Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-03889/USCOURTS-cand-3_14-cv-03889-3/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1692 Fair Debt Collection Act

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ORDER GRANTING LEAVE TO FILE MOTION FOR RECONSIDERATION

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ZOE LETTY JAMES,

Plaintiff,

v.

PORTFOLIO RECOVERY ASSOCIATES, 

LLC,

Defendant.

Case No. 14-cv-03889-RMW 

ORDER GRANTING MOTION FOR 

LEAVE TO FILE A MOTION FOR 

RECONSIDERATION

Re: Dkt. No. 28

On February 20, 2015, the court granted defendant’s motion to compel arbitration. Dkt. 

No. 26. Shortly thereafter, on March 13, 2015, plaintiff filed a motion for leave to file a motion for 

reconsideration. Dkt. No. 28. Pursuant to Civil Local Rule 7-9(d), ] the court asked defendant to

file a response to plaintiff’s motion, Dkt. No. 29, which they did on March 26, 2015, Dkt. No. 34. 

Plaintiff filed a reply on March 27, 2014. Dkt. No. 35. Having considered the submissions of the 

parties, the relevant law, and the record in this case, the court hereby GRANTS plaintiff’s motion 

for leave to file a motion for reconsideration.

Under Civil Local Rule 7-9(b), a party may file a motion for leave to file a motion for 

reconsideration if the motion is brought with reasonable diligence and is based on one of the 

following:

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(1) That at the time of the motion for leave, a material difference in 

fact or law exists from that which was presented to the Court before 

entry of the interlocutory order for which reconsideration is sought. 

The party also must show that in the exercise of reasonable diligence

the party applying for reconsideration did not know such fact or law 

at the time of the interlocutory order; or 

(2) The emergence of new material facts or a change of law 

occurring after the time of such order; or 

(3) A manifest failure by the Court to consider material facts or 

dispositive legal arguments which were presented to the Court 

before such interlocutory order.

As plaintiff brought this motion 21 days after the court entered its order granting 

defendant’s motion to compel arbitration, the court is satisfied that plaintiff has acted with 

reasonable diligence. Plaintiff bases her motion for leave to file a motion for reconsideration on 

Civil Local Rule 7-9(b)(1) and (b)(3). The court finds that plaintiff has met her burden under Rule 

7-9(b)(1) of showing that a material difference in fact or law exists from that which was presented 

to the court before the entry of its order granting defendant’s motion to compel arbitration, and so

need not address plaintiff’s arguments under Rule 7-9(b)(3).

The court granted defendant’s motion to compel arbitration because: (1) the court found 

that there was an enforceable arbitration clause the cardholder agreement had entered into with 

HSBC Bank; (2) the arbitration clause encompassed the claims asserted by plaintiff in this case; 

(3) defendant PRA was authorized to enforce the arbitration clause as the assignee of HSBC’s 

interest in the cardholder agreement; and (4) PRA had not waived its right to arbitrate. See Dkt. 

No. 26. 

Plaintiff noted in her opposition to defendant’s motion to compel arbitration that there was 

a Forward Flow Agreement which might affect PRA’s rights under the cardholder agreement it 

purchased from HSBC, and speculated that “[i]t is possible that such an agreement sets forth that 

Defendant is only purchasing the right to receive payment, and not any other rights held by the 

respective Capital One entity.”1 Dkt. No. 22, at 11. However, plaintiff’s argument was speculative, 

 1 Plaintiff also raised this point at the hearing on defendant’s motion to remand, but, as in her 

opposition, plaintiff merely speculated that it might contain restrictions on PRA’s right to 

arbitrate.

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United States District Court

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and the court did not find it sufficient reason to deny the motion. 

Following the court’s order compelling arbitration, defendant produced a copy of the 

Forward Flow Agreement in the state court collection lawsuit filed by PRA in the Superior Court 

of Santa Clara.2 The Forward Flow Agreement, which plaintiff subsequently filed in this case 

under seal, see Dkt. Nos. 30, 31, contains in a section entitled “Covenants; Conduct of Business 

Following Each Closing,” the following provision: 

6.10 Arbitration. Buyer agrees that it shall not use arbitration for 

collection of debt or otherwise in connection with the Accounts 

purchased under this Agreement, unless arbitration is commenced 

by the Borrower or otherwise mutually agreed to by Buyer and

Borrower.

Dkt. No. 31-4, at ECF p. 18. Plaintiff argues that this provision meets the standard required for 

leave to file a motion for reconsideration under Civil Local Rule 7-9(b)(1) because it constitutes a 

“material difference in fact . . . from that which was presented to the Court before entry of” the 

order granting defendant’s motion to compel arbitration. Dkt. No. 28-1, at 5–6. The court agrees. 

Additionally, given that the Forward Flow Agreement was in the possession of defendant and only 

received by plaintiff on March 16, 2015, see Dkt. No. 35, at 5, and the fact that the Agreement was 

apparently only produced after the superior court granted plaintiff’s motion to compel discovery 

responses, see id., plaintiff has shown that in the exercise of reasonable diligence she did not know 

that the Agreement contained a provision limiting PRA’s right to arbitrate at the time the court 

ruled on defendant’s motion to compel arbitration. Accordingly, the court finds that plaintiff has 

made the required showing under Civil Local Rule 7-9(b) and GRANTS plaintiff’s motion for 

leave to file a motion for reconsideration.

Although the parties address the question of how the newly-produced Forward Flow 

Agreement affects defendant’s right to arbitrate in their papers on this motion, defendant requested 

the opportunity to file a separate opposition to plaintiff’s motion for reconsideration in the event 

that the court granted plaintiff leave to file a motion for reconsideration. Dkt No. 34, at 8 fn.9. 

 2 Portfolio Recovery Associates v. Zoe L. James, Case No. 1-14-CV-265849.

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Accordingly, the court sets the following supplemental briefing schedule: (1) plaintiff’s motion for 

reconsideration is due by April 22, 2015; (2) defendant’s responsive brief is due by May 6, 2015; 

and (3) plaintiff’s reply brief is due by May 13, 2015.

IT IS SO ORDERED.

Dated: March 30, 2015

______________________________________

Ronald M. Whyte

United States District Judge

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