Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-06-56370/USCOURTS-ca9-06-56370-0/pdf.json

Parties Involved:
Experian Information Solutions, Inc.

JPMorgan Chase & Co.
Appellee
Shane Satey
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SHANE SATEY, 

Plaintiff-Appellant,

v.

JPMORGAN CHASE & COMPANY, a No. 06-56370

corporation, d/b/a Chase Bank D.C. No. USA NA,  CV-05-07758-R Defendant-Appellee,

OPINION and

EXPERIAN INFORMATION SOLUTIONS,

INC., a corporation,

Defendant. 

Appeal from the United States District Court

for the Central District of California

Manuel L. Real, District Judge, Presiding

Argued and Submitted

February 14, 2008—Pasadena, California

Filed March 31, 2008

Before: Betty B. Fletcher and N. Randy Smith,

Circuit Judges, and Samuel P. King,* Senior Judge.

Opinion by Judge N.R. Smith

*The Honorable Samuel P. King, Senior United States District Judge

for the District of Hawaii, sitting by designation. 

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COUNSEL

Robert F. Brennan, Esq., Brennan, Wiener & Associates,

P.C., La Crescenta, California, for the plaintiff-appellant. 

George G. Weickhardt, Ropers, Majeski, Kohn, Bentley, San

Francisco, California, for the defendant-appellee. 

OPINION

N.R. SMITH, Circuit Judge: 

We hold that Appellant Shane Satey’s claim against

JPMorgan Chase & Company, d/b/a Chase Bank USA NA

(“Chase”) fails because Chase is not a “claimant” under CaliSATEY v. JPMORGAN CHASE 3273

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fornia Civil Code sections 1798.92, et seq. (“California’s

Identity Theft Law”). We deny as moot Chase’s request for

further proceedings on its statement of material facts not in

controversy. We have jurisdiction under 28 U.S.C. § 1291 and

we affirm.

I.

Chase issued a credit card to Appellant Shane Satey on

March 17, 2002. Satey used the credit card in April 2002 for

purchases totaling a few hundred dollars. On May 19, 2002,

Chase received a charge in the amount of $8,666.00 on

Satey’s credit card account from Jackpot 98 Cent Store in

Glendale, California. Chase approved the charge and it thereafter appeared on Satey’s credit card statement for the billing

period ending on May 29, 2002. 

Satey contacted Chase on June 4, 2002 to dispute the

charge as fraudulent and to report that his credit card was

missing. Based on Satey’s report of credit card fraud, Chase

closed the existing account (“original account”) and transferred the balance to a new account with a new account number. 

That same day, a Chase account representative contacted

Jackpot 98 Cent Store and spoke with the merchant. The merchant told the Chase account representative that Satey purchased $8,000, before taxes, worth of clothing and suitcases,

and provided at the time of purchase a California driver’s

license containing the license number and date of birth. The

merchant also told the Chase account representative that Jackpot 98 Cent Store obtained a signed credit card slip and an

imprint of the card at the time of purchase. The Chase account

representative requested that the merchant fax the documentation to Chase for review. Upon review, the Chase account representative determined that Satey’s actual date of birth and

driver’s license number matched the information provided by

the merchant.

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After this investigation, Chase decided that the charge was

legitimate and continued to seek payment from Satey for the

amount due including interest and other charges. Satey then

notified each of the three major credit bureaus that he was the

victim of identity theft, but, unfortunately, referenced only the

original account number when doing so. Meanwhile, Satey

refused to make any payments to Chase on the disputed

charge. As a result of his nonpayment, Satey’s account with

Chase became delinquent, and Chase reported the delinquency to the credit bureaus.

On March 28, 2003, Satey received a letter from CI Creditors Interchange, Inc. notifying him that Trilogy Capital Management, LLC (“Trilogy”) purchased Satey’s account from

Chase. Trilogy requested that Satey tender payment in the

amount of $10,106.11. That letter stated that the collection

letter was “For: Chase Bank” but then went on to state that

Trilogy had purchased the debt and was responsible for collection. 

On December 6, 2004, lawyers for Great Seneca Financial

Corporation (“Great Seneca”) notified Satey that Great Seneca had purchased Satey’s delinquent account. 

II.

On October 31, 2005, Satey sued Chase, Great Seneca, and

Experian, one of the major credit bureaus, for violations of the

Fair Credit Reporting Act (“FCRA”), California’s Identity

Theft Law, the federal Fair Debt Collection Practices Act

(“FDCPA”), and California’s Fair Debt Collection Practices

Act (“California FDCPA”) in the United States District Court

for the Central District of California. 

Subsequently, Satey voluntarily dismissed his claims

against Great Seneca and settled with Experian. Chase’s

counsel and Satey’s counsel executed a stipulation for dismissal of the FCRA, FDCPA, and California FDCPA claims.

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The record is unclear whether that document was ever filed,

though it appears that it was not. However, in the pretrial

report, Satey’s counsel represented to the district court that

those claims had been dismissed and both the district court

and counsel proceeded as if the claims had been dismissed.

Satey also requested in the pretrial report that the district court

consider whether it had jurisdiction over the remaining state

law claim. 

The factual bases for Satey’s claim under California’s Identity Theft Law included improper credit reporting, improper

investigation, and improper sale of the disputed account by

Chase. On or about July 19, 2006, Chase brought a motion for

summary judgment on Satey’s claim arising under California’s Identity Theft Law. Chase argued that Satey’s claim

under California’s Identity Theft law failed because (1) it was

preempted by the federal FDCPA and (2) Chase was not a

“claimant” under California’s Identity Theft Law. The district

court heard argument regarding Chase’s motion on August

28, 2006, and granted Chase’s motion from the bench after a

short hearing, ruling that the FDCPA preempted Satey’s

claims under California’s Identity Theft Law. 

III.

We review de novo whether the district court had subject

matter jurisdiction. Hoeck v. City of Portland, 57 F.3d 781,

784 (9th Cir. 1995). We review the district court’s decision to

exercise supplemental jurisdiction for an abuse of discretion.

Foster v. Wilson, 504 F.3d 1046, 1051 (9th Cir. 2007) (citing

28 U.S.C. § 1367(c)(3)). 

“Summary judgment, a final order over which we take

jurisdiction pursuant to 28 U.S.C. § 1291, is reviewed de

novo, drawing all reasonable inferences supported by the evidence in favor of the non-moving party.” Bodett v. CoxCom,

Inc., 366 F.3d 736, 742 (9th Cir. 2004) (citation and internal

quotation marks omitted). “We may affirm the district court

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on any basis supported by the record.” E. & J. Gallo Winery

v. EnCana Corp., 503 F.3d 1027, 1049 (9th Cir. 2007) (internal brackets, citation, and quotation marks omitted). 

IV.

A. The District Court Properly Exercised Jurisdiction 

[1] “The decision whether to continue to exercise supplemental jurisdiction over state law claims after all federal

claims have been dismissed lies within the district court’s discretion.” Foster, 504 F.3d at 1051. The fact that Satey may

have later sought dismissal of his federal claims does not

divest the district court of its power to exercise supplemental

jurisdiction unless those claims were absolutely devoid of

merit or obviously frivolous. See Gilder v. PGA Tour, Inc.,

936 F.2d 417, 421 (9th Cir. 1991). Satey’s federal claims

were neither devoid of merit nor obviously frivolous even

though they were not pursued. 

[2] In Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 351

(1988), the Supreme Court observed that “pendent jurisdiction

doctrine is designed to enable courts to handle cases involving

state-law claims in the way that will best accommodate the

values of economy, convenience, fairness, and comity[.]” Id.

at 351. “[I]n the usual case in which all federal-law claims are

eliminated before trial, the balance of factors to be considered

under the pendent jurisdiction doctrine—judicial economy,

convenience, fairness, and comity—will point toward declining to exercise jurisdiction over the remaining state-law

claims.” Id. However, dismissal of the remaining state law

claims in not “mandatory.” Id. at 350 n.7. 

There is no dispute that the district court’s initial exercise

of supplemental jurisdiction over Satey’s state law claims was

entirely proper. See 28 U.S.C. § 1367(a). The parties dispute

whether the district court abused its discretion by retaining

supplemental jurisdiction over the remaining state law claim

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in light of Satey’s stated intention to dismiss the remaining

federal claims. 

[3] We hold that the district court did not abuse its discretion by retaining supplemental jurisdiction over the remaining

state law claim. See 28 U.S.C. § 1367(c); Acri v. Varian

Assoc., Inc., 114 F.3d 999, 1000 (9th Cir. 1997) (en banc)

(recognizing discretionary nature of 28 U.S.C. § 1367(c) and

observing that “a federal district court with power to hear

state law claims has discretion to keep, or decline to keep,

them under the conditions set out in § 1367(c)”). Judicial

economy and convenience to the parties were better accommodated by retaining the state law claim at that juncture, and

the district court did not abuse its discretion by so doing. See

Carnegie-Mellon Univ., 484 U.S. at 350-51. 

B. Chase is Entitled to Summary Judgment on Satey’s

Claim Under California’s Identity Theft Law 

Chase challenges Satey’s claim under California’s Identity

Theft law on two distinct bases. Chase contends that the

FDCPA preempts Satey’s claim under California’s Identity

Theft Law. Chase also argues that it is not a “claimant” under

California’s Identity Theft Law, and thus, Satey’s claim

against Chase fails as a matter of law. Since we conclude that

Chase is not a “claimant” under California’s Identity Theft

Law, we express no opinion on whether the FDCPA preempt’s Satey’s claim against Chase under California’s Identity Theft Law. 

[4] California’s Identity Theft Law allows a “victim of

identity theft” to bring an action for damages, civil penalties,

and injunctive relief against a “claimant to establish that the

person is a victim of identity theft in connection with the

claimant’s claim against that person.” Cal. Civ. Code

§ 1798.93(a) and (c). “Claimant” means “a person who has or

purports to have a claim for money or an interest in property

in connection with a transaction procured through identity

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theft.” Cal. Civ. Code § 1798.92(a). The statute defines a

“victim of identity theft” as “a person who had his or her personal identifying information used without authorization by

another to obtain credit, goods, services, money, or property,

and did not use or possess the credit, goods, services, money,

or property obtained by the identity theft, and filed a police

report in this regard pursuant to Section 530.5 of the Penal

Code.” Cal. Civ. Code § 1798.92(d). 

Civil penalties are available if the victim of identity theft

proves all of the following by clear and convincing evidence:

(A) That at least 30 days prior to filing an action or

within the cross-complaint pursuant to this section,

he or she provided written notice to the claimant at

the address designated by the claimant for complaints related to credit reporting issues that a situation of identity theft might exist and explaining the

basis for that belief. 

(B) That the claimant failed to diligently investigate the victim’s notification of a possible identity

theft. 

(C) That the claimant continued to pursue its claim

against the victim after the claimant was presented

with facts that were later held to entitle the victim to

a judgment pursuant to this section. 

Cal. Civ. Code § 1798.93(c)(6). 

Chase argues that summary judgment is appropriate on

Satey’s claim under California’s Identity Theft law because it

does not currently have, and has not had since 2003, “a claim

for money . . . in connection with a transaction procured

through identity theft.” Thus, Chase argues, that it has not

been a “claimant” since 2003 and that Satey’s claim against

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Chase under California’s Identity Theft Law fails as a matter

of law. For the reasons set forth below, we agree. 

[5] The term “claimant,” as defined in California Civil

Code section 1798.92(a), reflects a present tense interest in a

debt or attempt to collect. “In construing statutes, the use of

verb tense by the Legislature is considered significant.”

Hughes v. Bd. of Arch. Exam’rs., 952 P.2d 641, 649 (Cal.

1998). “It is a general rule of statutory construction that a statute, expressed in general terms and words of present or future

tense, will be applied, not only to situations existing and

known at the time of the enactment, but also prospectively to

things and conditions that come into existence thereafter.”

State Comp. Ins. Fund v. McConnell, 294 P.2d 440, 446 (Cal.

1956); see also Cal. Civ. Code § 14. (“Words used in this

code in the present tense include the future as well as the present.”). If the California Legislature wanted to define “claimants” in the past tense, it could easily have done so by

modifying the statutory language. See Palmer v. United

States, 945 F.2d 1134, 1136 (9th Cir. 1991) (“If the legislature

wished to deprive urban property holders of qualified immunity, it could have easily done so. It is not our role as a court

to rewrite the plain language of a state statute.”); see e.g., Cal.

Health & Safety Code § 52012.5 (expressly including a pasttense construction in the statutory definition of “first time

homebuyer”). 

[6] Accordingly, granting the appropriate significance to

the verb tense used by the California Legislature, we cannot

construe “claimant” to include a person who had an interest

in a disputed debt at some point in the past, but who no longer

retains the interest at the time suit is filed, under California’s

Identity Theft Law. 

[7] At the time Satey filed suit on October 31, 2005, he

may have had a claim under California’s Identity Theft Law

against Great Seneca. Great Seneca had “a claim for money

or an interest in property in connection with a transaction pro3280 SATEY v. JPMORGAN CHASE

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cured through identity theft.” Cal. Civ. Code § 1798.92(a).

However, Satey had no claim under California’s Identity

Theft Law against Chase on October 31, 2005 because Chase

did not have, and had not had since 2003, “a claim for money

or an interest in property in connection with a transaction procured through identity theft.” Id.

[8] Our holding that the term “claimant” is limited to the

present or future tenses is consistent with the four-year statute

of limitations allowed by California’s Identity Theft Law: a

“claimant” could maintain a claim against a victim of identity

theft for four or more years. The statute of limitations would

continue to run, and a victim of identity theft could seek relief

under California’s Identity Theft Law, so long as the “claimant” maintained a claim. If, as happened here, a “claimant”

sells the disputed debt to another entity, and the victim of

identity theft has not yet filed suit, the victim of identity theft

may no longer sue the former “claimant” under California’s

Identity Theft Law. In that situation, the victim of identity

theft would be able to seek relief against the new “claimant”

and would have four years within which to do so. 

[9] In summary, because the California Legislature explicitly used the present tense when crafting the definition of

“claimant” under California’s Identity Theft Law, we hold

that it does not apply to a “claimant” who no longer has a

claim at the time the lawsuit is filed. For that reason, while

Chase may have previously come within the scope of California’s Identity Theft Law, once Chase sold the debt it was no

longer a “claimant” under California’s Identity Theft Law.

Thus Satey’s claim under California’s Identity Theft Law was

not viable against Chase when he filed suit on October 31,

2005. Satey instead dismissed his claim against Great Seneca.

Consequently, we affirm the district court and hold that summary judgment was appropriately entered in light of the fact

that Chase is not a “claimant” under California’s Identity

Theft Law. 

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Therefore, we decline to reach the propriety of the district

court’s conclusion that California’s Identity Theft Law is preempted by the FCRA. In light of our decision affirming summary judgment, Chase’s request for further proceedings on its

statement of material facts not in controversy is moot.1

Affirmed.

1By failing to file a cross appeal, Chase waived any issue it may have

had with respect to these claims. See S.M. v. J.K., 262 F.3d 914, 923 (9th

Cir. 2001). 

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