Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-02324/USCOURTS-cand-3_07-cv-02324-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1601 Truth in Lending

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United States District Court

For the Northern District of California

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The Court takes the following factual background entirely from the complaint, the allegations

of which must be taken as true at this stage. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th

Cir. 1987). 

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

GREGORY THOMAS,

Plaintiff,

 v.

AMERICREDIT FINANCIAL

CORPORATION,

Defendant. /

No. C 07-02324 SI

ORDER GRANTING DEFENDANT’S

MOTION TO DISMISS, GRANTING

PLAINTIFF LEAVE TO AMEND

On June 29, 2007 the Court heard arguments on defendant Americredit Financial Corporation’s

motion to dismiss plaintiff’s complaint for failure to state a claim. Having considered the arguments

and briefs of both parties, the Court DISMISSES plaintiff’s complaint, with leave to amend.

BACKGROUND

On or around May 11, 2005, plaintiff Gregory Thomas purchased a vehicle from the Manly

Oldsmobile automobile dealership in Santa Rosa, California.1 Complaint ¶ 5. Defendant Americredit

Financial Corporation financed plaintiff’s purchase. Id.

Plaintiff alleges that during the course of his performance of the auto loan, defendant engaged

in debt collection practices that violated the federal Fair Debt Collection Practices Act (FDCPA). Id.

¶ 6. Plaintiff alleges that upon initially contacting him, defendant did not inform him that the purpose

of defendant’s communication was debt collection. Id. ¶ 14. Additionally, plaintiff alleges defendant

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did not report the subsequent payment dispute to a credit reporting agency, and continued to contact

plaintiff, as well as a third parties, after plaintiff exercised his right to demand that defendant cease

communication. Id. ¶¶ 19, 22. Plaintiff alleges that defendant inappropriately disclosed information

to the third parties that defendant contacted. Id. ¶ 30. Finally, plaintiff alleges defendant made false

or deceptive representations and harassed and abused plaintiff and his minor child. Id. ¶¶ 25, 28, 33.

As a result, plaintiff, acting pro se, filed this action. Id. ¶ 1. Defendant now moves to dismiss the

complaint.

LEGAL STANDARD

According to Federal Rule of Civil Procedure 8(a)(2), a pleading must contain "a short and plain

statement of the claim showing that the pleader is entitled to relief. . . ." FRCP 8(a)(2). Under Federal

Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon

which relief can be granted. The question presented by a motion to dismiss is not whether the plaintiff

will prevail in the action, but whether the plaintiff is entitled to offer evidence in support of the claim.

See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scherer, 468

U.S. 183 (1984). In answering this question, the Court must assume that the plaintiff's allegations are

true and must draw all reasonable inferences in the plaintiff's favor. See Usher v. City of Los Angeles,

828 F.2d 556. 561 (9th.Cir. 1987). Even if the face of the pleadings suggests that the chance of recovery

is remote, the Court must allow the plaintiff to develop the case at this stage of the proceedings. See

United States v. City of Redwood City, 640 F.2d 963, 966 (9th Cir. 1981). 

If the Court dismisses the complaint, it must then decide whether to grant leave to amend. The

Ninth Circuit has “repeatedly held that a district court should grant leave to amend even if no request

to amend the pleading was made, unless it determines that the pleading could not possibly be cured by

the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (citations and internal

quotation marks omitted). Additionally, pro se pleadings may be liberally construed. See Balistreri v.

Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). 

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DISCUSSION

Defendant argues that as an original creditor attempting to collect its own debts, it is not subject

to the FDCPA. Accordingly, defendant urges the Court to dismiss plaintiff’s FDCPA claims, without

which this Court lacks jurisdiction. For the following reasons, the Court GRANTS defendant’s motion.

I. Liability under the California Fair Debt Collection Practices Act

In response to defendant’s motion, plaintiff first argues that his claims survive under the

California FDCPA (“CFDCPA”), which adopted standards and remedies from the FDCPA. Unlike the

FDCPA, which creates a private right of action only against debt collectors, and not original creditors

(with limited exceptions discussed below), the CFDCPA creates a private right of action against both

debt collectors and original creditors such as defendant. Plaintiff argues that the adoption of FDCPA

standards and remedies by the CFDCPA gives him the right to bring suit in federal court. As defendant

correctly points out, however, a state statute cannot create a federal cause of action. See Alkan v.

Citimortgage, Inc. 336 F. Supp. 2d 1061, 1065 (N.D. Cal. 2004) (“California simply incorporated by

reference the text of certain federal provisions into the CFDCPA rather than copying them verbatim in

to the California code. Any resulting liability, however, remains a state claim.”). 

Thus, plaintiff cannot remain in this Court if he only has CFDCPA claims. If he only has

CFDCPA claims, state court is the appropriate forum for his case. Plaintiff can, however, bring

CFDCPA claims in this Court if he also has claims under the FDCPA or some other federal law, or if

he can establish diversity jurisdiction. As discussed in the next section, plaintiff may have a claim under

the FDCPA. Plaintiff also may be able to establish diversity jurisdiction. The Court will therefore grant

plaintiff leave to amend his complaint so that he may, should he desire, amend his complaint to attempt

to state an FDCPA claim or establish diversity jurisdiction. Alternatively, he may simply wish to refile

this case in state court. 

II. Liability under the FDCPA

Though the CFDCPA alone cannot keep plaintiff’s case in federal court, plaintiff’s complaint

comes close to stating a claim for violation of the FDCPA. The FDCPA allows individuals who have

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It also excludes and exempts “any officer or employee of a creditor while, in the name of the

creditor, collecting debts for such creditor.” 15 U.S.C. § 1692a(6)(A).

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Moreover, “[i]n evaluating potential violations of the FDCPA, the court must use an objective

standard based on whether the ‘least sophisticated consumer’ would be deceived by the collection

practice.” Maguire v. Citicorp Retail Serv., Inc., 147 F.3d 232, 236. 

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been harmed by unfair debt collection practices to bring suit against their debt collectors. See 15 U.S.C.

§ 1692a. The statute’s definition of “debt collectors” does not include original creditors collecting their

own debts, effectively exempting them from liability under the FDCPA.2

 See § 1692a(6). Defendant

asserts that, as an original creditor collecting its own debt, it is not liable under the FDCPA.

There is, however, an exception to the original creditor liability exemption. Id. Under section

1692a(6) the term “debt collectors” also includes “any creditor who, in the process of collecting his own

debts, uses any name other than his own which would indicate that a third person is collecting or

attempting to collect such debts.” Id. “A creditor uses a name other than its own when it uses a name

that implies that a third party is involved in collecting its debts, pretends to be someone else or uses a

pseudonym or alias.” See Maguire v. Citicorp Retail Serv., Inc., 147 F.3d 232, 235 (2d. Cir. 1998)

(internal quotations omitted) (quoting case). Thus, courts look to the actions of a defendant to determine

whether it may be liable under the FDCPA.3

 See, e.g., Romine v. Diversified Collection Serv. Inc., 155

F.3d 1142 (9th Cir. 1998) (holding that though Western Union is not a traditional debt collector, it was

a “debt collector” subject to the FDCPA by virtue of its Automated Voice Telegram service, which

obtained unlisted or otherwise unavailable telephone numbers of debtors which it then turned over to

creditors and debt collection agencies for use in collecting debts). Accordingly, here it is the activities

of Americredit, and not its status as plaintiff’s lender, that determines whether it can be held liable under

the FDCPA. 

Plaintiff alleges in his complaint that at one point defendant (or one of the Doe defendants),

contacted third parties and “identified themselves to the hearer of the telephone call as a ‘debt collector

for Americredit financial services’ . . . . Defendants further explained to the third party that the purpose

of the call was regarding a delinquent account with Americredit Financial Services . . . .” See Compl.

¶ 31 (emphasis added). This allegation could be interpreted to subject Americredit to the FDCPA, as

a “creditor who, in the process of collecting his own debts, uses any name . . . which would indicate that

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Alternatively, if one of the Doe defendants made the telephone call at issue, and the Doe

defendant was a debt collector, then the Doe defendant would be subject to the FDCPA, and this Court

would retain plaintiff’s claims against Americredit as supplemental CFDCPA claims. 

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a third person is collecting or attempting to collect such debts.” §1692a(6). Put simply, plaintiff may

be alleging that defendant posed as a debt collector when it called the third parties4

; by doing so,

defendants, would have still subjected itself to the FDCPA. 

However , even under the totality of the circumstances, taking the facts as plaintiff presents them

and considering the leniency that pro se parties are afforded, the allegations of paragraph 31 are not

clear enough to support an FDCPA claim. A more reasonable reading of Paragraph 31 is that an

employee of defendant called the third party and identified him or herself as such. As discussed above,

if this were the case, the caller would not qualify as a “debt collector.” See § 1692a(6)(A) The Court

therefore GRANTS defendant’s motion to dismiss, and GRANTS plaintiff leave to amend his complaint

so that he may clarify the factual allegations contained in paragraph 31, if in fact the caller identified

him or herself as a third party debt collector, rather than as an employee of defendant.

 

III. Diversity Jurisdiction

In his complaint, plaintiff also asserts that this action has been properly brought in federal court

under title 28 U.S.C. section 1332, which establishes diversity jurisdiction. Diversity jurisdiction

requires that the amount in controversy (the total amount of the remedy sought) be over $75,000 and

that there be complete diversity of citizenship, meaning each plaintiff must be a citizen of a different

state from each defendant. See § 1332(a)(1); see also Caterpillar, Inc v. Lewis, 519 U.S. 61, 68 (1996).

Under title 28 U.S.C. section 1332(c)(1), a corporation is a citizen of any state in which it is

incorporated and of the state where it has its principal place of business. See Breitman v. May Co., 37

F.3d 562, 564 (9th Cir. 1994). 

Plaintiff does not allege the citizenship of defendant and fails to give the amount of the remedy

he requests. Portions of plaintiff’s prayer for relief were calculated including damages that plaintiff

subsequently withdrew (as discussed below in section four), and plaintiff failed to submit an amended

prayer for relief. Thus he has not provided this Court with a current and accurate amount in controversy.

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Plaintiff has therefore failed to adequately allege a basis for diversity jurisdiction. Should he wish to

establish diversity jurisdiction, plaintiff must be able to allege in his amended complaint that the state

of defendant’s citizenship is different from his own, and that his damages total over $75,000.

IV. Federal Trade Commission Act claims

In his complaint plaintiff also alleges that defendant violated the Federal Trade Commission Act

(FTC Act). Compl. ¶ 35. Defendant argues that plaintiff may not bring suit as a private party under the

FTC Act. Id. 7:26-28. In response, plaintiff has withdrawn his FTC Act claim. See Oppo. at 2:8-9.

CONCLUSION

For the foregoing reasons and for good cause shown, the Court hereby GRANTS defendant's

motion to dismiss, and GRANTS plaintiff leave to amend. Plaintiff must file an amended complaint,

should he wish to do so, no later than July 20, 2007. 

IT IS SO ORDERED.

Dated: July 6, 2007 

SUSAN ILLSTON

United States District Judge

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