Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-02285/USCOURTS-casd-3_13-cv-02285-0/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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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MERCEDES FALU-MAYSOMET, on

behalf of herself and all others

similarly situated,

Plaintiff,

CASE NO. 13-cv-02285 JM (NLS)

ORDER GRANTING MOTION TO

DISMISS

vs.

NATIONAL ENTERPRISE

SYSTEMS, INC.,

Defendant.

On December 3, 2013, Defendant National Enterprise Systems, Inc.

(“Defendant”) filed a motion to dismiss the first amended complaint for failure to

state a claim. Dkt. No. 9. After the court granted the parties’ request to continue

the hearing date on this motion, Plaintiff Falu-Maysomet (“Plaintiff”) filed an

opposition to Defendant’s motion, Dkt. No. 12, and Defendant subsequently filed its

reply. Dkt. No. 13. For the reasons set forth below, Defendant’s motion to dismiss

is granted with prejudice as to Plaintiff’s allegations in Counts I, II, and III as

alleged in the amended complaint.

1

BACKGROUND

At some point prior to August 2013, Plaintiff incurred federal student loan

financial obligations from United Student Aid Fund (“USAF”). After Plaintiff

As set forth more fully below, Plaintiff withdrawsthe RFDCPA claim in Count

1

III in her opposition to Defendant’s motion to dismiss. 

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defaulted on this debt, USAF assigned the debt to Defendant in order for Defendant

to collect the debt from Plaintiff. Defendant is a corporation operating as a

collection agency with its principal place of business in Solon, Ohio. 

On August 30, 2013, Defendant sent Plaintiff a “NOTICE PRIOR TO WAGE

WITHHOLDING” (“Notice”), which Plaintiff has attached to the amended

complaint as Exhibit A. Plaintiff alleges that the Notice contained false and

misleading statements in violation of the Fair Debt Collection Practices Act

(“FDCPA”), 15 U.S.C. § 1692 et seq. 

The first statement within the Notice provided as follows:

You are given notice that United Student Aid Funds, Inc., pursuant to

federal law . . . will order your employer to immediately withhold

money from your earnings (a process known as Administrative Wage

Garnishment) for payment of your defaulted student loan(s), unless you

take action set forth in this notice. 

Am. Compl., Ex. A at 1 (emphasis in original). The Notice further stated:

You must establish a written repayment agreement with National

Enterprise Systems, Inc. on or before September 29, 2013. Otherwise,

United Student Aid Funds, Inc. will proceed to collect this debt through

deductions from your pay. Unless you act by September 29, 2013, your

employer will be ordered to deduct from your pay an amount equal to no

more than fifteen percent (15%) of your disposable pay for each pay

period, or the amount permitted by 15 U.S.C, 1673 . . . to repay your

student loan(s) held by United Student Aid Funds, Inc.

Id. Beginning on the second page of the Notice, Defendant detailed Plaintiff’s

rights regarding the proposed garnishment of wages. Specifically, the letter sets

forth Plaintiff’s rights under the FDCPA and the Higher Education Act (“HEA”),

including her right to object to the proposed garnishment and to request a hearing

on any objections. Pages 4, 5, and 6 of the Notice provide a form for Plaintiff to fill

out in order to request a hearing on any objections. 

In the amended complaint, Plaintiff alleges the Notice contained false and

misleading statements that overshadowed Plaintiff’s actual rights afforded to her

under the HEA and FDCPA. Although the Notice included an explanation of the

rights provided by the HEA, Plaintiff contends Defendant’s initial statements on the

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cover page of the Notice contradicted the rights described in subsequent pages. 

Because the HEA provides a period of thirty days within which Plaintiff could take

steps to avoid the garnishment, Plaintiff contends Defendant’s statement that

Plaintiff’s employer will be ordered to “immediately” withhold Plaintiff’s wages is

patently false, deceptive and misleading, and contrary to the rights afforded to her

by law. Similarly, because the HEA provides a borrower with several options to

avoid wage garnishment, only one of which is entering into a repayment agreement,

Plaintiff argues Defendant’s statement that Plaintiff “must” enter into a repayment

agreement or her wages “will” be garnished is false and misleading. 

Based upon these allegations, the amended complaint contains three claims

against Defendant: (1) Violation of 15 U.S.C. § 1692e of the FDCPA by Use of

Deception to Collect a Debt; (2) Violation of 15 U.S.C. §1692f of the FDCPA by

Using Unfair or Unconscionable Practices; and (3) Violation of the Rosenthal Fair

Debt Collection Practices Act (“RFDCPA”), Cal. Civ. Code § 1788 et seq. Plaintiff

asserts these claims individually and as a class action on behalf of other consumers

receiving this type of Notice from Defendant. 

LEGAL STANDARD

For a plaintiff to overcome a Rule 12(b)(6) motion to dismiss for failure to

state a claim, the complaint must contain “enough facts to state a claim to relief that

is plausible on its face.” Bell Atl. 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). Factual pleadings merely

consistent with a defendant’s liability are insufficient to survive a motion to dismiss

because they only establish that the allegations are possible rather than plausible. 

See id. at 678-79. The court should grant 12(b)(6) relief only if the complaint lacks

either a “cognizable legal theory” or facts sufficient to support a cognizable legal

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

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In addition, when resolving a motion to dismiss for failure to state a claim,

courts may not generally consider materials outside the pleadings. Schneider v. Cal.

Dep’t of Corrs., 151 F.3d 1194, 1197 n. 1 (9th Cir. 1998); Jacobellis v. State Farm

Fire & Cas. Co., 120 F.3d 171, 172 (9th Cir. 1997); Allarcom Pay Television Ltd. v.

Gen. Instrument Corp., 69 F.3d 381, 385 (9th Cir. 1995). “The focus of any Rule

12(b)(6) dismissal . . . is the complaint.” Schneider, 151 F.3d at 1197 n. 1. This

precludes consideration of “new” allegations that may be raised in a plaintiff's

opposition to a motion to dismiss brought pursuant to Rule 12(b)(6). Id. (citing

Harrell v. United States, 13 F.3d 232, 236 (7th Cir. 1993); 2 Moore’s Fed. Prac. §

12.34[2] (Matthew Bender 3d ed.)).

However, “[w]hen a plaintiff has attached various exhibits to the complaint,

those exhibits may be considered in determining whether dismissal [i]s proper . . . .”

Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (citing Cooper v. Bell,

628 F.2d 1208, 1210 n. 2 (9th Cir. 1980)). The court may also consider “documents

whose contents are alleged in a complaint and whose authenticity no party

questions, but which are not physically attached to the pleading. . . .” Knievel v.

ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (citing Branch v. Tunnell, 14 F.3d 449,

454 (9th Cir. 1994) overruled on other grounds by Galbraith v. County of Santa

Clara, 307 F.3d 1119 (9th Cir. 2002)). 

When considering alleged violations of sections 1692e and 1692f of the

FDCPA, the Ninth Circuit applies the “least sophisticated debtor” standard. 

Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 934 (9th Cir. 2007). “If the least

sophisticated debtor would ‘likely be misled’ by a communication from a debt

collector, the debt collector has violated the FDCPA.” Id. (quoting Swanson v.

Southern Oregon Credit Serv., Inc., 869 F.2d 1222, 1225 (9th Cir. 1988)). “The

objective least sophisticated debtor standard is ‘lower than simply examining

whether particular language would deceive or mislead a reasonable debtor.’” 

/ / /

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Terran v. Kaplan, 109 F.3d 1428, 1431-32 (9th Cir. 1997)(quoting Swanson, 869

F.2d at 1227)). 

DISCUSSION

I. FDCPA Violations in Counts I and II

Under the HEA, eligible lenders make guaranteed loans on favorable terms to

students and parents to help finance student education costs. Rowe v. Educ. Credit

Mgmt. Corp., 559 F.3d 1028, 1030 (9th Cir. 2009). These loans are typically

guaranteed by guaranty agencies and are ultimately reinsured by the Department of

Education (“DOE”). Id. If a borrower becomes delinquent in making his or her

student loan payments, the guaranty agency has the ability to conduct an

administrative wage garnishment pursuant to section 1095a of the HEA. 20 U.S.C.

§ 1095a(a). However, the garnishment is subject to certain restrictions, such as

limiting the maximum garnishment amount to 15% of disposable wages per pay

period; requiring notice to be sent to the debtor’s last known address at least 30 days

prior to issuing a garnishment order to an employer; allowing the debtor the

opportunity to inspect and copy documents; conducting a hearing if requested by the

debtor within 15 days of the date the 30-day notice is mailed; and disallowing wage

garnishment if the debtor has been involuntarily separated from employment and

has not been reemployed continuously for twelve months. 20 U.S.C. § 1095a(a)-(c). 

Plaintiff contends the Notice violated sections 1692e and 1692f of the

FDCPA because it would mislead and confuse the least sophisticated consumer

concerning their rights under the HEA. Under section 1692e, a debt collector may

not use any “false, deceptive, or misleading representation or means in connection

with the collection of any debt.” 15 U.S.C. § 1692e. Section 1692f prohibits

“unfair or unconscionable means to collect or attempt to collect any debt.” 15

U.S.C. § 1692f. In the amended complaint, Plaintiff specifically objects to two

statements in the Notice as violating the FDCPA and raises an additional objection

to the Notice in her opposition brief. 

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A. Reference to Immediate Withholding of Wages

Plaintiff’s first objection pertains to the Notice’s opening line: “You are given

notice that United Student Aid Funds, Inc., pursuant to federal law. . ., will order

your employer to immediately withhold money from your earnings (a process

known as Administrative Wage Garnishment) for payment of your defaulted student

loan(s), unless you take action set forth in this notice.” Am. Compl. Ex. A at 2

(emphasis in original). Notwithstanding the explanation of her rights under the

HEA on subsequent pages, Plaintiff contends Defendant’s language on the cover

page advising Plaintiff that the garnishment will commence immediately is patently

false, deceptive and misleading, and contrary to the true rights afforded to her by

law.

In its motion to dismiss, Defendant argues the Notice does not state that wage

garnishment would be immediate; rather, the Notice stated that garnishment of

wages would be immediate if Plaintiff did not “take action set forth in this notice.”

After advising Plaintiff she could potentially avoid wage garnishment, Defendant

emphasizes that the Notice then detailed all of the rights available to her under the

HEA on the second page. For this reason, Defendant contends the opening line of

the Notice did not violate the FDCPA as it was neither false, deceptive, or

misleading.

While acknowledging that the Notice contains the requisite HEA disclosures,

Plaintiff contends the language used by Defendant in describing the immediate

possibility of wage garnishment is misleading because it overshadows the language

informing her of her HEA rights. Defendant notes that there does not appear to be

any case law addressing whether statements made in conjunction with the required

HEA disclosure of wage garnishment rights can nonetheless overshadow or

contradict the HEA disclosure such that it violates the FDCPA, but does rely on

Terran v. Kaplan, 109 F.3d 1428, 1431-32 (9th Cir. 1997), which analyzes 15

U.S.C. § 1692g in another debt collection context. Much like the HEA’s disclosure

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requirements, section 1692g of the FDCPA requires debt collectors to provide

consumers with adequate information concerning their dispute and validation rights,

including the right to receive a notice from the debt collector stating the amount of

the debt, the name of the creditor to whom the debt is owed, and the ability to

dispute the validity of the debt and/or request creditor information and verification

of the debt within 30 days. 15 U.S.C. § 1692g.

In Terran, the court considered whether the language in a collection letter

overshadowed or contradicted the validation notice required by section 1692g so as

to confuse a hypothetical least sophisticated debtor. 109 F.3d at 1432. The

one-page letter, typed on Kaplan’s law office letterhead, in a uniform size and

typeface, provided as follows:

Please be advised that this office represents MONTGOMERY WARD

CREDIT CORP with whom you have an outstanding balance of

$546.63.

Unless an immediate telephone call is made to J SCOTT, a collection

assistant of our office at (602) 258–8433, we may find it necessary to

recommend to our client that they proceed with legal action.

Unless you notify us in writing within thirty (30) days after receipt of

our initial notice that you dispute the validity of this debt, or any

portion thereof, we will assume the debt to be valid. Upon such

notification, we will obtain verification of the debt or a copy of the

judgment against you and a copy of such verification or judgment will

be mailed to you. Upon your written request within the thirty (30) day

period described above we will provide you with the name and address

of the original creditor if different from the current creditor.

Id. at 1430. 

In analyzing Terran, it becomes clear that both the format and substance of a

payment demand are important considerations that should bridge typical consumer

debts as well as student loan obligations. Format considerations involve

2

comparative font size, the use of bold-face type, colored type, message placement or

arrangement and, ultimately as in Terran, whether the required validation rights are

One may ponder whether the hypothetical least sophisticated debtor standard 2

should apply to the least sophisticated college student. 

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“dwarfed” by the payment demand. Id. at 1433. Substantively, it is important to

analyze whether the notice demands the debt be disputed “today,” or “immediately,”

or whether payment be made “immediately,” or whether important statutory rights

are not set forth. Id. at 1433-34. 

In Terran, the court noted that “[t]he [questioned] validation notice

immediately follows the language regarding an immediate telephone call. The text

of the letter is uniformly presented in ordinary, same-sized font. No emphasis is

placed on any particular statement, with the exception of the creditor’s name and the

name of the person to contact at Kaplan’s office.” Id. The court also noted that the

validation notice immediately followed the language regarding an immediate phone

call to arrange payment. Id. The court concluded that the request that the debtor

“immediately” telephone a collection assistant to avoid potential legal action did not

“overshadow or contradict” the language in the notice that the alleged debtor had

thirty days in which to dispute the debt. Id. at 1434. See also Renick v. Dun &

Bradstreet Receivable Mgmt. Serv., 290 F.3d 1055, 1057-58 (9th Cir. 2002)(per

curiam)(finding a request to “[u]se the tear-off portion of this letter ... to send your

payment today” did not overshadow the language in the notice that the alleged

debtor has thirty days in which to dispute the debt because it “was in the same font

as the surrounding text; was not emphasized in any other way; was in the nature of a

request rather than a demand; and carried no sense of urgency”). 

Rather than applying the considered approach of Terran, Plaintiff primarily

takes issue with the use of the word “must” in the Notice, as well as with the

language in the opening line of Defendant’s Notice. Applying the analysis in

Terran, the court concludes the language regarding immediate wage garnishment

does not violate sections 1692e and 1692f as it does not overshadow or contradict

the rights afforded to Plaintiff under the HEA. First and foremost, that language is

preceded by the words, in bold, “NOTICE PRIOR TO WAGE

WITHHOLDING.” This bold notice language suggests the availability of options

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before withholding occurs. While the complained-of sentence itself contains the

word “immediately,” there is no threat of immediate wage garnishment. The

remainder of the Notice details the other possible actions Plaintiff may take in order

to avoid wage garnishment, including exercising her rights to inspect or request

records from Defendant, to object to the proposed garnishment, and to request a

hearing. The available rights under the HEA are written in the same-sized font as

the other parts of the Notice, much like the notices in Terran and Renick. See

Terran, 109 F.3d at 1431; Renick, 290 F.3d at 1057. These rights set forth available

options for Plaintiff to avoid or modify wage garnishment. Thus, much like the use

of “immediately” in Terran, that term does not convey a threat which would induce

the least sophisticated debtor to give up the rights afforded under the HEA. See

Renick, 290 F.3d at 1057 (finding the statement on the reverse that “PROMPT

PAYMENT IS REQUESTED” did not convey a threat that could induce Renick to

“ignore his right to take 30 days to verify his debt and act immediately”)(quoting

Swanson, 869 F.2d at 1226). Moreover, there is nothing inaccurate about

Defendant informing Plaintiff that the administrative wage garnishment would be

immediate if she did not dispute the garnishment or invoke her other rights under

the HEA.

Essentially, the court concludes that the opening line of the Notice does not

overshadow Plaintiff’s rights under the HEA. While indicating that Plaintiff’s

employer would be instructed to “immediately withhold money from [her]

earnings,” it clearly states that this withholding would only occur if she did not

“take action set forth in this notice.” The Notice goes on to explain Plaintiff’s HEA

rights in detail. As in Terran, the text of the opening line is uniformly presented in

ordinary, same-size font, with the exception of the lender’s name, United Student

Aid Fund, Inc., which appears in bold font. Under the circumstances, the language

regarding the possibility of immediate withholding of wages does not overshadow

or contradict the Notice’s description of the HEA rights available to Plaintiff. 

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Accordingly, the court finds this particular language standing on its own would not

deceive or mislead the least sophisticated debtor such that it violates the FDCPA.

B. Indication that Plaintiff “Must” Set Up a Repayment Plan

Plaintiff’s second objection to the Notice pertains to the following language

in the final paragraph on the first page of the Notice, stating: “You must establish a

written repayment agreement with National Enterprise Systems, Inc. on or before

September 29, 2013. Otherwise, United Student Aid Funds, Inc. will proceed to

collect this debt through deductions from your pay.” Am. Compl., Ex. A at 2. 

Notwithstanding the explanation of her rights under the HEA on subsequent pages,

Plaintiff contends Defendant’s language advising Plaintiff that the garnishment will

occur unless she enters into a repayment agreement is patently false, deceptive and

misleading, and contrary to the true rights afforded to her by law. Plaintiff alleges

Defendant’s Notice improperly emphasizes that the consumer “must” set up a

repayment plan with Defendant in order to avoid wage garnishment, while glossing

over the consumer’s other equally valid options under the HEA, such as requesting

a hearing or providing notice that the consumer has been recently reemployed.

In response to Plaintiff’s allegations, Defendant notes the request for a written

repayment agreement is followed by the enumeration of rights as required by the

HEA. See Renick, 209 F.3d at 1057. As a result, Defendant contends it would be

clear to the least sophisticated debtor that she could take one of several steps to

avoid a wage garnishment, such as requesting a hearing to challenge the wage

garnishment within 30 days or demonstrate reemployment. This is supported by the

fact that five out of the six pages of the Notice are dedicated to requesting a hearing. 

Again, Defendant notes the language in question and the language enumerating

Plaintiff’s HEA rights are in the same style and size font, further indicating that the

Notice’s request to establish a written repayment does not overshadow Plaintiff’s

HEA rights. See Terran,109 F.3d at 1431; Renick, 290 F.3d at 1057.

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Defendant further emphasizes that the Notice accurately states that wage

garnishment could be avoided if a repayment agreement is entered into with

Defendant on or before expiration of the 30-day period. Defendant argues that

statement is true as there would be no need for wage garnishment if Plaintiff repaid

her student loans per an agreement with the lender or its agent. Additionally,

Defendant argues the Notice accurately states that wage garnishment “will” occur

“unless” Plaintiff acts by September 29, 2013, by entering into a repayment

agreement or invoking any of Plaintiff’s hearing and dispute rights, which are fully

explained in the balance of the Notice. 

In her opposition to Defendant’s motion to dismiss, Plaintiff argues it is

misleading to tell a consumer that he or she “must” enter into a payment

arrangement, without simultaneously notifying the consumer of other equally viable

options under the HEA. Plaintiff contends Defendant initially warns the consumer

of the necessity to enter into a repayment agreement, but then fails to treat the other

possible options under the HEA in the same fashion or with the same importance. 

Specifically, Plaintiff objects to the Notice having failed to disclose any of the

borrower’s rights on its cover page at all, instead leaving the available HEA rights

“squirreled away on the second page.” Pl. Resp. 10. 

Plaintiff relies on Robertson v. Richard J. Boudreau & Assocs., LLC as

support for her objection to the Notice based on the list of her rights under the HEA

not being included on the first page of the Notice. 2009 WL 5108479 (N.D. Cal.

Dec. 18, 2009). In Robertson, the collection letter initially warned that “unless

payment in full is made or you arrange through this firm for the repayment of this

debt in a manner acceptable to our client, we will conduct a review of your account. 

Our review will determine whether there is a valid legal dispute regarding this debt,

and assuming none, the most effective means to secure repayment.” Id. at *4. The

court determined that this language implied “to the least sophisticated consumer that

the consumer has only one option, to pay or arrange to pay the debt in full.” Id. 

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The following paragraph set forth the consumer’s FDCPA right to dispute; however,

the court found this insufficient as “[s]tating inconsistent information in separate

paragraphs does not provide the level of consumer protection Congress mandated.”

Id. Here, Plaintiff contends the “must establish a written payment agreement”

language suggested she had only one option in order to avoid wage garnishment,

and the notification of the right to request a hearing is not disclosed until the second

page when the Notice’s cover page commands that a payment arrangement “must”

be made. Like Robertson, Plaintiff argues the language on the cover page is

inconsistent with consumers’ other HEA rights, and therefore does not provide the

level of consumer protection Congress mandated.

To avoid violating the FDCPA, Plaintiff contends Defendant should have

provided the consumer with a series of mutually exclusive options based upon the

HEA’s requirements on the cover page of the Notice. Plaintiff suggests this would

require no more than the inclusion of one sentence notifying the consumer that to

avoid immediate wage garnishment, she must: 1) enter into a payment plan; 2)

request a hearing; or 3) inform Defendant that she had been involuntarily separated

from employment.

In its reply brief, Defendant asserts that Plaintiff wrongfully characterizes the

Notice as emphasizing that she “must” establish repayments as the word “must”

received no emphasis, and was in the same-sized font as other language in the

notice. Additionally, Defendant argues the Notice actually emphasized Plaintiff’s

HEA rights and the hearing procedure on the second page of the notice using bold

and underlined typeface stating: “You have the following rights regarding this

action: . . ..” Am. Compl., Ex. A at 3. Defendant contends the Notice did

simultaneously (and accurately) explain to Plaintiff that: (1) she must enter into a

repayment agreement to avoid the administrative wage garnishment procedure, and

(2) she has a variety of other options to avoid administrative wage garnishment,

including the option to raise as objections the existence of the debt, the amount of

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the debt, or that making installment payments in amounts equal to 15% of your

disposable pay, or having payments in that amount withheld from your disposable

pay would constitute an extreme financial hardship. 

Defendant further objects to Plaintiff’s characterization of her HEA rights

being “squirreled away” on the second page of the Notice. Defendant argues

nothing is “squirreled away” on the second page. Rather, the second page of the

notice prominently informed Plaintiff of her rights under the HEA, and how to

request a hearing, in bold and underlined typeface, with the explanation of her rights

set forth in neat, organized bullet points. Defendant notes that the Notice also

informs Plaintiff she can avoid wage garnishment by entering into a repayment plan

on the second page of the Notice, in the second bullet point, alongside the

explanation of Plaintiff’s other rights under the HEA. This language receives no

special emphasis, it is argued, and the remaining bullet points on the second page

clearly and accurately explain how Plaintiff may object to wage garnishment in the

absence of a repayment agreement. As a result, Defendant contends the alleged

“command” to make an agreement certainly did not take precedence over all other

options, when the repayment agreement language appeared alongside the

enumeration of various objections Plaintiff may assert if no repayment agreement is

reached. 

Lastly, Defendant emphasizes that the Notice is six pages in length, with five

of the six pages devoted to explaining Plaintiff’s rights under the HEA, including

the three-page form to request a hearing. As a result, Defendant argues Plaintiff

cannot reasonably contend she was misled or that her HEA rights were

overshadowed when five of the six pages of the Notice fully explained her HEA

rights, including how to object to wage garnishment and request a hearing. 

Defendant notes the language Plaintiff complains about on the first page of the

Notice received no special emphasis and is consistent with the balance of the

Notice. 

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Having reviewed the entirety of the Notice, the court finds the language on

the cover page does not overshadow or contradict Plaintiff’s rights under the HEA

as detailed on the remaining pages of the Notice. While the language itself suggests

Plaintiff must establish repayment to avoid wage garnishment, the Notice clearly

states after that paragraph: “NOTICE: SEE REVERSE SIDE FOR IMPORTANT

INFORMATION.” As noted by Defendant, the second page of the Notice states in

bold and underlined font: “You have the following rights regarding this action:”

and proceeds to describe Plaintiff’s rights under the HEA in an organized and

concise fashion. On the cover page, the Notice indicates that Plaintiff needs to take

action to avoid wage garnishment, and the remaining five pages provide her with

the information she needs to do so. Moreover, the ability to seek a written

repayment agreement is a valid method for Plaintiff to avoid wage garnishment

under the HEA. Finally, although not emphasized by either party, the language

employed throughout the notice is plain and clear, especially when the HEA rights

are articulated. Both the primary notice paragraph and the HEA rights are devoid of

legalese. 

As for the decision in Robertson, it was not based entirely on the location of

the required disclosure of the borrower’s rights compared to the objectionable

statement. The court primarily objected to the language used by the debt collector

because it overshadowed the rights provided in the next paragraph. The court

determined that the language “directly contradicts a debtor’s statutory right to

dispute the validity of the debt within thirty days of receipt, and suggests that

defendant alone will determine if there is any valid dispute, without plaintiff’s

input.” Robertson, 2009 WL 5108479 at *4. The court found that the debt collector

could not “imply in one paragraph that plaintiff has no right to dispute the debt and

then cure that violation in the next paragraph by stating that plaintiff has such a

right.” Id. Here, the objectionable phrase in the Notice informs Plaintiff that she

can avoid wage garnishment by entering into a written payment agreement, one of

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the rights available to her under the HEA, but it does not directly contradict

Plaintiff’s right to object to the wage garnishment or request a hearing. 

Accordingly, Robertson is of limited relevance here.

Taken in isolation, the court recognizes Plaintiff’s concern regarding the

following language: “You must establish a written repayment agreement with

National Enterprise Systems, Inc. on or before September 29, 2013. Otherwise,

United Student Aid Funds, Inc. will proceed to collect this debt through deductions

from your pay.” Am. Compl., Ex. A at 2. This is suggestive of a procedural

equation: no repayment agreement equals wage garnishment. Such an

interpretation, standing alone, would be inconsistent with the options set forth on

the following pages of the Notice. However, the question is whether this statement

overshadows the language in the Notice detailing the several options available to

Plaintiff, particularly when the Notice states, in bold, “NOTICE: SEE REVERSE

SIDE FOR IMPORTANT INFORMATION” immediately following the

objectionable paragraph. This language actually draws the debtor to the thorough

description of her rights on the following page. Given this context, the language

objected to by Plaintiff, while concerning, does not overshadow the information

provided in the remainder of the Notice.

Notably, the question is not whether this notice could have been better

constructed or more mitigated in tone, or whether several pages of rights should

have been integrated with the initial demand paragraphs. To be sure, the form and

content of any demand or notice may always be susceptible to improvement. As

stated in Terran, however, “[the court’s] role . . . is . . . the essentially negative one

of examining whether a given notice comports with the requirements of the statute.” 

Terran, 109 F.3d at 1433 (citations and internal quotations omitted).

For these reasons, the language indicating Plaintiff must establish a written

repayment agreement in order to avoid wage garnishment does not overshadow or

contradict the Notice’s description of the HEA rights available to Plaintiff. 

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/ / /

Therefore, the court concludes this particular language would not deceive or

mislead the least sophisticated debtor such that it violates the FDCPA.

C. Request for Written Documentation of Employment

In Plaintiff’s opposition to Defendant’s motion to dismiss, she raises a basis

for her FDCPA claims that was not initially raised in her amended complaint. For

the first time, Plaintiff contends the Notice is misleading because it requires the

consumer to provide written proof of their employment status to satisfy the HEA’s

employment exemption when there is no such requirement under the law. 

3

Defendant argues Plaintiff’s new allegation should not be considered by the

court because it is not pled in her amended complaint. Courts “may not look beyond

the complaint to a plaintiff’s moving papers, such as a memorandum in opposition

to a defendant’s motion to dismiss.” See Schneider v. California Dept. of

Corrections, 151 F.3d 1194, 1197 n. 1 (9th Cir. 1998) (emphasis in original);

Cordell v. Tilton, 515 F. Supp. 2d 1114, 1128 (S.D. Cal. 2007) (same); Evans v.

County of San Diego, 2008 WL 842459, at *6 (S.D. Cal. Mar. 27, 2008) (same). 

Accordingly, Defendant contends the court should not consider this additional

objection when deciding whether to dismiss the complaint.

The court agrees with Defendant’s assessment and finds Plaintiff improperly

asserted this objection for the first time in her opposition to Defendant’s motion to

dismiss rather than in her amended complaint. As a result, it cannot be used as a

means of surviving Defendant’s motion to dismiss for failure to state a claim. 

Under the circumstances, the court is reluctant to conclude that Plaintiff cannot

On the second page, the Notice states: “If you wish to claim this exemption 3

from wage garnishment, you need to complete Part II of the enclosed Request for

Hearing form and send us written proof that you qualify for the exemption by

September 29, 2013.” Am. Compl., Ex. A at 3. Under the HEA, “[t]he guaranty

agencymay not garnish the wages of a borrower whom it knows has been involuntarily

separated from employment until the borrower has been reemployed continuously for

at least 12 months.” 34 C.F.R. § 682.410(b)(9)(i)(G). 

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possibly articulate a valid FDCPA claim regarding the written proof of employment

requirement. Accordingly, the court grants Plaintiff leave to amend the complaint. 

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II. Violation of RFDCPA in Count III

Defendant seeks dismissal of Plaintiff’s RFDCPA claim for many of the same

reasons discussed above with regard to the FDCPA. In addition, Defendant

contends Plaintiff’s claim under the RFDCPA is expressly preempted by the HEA. 

In her opposition to Defendant’s motion to dismiss, Plaintiff withdraws her

RFDCPA claim alleged in Count III. Accordingly, Plaintiff’s RFDCPA claim in

Count III is dismissed. 

CONCLUSION

For the foregoing reasons, the court grants Defendant’s motion to dismiss. 

Because Plaintiff’s present claims do not appear curable by further amending her

complaint as they are cabined by the undisputed language of the Notice, the claims

in Counts I, II, and III of the first amended complaint are dismissed without leave to

amend. Plaintiff does, however, have leave to amend the complaint with regard to

the Notice’s written proof of employment requirement and must do so within twenty

days of the filing of this order.

IT IS SO ORDERED.

DATED: March 21, 2014

 Hon. Jeffrey T. Miller

 United States District Judge

Should Plaintiff consider amending her complaint to include this claim, she

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may wish to bear in mind the implications of the Seventh Circuit’s decision in Kort v.

Diversified Collection Serv., 394 F.3d 530 (7th Cir. 2005) as raised by Defendant in

its reply brief.

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