N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
M ER C EDES UR

B INA, Pla i ntiff-Appe lla

nt,
v. NATIONAL B USINESS FAC TOR S INC
. ,

De fe nda n t-Appe l le e . No. 19-16055 D.C . No. 3:17-c v-00385-W GC
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of Ne v a da W illia m G. C obb, M a gistra

te Judge , Pre siding Subm itte d August 12, 2020 ** San Fran c isc o , C a lifornia B e fore : TASHIM A a

n d C HR ISTEN, C i rc uit Judge s , a nd B ATAILLON, *** Distric t Judge
. 

# FIL ED AUG 17 2020 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.

* * The pa

ne l una nim ously c onc lude s this c a se is suita ble for de c ision without ora l a

rgum e nt. Se e Fe d. R . App. P. 34(a )(2).

* * * The Honora

ble Jose ph F. B ata illon, Unite d Stat e s Distric t Judge for the D istric t of Ne b ra ska , sitting by de signa tion.M e rc e de s Urbina a ppe a ls the distric t c ourt’ s orde r gra nting sum m ary judgm e nt for Na

t iona l B usine ss Fa c tors, Inc . (NB F), a de bt c olle c tor. W e have jurisdic tion pursua

n t to 28 U.S.C . § 1291, a

nd we re ve rse . B e c a

u se the pa rtie s a re fam ilia r with thefa c t s, we re c ite the m only a s ne c e ssa

ry to re s olve the issue s on
a ppe a l. The distric t c ourt gra

nte d sum m ary judgm e nt for NB F be c a

use it c onc lude d that NB F qua lifie d for the bona fide e rror de fe nse . To a sse rt a bona fide e rror de fe nse , the de b t c olle c tor m ust prove tha

t: (1) it viola

te d the FDC PA uninte ntiona l ly ; (2) the viola tion re sulte d

from a bona fide e rror; and (3) it
m a inta ine d proc e dure s re a sona bly a da pte d to a void theviola

tion. Mc C

ollough v
. J ohnson, Rodenburg &Lauinge r, LLC , 637 F.3d 939, 948 (9th C ir. 2011) (c iting 15 U.S.C . § 1692k(c )). The pa rtie s do not dispute

tha t NB F uninte ntiona l ly

viola te d the FDC PA whe n it c a lc ulate d inte re st on Urbina ’ s de bt owe d to the Ta hoe Fra c t ure C linic (TFC ). At issuehe re is whe the r NB F m a i nta ine d proc e dure s re a sona

bly a da pte d to
avoid this viola

tion. R e vie wing de novo, B ranc h Bank ing &Tr. C

o. v . D.M.S.I., LLC , 871 F.3d 751, 759 (9th C ir. 2017), we c onc lude tha t it did not. TFC c ontra c t e d NB F for de bt c olle c tion se rvic e s in 2014. Under TFC and NB F’ s e xc lusive a gre e m e nt, NB F c ould a dd inte re s t c ha rge s on unpa id c olle c tions
2a t the sta

tutorily a llowe d rat e . The a gre e m e nt re q uire d TFC to re fe r outsta

n ding de bts to NB F for c olle c tion “ w ith only a c c urat e data

and tha t the ba la nc e s re fle c t le gitim ate , e nforc e a

ble obliga tions of thec onsum e r.” NB F argue s tha

t this proc e dure wa s re a sona bly a da pte d to a void viola

tions of the FDC PA. W e disa g re e . “ To qua lify for the bona

fide e rror de fe nse unde r the FDC PA, the de bt c o l le c tor ha s a n a ffirm ative obliga

t ion to m a inta in proc e dure s de signe d to a

void disc ove ra

ble e rrors, inc l uding, but not lim ite d to, e rrors in
c a lc ulat ion a

nd ite m iz a tion.” Re ic h e rt v . N a t’l C re dit Sy s., Inc
. , 531 F.3d 1002, 1007 (9th C ir. 2008); C

lark v . C apital C re dit &C olle c tion Se rv

s., Inc
. , 460 F.3d 1162, 1177 (9th C ir. 2006) (no de fe nse for de bt c olle c tor “ whose re lia nc e on the
c re d itor’ s re pre se ntation is unre a sona ble ” ). The distric t c ourt e rre d by c onc luding a s a m atte r of la w tha t the boile rplate
a gre e m e nt be twe e n TFC and NB F wa s suffic ie nt to e sta b lish a bona fide e rror de fe nse . This proc e dure e ffe c tive ly outsourc e d

NB F’ s sta

t utory duty

unde r the FDC PA. If this pra c t ic e we re suffic ie nt, the FDC PA would be a de a d le tte r. Eve n if NB F c ould show tha

t TFC ha s a

ste rling history

of providing a c c urat e inform a t ion, we hav e pre viously re je c t e d unque stione d re lia

n c e on a c re ditor’ s inform a t ion a s a bona

fide de fe nse . Re i c he rt , 531 F.3d a t 1007 (holding tha

t a history of providing re l ia

ble inform ation c annot “ e sta blish tha t re lia nc e in the
3pre s e nt c a se wa s re a s ona ble and a c t a s a

substitute

for the mainte nanc e of a de quate proc e d ure s to a void future m ista

ke s ” ) (e m pha s is a dde d). In Re ic he rt , we de sc ribe d se ve ra l e x am p le s of proc e dure s tha

t m ay qua lify for the bona

fide e rror de fe n se . 531 F.3d a t 1006 (quoting J

e nk i ns v . He intz , 124 F.3d 824, 834–35 (7th C ir. 1997)). NB F’ s a gre e m e nt with TFC is signific antly
m ore lax. TFC ’ s 2014 promise to provide“ a c c urate dat a ,” m a de be fore a single de bt wa s re porte d

by TFC to NB F, and four y e ars be fore the ope ra tive fa c ts of this
c a se oc c urre d, is not a

re a s ona ble proc e dure
. The distric t c ourt re lie d on Turne r v . J .V.D.B. &Assoc

s., Inc
. , 330 F.3d 991, 996 (7th C i r. 2003). W e are not bound by Turne r and find it unpersua sive
. Turne r
m e ntione d in pa s sing tha

t a n a g re e m e nt to provide

re lia ble inform ation might a llow
a de b t c olle c tor to show bona fide e rror. Id. B ut the re wa s no boile rplate
a gre e m e nt be twe e n the pa rtie s in Turne r , a

n d on re m and, the distric t c ourt
c onc lude d tha

t re ly ing on c re ditor-c lie nts to provide a c c urat e inform at ion doe s not suffic e to e sta

blish a bona fide e rror de fe nse . Turne r v . J .V.D.B. &Assoc

s., Inc
. , 318 F. Supp. 2d 681, 686–87 (N.D. Ill. 2004). NB F a lso m a ile d Urbina

a c olle c tion notic e with inc orre c t inte re st
c a lc ulat ions only

a d a y a fte r re c e iving thefile , but this proc e dure did not a llow

4tim e to re c e ive a re s ponse to the a uthe ntic ation le tte r, and the re fore fa ils to qualify
a s a proc e dure re a sona

bly a da pte d to a void theviola

tion. Appe lle e to be ar c osts. RE V E RSE D AND RE M ANDE D.

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