Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-05176/USCOURTS-cand-5_05-cv-05176-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

Donald Johnson,

Plaintiff,

 v.

Phillips & Cohen Associates, LTD, et al,

Defendants. /

NO. C 05-05176 JW 

ORDER GRANTING MOTION TO

DISMISS

I. INTRODUCTION

Plaintiff Donald Johnson, on behalf of himself and others similarly situated, filed a complaint

against Phillips & Cohen Associates, Ltd. and Adam S. Cohen ("Defendants") for violations of Civil

Code § 1812.700, California's Fair Debt Collection Practices Act (Civil Code § 1788 et seq.,

hereinafter "Rosenthal Act"), and the Federal Fair Debt Collection Practices Act ("FDCPA"). 

Presently before the Court is Defendants' Motion to Dismiss Plaintiff's FDCPA claims. On April 3,

2006, the Court held a hearing on Defendants' Motion and on April 5, 2006, Plaintiff filed a "Notice

of Voluntary Dismissal" to dismiss only the FDCPA claims against Defendants. Based on the

statements of the parties at the hearing and on the papers submitted, this Court GRANTS

Defendants’ Motion to Dismiss the FDCPA claims without leave to amend. 

II. BACKGROUND

In a letter addressed to Plaintiff and dated December 14, 2004 ("Collection Letter"),

Defendants attempted to collect the outstanding balance of $2862.55 on an MBNA credit card

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United States District Court

For the Northern District of California

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 The letter did not include the following notice: 

"The state Rosenthal Fair Debt Collection Practices Act and the federal Fair Debt Collection

Practices Act require that, except under unusual circumstances, collectors may not contact you

before 8 a.m. or after 9 p.m. They may not harass you by using threats of violence or arrest or by

using obscene language. Collectors may not use false or misleading statements or call you at work if

they know or have reason to know that you may not receive personal calls at work. For the most

part, collectors may not tell another person, other than your attorney or spouse, about your debt.

Collectors may contact another person to confirm your location or enforce a judgment. For more

information about debt collection activities, you may contact the Federal Trade Commission at

1-877-FTC-HELP or www.ftc.gov."

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account ending 4229C. Plaintiff does not contest the validity of the debt. Defendants' Collection

Letter did not include the notice required under California Civil Code § 1812.7001

. 

In the Complaint, Plaintiff alleges two causes of actions: (1) the failure to include the notice

required under § 1812.700 in the Collection Letter violates the Rosenthal Act and the FDCPA, and

(2) the Collection Letter was unfair, misleading, and deceptive in violation of Rosenthal Act and the

FDCPA. Defendants filed a motion to dismiss Plaintiff's FDCPA claims and requests that the Court

decline to exercise supplemental jurisdiction over the remaining Rosenthal Act claims.

III. STANDARDS

The strict standard for granting a motion to dismiss under Rule 12(b)(6) is set forth in Conley

v. Gibson, 355 U.S. 41 (1957). A motion to dismiss under Rule 12(b)(6) must not be granted

"unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim

which would entitle him to relief." Id. at 45-46. As the Ninth Circuit observed, a "motion to dismiss

for failure to state a claim is viewed with disfavor and is rarely granted." Gilligan v. Jamco Develop.

Corp., 108 F.3d 246, 249 (9th Cir. 1997).

In ruling on a motion to dismiss, the Court must accept as true all material allegations in the

complaint, as well as reasonable inferences to be drawn from them. Leatherman v. Tarrant County

Narcotics Intelligence and Coordination Unit, 507 U.S. 163, 164 (1993); Pareto v. FDIC, 139 F.3d

696, 699 (9th Cir. 1998). However, the court need not accept as true conclusory allegations or legal

characterizations, Pareto, 139 F.3d at 699, or unreasonable inferences or unwarranted deductions of

fact. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

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IV. DISCUSSION

A. Notice of Voluntary Dismissal

Two days following the hearing on Defendants' motion to dismiss, Plaintiff filed a "Notice of

Voluntary Dismissal." (Docket Item No. 13, "Notice") 

Pursuant to Fed. R. Civ. P. 41(a)(1), Plaintiff hereby files this Notice of Voluntary

Dismissal of the 15 U.S.C. § 1692 et seq. federal claims. The only claims remaining

are state law claims under Civil Code § 1812.700 and Civil Code § 1788. For the

convenience of the Court, Plaintiff has provided a proposed order in the event the

court wishes to decline jurisdiction of the supplemental state law claims.

As a general rule, a plaintiff has an absolute right and power to dismiss the action under FED. R. CIV.

P. 41(a)(i) even if the defendant has filed a motion to dismiss. Concha v. London, 62 F.3d 1493,

1506 (9th Cir. 1995). However, in this Circuit, a voluntary dismissal cannot be used to dispose of

only certain claims while not dismissing any defendant: "[A] plaintiff may not use Rule 41(a) to

dismiss, unilaterally, a single claim from a multi-claim complaint." Ethridge v. Harbor House

Restaurant, 861 F.2d 1389, 1392. See also Gobbo Farms & Orchards v. Poole Chem. Co., 81 F.3d

122, 123 (10th Cir. 1996). Plaintiff provided a Notice to the Court of dismissal of only the FDCPA

claims against the Defendants, while maintaining state law claims under Civil Code §§ 1788 and

1812.700 against the same Defendants. As Plaintiff's Notice was improper, the Court proceeds to

reach the merits of Defendants' Motion to Dismiss Plaintiff's FDCPA claims..

B. Failure to Provide Notice Required by § 1812.700

The issue of whether the failure to provide the notice required by § 1812.700, by itself, rises

to a violation of the Federal FDCPA is not one of first impression before this District. In Luna v.

Alliance One Receivables Mgmt., No. C 05-4751JF, 2006 WL 357823 (N.D. Cal Feb. 16, 2006), the

court determined that failure to include notice required by § 1812.700 does not violate the FDCPA,

because "[w]hile violations of the FDCPA may constitute an automatic violation of state law, the

reverse is not true." Id. at *4 (citing Wade v. Reg'l Credit Ass'n, 87 F.3d 1098, 1100 (9th Cir.

1996)). The Court is persuaded by the reasoning in Luna that "Congress did not elect to import all

of the requirements of the various state debt collection laws into the [FDCPA], and nothing the

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FDCPA creates a cause of action based on a violation of state law." Luna, 2006 WL 357823, at * 4

(alteration in original). See also Carlson v. First Revenue Assurance, 359 F.3d 1015, 1018 (8th Cir.

2004) ("[t]he FDCPA . . . was not meant to convert every violation a state debt collection law into a

federal violation").

Plaintiff relies on McDonald v. Bonded Collectors, LLC, 233 F.R.D. 576 (S.D. Cal. 2005) to

support its position. Plaintiff's following representation to this Court citing McDonald as authority

is incorrect:

Courts within the Ninth Circuit have further stated that a debt collector's failure to

provide California consumers with a notice of their rights in its initial collection

letter to the consumer can violate both state and federal law. Thus, Defendants'

argument that a violation of state law can not [sic.] be a violation of federal law is

without merit as such contention was specifically rejected by the Southern

District of California.

 (Opp. at 6:9-16.) In McDonald, "the original complaint alleged violations of both the federal

statutes regulating debt collection practices." McDonald, 233 F.R.D. at 576. The court in

McDonald then granted plaintiffs leave to file an amended complaint to bring class allegations under

both the Rosenthal Act and the federal FDCPA because "'California simply incorporated by

reference the text of certain federal provision' into its statute, 'rather than copying them verbatim into

the California code.'" Id. at 577 (quoting Alkan v. CitiMortgage, Inc., 336 F. Supp. 2d 1061, 1065

(N.D. Cal. 2004)). Thus, while McDonald may reach the issue of whether a violation of the FDCPA

may violate the Rosenthal Act because of the California legislature's incorporation of the federal act

into the state act, McDonald does not address the question of whether a violation of the Rosenthal

Act itself constitutes a violation of the federal FDCPA. 

C. Unfair, Deceptive, Misleading

Because the failure to provide a notice required by state law does not automatically trigger a

violation of the federal FDCPA, Plaintiff's attempt to bootstrap the absence of notice required by

state law into a violation of the federal FDCPA by characterizing the absence of notice as unfair,

deceptive, or misleading is also unpersuasive. This Court also finds that the letter itself is not unfair,

deceptive, or misleading to the "least sophisticated debtor." Wade v. Regional Credit Ass'n, 87 F.3d

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1098, 1100 (9th Cir. 1996) (quoting Swanson v. S. Or. Credit Serv., Inc., 869 F.2d 1222, 1225 (9th

Cir. 1988)). The “least sophisticated debtor” standard is objective, but “lower than simply

examining whether particular language would deceive or mislead a reasonable debtor.” Swanson,

869 F.2d at 1299. In the Ninth Circuit, the effect of collection letters on the "least sophisticated

debtor" is determined as a matter of law. See Terran v. Kaplan, 109 F.3d 1428, 1432 (9th Cir.

1997).

In Wade, the plaintiff received a collection letter stating: “If not paid TODAY, it may STOP

YOU FROM OBTAINING credit TOMORROW.” 87 F.3d at 1099 (capitalization in original). The

court in Wade held that the least sophisticated debtor would construe the notice as a prudential

reminder, and not a threat to take action. In this case, Defendants' letter appears to only be a

prudential reminder as well; at the very least, Defendants' Collection Letter appears far less unfair,

deceptive, and misleading than the letter before the Ninth Circuit in Wade. 

Because the failure to provide the notice required by § 1812.700 does not, by itself, rise to a

violation of the FDCPA, and the text of the letter is only a prudential reminder even to the least

sophisticated debtor, Plaintiff's FDCPA claims are dismissed without leave to amend.

D. Supplemental Jurisdiction

"Where a district court dismisses a federal claim, leaving only state claims for resolution, it

should decline jurisdiction over the state claims and dismiss them without prejudice." Wade, 87

F.3d at 1101. Based on the Court's disposition of the FDCPA claim, the Court declines to exercise

supplemental jurisdiction over Plaintiff's Rosenthal Act claim. 

V. CONCLUSION

Defendants' Motion to Dismiss Plaintiff's FDCPA claims is GRANTED without leave to

amend. The Court declines to exercise supplemental jurisdiction over Plaintiff's remaining

Rosenthal Act claims.

Dated: August 15, 2006

05cv5176mtd

 /s/ James Ware 

JAMES WARE

United States District Judge

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For the Northern District of California

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THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO:

Allison Amy Krumhorn allison@caclawyers.com

Andrew Steinheimer asteinheimer@mpbf.com

Lance A. Raphael lar@caclawyers.com

Ronald Wilcox ronaldwilcox@post.harvard.edu

Dated: August 15, 2006 Richard W. Wieking, Clerk

By:_/s/ JW Chambers__________

J. Younger

Courtroom Deputy

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