Pasquale v. Law Offices of Nelson & Kennard

Filing 80

ORDER by Judge Joseph C. Spero granting 56 Motion for Summary Judgment, vacating motion hearing and case management conference set for April 19, 2013 at 9:30 a.m. (jcslc1, COURT STAFF) (Filed on 4/15/2013)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 DANA PASQUALE, 7 Case No. 11-cv-05265-JCS Plaintiff, 8 v. ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT 9 LAW OFFICES OF NELSON & KENNARD, 10 Defendant. 11 United States District Court Northern District of California Re: Dkt. No. 56 12 13 I. INTRODUCTION Plaintiff Dana Pasquale brings this action under the Fair Debt Collection Practices Act 14 15 (“FDCPA), 15 U.S.C. §§ 1692 et seq. and the Rosenthal Fair Debt Collection Practices Act 16 (“Rosenthal Act”), Cal. Civ. Code §§ 1788 et seq., alleging that telephone messages left on her 17 home answering machine by Defendant Law Offices of Nelson & Kennard (“Nelson & Kennard”) 18 did not comply with § 1692(e)(11) because they failed to disclose that Nelson & Kennard was a 19 debt collector.1 Nelson & Kennard brings a Motion for Summary Judgment seeking dismissal of 20 Plaintiff‟s claims on the grounds that it complied with the FDCPA, as a matter of law, or in the 21 alternative, that the undisputed facts establish that its failure to comply was a bona fide mistake. 22 Nelson & Kennard asserts that Plaintiff‟s claim under the Rosenthal Act fails for the additional 23 reason that it is not a “debt collector” under that Act. The Court finds that the Motion is suitable 24 for determination without oral argument, and therefore vacates the hearing set for April 19, 25 2013 pursuant to Civ.L.R. 7-1(b); the Case Management Conference set for the same date and 26 27 1 28 In her amended complaint Plaintiff also asserted claims under Sections 1692e(2), 1692e(4), and 1692e(5) of the FDCPA. Plaintiff subsequently withdrew those claims. See Docket No. 41. 1 time is also vacated. For the reasons stated below, the Motion is GRANTED.2 2 II. BACKGROUND A. 3 Factual Background3 1. 4 Communications between Pasquale and Nelson & Kennard Nelson & Kennard was retained by Riverwalk Holdings, Ltd. (“Riverwalk”), on May 18, 5 2010 to file suit against Plaintiff to collect the balance due and owing on a credit card account 7 issued by Washington Mutual Bank and assigned to Riverwalk. Declaration of Robert Scott 8 Kennard in Support of Defendant‟s Motion for Summary Judgment (“Kennard Decl.”), ¶ 4. On 9 May 21, 2010, Nelson & Kennard mailed a letter to Pasquale informing her that Nelson & 10 Kennard represented Riverwalk and had been instructed to “take appropriate action to effect 11 United States District Court Northern District of California 6 collection” of the amount due on the account. Kennard Decl., Ex. 1 (May 21, 2010 Collection 12 Letter). According to Nelson & Kennard, the May 21, 2010 Collection Letter contained “all the 13 admonitions required under 15 USC §1692g, 15 USC §1692e(11) and the Rosenthal Act.” 14 Kennard Decl., ¶ 6. 15 Pasquale replied to Nelson & Kennard‟s May 21, 2010 letter in an undated letter received 16 by Nelson & Kennard on June 4, 2010. Pasquale acknowledged receipt of Defendant‟s May 21, 17 2010 Letter and requested that Nelson & Kennard “validate this alleged debt explaining why you 18 are demanding the sum of $19,236.06.” Kennard Decl., Ex. 2 (June 4, 2010 Letter). 19 On June 17, 2010, Nelson & Kennard sent Plaintiff a letter setting forth its verification 20 obligations under the FDCPA and providing the name and address of the original creditor, the 21 current owner of the debt, the amount due and a copy of the terms and conditions of the bill of 22 sale. It also states that Nelson & Kennard is a “debt collector attempting to collect a debt.” 23 Kennard Decl., Ex. 3. 24 2 25 26 27 28 The parties have consented to the jurisdiction of a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). 3 Defendant did not comply with the Standing Order of the undersigned magistrate judge requiring that summary judgment motions must be supported by a joint statement of undisputed facts. Therefore, unless otherwise noted, the facts in this section are those that the Court finds to be undisputed. The Court notes that Plaintiff does not challenge any of Defendants‟ evidence documenting the communications between Nelson & Kennard. Nor does she Plaintiff dispute Defendant‟s evidence describing the procedures it follows to ensure FDCPA compliance. 2 1 On July 6, 2010, Nelson & Kennard received another letter from Pasquale, carrying the 2 heading “Notice of Dispute of Alleged Debt.” Kennard Decl., Ex. 4 (Notice of Dispute). The 3 Notice of Dispute references the file number that was indicated on the two previous letters from 4 Nelson & Kennard to Pasquale, as well as the June 17, 2010 Letter. Id. at 1. Pasquale states that 5 she has “received and read the debt collection letter referenced above, identifying yourself as debt 6 collectors . . .wherein you allege that I have a debt obligation to the alleged creditor referenced 7 above . . .[and that] the purpose of this Notice of Dispute is to assert my rights in debt collection 8 under FDCPA § 1692(g) (b) without delay and within thirty (30) days of my receipt of your 9 aforesaid debt collection letter.” She goes on to request extensive documentation to substantiate the debt and Nelson & Kennard‟s authority to collect on the account, referencing, inter alia, 11 United States District Court Northern District of California 10 specific provisions of the U.S. Code, the Federal Rules of Evidence and forms issued by the 12 United States Department of the Treasury. Id. Copies of Nelson & Kennard‟s May 21, 2010 and 13 June 17, 2010 Letters were attached to the July 6, 2010 Notice of Dispute. Id. 14 Nelson and Kennard responded to Pasquale‟s Notice of Dispute in a letter dated July 8, 15 2010, attaching a copy of the June 17, 2010 Letter and stating that Nelson & Kennard is a “debt 16 collector attempting to collect a debt.” Id., Ex. 5 (July 8, 2010 Letter). 17 On July 29, 2010, Defendant received a “Second Notice of Dispute of Alleged Debt” from 18 Pasquale. Id., Ex. 6 (“Second Notice of Dispute”). The Second Notice of Dispute referenced 19 Nelson & Kennard‟s July 8, 2010 Letter and again requested detailed documentation related to the 20 debt. Id. Pasquale attached copies of all of the previous communications that had been 21 exchanged between Nelson & Kennard and Pasquale. 22 On July 30, 2010, Nelson & Kennard sent a letter that was essentially the same as the June 23 17, 2010 Letter, again listing the name and address of the original creditor, the current owner of 24 the debt, the amount due and providing a copy of the terms and conditions of the bill of sale. Id., 25 Ex. 7 (July 30, 2010 Letter). Like the June 17, 2010 Letter, the July 30, 2010 Letter also stated 26 that Nelson & Kennard is a “debt collector attempting to collect a debt.” Id. 27 28 3 On August 19, 2010, Pasquale sent a Third Notice of Dispute. Id., Ex. 8 (Third Notice of 1 2 Dispute). This letter acknowledged receipt of the July 30, 2010 Letter. Id. Otherwise, it was 3 virtually identical to the previous notices of dispute. Id. Nelson & Kennard did not reply to the 4 Third Notice of Dispute, believing that it had already met its obligation to verify the debt. Id. ¶ 5 13. On September 18, 2010, Nelson & Kennard attempted, for the first time, to reach Plaintiff 6 7 by telephone. Id. ¶ 14. An answering machine picked up, and the transcript of the call is as 8 follows: 9 Answering Machine: No one is available to take your call. Please leave a message. (Beep) 10 Nelson &Kennard Employee: This message is for Dana Pasquale. This is Jose Loya. I am calling from the law offices of Nelson & Kennard. May I remind you that we are working with a time sensitive matter here so it would be in your best interest to return this call. Toll free number wil1 be 866 920 2296. This firm is a debt collector. United States District Court Northern District of California 11 12 13 14 15 Id. On September 23, 2010, a Nelson & Kennard account representative spoke with Pasquale 16 by telephone. Id. ¶ 15. According to the Kennard Declaration, contemporaneous notes of the 17 conversation indicate that the “mini Miranda” (indicating that Nelson & Kennard was a debt 18 collector attempting to collect a debt) was provided by its account representative and Pasquale said 19 she “needed time to review her finances” and would return the call later. Id. 20 As of September 27, 2010, Defendant had not received a return call from Pasquale. Id. ¶ 21 16. On that date, a Nelson & Kennard account representative placed another telephone call to 22 Plaintiff. Id. Again, the answering machine picked up. Id. The transcript of the call is as 23 follows: 24 25 26 27 28 Answering Machine: No one is available to take your call. Please leave a message. (Beep). Nelson & Kennard Employee: This message is for Dana Pasquale. This is Mike Lopez calling from the law firm of Nelson & Kennard. Please call me back at your earliest convenience. 866 920 2296. We do have important information for to discuss with you and it is in your best interest to return the call. 866 920 2296, extension 198. 4 1 Id. On September 30, 2010, a Nelson & Kennard account representative spoke with Pasquale 2 3 by telephone. Id. ¶ 17. Pasquale requested that Nelson & Kennard call at a specified time to 4 discuss a repayment arrangement. Id. However, when a Nelson & Kennard account 5 representative called Pasquale back at the arranged time, Pasquale could not be reached. Id. On October 6, 2010, a Nelson &Kennard account representative again placed a telephone 6 7 call to Pasquale and reached her answering machine. Id. ¶ 18. The transcript of that call is as 8 follows: 9 Answering Machine: Hello, you have reached the Pasquales. Please leave a message. (Beep) 10 Nelson &Kennard Employee: This message is for Dana Pasquale. I am calling from the law firm of Nelson & Kennard. It is important that you return this call. Toll free number is 866 920 2296, extension 170. My name is Marco Cota calling from the law office of Nelson & Kennard once again. I have time sensitive information to disclose to you. It is important you return the call. Thank you. Bye bye. United States District Court Northern District of California 11 12 13 14 15 Id. On December 15, 2010, Michelle Moralez, a Nelson & Kennard account representative, 16 spoke with Pasquale by telephone. Id. ¶ 19. Pasquale again requested a call back at a later time. 17 Id. Ms. Morales called back and left a message but did not receive a return call. Id. She then 18 tried to reach Pasquale on two subsequent occasions, unsuccessfully. Id. In particular, Ms. 19 Moralez left messages on Pasquale‟s answering machine on February 28, 2011 and March 11, 20 2011. Id. ¶¶ 19-21. The transcript of the February 28, 2011 call is as follows: 21 Answering Machine: Hello, you have reached the Pasquales please leave a message. (Beep). 22 Nelson & Kennard Employee: This message is for Dana Pasquale. This is Michelle Moralez calling from the law office of Nelson & Kennard. Please return this phone call to 866 920 2295, extension 137. Thank you. 23 24 25 26 Id. The transcript of the March 11, 2011 call is as follows: Answering Machine: Hello, you have reached the Pasquales please leave a message. (Beep) . 27 28 Nelson & Kennard Employee: This message is for Dana Pasquale. This is Michelle Moralez calling from the law office of Nelson & 5 Kennard. Please return this call to 866 920 2295, extension 137. Thank you. 1 2 3 Id. On March 21, 2011, Nelson & Kennard received a letter form Pasquale indicating she 4 wished to arbitrate Riverwalk‟s claim against her. Id., ¶ 22 & Ex. 10. Pasquale sent another letter 5 directly to Riverwalk requesting arbitration. Id., Ex. 11. Nelson & Kennard sent Pasquale a letter 6 dated May 23, 2011 informing her that Riverwalk had agreed to the request. Id., Ex. 12. On July 7 7, 2011 Nelson & Kennard submitted a claim on Riverwalk‟s behalf with the American 8 Arbitration Association. Id. ¶ 24 & Ex. 13. 2. 9 10 Nelson & Kennard Training and Protocols Mr. Kennard, one of the two partners of the Nelson & Kennard firm, describes the United States District Court Northern District of California 11 following training used by Nelson & Kennard to ensure compliance with the FDCPA and the 12 Rosenthal Act: 13 18 Each account representative employed on behalf of Nelson & Kennard undergoes significant training, testing and are provided scripts with respect to the content of voicemail messages left for consumers. The initial training provided to the account representatives consists of approximately two weeks in a classroom environment where attorneys and supervisory personnel instruct the account representatives on such matters as the proper documentation of communications with consumers, the content of the FDCPA and California‟s Rosenthal Act, the litigation process as it relates to consumer accounts and other matters. Training includes interactive role playing, mentoring and frequent testing on training materials. 19 Id. ¶ 25. The day-by-day agenda of the training given to account representatives is provided as an 20 attachment to the Kennard Declaration, id., Ex. 14, and Mr. Kennard states that “the account 21 representatives whose calls are at issue in this litigation received training substantially consistent 22 with the attached agenda.” Id. ¶ 25. 14 15 16 17 23 Mr. Kennard further states in his declaration that Nelson & Kennard conducts “periodic 24 retesting” of its account representatives and that the account representatives involved in the 25 communications at issue in this case were tested on their knowledge of the FDCPA in February 26 2010. Id. ¶ 15 & Ex. 15. Attached to the declaration are relevant portions of Defendant‟s training 27 materials, as well as the responses of two account representatives, Cota and Lopez. Id., Ex. 15. 28 Mr. Kennard notes that the test results for account representative Moralez could not be located and 6 1 appear to have been misplaced. Id. at 10 n. 1. The training materials state that the “mini-Miranda” 2 is “a warning required under the FDCPA to be given by debt collectors in certain written and oral 3 communications” which reads: “This communication is an attempt to collect a debt and all 4 information obtained will be used for that purpose.” Id. The training materials go on to explain 5 that “[t]he original version of the FDCPA required that the „mini-Miranda‟ be used in all 6 communications, both written and oral” but that “[t]he current version of the FDCPA requires that 7 the „mini-Miranda‟ be used only in the first communication.” Id. It continues, “[a]fter the first 8 communication, the FDCPA requires only that you identify yourself as a debt collector.” Id. The 9 test responses of Cota and Lopez indicate that both understood that on outgoing calls, they should 10 be saying at the beginning of every call at least that Nelson & Kennard is a debt collector. Id. According to Mr. Kennard, Nelson & Kennard also provides its account representatives United States District Court Northern District of California 11 12 with “scripts and sample voicemail messages which are posted and available” at each individual 13 account representative‟s desk. Id. ¶ 27. A copy of the script for making outgoing calls is 14 attached to the declaration. Id., Ex. 16. It states that for all outgoing calls, the account 15 representative must start the call by stating that “[t]his firm is a debt collector and this call is being 16 recorded.” Id. Finally, Mr. Kennard states that in June 2010, Nelson & Kennard began using a digital call 17 18 recording system which records “a significant number” of incoming and outgoing calls from 19 Nelson & Kennard. Id. ¶ 28. Mr. Kennard states that the recording system “was and is used as a 20 training tool” and that “Nelson & Kennard personnel, including the undersigned, consistently 21 review random calls and use the information gleaned for review and training purposes with 22 account representatives.” Id. 4 23 B. The Motion 24 Nelson & Kennard seeks summary judgment on Pasquale‟s FDCPA claim and her 25 Rosenthal Act claim (which depends on the FDCPA claim) on the ground that it was not required 26 under § 1692e(11) to state in its messages that it was a debt collector because the messages were 27 4 28 The digital recording system recorded all of the calls that are at issue in this case. Id. They were reviewed and transcribed by Mr. Kennard. Id. 7 “follow-up” messages and therefore do not constitute “communications” under the FDCPA. 2 Motion at 9-14. According to Defendant, whether a violation occurs is based on an objective 3 inquiry as to whether the „least sophisticated debtor would likely be misled by a communication.‟” 4 Id. at 9-10 (citing Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1030 (9th Cir. 2010)). That 5 standard is not met, Defendant contends, under the circumstances of this case, where Pasquale had 6 actual knowledge of the identity of the caller and the purpose of the calls. Id. at 11 (citing Reed v. 7 Global Acceptance Credit Co., 2008 WL 3330165 (N.D. Cal. Aug. 12, 2008)). Defendant points 8 out that some courts have held that a telephone message is not a “communication” under the 9 FDCPA where it contains no information about the debt. Id. (citing Biggs v. Credit Collections, 10 Inc., 2007 WL 4034997 (W.D. Ok. Nov. 15, 2007)). Defendant also notes that in Reed, the court 11 United States District Court Northern District of California 1 cited the Ninth Circuit‟s holding in Pressley v. Capital Credit and Collections Service that a 12 follow-up call is not a “communication” under the FDCPA. Id. (citing 760 F.2d 922, 925 (9th Cir. 13 1985)). According to Defendant, these cases support the conclusion that it would serve no useful 14 purpose to require further disclosures in Defendant‟s telephone messages because Pasquale was 15 already aware that Nelson & Kennard was a debt collector attempting to collect a debt. Id. at 14. 16 Nelson & Kennard further contends that even if the telephone messages violated the 17 FDCPA, it is entitled to summary judgment in its favor because the undisputed evidence 18 establishes that the violations were “not intentional and resulted from a bona fide error 19 notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” Id. at 20 14 (citing 15 U.S.C. § 1692k(c); Clark v. Capital Credit & Collection Services, Inc., 460 F.3d 21 1162, 1176-77 (9th Cir. 2006)). Defendant points to the training procedures and protocols 22 described in the Kennard Declaration, discussed above. Id. 23 Finally, Defendant seeks summary judgment on the Rosenthal Act claim not only because 24 liability on that claim is derivative of liability under the FDCPA, but also on the basis that Nelson 25 & Kennard is not a “debt collector” under the Rosenthal Act, which excludes “an attorney or 26 counselor at law.” Id. at 16 (citing Cal. Civ. Code Section 1788.2(c); Owings v. Hunt & 27 Henriques, 2010 WL 3489342 (S.D. Cal. Sept. 3, 2010)). 28 In her Opposition brief, Plaintiff challenges all three of Defendant‟s arguments. First, she 8 1 rejects Nelson & Kennard‟s reliance on Reed and Pressley for the proposition that Nelson & 2 Kennard was not required to disclose that it was a debt collector in follow-up messages because 3 she knew it was a debt collector collecting a debt. Opposition at 5-10. Pasquale argues that after 4 Pressley was decided, § 1692e(11) was amended to make clear that in any subsequent 5 communication after the initial communication from a debt collector, it must be disclosed that the 6 communication is from a debt collector. Id. at 6. Because this requirement is so clear, Pasquale 7 asserts, the Court should grant summary judgment in favor of Plaintiff that the FDCPA and the 8 Rosenthal Act have been violated, and not in favor of Nelson & Kennard. Id. at 2. Second, Pasquale argues that Nelson & Kennard is not entitled to summary judgment in its 9 favor based on the bona fide error defense of the FDCPA because this is generally a fact question 11 United States District Court Northern District of California 10 and to prevail on this defense a debt collector must provide an “elaborate” description of the 12 procedures in place. Id. at 11 (citing Wilhelm v. Credico, Inc., 519 F.3d 416, 421 (8th Cir. 2008)). 13 Further, Pasquale asserts, this defense should be interpreted narrowly should not be applied here 14 because Defendant has not presented any evidence as to why Nelson & Kennard‟s training 15 procedures failed in this case. Id. at 12. 16 Third, Pasquale argues that the exception for attorneys under the Rosenthal Act does not 17 apply to law firms and therefore, that Nelson & Kennard is a debt collector under that act. Id. at 18 13-17. 19 In its Reply brief, Nelson & Kennard argue that all the evidence shows that Plaintiff was 20 not misled by the messages on her answering machine because she knew Nelson & Kennard was a 21 debt collector. Reply at 4. Further, Defendant argues that Reed and Pressley remain good law 22 even though § 1692e(11) was subsequently amended because the amendment lessened the 23 disclosure requirements under the FDCPA rather than increasing them. Id. at 7. Nelson & 24 Kennard also asserts that it is entitled to summary judgment because it has offered extensive 25 evidence that it followed reasonable procedures to ensure compliance with the FDCPA and the 26 Rosenthal Act and that Pasquale has offered no evidence in response showing that its procedures 27 were insufficient. Id. at 9-13. Finally, Nelson & Kennard argues that the exception under the 28 Rosenthal Act for attorneys also applies to law partnerships like Nelson & Kennard. Id. at 13-14. 9 1 III. ANALYSIS 2 A. Legal Standard under Rule 56 3 Summary judgment on a claim or defense is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of 5 law.” Fed. R. Civ. P. 56(a). In order to prevail, a party moving for summary judgment must show 6 the absence of a genuine issue of material fact with respect to an essential element of the non- 7 moving party‟s claim, or to a defense on which the non-moving party will bear the burden of 8 persuasion at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has 9 made this showing, the burden then shifts to the party opposing summary judgment to designate 10 “specific facts showing there is a genuine issue for trial.” Id. On summary judgment, the court 11 United States District Court Northern District of California 4 draws all reasonable factual inferences in favor of the non-movant. Scott v. Harris, 550 U.S. 372, 12 378 (2007). 13 14 B. Whether Nelson & Kennard Was Required to Disclose that it is a Debt Collector in Follow-up Voicemail Messages 15 Defendant contends the voicemail messages at issue in this case do not violate the FDCPA, 16 even though they did not include a statement indicating that Nelson & Kennard is a debt collector, 17 because they were not false and misleading. Because the plain language of § 1692e(11) 18 specifically requires that all subsequent communications disclose that the communication is from 19 a debt collector, the Court rejects Nelson & Kennard‟s position. 20 The first sentence of § 1692e prohibits debt collectors from using “any false, deceptive, or 21 misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 22 1692e. In order to determine whether conduct is “false, deceptive or misleading,” courts must 23 undergo “an objective analysis that takes into account whether „the least sophisticated debtor 24 would likely be misled by a communication.‟” Donohue v. Quick Collect, Inc., 592 F.3d 1027, 25 1030 (9th Cir. 2010) (citing Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 934 (9th Cir. 26 2007)). Section 1692e also enumerates specific conduct that constitutes a violation. In particular, 27 the second sentence states, “[w]ithout limiting the general application of the foregoing, the 28 following conduct is a violation of this section,” and in subsection (11) makes actionable the 10 1 2 3 4 5 6 following specific conduct: (11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action. 15 U.S.C. § 1692e(11) (emphasis added). The plain language of this provision requires a debt 8 collector to identify himself as such in all subsequent communication. See Savage v. NIC, Inc., 9 2009 WL 2259726, at *5-6 (D. Ariz. July 28, 2009) (holding that telephone message in which 10 caller did not identify himself as a debt collection violated § 1692e(11) and that this disclosure 11 United States District Court Northern District of California 7 must be included in all subsequent communications) (citing Schwarm v. Craighead, 552 12 F.Supp.2d 1056, 1081-1082 (E.D. Cal., 2008)). The court in Savage noted that “presuming that 13 Plaintiffs were aware that Defendant was a debt collector would be contrary to the objectives of 14 the statute to protect debtors, even the most unsophisticated, from abusive or deceptive collection 15 practices.” Id. at *6. 16 In Reed v. Global Acceptance Credit Company, another judge in this district reached a 17 different conclusion in a case that is factually similar to this one, involving follow-up voicemail 18 messages. 2008 WL 3330165 (N.D. Cal. Aug. 12, 2008). Citing the Ninth Circuit‟s decision in 19 Pressley v. Capital Credit & Collection Serv., 760 F. 2d 922, 925 (9th Cir. 1985) (per curiam), the 20 court in Reed found that where the debtor already knows the identity of the debt collector, follow- 21 up notices from the debt collector are not “communications” and the FDCPA and need not comply 22 with § 1692e(11) so long as they are not false and misleading. Id. at * 3. The Court went on to 23 find that there was a fact question that precluded summary judgment because there was evidence 24 from which a jury, applying the least sophisticated consumer standard, could reasonably have 25 concluded that the communications at issue were not misleading. Id. at * 4. The Court relied, in 26 part, on prior communications between the defendant and the debtor indicating that the debtor 27 might have been aware of the identity of the caller and the nature of the call. Id. The court also 28 cited the name of the debt collector -- Global Acceptance Credit Company -- which it found 11 1 2 might also have alerted the debtor that the caller was a debt collector. Id. This Court respectfully declines to follow the reasoning in Reed because it finds that 3 Pressley is no longer good law. See Schwarm v. Craighead, 552 F.Supp.2d 1056, 1081-1082 4 (E.D. Cal., 2008). In Schwarm, the court found that the holding in Pressley was superseded by a 5 change in § 1692e(11) distinguishing between initial and subsequent communications: 6 In Pressley v. Capital Credit & Collection Serv., Inc., 760 F.2d 922 (9th Cir.1985), the Ninth Circuit held that § 1692e(11)‟s requirements do not apply to a “follow up notice which only demands a payment as earlier requested” so long as there is no evidence that the debt collector‟s communications were abusive, false, deceptive, or misleading. Id. at 925. The court reasoned that a follow up notice did not constitute a “communication” as used in § 1692e(11). Id. The court‟s decision, however, was based on a prior version of § 1692e(11). Id. Unlike the prior version, which applied to “all communications,” Congress amended subsection (11) in 1996 to differentiate between “initial” communications and “subsequent” communications. 15 U.S.C. § 1692e(11). The 1996 amendment also limited the requisite disclosure for subsequent communications to include only that the communication is from a debt collector. This limitation is consistent with the Ninth Circuit's reasoning that Congress did not intend for the full disclosure the pre-1996 version of subsection (11) required to be in every subsequent communication. Id. Therefore, in light of the 1996 amendments to § 1692e(11), the Ninth Circuit‟s holding that § 1692e(11) does not apply to follow up notices is no longer good law. 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 552 F.2d at 1081 n. 18. This Court agrees with the reasoning of Schwarm and reaches the same 18 conclusion. 19 The Court also rejects Nelson & Kennard‟s reliance on Biggs v. Credit Collections, Inc., 20 2007 WL 4034997 (W.D. Okla. Nov. 15, 2007). In that case, the court held that a voicemail 21 message from a debt collector that contained no information about the debt was not a 22 “communication” under the FDCPA‟s definition of that term and therefore was not required to 23 comply with § 1692(11). The holding in Biggs is a minority position that has not been followed 24 by any court in the Ninth Circuit; indeed, courts in the Ninth Circuit (and elsewhere) have rejected 25 the reasoning of Biggs. See Lensch v. Armada Corp., 795 F.Supp.2d 1180, 1188 (W.D. Wash., 26 2011) (citing Costa v. Nat'l Action Fin. Servs., 634 F.Supp.2d 1069, 1076 (E.D. Cal. 2007); 27 Hosseinzadeh v. M.R.S. Associates., Inc., 387 F.Supp.2d 1104, 1116 (C.D. Cal. 2005)). These 28 courts have pointed to the fact that the definition of “communication” under the FDCPA is broad, 12 1 covering “the conveying of information regarding a debt directly or indirectly to any person 2 through any medium.” 15 U.S.C. § 1692a(2) (emphasis added). As the court in Lensch noted, 3 “[t]he weight of authority falls in favor of a broad interpretation, and most courts to decide this 4 issue have held that voicemails are communications that must conform to the disclosure 5 requirements of section 1692e(11).” This Court agrees. 6 Because the Court finds that the voicemail messages at issue in this case are subsequent 7 communications that must meet the requirements of § 1692e(11), Nelson & Kennard is not 8 entitled to summary judgment on this question. 9 C. Whether Nelson & Kennard is Entitled to Summary Judgment on Bona Fide Error Defense 11 United States District Court Northern District of California 10 Nelson & Kennard seeks summary judgment on the alternative ground that based on the 12 13 undisputed facts, the bona fide error defense applies. The Court agrees. The Ninth Circuit has held that the FDCPA is “a strict liability statute.” Clark v. Capital 14 Credit & Collection Services, Inc., 460 F.3d 1162, 1175 (9th Cir. 2006). Thus, it is not necessary 15 to prove that a debt collector acted intentionally to establish a violation of § 1692e. Id. However, 16 the FDCPA provides the following defense to liability for debt collectors where a violation results 17 from a bona fide error: 18 19 20 21 A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. 15 U.S.C. § 1692k(c). 22 Here, Nelson & Kennard has offered evidence showing that: 1) it trains its account 23 representatives to start all subsequent telephone calls with debtors with disclosure that the call is 24 from a debt collector; 2) it gives its account representatives scripts with specific language to be 25 used in telephone communications, including the disclosure that the call is from a debt collector; 26 3) it reviews recorded telephone calls on a regular basis to ensure compliance ; and 4) the account 27 representatives who left the telephone messages had been tested recently as to the disclosures 28 required for telephone calls placed to debtors. This evidence is sufficient to make a prima facie 13 case, based on a preponderance of the evidence, that the failure to indicate that the voice mail 2 messages were coming from a debt collector was unintentional and occurred despite Nelson & 3 Kennard‟s maintenance of procedures reasonably adapted to avoid such error. Pasquale did not 4 rebut that showing with any evidence of her own. The Court finds that there is no evidence in the 5 record from which a jury could reasonably conclude that the omission was anything but a bona 6 fide error. See Wilhelm v. Credico, Inc., 519 F.3d 416, 421 (8th Cir. 2008) (affirming summary 7 judgment in favor of debt collector on bona fide error defense, even though defense involves a 8 fact-intensive inquiry, where the defendant had provided an affidavit from its president explaining 9 the procedures it follows to ensure compliance, as well as a copy of the company‟s written policy, 10 and where the plaintiff “did not depose [the defendant‟s] president or any other employee, did not 11 United States District Court Northern District of California 1 seek to discover the identity of the former clerical employee [who committed the error], and 12 offered no affidavits, depositions, or other evidence disputing [the defendant‟s] affidavits). 5 13 14 D. Whether Nelson & Kennard is Entitled to Summary Judgment on the Rosenthal Act Claim on the Ground that it is Not a Debt Collector 15 Nelson & Kennard seeks summary judgment on the Rosenthal Act claim on the additional 16 basis that it is not a “debt collector” under the Rosenthal Act, citing Cal. Civ. Code Section 17 1788.2(c). That subsection provides as follows: c) The term “debt collector” means any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in debt collection. The term includes any person who composes and sells, or offers to compose and sell, forms, letters, and other collection media used or intended to be used for 18 19 20 21 5 22 23 24 25 26 27 28 The Court notes that any inference that Nelson & Kennard was attempting to mislead Pasquale by failing to disclose in the follow-up voice mail messages that the calls were from a debt collector is significantly undermined by the extensive evidence in the record that Pasquale knew that the messages were from a debt collector and that Nelson & Kennard knew that Pasquale understood that it was a debt collector based on the multiple communications it had already received from her acknowledging that she had not only received the prior communications from Nelson & Kennard but also had some familiarity with the laws governing the debt collection process. Regardless of what Pasquale did or did not know, however, the evidence offered by Nelson & Kennard establishing both its general training policies and the training actually received by the account representatives involved in the specific communications at issue in this case is a sufficient basis for granting summary judgment in Defendant‟s favor where Plaintiff has come forward with no evidence of her own from which a jury could reasonably conclude Nelson & Kennard either acted intentionally or maintained inadequate training and procedures to ensure compliance. 14 debt collection, but does not include an attorney or counselor at law. 1 Cal. Civ. Code Section 1788.2(c). A number of federal district courts have held that this provision 3 creates an exclusion for attorneys but not for law firms. See, e.g., Abels. v. JBC Legal Group, 4 P.C., 227 F.R.D 541, 548 (N.D. Cal. 2005); Moriarty v. Henriques, 2011 WL 4769270, * 6 (E.D. 5 Cal. Oct. 7, 2011); Miranda v. Law Office of D. Scott Carruthers, 2011 WL 2037556 (E.D.Cal., 6 May 23, 2011). These decisions rely on the plain language of the provision and the intent of the 7 California legislature but do not cite any cases decided by California courts. On the other hand, 8 the court in Owings v. Hunt & Henriques, 2010 WL 3489342 (S.D. Cal. Sept. 3, 2010) held that 9 law firms are exempt from liability under the Rosenthal Act based on the decision of a California 10 appellate court in Carney v. Rotkin, Schmerin & McIntyre, 206 Cal. App. 3d 1513, 1518 (1988). 11 United States District Court Northern District of California 2 The Carney court, however, did not explain its holding or address the distinction between law 12 firms and attorneys; nor did it address legislative intent. Given the split authority on this question and the limited guidance to be found in the case 13 14 law of the California courts -- and because the Court has already found that the Rosenthal Act 15 claim fails on the ground that there is no liability under the FDCPA -- the Court declines to rule on 16 this issue. 17 IV. 18 CONCLUSION For the reasons stated above, the Motion is GRANTED. This action is dismissed, in its 19 entirety, with prejudice. The Clerk is instructed to enter judgment in favor of Defendant and close 20 the file in this case. 21 IT IS SO ORDERED. 22 23 Dated: April 15, 2013 24 ________________________ Joseph C. Spero United States Magistrate Judge 25 26 27 28 15

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