Brooks v. Sun Cash of SD, LLC et al

Filing 13

ORDER Granting Plaintiff's Motion for Default Judgment and Attorney's Fees and Costs [Doc. Nos. 9 , 10 ]. Signed by Judge Marilyn L. Huff on 2/7/2018. (jjg)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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PATRICK BROOKS, an individual,
Plaintiff,

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Case No.: 3:17-cv-01934-H-AGS
ORDER GRANTING PLAINTIFF’S
MOTIONS FOR DEFAULT
JUDGMENT AND ATTORNEY’S
FEES AND COSTS

v.
SUN CASH OF SD, LLC; CHECK
CASHIERS OF SOUTHERN
CALIFORNIA, INC., d/b/a USA
CHECKS CASHED,

[Doc. Nos. 9, 10]

Defendants.

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On November 11, 2017, Plaintiff Patrick Brooks (“Plaintiff”) filed a motion for

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default judgment against Defendant Sun Cash of SD, LLC (“Sun Cash”). (Doc. No. 9.)

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Also on November 11, 2017, Plaintiff filed a motion for attorney’s fees and costs. (Doc.

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No. 10.) To date, Sun Cash has not filed any opposition to Plaintiff’s motions or otherwise

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appeared in this case. The Court, pursuant to its discretion under Local Rule 7.1(d)(1),

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determines that the motions are fit for resolution without oral argument, submits the

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motions on the papers, and vacates the hearings set for February 20, 2018. For the reasons

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discussed below, the Court grants Plaintiff’s motions for default judgment and attorney’s

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fees and costs.
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BACKGROUND

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Sometime before July 2017, Plaintiff and Sun Cash entered into a short-term payday

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loan transaction in which Plaintiff provided Sun Cash with a personal check, post-dated by

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approximately two weeks, in the amount of $300, and Plaintiff immediately received $255

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in cash. (Doc. No. 1 ¶ 33.) The $45 difference represented fees and interest charged by Sun

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Cash. (Id.) Plaintiff incurred this debt primarily for personal, family, or household

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purposes. (Id. ¶ 35.) Plaintiff did not have sufficient funds to cover the post-dated check,

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and his bank returned the check to Sun Cash as unpaid. (Id. ¶ 34.)

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In or around July 2017, Plaintiff retained an attorney to assist him with his

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indebtedness. (Id. ¶ 27.) On July 26, 2017, Plaintiff filed a Chapter 7 Bankruptcy, and on

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July 28, 2017, the Bankruptcy Court served a “Notice of Chapter 7 Bankruptcy” (“BNC

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Notice”) on all of Plaintiff’s creditors, including Sun Cash. (Id. ¶¶ 28, 29.) The BNC Notice

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stated that Plaintiff was represented by counsel and identified Plaintiff’s bankruptcy

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counsel by name and address. (Id. ¶ 37.) In addition, the BNC Notice advised Sun Cash to

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cease and desist all collection attempts against Plaintiff by mail, phone, or otherwise. (Id.

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¶ 38.)

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Sun Cash, however, continued to contact Plaintiff directly by mail and by phone.

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(Id. ¶ 40.) On August 4, 2017, Sun Cash sent a letter to Plaintiff’s home address demanding

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payment on the debt in the amount of $300.00. (Id. ¶ 55.) On September 6, 2017, Sun Cash

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sent another letter to Plaintiff’s home address demanding payment on the debt in the

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amount of $300.00. (Id. ¶ 56.) Moreover, on September 6, 2017, Sun Cash contacted

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Plaintiff directly on his cellular phone via text message. (Id. ¶ 41.) Sent using the telephone

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number 77513, that text message stated:

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Sun Cash of SD, LLC: Your last pmt was returned by your bank. Pls call (619)
583-2100 to discuss your options before add’l fees apply. For help reply
HELP

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(Id. ¶ 42; see Doc. No. 9 Ex. 2.)
Similarly, on September 21, 2017, Sun Cash contacted Plaintiff directly on his
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cellular phone via text message. (Doc. No. 1 ¶ 45.) The text message was sent using

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telephone number 77513 and stated:

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Sun Cash of SD, LLC: Your last pmt was returned by your bank. Pls call (619)
583-2100 to discuss your options before add’l fees apply. For help reply
HELP

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(Id. ¶ 46; see Doc. No. 9 Ex. 2.)

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On September 22, 2017, Plaintiff initiated the present action against Sun Cash and

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Defendant Check Cashiers of Southern California, Inc. (“Check Cashiers”), claiming

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violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. §§ 227 et seq.,

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and the Rosenthal Fair Debt Collection Practices Act (“the Rosenthal Act”), California

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Civil Code §§ 1788 et seq. (Doc. No. 1.) On October 25, 2017, the Clerk of Court made an

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entry of default for Sun Cash. (Doc. No. 5.) On October 29, 2017, Plaintiff filed a notice

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of settlement and notice of voluntary dismissal as to Check Cashiers only. (Doc. No. 6.)

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On January 11, 2018, Plaintiff filed a motion for default judgment against Sun Cash

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and a motion for attorney’s fees and costs. (Doc. Nos. 9, 10.) For the following reasons,

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the Court grants Plaintiff’s motions.

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DISCUSSION
I.

Legal Standards for Default Judgment

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Plaintiff moves for default judgment pursuant to Federal Rule of Civil Procedure

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55(b)(2). (Doc. No. 9-1 at 3.) In determining whether to exercise its discretion to grant

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default judgment, the Court may consider the so-called Eitel factors, namely “(1) the

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possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3)

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the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the

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possibility of a dispute concerning material facts; (6) whether the default was due to

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excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil

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Procedure favoring decisions on the merits.” Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th

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Cir. 1986).

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“A default judgment must not differ in kind from, or exceed in amount, what is
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demanded in the pleadings.” Fed. R. Civ. P. 54(c). “The general rule of law is that upon

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default the factual allegations of the complaint, except those relating to the amount of

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damages, will be taken as true.” Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir.

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1977).

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II.

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Review of Requested Default Judgment
A. Appropriateness of Default Judgment

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Based on careful consideration of the Eitel factors, the Court concludes that default

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judgment is appropriate on Plaintiff’s claims under the TCPA and the Rosenthal Act. See

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Eitel, 782 F.2d at 1471-72. As explained in more detail below, Plaintiff’s factual allegations

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are sufficient and his substantive claims meritorious. In addition, the prejudice to Plaintiff

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in the absence of entry of default is considerable. Sun Cash has been served with the

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complaint and Plaintiff’s motion for default judgment, but has failed to appear. (See Doc.

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Nos. 3, 9-6.) The record contains no indication that Sun Cash’s default was due to

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excusable neglect. (See Doc. No. 9-2, Sinnett Decl. ¶¶ 2-3.) Absent entry of default

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judgment, Plaintiff would have no remedy against Sun Cash, a party that has refused to

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litigate. Moreover, there is no dispute as to material facts because Sun Cash has not

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appeared to contest Plaintiff’s allegations. And although the Court recognizes the strong

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policy favoring decisions on the merits, proceeding with the instant litigation would be

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futile given Sun Cash’s failure to appear.

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Plaintiff’s factual allegations, accepted as true as a result of Sun Cash’s default,
establish Sun Cash’s violations of the TCPA and the Rosenthal Act.
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TCPA Claims

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“The three elements of a TCPA claim are: (1) the defendant called a cellular

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telephone number; (2) using an automatic telephone dialing system; (3) without the

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recipient’s prior express consent.” Meyer v. Portfolio Recovery Assocs., LLC, 707 F.3d

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1036, 1043 (9th Cir. 2012) (citing 47 U.S.C. § 227(b)(1)(B)). “Automatic telephone dialing

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system” (“ATDS”) means “equipment that has the capacity—(A) to store or produce

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telephone numbers to be called, using a random or sequential number generator; and (B)
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to dial such numbers.” Id. (quoting 47 U.S.C. § 227(a)(1)). The TCPA applies to autodialed

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debt collection calls made to a wireless number. Blair v. CBE Grp. Inc., No. 13-CV-134,

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2013 WL 5677026, at *3-5 (S.D. Cal. Oct. 17, 2013). Text messages are “calls” under the

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TCPA. Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009).

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“Express consent” is “[c]onsent that is clearly and unmistakably stated.” Id. at 955

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(alteration in original) (citation omitted). When a consumer gives his phone number to a

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company, “the transactional context matters in determining the scope of [that] consumer’s

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consent to contact.” Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1046 (9th

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Cir. 2017). “[T]he TCPA permits consumers to revoke their prior express consent to be

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contacted by telephone autodialing systems.” Id. at 1048. To be effective revocation for

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TCPA purposes, “[r]evocation of consent must be clearly made and express a desire not to

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be called or texted.” Id.

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Here, Plaintiff alleges that Sun Cash used an ATDS to send two text messages from

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the number “77513” directly to Plaintiff’s cellular phone for the purpose of collecting

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Plaintiff’s debt. (Doc. No. 1 ¶ 49.) Plaintiff claims that the text messages were sent using

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an ATDS because the texts were “impersonal” and were sent from “SMS short code,

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‘77513.’” (Doc. No. 9-1 at 5.) Plaintiff also alleges that Sun Cash did not have Plaintiff’s

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prior consent to send the two text messages in September 2017, because the BNC Notice,

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served on Sun Cash on July 28, 2017, revoked any consent Plaintiff may have given to be

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contacted regarding the debt, (Doc. No. 1 ¶ 53); the BNC Notice stated, “Creditors cannot

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demand repayment from debtors by mail, phone, or otherwise,” (Doc. No. 9 Ex. 3).

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Thus, accepted as true, the allegations in Plaintiff’s complaint establish that Sun

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Cash violated the TCPA by sending two text messages to Plaintiff’s cellular phone using

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an ATDS without his prior express consent.

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2.

Rosenthal Act Claim

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The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seq.,

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“comprehensively regulates the conduct of debt collectors, imposing affirmative

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obligations and broadly prohibiting abusive practices.” Gonzales v. Arrow Fin. Servs.,
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LLC, 660 F.3d 1055, 1060-61 (9th Cir. 2011). The FDCPA prohibits debt collectors from,

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for example, communicating with a consumer known to be represented by an attorney, 15

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U.S.C. § 1692c(a)(2); communicating with a consumer after the consumer notifies the debt

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collector in writing that he wishes the debt collector to cease further communication

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regarding the debt, id. § 1692c(c); and engaging in any conduct the natural consequence of

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which is to harass, oppress, or abuse any person in connection with the collection of a debt,

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id. § 1692d. The FDCPA is a strict liability statute. Gonzales, 660 F.3d at 1061. Violations

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of Sections 1692b-j of the FDCPA are independent violations of the Rosenthal Act, which

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is, similarly, a strict liability statute. Cal. Civil Code §§ 1788.17, 1788.30(a).

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Here, Plaintiff alleges that Sun Cash regularly engages in “debt collection” and is a

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“debt collector” for purposes of the Rosenthal Act. (Doc. No. 1 ¶ 21.) Plaintiff alleges that

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Sun Cash communicated with Plaintiff via text messages and mail after Plaintiff had served

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Sun Cash with the BNC Notice, which stated that Plaintiff was represented by counsel and

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identified Plaintiff’s bankruptcy counsel by name and address. (Id. ¶¶ 36-37, 40.) In

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addition, the BNC Notice advised Sun Cash to cease all collection attempts against Plaintiff

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by mail, phone, or otherwise. (Id. ¶ 38.) Thus, Plaintiff has sufficiently alleged meritorious

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claims under the FDCPA and, therefore, under the Rosenthal Act.

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In sum, based on careful consideration of all of the Eitel factors, the Court concludes
that default judgment is appropriate on Plaintiff’s TCPA and Rosenthal Act claims.
B. Relief Sought

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A plaintiff who establishes that the defendant has violated the TCPA may obtain

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$500 in statutory damages for each violation. 47 U.S.C. § 227(b)(3)(B). A court may, in its

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discretion, increase the damages award to up to three times the amount otherwise

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recoverable if the court finds that the defendant “willfully or knowingly” violated the

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TCPA. Id. § 227(b).

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Moreover, a debt collector who “knowingly and willfully” violates the Rosenthal

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Act is liable for statutory damages not less than $100 nor greater than $1,000. Cal. Civil

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Code § 1788.30(b). Statutory damages under the Rosenthal Act are limited to $1,000 per
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lawsuit, not $1,000 per violation. Marseglia v. JP Morgan Chase Bank, 750 F. Supp. 2d

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1171, 1180 (S.D. Cal. 2010). Furthermore, remedies under the Rosenthal Act are

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“cumulative and are in addition to any other . . . remedies under any other provision of

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law.” Cal. Civil Code § 1788.32; accord Gonzales, 660 F.3d at 1067 (“[T]he Rosenthal Act

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does not limit recovery simply because it is also available under federal law.”). When

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determining the amount of liability for violation of the Rosenthal Act, courts consider the

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frequency and persistence of the debt collector’s noncompliance, the nature of such

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noncompliance, and the extent to which such noncompliance was intentional. See, e.g.,

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Lyon v. Bergstrom Law, Ltd., No. 16-CV-401, 2017 WL 2350447, at *10-11 (E.D. Cal.

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May 31, 2017); Patton v. Prober & Raphael, a Law Corp., No. 11-CV-1458, 2012 WL

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294537, at *6-7 (N.D. Cal. Jan. 13, 2012); McKibben v. Collection Prof’l Servs., No. 9-

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CV-2949, 2010 WL 2025319, at *8 (E.D. Cal. May 18, 2010).

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Plaintiff seeks statutory damages for two violations of the TCPA and one violation

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of the Rosenthal Act. (Doc. No. 9-1 at 7-9.) Exercising its sound direction, and having

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carefully considered all of Plaintiff’s factual allegations and arguments, the Court awards

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Plaintiff $1,000 in statutory damages under the TCPA and $100 in statutory damages under

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the Rosenthal Act.

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C. Attorney’s Fees and Costs

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Plaintiff also requests attorney’s fees and costs pursuant to the Rosenthal Act,

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California Civil Code § 1788.30(c). (Doc. No. 10.) The Rosenthal Act provides that “the

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prevailing party shall be entitled to costs of the action” as well as reasonable attorney’s

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fees “based on time necessarily expended to enforce the liability.” Cal. Civil Code §

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1788.30(c).

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District courts use the “lodestar” method to calculate reasonable attorney’s fees,

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multiplying the number of hours the prevailing party reasonably expended on the litigation

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by a reasonable hourly rate. Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir.

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2008) (citations omitted). The prevailing market rates in the forum in which the district

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court sits set the reasonable hourly rate. Gonzalez v. City of Maywood, 729 F.3d 1196,
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1205 (9th Cir. 2013). Within this geographic community, the district court should consider

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the requesting attorney’s “experience, skill, and reputation.” Id. at 1205-06 (citation

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omitted). The fee applicant must produce “satisfactory evidence, in addition to the

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affidavits of its counsel, that the requested rates are in line with those prevailing in the

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community for similar services of lawyers of reasonably comparable skill and reputation.”

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Jordan v. Multnomah County, 815 F.2d 1258, 1263 (9th Cir. 1987). As evidence of

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prevailing market rates, the Court considers all of the information in the record, including

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affidavits by the fee applicant’s attorneys and other attorneys regarding prevailing market

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rates, as well as rate determinations in other cases, “particularly those setting a rate for the

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[fee applicant’s] attorney.” See United Steelworkers of Am. v. Phelps Dodge Corp., 896

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F.2d 403, 407 (9th Cir. 1990).

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Plaintiff is entitled to an award of reasonable attorney’s fees and costs because he

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prevailed in this Rosenthal Act action through default judgment. In support of his motion,

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Plaintiff has submitted a detailed summary of legal services provided, (Doc. No. 10 Ex. 1);

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a sworn declaration by Plaintiff’s counsel regarding his experience, billing rate, and

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incurred costs, (Doc. No. 10-2, Sinnett Decl.); and a sworn declaration by a consumer law

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attorney who practices in the Central District of California, (Doc. No. 10-3, Lloyd Decl.).

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Plaintiff’s counsel seeks payment for 17.7 hours of work at a rate of $375 per hour, totaling

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$6,637.50, as well as $400 in costs. (Doc. No. 10 Ex. 1.)

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Looking to Plaintiff’s counsel’s declaration, the Court notes that Plaintiff’s counsel

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has litigated numerous actions under the Rosenthal Act and similar consumer protection

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statutes. (Doc. No. 10-2, Sinnett Decl. ¶ 4.) Plaintiff’s counsel was admitted to the State

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Bar of California in May 2015. He was awarded $400 per hour for 206.20 hours of work

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pursuant to an FDCPA default judgment in the Central District of California. (Doc. No.

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10-1 at 4.) Additionally, Plaintiff submits a declaration by Mr. Aaron Lloyd, who practices

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consumer law in the Central District of California and opines that $375 is a reasonable

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hourly rate considering Plaintiff’s counsel’s experience and expertise. (Doc. No. 10-3,

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Lloyd Decl. ¶¶ 3-4, 6.) Finally, Plaintiff submits excerpts from the 2013-2014 United States
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Consumer Law Attorney Fee Survey, which reports that “85.9% of all California Consumer

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Law attorneys (regardless of all other factors) have a billable hourly rate above $325 and

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the average rate was $439.” (Doc. No. 10 Ex. 2.) As submitted, this Survey does not report

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on the average hourly rate for consumer law attorneys in the Southern District with similar

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degrees of experience as Plaintiff’s counsel. (See id.)

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The Court is not persuaded that the hourly rate Plaintiff’s counsel requests is

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consistent with the prevailing market rates in San Diego for the type of work involved in

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this case. The Court finds that a reasonable hourly rate for the work performed in this case

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is $250. See Arana v. Monterey Fin. Servs. Inc., No. 15-CV-2262, 2016 WL 1324269, at

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*2 (S.D. Cal. Apr. 4, 2016) (awarding Plaintiff’s counsel, Mr. Sinnett, $250 per hour in

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FDCPA and Rosenthal Act action following Federal Rule of Civil Procedure 68 Offer of

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Judgment).

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The Court also determines that Plaintiff requests reimbursement for unrecoverable

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clerical work. See Davis v. City & County of San Francisco, 976 F.2d 1536, 1543 (9th Cir.

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1992) (citing Missouri v. Jenkins, 491 U.S. 274, 288 n.10 (1989)), vacated on other

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grounds, 984 F.2d 345 (9th Cir. 1993). Unrecoverable clerical tasks include filing and

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scheduling, preparing exhibits, and preparing a proof of service. See Arana, 2016 WL

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1324269, at *3 (collecting cases). Plaintiff’s submitted billing records contain 1.1 hours

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that Plaintiff’s counsel spent on these unrecoverable tasks. (See Doc. No. 10 Ex. 1.) Thus,

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the Court deducts these 1.1 hours as unreasonable.

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Taking this deduction into account, the lodestar calculation is as follows: 16.6 (hours
approved) multiplied by $250 (hourly rate), yielding $4,150.

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Plaintiff’s counsel seeks reimbursement for $400 in costs for filing fees. (Doc. No.

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10 Ex. 1.) The Court approves of these costs. Cal. Civil Code § 1788.30(c).

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//

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//

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//

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//
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CONCLUSION

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The Court concludes that Plaintiff is entitled to a default judgment on his TCPA and

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Rosenthal Act claims against the defaulted Defendant Sun Cash. The Court awards $1,100

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in statutory damages and grants $4,550 in attorney’s fees and costs.

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IT IS SO ORDERED.
DATED: February 7, 2018
MARILYN L. HUFF, District Judge
UNITED STATES DISTRICT COURT

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