Pintos v. Pacific Creditors Association et al

Filing 169

ORDER DENYING PLAINTIFFS 147 MOTION FOR PARTIAL SUMMARY JUDGMENT, DENYING DEFENDANT PACIFIC CREDITORS ASSOCIATIONS 152 MOTION FOR SUMMARY JUDGMENT AND DENYING AS MOOT PLAINTIFFS 158 MOTION TO STRIKE.ORDER REFERRING CASE to Magistrate Judge for Settlement. Signed by Judge Claudia Wilken on 9/2/2011. (ndr, COURT STAFF) (Filed on 9/2/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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No. C 03-5471 CW
MARIA E. PINTOS,

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Plaintiff,
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v.
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PACIFIC CREDITORS ASSOCIATION and
EXPERIAN INFORMATION SOLUTIONS, INC.,

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Defendants.
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United States District Court
For the Northern District of California

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ORDER DENYING
PLAINTIFF’S MOTION
FOR PARTIAL SUMMARY
JUDGMENT, DENYING
DEFENDANT PACIFIC
CREDITORS
ASSOCIATION’S MOTION
FOR SUMMARY JUDGMENT
AND DENYING AS MOOT
PLAINTIFF’S MOTION
TO STRIKE
(Docket Nos. 147,
152 and 158)

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Plaintiff Maria E. Pintos moves for partial summary judgment
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against Defendant Pacific Creditors Association (PCA), the
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remaining Defendant against which she has claims.1

PCA opposes

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Plaintiff’s motion and cross-moves for summary judgment.

Plaintiff

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opposes PCA’s cross-motion and moves to strike PCA’s expert witness
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disclosure.

The motions were heard on September 1, 2011.

Having

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considered oral argument and the papers submitted by the parties,
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the Court DENIES Plaintiff’s motion for partial summary judgment
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and PCA’s motion for summary judgment and DENIES as moot
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Plaintiff’s motion to strike.
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BACKGROUND
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Because the Court’s Order of November 9, 2004 (Docket No. 82)
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explains the facts of this case in sufficient detail, they will not
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be repeated here in their entirety.
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On August 2, 2011, pursuant to stipulation, the Court
dismissed Plaintiff’s claims against Experian Information
Solutions, Inc.

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PCA is a collection agency that specializes in deficiency

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claims for towing companies.

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reporting agency that gathers credit information and makes it

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available to third-party subscribers.

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subscriber agreement with Experian’s predecessor, and PCA continues

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to subscribe to Experian’s credit reporting services.

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Experian is a consumer credit

In 1987, PCA entered into a

On May 29, 2002, the San Bruno Police Department instructed

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P&S Towing to tow and impound a Chevrolet Suburban because the

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registration tags were expired.

Thereafter, P&S Towing sent a

United States District Court
For the Northern District of California

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“Notice of Pending Lien Sale” to Plaintiff and her son, indicating

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that it held a lien on the vehicle for towing and impound charges

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and that the car would be sold if Plaintiff or her son did not pay

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the debt and reclaim the vehicle.

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and, following the lien sale, P&S Towing referred the deficiency

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for towing and impounding to PCA for collection.

The vehicle was not reclaimed

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On December 5, 2002, after failing to secure payment on

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Plaintiff’s debt, PCA obtained Plaintiff’s credit information from

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Experian’s database.

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On December 4, 2003, Plaintiff filed a complaint against both

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PCA and Experian, alleging violations of the FCRA.

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claimed that PCA did not have a legally permissible purpose for

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obtaining her credit report.

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the FCRA willfully or, at the least, negligently.

Plaintiff

Plaintiff alleged that PCA violated

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In its original motion for summary judgment, PCA asserted

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that, by obtaining Plaintiff’s credit report to collect on the

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deficiency, it did so in connection with the “collection of an

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account,” as provided under 15 U.S.C. § 1681b(a)(3)(A).

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November 9, 2004, the Court granted PCA’s motion for summary
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On

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judgment, concluding that PCA had a legally permissible purpose

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when it obtained Plaintiff’s credit report.

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The Ninth Circuit reversed the Court’s judgment, concluding

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that § 1681b(a)(3)(A) applies only when a consumer’s credit report

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is furnished in connection with a credit transaction initiated by

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the consumer.

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(9th Cir. 2010).

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transaction, inasmuch as she did not ask P&S Towing to tow the

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vehicle, the Ninth Circuit held that § 1681b(a)(3)(A) did not

Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 675-76
Because Plaintiff had not initiated the credit

United States District Court
For the Northern District of California

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apply.

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seven circuit judges dissented from the denial.

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Pintos, 605 F.3d at 670-72.

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mandate issued.

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Id. at 676.

Petitions for rehearing en banc were denied;
See generally

On June 1, 2010, the Ninth Circuit’s

Plaintiff has dismissed her claim against PCA for a willful

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violation of FCRA.

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negligent violation of the statute.

She asserts only a claim against PCA for a

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LEGAL STANDARD
Summary judgment is properly granted when no genuine and

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disputed issues of material fact remain, and when, viewing the

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evidence most favorably to the non-moving party, the movant is

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clearly entitled to prevail as a matter of law.

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56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);

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Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir.

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1987).

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Fed. R. Civ. P.

The moving party bears the burden of showing that there is no

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material factual dispute.

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the opposing party's evidence, if supported by affidavits or other

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evidentiary material.

Therefore, the court must regard as true

Celotex, 477 U.S. at 324; Eisenberg, 815
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F.2d at 1289.

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favor of the party against whom summary judgment is sought.

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Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

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587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d

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1551, 1558 (9th Cir. 1991).

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The court must draw all reasonable inferences in

Where the moving party does not bear the burden of proof on an

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issue at trial, the moving party may discharge its burden of

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showing that no genuine issue of material fact remains by

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demonstrating that “there is an absence of evidence to support the

United States District Court
For the Northern District of California

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nonmoving party's case.”

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party is not required to produce evidence showing the absence of a

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material fact on such issues, nor must the moving party support its

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motion with evidence negating the non-moving party's claim.

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see also Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 885 (1990);

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Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991),

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cert. denied, 502 U.S. 994 (1991).

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absence of evidence to support the non-moving party's case, the

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burden then shifts to the opposing party to produce "specific

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evidence, through affidavits or admissible discovery material, to

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show that the dispute exists."

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failure of proof concerning an essential element of the non-moving

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party's case necessarily renders all other facts immaterial.

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Celotex, 477 U.S. at 323.

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Celotex, 477 U.S. at 325.

The moving

Id.;

If the moving party shows an

Bhan, 929 F.2d at 1409.

A complete

DISCUSSION
The FCRA limits the purposes for which consumer credit reports

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may be used.

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against persons who negligently violate this restriction.

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§ 1681o.

15 U.S.C. § 1681b.

Consumers may seek liability

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Id.

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The FCRA does not define what constitutes negligence.

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However, under common law principles, negligence refers to “conduct

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which falls below the standard established by law for the

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protection of others against unreasonable risk of harm.”

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Restatement (Second) of Torts § 282.

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required to avoid negligence [is] that of a reasonably prudent

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person under similar circumstances.”

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Corp., 472 F.2d 123, 124 (9th Cir. 1972).

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may be negligent it is necessary that the actor should realize that

The “standard of conduct

Almaraz v. Universal Marine
“In order that an act

United States District Court
For the Northern District of California

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it involves a risk of causing harm to some interest of another.”

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Restatement (Second) of Torts § 289, cmt. b.

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have knowledge of what a reasonable person would know at that time

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under the circumstances.

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Elec. Co., 561 F.3d 439, 444 (6th Cir. 2009) (citing Restatement

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(Second) of Torts § 290).

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negligent, the customs of the community, or of others under like

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circumstances, are factors to be taken into account but are not

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controlling where a reasonable man would not follow them.’”

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ex rel. State Highway Comm’n v. Tug Go-Getter, 468 F.2d 1270, 1275

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n.4 (9th Cir. 1972) (quoting Restatement (Second) of Torts

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§ 295(A)).

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be given its common law meaning.

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551 U.S. 47, 58 (2007) (citing Beck v. Prupis, 529 U.S. 494, 500-01

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(2000)).

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An actor is deemed to

See, e.g., Martin v. Cincinnati Gas &

“‘[I]n determining whether conduct is

Oregon

Absent contrary congressional intent, negligence must
Safeco Ins. Co. of Am. v. Burr,

Plaintiff reads Safeco, a case in which the Supreme Court

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determined what constitutes a willful violation of the FCRA, to

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create a negligence standard that deviates from the common law.

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Plaintiff argues that, under Safeco, a defendant negligently
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violates the FCRA if it “obtains a credit report under a reasonable

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but erroneous construction of the FCRA.”

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(emphasis in original).

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following passages:

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Pl.’s Reply at 3

Her interpretation is based on the

Thus, a company subject to FCRA does not act in reckless
disregard of it unless the action is not only a violation
under a reasonable reading of the statute’s terms, but
shows that the company ran a risk of violating the law
substantially greater than the risk associated with a
reading that was merely careless.

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United States District Court
For the Northern District of California

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Here, there is no need to pinpoint the
negligence/recklessness line, for Safeco’s reading of the
statute, albeit erroneous, was not objectively
unreasonable.
Safeco, 551 U.S. at 69.
This language does not reflect a departure from negligence’s

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common law definition.

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negligence under the FCRA, let alone dispense with the term’s

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common law meaning.

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willful violation of the FCRA, a company’s action must: (1) be a

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violation under a reasonable reading of the statute and (2) exhibit

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“a risk of violating the law substantially greater than the risk

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associated with a reading that was merely careless.”

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words, a careless reading, on its own, does not suffice to show

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recklessness.

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Plaintiff insists, that a reasonable but erroneous reading must be

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deemed negligent.

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reasonableness inquiry generally associated with negligence and

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make negligence in the context of the FCRA akin to strict

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liability.

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such a standard.

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support of the statute, none of them evinces an intent to displace

Safeco did not substantively address

The Court simply stated that, to commit a

In other

However, a corollary of this principle is not, as

Such a standard would eliminate the

Plaintiff identifies no congressional intent to create
Although she cites congressional findings made in

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the common law definition of negligence.

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§ 1681(a)(1) and (4).

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the proper inquiry in this case is whether a reasonably prudent

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collection agency would have, in December 2002, obtained

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Plaintiff’s consumer credit report to collect on a towing

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deficiency, despite the FCRA and authority interpreting the statute

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at that time.

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I.

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See 15 U.S.C.

Giving negligence its common law meaning,

Plaintiff’s Motion for Partial Summary Judgment
Plaintiff does not establish, as a matter of law, that PCA

United States District Court
For the Northern District of California

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negligently violated the FCRA.

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because the parties do not dispute that it intentionally obtained

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her credit report and did so, as deemed by the Ninth Circuit in

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2010, without a permissible purpose.

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no undisputed evidence establishing as a matter of law that a

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reasonably prudent collection agency would have known in December

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2002 that the FCRA prohibited PCA’s conduct.

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She argues that PCA was negligent

However, Plaintiff proffers

Plaintiff also contends that “PCA’s intentional act subsumes

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the negligence that is required under § 1681o.”

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(emphasis in original).

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proffered uncontested evidence that PCA knew or should have known

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at that time that its action was impermissible.2

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contains no such evidence.

Pl.’s Reply at 7

This statement could be true if Plaintiff

The record

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Plaintiff maintains that concluding that the uncontested facts

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do not support imposing negligence liability against PCA would blur

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the distinction between willful and negligent violations of the

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Indeed, if there were evidence that PCA knew it lacked a
permissible purpose, its intentional act could render it liable
under the FCRA’s willfulness prong. However, Plaintiff has
dismissed her claim for a willful violation of the statute.
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FCRA.

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either theory, a “consumer would have to prove that the defendant’s

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interpretation of the FCRA was objectively unreasonable.”

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Reply at 5.

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law principles underlying the FCRA.

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United States District Court
For the Northern District of California

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She complains that such a ruling would mean that, under

Pl.’s

This result would not be inconsistent with the common
As Safeco noted,

The actor’s conduct is in reckless disregard of the
safety of another if he does an act or intentionally
fails to do an act which it is his duty to the other to
do, knowing or having reason to know of facts which would
lead a reasonable man to realize, not only that his
conduct creates an unreasonable risk of physical harm to
another, but also that such risk is substantially greater
than that which is necessary to make his conduct
negligent.

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551 U.S. at 69 (quoting Restatement (Second) of Torts § 500).

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other words, the distinction between willful and negligent conduct

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is the degree of unreasonable risk of harm created by the actor’s

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conduct.

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FCRA was objectively unreasonable may be probative of both a

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willful and negligent violation, this does not mean that the two

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are the same.

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reading of the statute may be insufficient to constitute a willful

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violation, but may support liability for a negligent violation.

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Finally, Plaintiff points to Jerman v. Carlisle, McNellie,

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Rini, Kramer & Ulrich LPA, which concerned the Fair Debt Collection

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Practices Act (FDCPA).

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FCRA, the FDCPA is a strict liability statute; however, “it excepts

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from liability those debt collectors who satisfy the ‘narrow’ bona

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fide error defense.”

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LLC, 637 F.3d 939, 948 (9th Cir. 2011).

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Court concluded that a debt collector could not assert a mistake-

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of-law defense under the bona fide error provision of the FDCPA.

In

Thus, while evidence that a defendant’s reading of the

Indeed, as Safeco suggests, a merely careless

130 S. Ct. 1605, 1624 (2010).

Unlike the

McCollough v. Johnson, Rodenburg & Lauinger,

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In Jerman, the Supreme

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130 S. Ct. at 1624.

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Safeco teaches, a reasonable, but mistaken, reading of the FCRA can

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preclude liability.

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This principle is inapplicable here.

As

Accordingly, Plaintiff’s motion for partial summary judgment

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must be denied.

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II.

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PCA’s Motion for Summary Judgment
Plaintiff maintains that, at the least, there is a triable

issue of fact on her claim.

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Robert S. Sola, a lawyer whom she designates as an expert.

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United States District Court
For the Northern District of California

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opines that, had PCA investigated the issue, it would have

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discovered legal authority demonstrating that “it did not have a

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permissible purpose to obtain her credit report.”

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However, Sola’s declaration is not appropriate expert witness

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opinion.

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research.

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research before obtaining Pintos’s report in December 2002, it

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would have known that it did not have a permissible purpose to

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obtain her report.”

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what practices or methods constitute “competent legal research.”

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Instead, he interpreted section 1681b(a)(3)(A) and recited the

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holdings of Ninth Circuit authority.

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proper for issues of law.”

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F.3d 1039, 1045 (9th Cir. 1996); see also McHugh v. United Serv.

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Auto Ass’n, 164 F.3d 451, 454 (9th Cir. 1999) (listing cases).

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Thus, PCA’s objection to the Sola Declaration is sustained, and

She points to the declaration by
Sola

Sola Decl. ¶ 7.

Sola did not opine on what constitutes competent legal
Sola stated “that if PCA had conducted competent legal

Sola Decl. ¶ 7.

However, he does not explain

“Expert testimony is not

Crow Tribe of Indians v. Racicot, 87

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Sola’s opinions are disregarded.3
However, even without Sola’s declaration, Plaintiff creates a

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triable issue of fact.

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was PCA’s compliance officer at the time PCA obtained Plaintiff’s

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credit report, failed to research whether PCA had a permissible

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purpose to obtain consumer credit reports based on the collection

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of towing deficiencies.

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degree, could have discovered the Ninth Circuit’s decisions in

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Andrews v. TRW, Inc., 225 F.3d 1063 (9th Cir. 2000), rev’d on other

The record suggests that George Long, who

Had he done so, Long, who has a law

United States District Court
For the Northern District of California

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grounds, TRW Inc. v. Andrews, 534 U.S. 19 (2001), and Mone v.

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Dranow, 945 F.2d 306 (9th Cir. 1991).

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which the Ninth Circuit relied in Pintos to conclude that PCA

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lacked a permissible purpose.

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Thus, a jury could conclude that PCA was negligent because a

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reasonably prudent collection company would have researched whether

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it could obtain reports to collect on towing deficiencies and that,

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had it done such research, it would have unearthed legal authority

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suggesting that it lacked a permissible purpose.

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the jury’s role, based on the evidence, to determine whether PCA

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had such a duty and whether the legal authority at the time would

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have persuaded a reasonably prudent collection company that the

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FCRA did not permit it to obtain Plaintiff’s consumer credit

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report.

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These cases were the two on

See Pintos, 605 F.3d at 674-76.

Of course, it is

Accordingly, PCA’s motion for summary judgment must be denied.

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Because Sola’s expert opinion on the law is excluded, PCA
has no need for its expert rebuttal witness, Lloyd Dix. Thus,
Plaintiff’s motion to strike PCA’s designation of Dix as an expert
witness must be denied as moot.
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CONCLUSION
For the foregoing reasons, the Court DENIES Plaintiff’s motion

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for partial summary judgment (Docket No. 147) and PCA’s motion for

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summary judgment (Docket No. 152) and DENIES as moot Plaintiff’s

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motion to strike (Docket No. 158).

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Plaintiff and PCA are referred to a magistrate judge for a
settlement conference.
A final pretrial conference is scheduled for November 1, 2011
at 2:00 p.m.

Although a four-day jury trial is set to begin on

United States District Court
For the Northern District of California

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November 15, 2011 at 8:30 a.m, as explained during the hearing on

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the parties’ motions, an earlier-filed case and a criminal case are

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also set for that date.

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until the trials in those cases conclude.

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Thus, trial in this action may not begin

IT IS SO ORDERED.

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Dated: 9/2/2011
CLAUDIA WILKEN
United States District Judge

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cc: Sue

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