Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_19-cv-01205/USCOURTS-caed-1_19-cv-01205-0/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 EASTERN DISTRICT OF CALIFORNIA

MELIK POGHOSYAN,

Plaintiff,

v.

FIRST FINANCIAL ASSET 

MANAGEMENT, INC., d/b/a as FFAM in 

California; and DOES 1 through 10, 

inclusive,

Defendants.

No. 1:19-cv-01205-DAD-SAB

ORDER GRANTING DEFENDANT’S 

MOTION TO DISMISS WITH LEAVE TO 

AMEND

(Doc. No. 4)

This matter is before the court on defendant First Financial Asset Management, Inc.’s 

(“FFAM”) motion to dismiss. On November 5, 2019, the motion came before the court for 

hearing. Attorney Meghan George appeared telephonically on behalf of plaintiff, and attorney

James Christopher Magid appeared telephonically on behalf of defendant. The court has 

considered the parties’ arguments and, for the reasons set forth below, will grant the motion to 

dismiss.

BACKGROUND

Plaintiff Melik Poghosyan originally filed this action in the Fresno County Superior Court 

on May 3, 2019. (Doc. No. 1-1, Ex. A at 7–16, Compl.) He later filed a First Amended 

Complaint on August 1, 2019, asserting: (1) a California Unfair Competition Law (“UCL”)

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claim; (2) a California False Advertising Law (“FAL”) claim; (3) a California Consumer Legal 

Remedies Act (“CLRA”) claim; (4) fraud; (5) a California Rosenthal Fair Debt Collection 

Practices Act (“RFDCPA”) claim; and (6) a federal Fair Debt Collection Practices Act 

(“FDCPA”) claim. (Doc. No. 1-1, Ex. A at 65–72, First Am. Compl. (“FAC”).)

According to the FAC, plaintiff received a debt collection notice for $803.00 (the “Debt”) 

from defendant in January 2010. (Id. at ¶ 6.) Within a month, plaintiff settled the Debt, which 

was related to damage to a rental car he had rented, for $603.00 (the “Settlement”). (Id.) 

However, when plaintiff attempted to rent a car in July 2018 from Enterprise, a car rental agency, 

he was denied and “referred back” to defendant. (Id. at ¶ 7.) After plaintiff contacted defendant, 

defendant allegedly confirmed that the Debt had been settled but nonetheless refused to notify 

any third parties of the Settlement. (Id. at ¶¶ 7, 9.) Rather, defendant allegedly informed plaintiff 

that he would have to pay the $203.00 in dispute (the “Disputed Debt”) before it would notify 

Enterprise that the Debt had been settled. (Id.) 

On September 3, 2019, defendant removed this case to this federal court on the basis of 

federal question jurisdiction. (Doc. No. 1.) Defendant then filed the pending motion to dismiss

on September 10, 2019. (Doc. No. 4.) Plaintiff filed his opposition to the motion on October 2, 

2019 (Doc. No. 7), and defendant filed its reply on October 8, 2019. (Doc. No. 11.)

LEGAL STANDARDS

A. Motion to Dismiss

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal 

sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “Dismissal can 

be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a 

cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 

A plaintiff is required to allege “enough facts to state a claim to relief that is plausible on its 

face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility 

when the plaintiff pleads factual content that allows the court to draw the reasonable inference 

that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009).

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In determining whether a complaint states a claim on which relief may be granted, the 

court accepts as true the allegations in the complaint and construes the allegations in the light 

most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. 

United States, 915 F.2d 1242, 1245 (9th Cir. 1989). However, the court need not assume the truth 

of legal conclusions cast in the form of factual allegations. U.S. ex rel. Chunie v. Ringrose, 788 

F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, 

“it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 

556 U.S. at 678. A pleading is insufficient if it offers mere “labels and conclusions” or “a 

formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555; see 

also Iqbal, 556 U.S. at 676 (“Threadbare recitals of the elements of a cause of action, supported 

by mere conclusory statements, do not suffice.”). Moreover, it is inappropriate to assume that the 

plaintiff “can prove facts which it has not alleged or that the defendants have violated the . . . laws 

in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State 

Council of Carpenters, 459 U.S. 519, 526 (1983).

A complaint alleging fraud, as does the plaintiff’s, must satisfy heightened pleading 

requirements. See Fed. R. Civ. P. Rule 9(b) (“In alleging fraud or mistake, a party must state with 

particularity the circumstances constituting fraud or mistake.”) “Fraud can be averred by 

specifically alleging fraud, or by alleging facts that necessarily constitute fraud (even if the word 

fraud is not used).” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (internal 

quotation marks omitted). The “circumstances constituting the alleged fraud [must] be specific 

enough to give defendants notice of its particular misconduct . . . so they can defend against the 

charge and not just deny that they have done anything wrong.” Kearns, 567 F.3d at 1124 

(internal quotation marks omitted) (citing Bly-Magee, 236 F.3d at 1019). To satisfy the 

particularity standard of Rule 9(b), the plaintiff “must set forth more than the neutral facts 

necessary to identify the transaction” at issue. Id. (internal quotation marks and citations 

omitted); see also Vess, 317 F.3d at 1106 (“Averments of fraud must be accompanied by the who, 

what, when, where, and how of the misconduct charged.”) (internal quotation marks omitted).

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“When an entire complaint, or an entire claim within a complaint, is grounded in fraud 

and its allegations fail to satisfy the heightened pleading requirements of Rule 9(b), a district 

court may dismiss the complaint or claim.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 

(9th Cir. 2003) (citing Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001)). 

LEGAL ANALYSIS

Defendant argues that plaintiff’s complaint must be dismissed because: 1) he has failed to 

allege facts demonstrating an economic injury and therefore lacks standing to assert claims under 

the UCL; 2) he does not plead sufficient facts to state a cognizable claim under any of his causes 

of action; and 3) his fraud, RFDCPA, and FDCPA claims are time-barred.

A. Voluntary Dismissal of Plaintiff’s FAL and CLRA Claims

Plaintiff has agreed to dismissal of his FAL and CLRA claims without prejudice and seeks 

leave to amend. (Doc. No. 7 at 9.) Defendant does not oppose dismissal with respect to the FAL 

claim but argues that the CLRA claim should be dismissed with prejudice because it only applies 

to “‘consumers’ who have engaged in a ‘transaction’ for ‘goods’ or ‘services,’” not to debt 

collection. (Doc. No. 11 at 3.)

1. The CLRA Applies to This Instance of Debt Collection

The CLRA prohibits “unfair methods of competition and unfair or deceptive acts or 

practices” in relation to “a transaction intended to result or that results in the sale or lease of 

goods or services to any consumer[.]” Cal. Civ. Code § 1770(a). Goods are defined as “tangible 

chattels bought or leased for use primarily for personal, family, or household purposes”; services 

as “work, labor, and services for other than a commercial or business use, including services 

furnished in connection with the sale or repair of goods”; and consumer as “an individual who 

seeks or acquires, by purchase or lease, any goods or services for personal, family, or household 

purposes.” Id. at § 1761. The CLRA also provides that it shall be “liberally construed and 

applied to promote its underlying purposes, which are to protect consumers against unfair and 

deceptive business practices and to provide efficient and economical procedures to secure such 

protection.” Id. at § 1760.

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Although the California Supreme Court has not yet addressed whether the CLRA applies 

to certain types of financial transactions such as debt collection, see, e.g., Underwood v. Future 

Income Payments, LLC, No. SACV171570DOCDFMX, 2018 WL 4964333, at *12 (C.D. Cal. 

Apr. 26, 2018) (discussing this in relation to lump sum loans that were repaid using borrowers’ 

pensions); Rex v. Chase Home Fin. LLC, 905 F. Supp. 2d 1111, 1156 (C.D. Cal. 2012) (noting the 

same with regards to mortgage loans and the activities involved in receiving and maintaining 

them), this court must apply “California law as we believe the California Supreme Court would 

apply it.” In re KF Dairies, Inc. & Affiliates, 224 F.3d 922, 924 (9th Cir. 2000).

Defendant urges the court to find that debt collection is neither a good nor a service under 

the CLRA, citing the decisions in Fairbanks v. Superior Court, 46 Cal. 4th 56 (2009) and Berry v. 

American Express Publ’g, Inc., 147 Cal. App. 4th 224 (2007). In Fairbanks, the California 

Supreme Court declared that life insurance policies are not services as defined by the CLRA, and 

that ancillary services provided by life insurance providers do not bring such policies within the 

CLRA’s coverage. 46 Cal. 4th at 61, 65. In Berry, a California Court of Appeal decided that 

“credit transactions separate and apart from any sale or lease of goods or services” are not 

covered by the CLRA. 147 Cal. App. 4th at 233. 

However, neither of these decisions precludes the possibility that debt collection—

especially of debt related to a good or service—falls under the purview of the CLRA. Here, the 

collection of debt that plaintiff incurred in connection to a car rental (i.e. the short-term “lease” of 

a “tangible” “good” for “personal . . . purposes”) is distinguishable from insurance and credit 

cards.

1

 Cf. Fairbanks, 46 Cal. 4th at 61, 65 (noting that life insurance policies are “not work or 

 

1

 Some courts have extended Fairbanks’ logic to mortgage loans and mortgage loan servicing. 

See, e.g., Alborzian v. JPMorgan Chase Bank, N.A., 235 Cal. App. 4th 29, 33, 40 (2015) 

(“Fairbanks applies with equal force to [mortgage] lenders.”); Jamison v. Bank of Am., N.A., 194 

F. Supp. 3d 1022, 1032 (E.D. Cal. 2016) (agreeing with Alborzian and applying Fairbanks to 

mortgage services). However, the California Supreme Court has not affirmed this extension of 

law. Moreover, the holding in Fairbanks was premised on unambiguous statutory language—at 

least with regards to insurance—and legislative history that indicated that the California 

Legislature intended to omit insurance from the CLRA’s definition of services. Fairbanks, 46 

Cal. 4th at 61–62. Neither rationale applies here. The court therefore declines to preemptively 

cabin a statute that, by design, is to be construed and applied liberally. See Cal. Civ. Code § 

1760.

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labor, nor is it related to the sale or repair of any tangible chattel”); Berry, 147 Cal. App. 4th at 

223 (holding that “the issuance of a credit card [even one with an annual fee] was not ‘a 

transaction intended to result or which results in the sale or lease of goods or services to [a] 

consumer’”). 

Moreover, plaintiff alleges that FFAM refused to notify Enterprise, the car rental agency 

that plaintiff had been trying to rent a car from, that his Debt had been settled unless he paid the 

Disputed Debt. It is reasonable to infer at this stage of the litigation that FFAM intended to 

leverage plaintiff’s desire to rent a car to coerce him into paying the Disputed Debt; such a 

transaction could be viewed as one that is either indirectly “intended to result,” or incidentally 

“results in the sale or lease of goods or services[.]” Cal. Civ. Code § 1770(a).

Keeping in mind the CLRA’s statutory command that it shall be “liberally construed and 

applied” to promote its purpose of protecting consumers against unfair and deceptive business 

practices, California Civil Code § 1760, the court concludes that the CRLA applies to the instance 

of debt collection at issue in this case. See Hernandez v. Hilltop Fin. Mortg., Inc., 622 F. Supp. 

2d 842, 849 (N.D. Cal. 2007) (“In similar matters involving financial transactions, the California 

Supreme Court and intermediate appellate divisions have found the CLRA applicable.”) (listing 

cases involving individual retirement accounts, automobile loans, and mortgage financing

services). Dismissal with prejudice is therefore inappropriate; plaintiff’s FAL and CLRA claims 

will instead be dismissed with leave to amend.

2. Plaintiff’s Fraud Claim

Defendant next argues that plaintiff’s fraud claim must fail because it: 1) is time-barred; 

and 2) fails to plead sufficient facts to state a claim. (Doc. No. 4 at 14–15.)

1. The Statute of Limitations Does Not Bar Plaintiff’s Fraud Claim

California law starts the clock on fraud’s three-year statute of limitations when the 

plaintiff discovers the facts constituting the fraud or mistake. See Cal. Civ. Proc. Code § 338; 

Meadows v. Bicrodyne Corp., 785 F.2d 670, 672 (9th Cir. 1986) (“This circuit has held that the 

three years do not begin to run until plaintiff discovers the facts constituting the violation or in the 

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exercise of reasonable diligence should have discovered them.”) (internal quotation marks and 

citations omitted).

Defendant argues that here the statute of limitations started to accrue on the date on which 

plaintiff settled the Debt, sometime in January or February 2010. (Doc. No. 4 at 14–15.) Plaintiff

counters that he only discovered that the Settlement was fraudulent in July 2018, “at the time that 

Defendant acknowledged the settlement, but still attempted to collect on an uncollectable debt[.]” 

(Doc. No. 7 at 10) (emphasis omitted). Plaintiff’s contention appears to implicitly invoke the 

discovery rule or, alternatively, the principle of fraudulent concealment. The California Supreme 

Court has described the discovery rule as follows:

[T]he plaintiff discovers the cause of action when he at least suspects 

a factual basis, as opposed to a legal theory, for its elements, even if 

he lacks knowledge thereof—when, simply put, he at least suspects . 

. . that someone has done something wrong to him, “wrong” being 

used, not in any technical sense, but rather in accordance with its “lay 

understanding.” He has reason to discover the cause of action when 

he has reason at least to suspect a factual basis for its elements. He 

has reason to suspect when he has notice or information of 

circumstances to put a reasonable person on inquiry; he need not 

know the specific “facts” necessary to establish the cause of action; 

rather, he may seek to learn such facts through the process 

contemplated by pretrial discovery; but, within the applicable 

limitations period, he must indeed seek to learn the facts necessary 

to bring the cause of action in the first place—he cannot wait for them 

“to find” him and “sit on” his “rights”; he must go find them himself 

if he can and file suit if he does.

Norgart v. Upjohn Co., 21 Cal. 4th 383, 397–98 (1999); see also Platt Elec. Supply, Inc. v. EOFF 

Elec., Inc., 522 F.3d 1049, 1054 (9th Cir. 2008) (internal quotation marks and citations omitted) 

(applying the discovery rule to fraud claims). Similarly:

A close cousin of the discovery rule is the well accepted principle of 

fraudulent concealment. The rule of fraudulent concealment is 

applicable whenever the defendant intentionally prevents the 

plaintiff from instituting suit[.] In order to establish fraudulent 

concealment, the complaint must show: (1) when the fraud was 

discovered; (2) the circumstances under which it was discovered; and 

(3) that the plaintiff was not at fault for failing to discover it or had 

no actual or presumptive knowledge of facts sufficient to put him on 

inquiry. In urging lack of means of obtaining knowledge, it must be 

shown that in the exercise of reasonable diligence the facts could not 

have been discovered at an earlier date.

Platt Elec. Supply, 522 F.3d at 1055 (internal quotation marks and citations omitted) (applying 

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the principle of fraudulent concealment to fraud claims).

According to the FAC, defendant effectively concealed its refusal to confirm the existence 

of the Settlement to third parties and its surreptitious desire to collect on the settled Debt by 

confirming only to plaintiff that the Debt had been settled. (FAC at ¶ 7.) Plaintiff thus had no 

reason to suspect that defendant would refuse to report the Settlement to third parties. It was only 

when plaintiff attempted to rent a vehicle from Enterprise that he learned that defendant had not 

reported the Settlement to Enterprise. (Id. at 7–11.) Defendant provides no explanation as to how 

plaintiff could have discovered this alleged deception any earlier through the exercise of due 

diligence. (Id.) On these alleged set of facts, the court concludes that the statute of limitations

was tolled by both the discovery rule and the principle of fraudulent concealment such that 

plaintiff’s fraud claim did not start to run until July 2018. The statute of limitations therefore 

does not bar plaintiff’s fraud claim.

2. Plaintiff’s Fraud Claim Fails to Meet Rule 9(b)’s Pleading Standards

Nonetheless, plaintiff’s fraud claims must meet the heightened pleading standards 

required by Rule 9(b) of the Federal Rules of Civil Procedure. Kearns, 567 F.3d at 1125 (holding 

that Rule 9(b)’s pleading standards apply to state law fraud claims being litigated in federal 

court). “To properly plead fraud with particularity under Rule 9(b), ‘a pleading must identify the 

who, what, when, where, and how of the misconduct charged, as well as what is false or 

misleading about the purportedly fraudulent statement, and why it is false.’” Scott v. Bluegreen 

Vacations Corp., No. 1:18-cv-649-AWI-EPG, 2018 WL 6111664, at *5 (E.D. Cal. Nov. 21, 

2018) (quoting Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 964 (9th Cir. 2018)).

Here, the allegations of plaintiff’s complaint fail to meet that standard. Although plaintiff 

has alleged that FFAM is responsible for the alleged fraud, plaintiff has not identified the FFAM 

employee(s) who perpetuated the fraud.

2

 Plaintiff also has not identified where the alleged fraud 

 

2

 One judge of this court has aptly observed as follows:

A number of California federal courts cite to Tarmann v. State 

Farm Mut. Auto. Ins. Co., 2 Cal. App. 4th 153, 157 (1991) for the 

proposition that, in a fraud action against a corporation, a 

plaintiff must “allege the names of the persons who made the 

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took place, nor has he explained how the events he has described in his complaint amounts to a 

fraud. While plaintiff alleges that he settled his debt with defendant, he does not describe with 

sufficient specificity the terms of the Settlement or how defendant “intentionally and recklessly

misled” him. (FAC at ¶ 49.) He also does not specify whether defendant communicated with any 

third parties about the Debt and, if so, what defendant told them about the status of that Debt. 

Without these key factual allegations, plaintiff cannot sustain his fraud claim. Accordingly, that 

claim will be dismissed with leave to amend.

3. Plaintiff’s RFDCPA and FDCPA Claims

Plaintiff also alleges that defendants used “unfair and unconscionable means to collect or 

attempt to collect a debt,” “knowingly submitt[ed] false or inaccurate [information],” and

“willfully conceal[ed] adverse information bearing upon a person’s credit[worthiness], credit 

standing, or credit capacity.” (FAC at ¶ 25(c)–(d).) Defendant argues that plaintiff’s RFDCPA

and FDCPA claims should be dismissed because: 1) they are partially time-barred; and 2) 

plaintiff does not allege facts that demonstrate any violation of the RFDCPA or FDCPA. (Doc. 

No. 4 at 15–17.)

/////

 

allegedly fraudulent representations, their authority to speak, to 

whom they spoke, what they said or wrote, and when it was said or 

written.” See Moss v. Infinity Ins. Co., 197 F. Supp. 3d 1191, 1198 

(N.D. Cal. 2016); Tapia v. Davol, Inc., 116 F. Supp. 3d 1149, 1163 

(S.D. Cal. 2015); Meixner v. Wells Fargo Bank, N.A., 101 F. Supp. 

3d 938, 956 (E.D. Cal. 2015); Delarosa v. Boiron, Inc., 818 F. 

Supp. 2d 1177, 1191 (C.D. Cal. 2011). This Court questions the 

reliance on this specific provision of Tarmann as properly 

interpreting Rule 9(b), since Tarmann is a state court decision 

regarding California state procedure. See Boring v. Nationstar 

Mortg., LLC, 2014 WL 5473118, at *5 (E.D. Cal. Oct. 28, 2014) 

(“In an action pending in federal court, ‘the Federal Rules of Civil 

Procedure apply . . . irrespective of whether the substantive law at 

issue is state or federal.’” (quoting Vess, 317 F.3d at 1102)). 

While Tarmann's level of detail may be important against a 

corporation to satisfy Rule 9(b), this should be considered under the 

circumstances of each case, not as a hard-and-fast rule of federal 

procedure.

Scott, 2018 WL 6111664, at *5. The undersigned agrees with this view of Tarmann’s impact on 

the assessment of whether Rule 9(b)’s pleading requirements have been met.

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1. The Statutes of Limitations Do Not Bar Plaintiff’s RFDCPA and FDCPA Claims 

Plaintiff’s RFDCPA and FDCPA claims are subject to a one-year statute of limitations. 

See Cal. Civ. Code § 1788.30(f) (providing “one year from the date of the occurrence of the 

[RFDCPA] violation” to sue); 15 U.S.C. § 1692k(d) (permitting FDCPA actions “within one year 

from the date on which the violation occurs”). Defendant argues that because the Debt was 

settled in January 2010 and plaintiff did not sue until May 2019, any claims based on events that 

occurred prior to May 2018 are time-barred. (Doc. No. 4 at 15–16.) Plaintiff acknowledges the 

applicable statute of limitations but argues that the “conduct that [he] alleges is a violation of the 

debt collection laws is Defendant’s subsequent attempts to collect on a debt that is uncollectable 

by virtue of the fact that the debt had been settled,” which occurred in July 2018, less than one 

year before the filing of this suit. (Doc. No. 7 at 5–6) (emphasis in original); (FAC at ¶ 7.) The 

court concludes that plaintiff’s claims are not time-barred to the extent they are based on 

defendant’s attempts to collect on the Debt after May 2018.

2. Plaintiff’s RFDCPA and FDCPA Claims Fail to Meet Rule 9(b)’s Pleading 

Standards

Next, defendant argues that plaintiff has not sufficiently alleged a violation of the 

RFDCPA or FDCPA. (Doc. No. 4 at 16.) According to defendant, plaintiff has not alleged that 

“FFAM continued collection attempts on the Debt after reaching Settlement” and has not alleged 

facts demonstrating that FFAM “misrepresented the character, amount, or legal status of the 

Debt . . . provided false representations or deceptive means to collect or attempted to collect the 

debt . . . informed others that Plaintiff continued to owe a Debt to FFAM . . . [or] ever informed 

him that settling his . . . Debt would allow him to rent a car from Enterprise in the future[.]” (Id.

at 16–17.) Plaintiff points out that in the FAC he alleges that “Defendant was explicitly 

continuing collection attempts on the debt that it had settled nearly 8 years earlier” and that 

“Defendant was refusing to notify any third parties . . . that Plaintiff’s debt had been settled with 

Defendant nearly 8 years prior.” (FAC at ¶¶ 8–9.) In response, defendant argues that plaintiff’s 

claims, even if true, still must fail because: 1) plaintiff acknowledged that defendant had 

“confirmed the settlement” in his FAC; and 2) merely seeking “voluntary repayment of a timeCase 1:19-cv-01205-SAB Document 14 Filed 01/28/20 Page 10 of 15
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barred” debt is not a violation of the FDCPA.

3

(Doc. No. 11 at 4–5.)

As a preliminary matter, the court notes that plaintiff’s RFDCPA and FDCPA claims are 

subject to Rule 9(b)’s heightened pleading standards because the conduct that serves as the basis 

of plaintiff’s RFDCPA and FDCPA claims is also the basis of his fraud claims and so “sound in

fraud.” See Kearns, 567 F.3d at 1125 (“A plaintiff may allege a unified course of fraudulent 

conduct and rely entirely on that course of conduct as the basis of that claim. In that event, the 

claim is said to be ‘grounded in fraud’ or to ‘sound in fraud,’ and the pleading . . . as a whole 

must satisfy the particularity requirement of Rule 9(b).”). Because of that, plaintiff’s RFDCPA 

and FDCPA claims fail for the same reasons that his fraud claim fails: the allegations of the FAC 

in support of those claims lack the specificity required by Rule 9(b). They do not identify with 

whom at FFAM plaintiff interacted, what they or FFAM promised, where the alleged conduct 

happened, what was agreed to as part of the Settlement, how defendant’s conduct amounts to a 

violation of the FRDCPA and FDCPA, and whether defendant communicated anything to 

Enterprise or any other third parties. Simply put, plaintiff’s vague and generalized allegations 

make it difficult for the court to ascertain whether plaintiff may allege an actionable FRDCPA or 

FDCPA claim. Therefore, those claims will be dismissed with leave to amend.

4. Plaintiff’s UCL Claim

1. Plaintiff Has Established Standing to Sue Under the UCL

To establish standing to sue under the UCL, a party must “(1) establish a loss or 

deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and 

(2) show that that economic injury was the result of, i.e., caused by, the unfair business practice 

or false advertising that is the gravamen of the claim.” Kwikset Corp. v. Superior Court, 51 Cal. 

 

3

 Although the court need not reach these issues for the reasons noted below, it notes that: 1) the 

fact that defendant allegedly informed plaintiff that the Debt had been settled does not mean that 

defendant did not nevertheless try to illegally collect on a settled debt or misrepresent the status 

of that debt to third parties; 2) defendant cites no binding authority for the proposition that

seeking “voluntary repayment of a time-barred” debt is permissible; and 3) even if such a 

proposition were to be true, it would not apply here because plaintiff alleges in the FAC that 

defendant attempted to condition disclosure of the Settlement to third parties on payment of the 

Disputed Debt. (See Compl.)

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4th 310, 322 (2011). This requirement was imposed by California voters in 2004 and it was 

designed to prevent suits from people who had not actually “‘used the defendant’s product or 

service, viewed the defendant’s advertising, or had any other business dealing with the 

defendant[.]’” Californians for Disability Rights v. Mervyn’s, LLC, 39 Cal. 4th 223, 228 (2006)

(quoting Prop. 64, § 1, subd. (b)(1)–(4)).

There are innumerable ways in which economic injury from unfair 

competition may be shown. A plaintiff may (1) surrender in a 

transaction more, or acquire in a transaction less, than he or she 

otherwise would have; (2) have a present or future property interest 

diminished; (3) be deprived of money or property to which he or she 

has a cognizable claim; or (4) be required to enter into a transaction, 

costing money or property, that would otherwise have been 

unnecessary.

Kwikset Corp., 51 Cal. 4th at 323; see also Hall v. Time Inc., 158 Cal. App. 4th 847, 854 

(2008), as modified (Jan. 28, 2008) (listing various types of economic injury). However, the 

court must also be mindful that:

While the economic injury requirement is qualitatively more 

restrictive than federal injury in fact, embracing as it does fewer 

kinds of injuries, nothing in the text of Proposition 64 or its 

supporting arguments suggests the requirement was intended to be 

quantitatively more difficult to satisfy. Rather, we may infer from 

the text of Proposition 64 that the quantum of lost money or property 

necessary to show standing is only so much as would suffice to 

establish injury in fact; if more were needed, the drafters could and 

would have so specified. Cf. Prop. 64, § 1, subd. (e) (“It is the intent 

of the California voters in enacting this act to prohibit private 

attorneys from filing lawsuits for unfair competition where they have 

no client who has been injured in fact under the standing 

requirements of the United States Constitution.”) In turn, federal 

courts have reiterated that injury in fact is not a substantial or 

insurmountable hurdle; as then Judge Alito put it: “Injury-in-fact is 

not Mount Everest.” Danvers Motor Co., Inc. v. Ford Motor 

Co., 432 F.3d 286, 294 (3d Cir. 2005). Rather, it suffices for federal 

standing purposes to “‘allege[] some specific, ‘identifiable trifle’ of 

injury.’”

Kwikset Corp, 51 Cal. 4th at 324.

Defendant argues that plaintiff’s allegations that he was denied a rental car from a nonparty to this case and suffered “actual damages” due to emotional distress, are not economic 

injuries. (Doc. No. 4 at 9; see also FAC at ¶¶ 6–11, 26.) Plaintiff contends that he alleged in his 

FAC that he was “caused to incur additional damages,” denied the opportunity to rent a car, 

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“deprived of money,” and is at risk of “suffering unknown damages into the future.” (FAC at ¶¶ 

6–11, Doc. No. 7 at 4–5.) 

However, the risk of suffering speculative, unknown damages in the future is insufficient 

to support a UCL claim. See JaM Cellars, Inc. v. Vintage Wine Estates, Inc., No. 17-01133-CRB, 

2017 WL 2535864, at *4 (N.D. Cal. June 12, 2017) (“A UCL plaintiff must allege that it has 

suffered injury in fact, and not just possible future injury.”); Cal. Bus. & Prof. Code § 17204 

(“Actions for relief pursuant to this chapter shall be prosecuted . . . by a person who has suffered

injury in fact and has lost money or property as a result of the unfair competition.”) (emphasis 

added). In addition, plaintiff’s inability to rent a car from Enterprise does not comport with the 

way the California Supreme Court has defined economic injury. See Kwikset, 51 Cal. 4th at 323

(listing various categories of economic injury, none of which include an inability to enter into a 

transaction).

The court can, however, infer at least one instance of economic injury: the $603.00 that 

plaintiff paid in the Settlement, an agreement that plaintiff now believes to be unfair, fraudulent, 

or an unlawful business practice. (FAC at ¶ 6.) Although defendant contends that the $603.00 

Settlement represents a “net benefit” to plaintiff because it is less than the $803.00 Debt 

originally owed by plaintiff, this does not obviate the fact that plaintiff might have abstained from 

entering that Settlement had he known that defendant would refuse to notify third parties that the 

Debt had been settled. See Kwikset Corp., 51 Cal. 4th at 323 (holding that plaintiffs have

standing under the UCL when they allege that unfair competition caused them to “enter into a 

transaction, costing money or property, that would otherwise have been unnecessary”). The court 

concludes that plaintiff has therefore plead sufficient facts to establish standing under the UCL.

2. Plaintiff Does Not State a Viable UCL Claim

Under the UCL, an act of unfair competition includes “any unlawful, unfair or fraudulent 

business act or practice,” and California courts recognize each of these three prongs as separate 

and distinct theories of liability. See Cal. Bus. & Prof. Code § 17200; Lozano v. AT & T Wireless 

Servs., Inc., 504 F.3d 718, 731 (9th Cir. 2007) (citing Cel-Tech Commc'ns, Inc. v. Los Angeles 

/////

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Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999)). Although plaintiff alleges a UCL claim under all 

three prongs, defendant argues that each of plaintiff’s theories of liability is fatally flawed.

“A ‘business act or practice’ is ‘unlawful’ under the unfair competition law if it violates a 

rule contained in some other state or federal statute.” Sandoz Inc. v. Amgen Inc., ___ U.S. ___, 

137 S. Ct. 1664, 1673 (2017) (citing Rose v. Bank of America, N. A., 57 Cal. 4th 390, 396

(2013)). In effect, the UCL “borrows violations of other laws and treats them as unlawful 

practices that the unfair competition law makes independently actionable. . . . [V]irtually any 

state, federal or local law can serve as the predicate for an action” under the UCL. Davis v. 

HSBC Bank Nevada, N.A., 691 F.3d 1152, 1168 (9th Cir. 2012) (citations and internal quotation

marks omitted). However, plaintiff’s theory of liability under the “unlawful” prong fails here 

because he has not viably alleged a violation of any other laws, as noted above. Until he cures 

this defect, plaintiff cannot sustain a claim under the “unlawful” prong of the UCL.

To advance a theory of fraud under the UCL, a plaintiff must allege facts showing that 

reasonable members of the public are likely to be deceived by the allegedly fraudulent conduct. 

See Davis, 691 F.3d at 1169. Such a claim is subject to Rule 9(b)’s particularity requirements, 

see In re Anthem, Inc. Data Breach Litig., 162 F. Supp. 3d 953, 990 (N.D. Cal. 2016) (“Claims 

stated under the fraud prong of the UCL are subject to the particularity requirements of Federal 

Rule of Civil Procedure 9(b).”), and must include “an account of the time, place, and specific 

content of the false representations” being alleged. Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th 

Cir. 2007) (internal quotation marks omitted). According to defendant, plaintiff’s theory of fraud 

fails because it does not allege any facts “demonstrating that ‘members of the general public’ are 

likely to be deceived, given that Plaintiff’s allegations are limited to his own private negotiations 

regarding the Settlement.” (Doc. No. 4 at 11.) Plaintiff, in response, reiterates his conclusory 

allegation that defendant’s “representations were part of a common scheme to mislead 

consumers[.]” (Doc. No. 7 at 9.) Plaintiff, however, does not allege any facts that would support 

such a theory.

Similar deficiencies plague plaintiff’s theory of liability under the “unfair” prong of the 

UCL. Courts in the Ninth Circuit have recognized that there are at least three separate tests to 

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determine if conduct is “unfair” under the UCL. See Davis, 691 F.3d at 1170–71; In re Anthem, 

Inc. Data Breach Litig., 162 F. Supp. 3d at 989–90; Ehret v. Uber Techs., Inc., 68 F. Supp. 3d 

1121, 1137 (N.D. Cal. 2014). In this case, both parties adopt the test that examines whether the 

alleged conduct violates public policy or is “tethered to specific constitutional, statutory, or 

regulatory provisions.” (Doc. Nos. 4 at 11; 7 at 8.) But because plaintiff has not viably alleged a 

violation of any constitutional, statutory, or regulatory provisions, he cannot proceed under the 

“unfair” prong of the UCL. Accordingly, plaintiff’s UCL claim will also be dismissed with leave 

to amend.

CONCLUSION

For the reasons discussed above:

1. Defendant’s motion to dismiss (Doc. No. 4) is granted with leave to amend; and

2. Any amended complaint shall be filed within thirty (30) days of service of this 

order.

IT IS SO ORDERED.

Dated: January 27, 2020 

UNITED STATES DISTRICT JUDGE

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