued her in the wrong county
“willfully and knowingly, ” but that there are
“no substantive allegations” to support that
conclusion. Mot. at 8. The Court disagrees. Willfulness and
intent need only be pled generally. See Fed. R. Civ.
P. 9(b); Fair v. Experian Info. Solutions, Inc., No.
C-16-5712 CW, 2017 WL 1164225, at *3 (N.D. Cal. Mar. 29,
2017). Here, Plaintiff alleges that she has lived in San
Mateo County for over 25 years, that she executed the debt in
San Mateo County, that Defendants had no basis to believe the
debt was executed in Contra Costa County, and that Defendants
in fact knew that Plaintiff lived in San Mateo County. Compl.
¶¶ 12, 14, 17. The plausibility of these
allegations is bolstered by Defendants' service of the
Contra Costa County action on Plaintiff at her residence in
San Mateo County. Id. ¶ 18. That Defendants
later refused to vacate the default after Plaintiff sent a
letter informing them the venue was improper also bolsters an
inference that their prior actions were willful; in other
words, one could reasonably infer that filing in Contra Costa
County was not simply an honest mistake that Defendants acted
to correct immediately upon notification. Id. ¶
21. Further, Defendants presumably obtained Ms. Byrne's
contact information upon assignment of the Walmart Account,
and presumably reviewed such details about the debt before
filing suit. It is thus plausible to infer that Defendants
knew that Ms. Byrne lived in San Mateo County and that the
debt was incurred there but nevertheless filed suit in Contra
Costa County. That Defendants ultimately requested ...