Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-02324/USCOURTS-cand-3_07-cv-02324-2/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 FAC, 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, DOES 1-10,

Defendants. /

No. C 07-02324 SI

ORDER GRANTING DEFENDANT’S

MOTION TO DISMISS, GRANTING

PLAINTIFF LEAVE TO AMEND

Defendant Americredit Financial Corporation has filed a motion to dismiss plaintiff’s First

Amended Complaint (“FAC”). The motion is scheduled for hearing on September 14, 2007. Having

considered the papers submitted, the Court determines that the motion is suitable for resolution without

oral argument, and pursuant to Civil Local Rule 7-1(b), hereby VACATES the September 14, 2007

hearing. For the following reasons, the Court GRANTS defendant’s motion to dismiss plaintiff’s FAC,

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

 FAC ¶ 6. Defendant Americredit

Financial Corporation financed plaintiff’s purchase. Id.

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

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United States District Court

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

Plaintiff alleges that upon initially contacting him, defendant did not inform him that the purpose of

defendant’s communication was debt collection. Id. ¶ 18. Additionally, plaintiff alleges defendant 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. ¶¶ 20, 22, 25. Plaintiff alleges that defendant inappropriately disclosed information

to the third parties that defendant contacted. Id. ¶ 33. Finally, plaintiff alleges defendant made false

or deceptive representations and harassed and abused plaintiff and his minor child. Id. ¶¶ 26, 29, 34.

As a result, plaintiff, acting pro se, filed this action. 

On July 6, 2007, the Court issued an order dismissing plaintiff’s complaint, for failure to state

a claim under the FDCPA, and a consequent lack of subject matter jurisdiction. Plaintiff subsequently

filed a First Amended Complaint, which defendant now moves to dismiss.

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

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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).

3

The parties refer to this exception as the “false name” exception. For the sake of brevity and

consistency, the Court will do so as well.

4

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, 147 F.3d at 236. 

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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). 

DISCUSSION

Defendant argues that plaintiff has failed to cure the deficiencies of his original Complaint.

Specifically, 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.

As the Court indicated in the July 6, 2007 Order, the FDCPA does not apply to original creditors

– such as defendant – collecting their own debts, effectively exempting them from liability under the

FDCPA.2

 See § 1692a(6). 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.”3 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.4 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

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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). 

Plaintiff alleged in his original 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). The Court found in the July 6, 2007 Order that this allegation

could be interpreted to subject Americredit to the FDCPA, under the “false name” exception. However,

the Court ultimately concluded that 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 of the original Complaint were not clear enough to support an FDCPA claim. 

Plaintiff has now attempted to clarify that the “false name” exception to the original creditor

exemption applies in this case. In the FAC, plaintiff has added an allegation that: “On at least one

occasion, Defendant used a name other than his own to collect a debt that would suggest another party

other than the Defendant AMERICREDIT FINANCIAL SERVICES themselves was involved in the

collection of the debt.” FAC ¶ 5. This allegation is still insufficient to establish defendant’s liability

under the FDCPA. In order to meet the “false name” exception, plaintiff must allege that the defendant

misrepresented itself as an independent debt collector during one of the communications or other

actions that he alleges violated the provisions of the FDCPA. The FAC fails to do so, and the Court

must therefore DISMISS plaintiff’s First Amended Complaint, for failure to state a claim under the

FDCPA, and lack of subject matter jurisdiction.

The Court will, however, allow plaintiff leave to amend the FAC, should he wish to do so. In

his opposition to defendant’s motion, plaintiff requests that he be allowed to amend his complaint to

allege diversity jurisdiction. The Court GRANTS plaintiff’s request. See Lopez v. Smith, 203 F.3d

1122, 1130 (9th Cir. 2000) (“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.”) (citations and internal quotation marks omitted). If he successfully pleads

the requisites for diversity jurisdiction, plaintiff may be able to state claims under the California FDCPA

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(“CFDCPA”), which unlike the FDCPA, creates a private right of action against both debt collectors

and original creditors such as defendant. The Court will also allow plaintiff one final opportunity to

attempt to state a claim under the “false name” exception of the Federal FDCPA, should he wish to do

so. 

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 his Second Amended

Complaint, should he wish to do so, no later than October 5, 2007. [Docket No. 13]

IT IS SO ORDERED.

Dated: September 11, 2007 

SUSAN ILLSTON

United States District Judge

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