Andexler v. Clarke
Filing
39
MEMORANDUM OPINION AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT: Defendant's Motion for Summary Judgment 19 is GRANTED. Signed on 6/20/11 by Magistrate Judge Dennis J. Hubel. (kb)
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
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MICHELLE ANDEXLER,
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Plaintiff,
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vs.
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MICHAEL T. CLARKE,
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Defendant.
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No. 03:10-cv-01019-HU
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) MEMORANDUM OPINION AND ORDER
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ON DEFENDANT’S MOTION
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FOR SUMMARY JUDGMENT
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________________________________
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Joshua R. Trigsted
TRIGSTED LAW GROUP, P.C.
5200 S.W. Meadows Road
Suite 150
Lake Oswego, OR 97035
Attorney for Plaintiff
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David A. Jacobs
LUVAAS COBB RICHARDS & FRASER, P.C.
777 High Street
Suite 300
Eugene, OR 97401
Attorney for Defendant
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1 - 10-1019 MEMORANDUM OPINION AND ORDER
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HUBEL, Magistrate Judge:
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The plaintiff Michelle Andexler brings this action against the
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defendant Michael T. Clarke for damages under the federal Fair Debt
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Collection Practices Act (“FDCPA” or “the Act”), 15 U.S.C. § 1692
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et seq.1
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collect a judgment obtained against her by Fred Butcher.
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judgment was obtained by default. Andexler claims a portion of the
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judgment represented a “lease buyout fee” that Butcher “was not
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allowed to charge” and was an “unlawful penalty.”
In her Complaint, Andexler alleges Clarke attempted to
The
She claims
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Clarke chose to pursue collection of the entire judgment amount,
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even
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portion,” violating 15 U.S.C. § 1692f(1).2
though
he
“could
have
refused
to
collect
the
unlawful
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Andexler further claims Clarke filed a writ of garnishment
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against her, and then failed to provide her with proper notice of
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her right to object to the garnishment as required by Oregon
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Revised Statutes § 18.845.
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notice “apparently designed for debtors who owe tax debts.”
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#1, ¶¶ 10 & 11, & Ex. A.
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damages and attorney’s fees under the FDCPA.
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Instead, Clarke provided a form of
Dkt.
Andexler seeks actual and statutory
Dkt. #1.
The matter is before the court on Clarke’s motion for summary
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judgment.
Dkt. #19.
The motion is supported by a brief, Dkt. #20;
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a statement of facts, Dkt. #21; and Declarations of Michael T.
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Clarke, Erin A. Fennerty, and Scott Mollenhour, Dkt. ## 22, 23 and
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The parties have consented to jurisdiction and the entry of
final judgment by a United States Magistrate Judge, in accordance
with Federal Rule of Civil Procedure 73(b). Dkt. #27.
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A debt collector violates the FDCPA by collecting any amount
that is not “expressly authorized by the agreement creating the
debt or permitted by law.” 15 U.S.C.§ 1692f(1).
2 - 10-1019 MEMORANDUM OPINION AND ORDER
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24, respectively.
Andexler has responded with a brief, Dkt. #31,
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accompanied by a copy of the Writ of Garnishment obtained against
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her on Butcher’s behalf.
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reply, Dkt. #34; a Declaration of David A. Jacobs, Dkt. #35; and a
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Supplemental Declaration of Michael T. Clarke, Dkt. #36.
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motion came on for oral argument on June 15, 2011.
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considered the parties’ summary judgment papers and counsels’ oral
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arguments, and grants the motion for summary judgment.
Dkt. #31 & 31-1.
Clarke has filed a
The
The court has
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DISCUSSION
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Clarke’s motion and Adexler’s response bring a single issue
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before the
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collector” for purposes of the FDCPA.
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that the judgment Clarke attempted to collect constituted a “debt”
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for purposes of the FDCPA (although Andexler disputes the validity
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of a portion of the debt). The Act defines a “debt collector” as:
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any person who uses any instrumentality of
interstate commerce or the mails in any business the principal purpose of which is the
collection of any debts or who regularly
collects or attempts to collect, directly or
indirectly, debts owed or due another.
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court;
i.e.,
whether
Clarke
qualifies as
a
“debt
The parties do not dispute
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15 U.S.C. § 1692a(6).
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“[L]awyers who regularly collect debts through litigation” are
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included within the statutory definition of “debt collector.”
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McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939, 948
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(9th Cir. 2011) (citing Heintz v. Jenkins, 514 U.S. 291, 293-94,
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115 S. Ct. 1489, 1490, 11 L. Ed. 2d 395 (1995); see id., 514 U.S.
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at 299, 115 S. Ct. at 1493 (FDCPA “applies to attorneys who
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‘regularly’ engage in consumer-debt-collection activity, even when
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that activity consists of litigation.”).
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Clarke,
however,
argues
he
does
not
qualify
as
a
“debt
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collector” as defined by the statute because at the time of the
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alleged violation, he had been practicing law for less than five
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years during which time he had handled only ten consumer debt
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collections for nine different clients, five of whom were his
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family members or friends.
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tionships with clients that have retained him specifically to
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handle consumer debt collections,” and he only occasionally handles
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debt collection matters as part of his small, generalized law
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practice.
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He claims he “has no ongoing rela-
Dkt. #20; see Dkt. #22, Clarke Declr.
Clearly, the principal purpose of Clarke’s business is not the
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collection of debts.
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can
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consumer debts.
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Carroll & Bertolotti, 374 F.3d 56, 60-61 (2d Cir. 2004) (FDCPA
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plaintiff
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collector status”).
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Andexler
show
Clarke
“bears
Thus, the question turns on whether Andexler
“regularly
collects
or
attempts
to
collect”
See Goldstein v. Hutton, Ingram, Yuzek, Gainen,
the
burden
complains
that
of
proving
she
“had
the
no
defendant’s
direct
access
debt
to
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[Clarke’s] files and therefore has no opportunity to meaningfully
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challenge the evidence provided by [Clarke] regarding the amount of
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[his] practice devoted to collection activity.”
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Clarke takes issue with Andexler’s representation.
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early on in the case, “with the court’s encouragement, the parties
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resolved a dispute over what information would be provided to
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[Andexler] from [Clarke’s] client files in such a way [as] to
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protect attorney-client confidences.”
Dkt. #31, p. 1.
He notes that
Dkt. #34, p. 1; see Dkt.
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#35, Declr. of David A. Jacobs (describing discussions with the
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court at the parties’ Rule 16 conference and subsequent status
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conference).
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Fennerty conducted a comprehensive review of Clarke’s client files
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and email correspondence, and prepared a listing of the types of
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work he had performed for each of his clients for calendar years
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2006 through 2010. See Dkt. #23, Fennerty Declr. This information
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was provided to Andexler, who then deposed Clarke.
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Clarke, Andexler did not have his deposition transcribed; she
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pursued no further discovery subsequent to his deposition; and, to
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Clarke’s knowledge, she did not depose, or subpoena documents from,
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any of the clients for whom he has performed consumer collection
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work.
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Pursuant to the parties’ agreement, attorney Erin A.
According to
Dkt. #34.
Andexler
“challenge[s]
of
[Clarke’s]
the
accuracy,
representation
or
that
at
he
least
the
does
not
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materiality,
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currently represent any of the clients for which he has done
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collection work on an ongoing basis.”
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#21, ¶ 3).
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performed ongoing collection activities for at least three clients;
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i.e., Modern Appraisal, “Northwest Plumbing,” and Vilardi Electric.
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Id. (referring to Dkt. #23, ¶ 9(i), (q), & (s)).
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it is immaterial whether or not Clarke still represented any of
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those three clients at the time of his Declaration; rather, “[w]hat
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would be material is information regarding the nature of [Clarke’s]
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arrangement with those parties as of the date that [he] performed
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the collection actions that are the subject of this lawsuit.” Id.
Dkt. #31, p. 1 (citing Dkt.
She argues Fennerty’s file review suggests Clarke
Andexler suggests
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Concerning the three clients cited by Andexler, Fennerty’s
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review of Clarke’s records shows he pursued three matters on behalf
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of Vilardi Electric.
One clearly was not a consumer matter, as it
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involved a contract between Vilardi and another business.
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other two matters were to collect payment due under contracts for
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the performance of residential electrical work.
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no lawsuit was filed.
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of contract.
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For
The
In one of those,
In the other, a lawsuit was filed for breach
See Dkt. #23, ¶ 9(i).
Modern
Appraisal,
Clarke
undertook
seven
collection
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matters, only one of which involved a consumer defendant.
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the matters involved collections from mortgage companies for the
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performance of home appraisals.
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commercial client, not a consumer.
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For
SRDH
Plumbing,
Inc.
Five of
The last action also involved a
Id., ¶ 9(q).
dba
Northwest
Plumbing,
Clarke
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undertook two consumer collection actions to recover payment due
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under contracts for the performance of plumbing services.
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¶ 9(s).
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Id.,
In Clarke’s supplemental declaration, he makes it clear that
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throughout
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relationship with any client to handle consumer collection work,
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nor
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“whenever they had the need.”
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has
his
any
The
legal
client
question
career,
ever
here
he
agreed
is
has
to
never
send
him
had
any
ongoing
collection
work
Dkt. #36, ¶ 1.
whether
Clarke’s
debt
collection
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activities are sufficient to satisfy the regularity prong of the
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definition
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addressed the issue once.
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Inc., the court held, with little analysis, that an attorney whose
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practice during the period in question included 80 percent debt
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collection work was a “debt collector” for purposes of the Act.
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Id., 15 F.3d 1507, 1513 (9th Cir. 1994).
of
“debt
collector.”
The Ninth
Circuit
has only
In Fox v. Citicorp Credit Services,
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More instructive on the issue is the court’s analysis in
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Goldstein.
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found that in determining whether an attorney qualifies as a “debt
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collector” for purposes of the FDCPA, the court’s focus cannot be
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limited to “the proportion of overall work or firm revenue,” a
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narrow view that “blurs the distinction between the ‘principal
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purpose’ and ‘regularity’ aspects of the statutory definition of
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debt collector.”
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follows:
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There, the court reviewed the issue thoroughly, and
Goldstein, 374 F.3d at 61.
The court observed as
To the extent that some courts confronted
with the task of articulating an analytical
framework for the regularity prong of the
definition have suggested that such proportionality factors may alone be determinative,
the facts of the particular cases often belie
the implication. Where debt collector status
was found lacking based on revenue or workload
figures, other indicia of regularity often
were also lacking; where debt collector status
was found, the regularity and/or principal
purpose criteria would in some cases easily
have been met in any event. Compare Schroyer
v. Frankel, 197 F.3d 1170, 1173, 1177 (6th
Cir. 1999) (where firm handled 50-75 collection cases annually, constituting less than 2%
of overall practice, maintained no nonattorney staff or computer aids for debt
collection, and debt collection activity came
from non-collection business clients and was
“incidental to, and not relied upon or anticipated in,” firm’s practice of law, firm was
not debt collector); White [v. Simonson &
Cohen P.C.], 23 F. Supp. 2d [273,] 278
[(E.D.N.Y.
1998)]
(lawyer
who
sent
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collection letters once as favor to personal
client and filed no follow-up litigation was
not debt collector); Von Schmidt v. Kratter, 9
F. Supp. 2d 100, 103-04 (D. Conn. 1997) (law
firm whose total three-year revenues from debt
collection were less than $1,000 and had only
one consumer credit client was not debt
collector); and Nance v. Petty, Livingston,
Dawson, & Devening, 881 F. Supp. 223, 225
(W.D.
Va.
1994)
(collection
work
that
constituted .61% of lawyer’s personal practice
and represented 1.07% of firm’s cases over 187 - 10-1019 MEMORANDUM OPINION AND ORDER
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month period did not render defendant law firm
debt collector, where plaintiff provided no
evidence of debt collection activity other
than that complained of in action); with Scott
v. Jones, 964 F.2d 314, 316-18 (4th Cir. 1992)
(principal purpose and regularity prongs
satisfied where lawyer and firm had regular
ongoing relationship with delinquent debt
division of credit card issuer, 70-80% of
revenues were generated by such work over
relevant period and over 4,000 “warrants” had
been issued annually in connection with such
work over five-year period). See also Garrett
[v. Derbes, 110 F.3d 317, 318 (5th Cir.
1997)], (rejecting district court finding that
collection activity was not “regular” where
639 demand letters were mailed in nine-month
period, although revenues from activity were
less than 0.5% of firm’s total for period).
In light of Goldstein’s proffer of specific
evidence of debt collection activity in the
form of 145 three-day notices issued in a oneyear period, the district court’s analysis was
too narrow to support its determination that
Hutton had not regularly engaged in debt
collection.
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Goldstein, 374 F.3d at 61-62.
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The court rejected Goldstein’s assertion that if any attorney
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engages in collection activities for clients “more than a handful
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of times per year,” the attorney must comply with the FDCPA.
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374 F.3d at 62 (citation omitted).
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‘handful’ standard has no precedential basis and, standing alone,
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lacks a meaningful nexus to the issue of regularity.” Id. Instead,
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the court held the determination must be made “on a case-by-case
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basis in light of factors bearing on the issue of regularity.”
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The court found the following factors to be “illustrative rather
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than exclusive”:
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Id.,
The court found, “Goldstein’s
Most important in the analysis is the
assessment of facts closely relating to
ordinary concepts of regularity, including (1)
the absolute number of debt collection communications issued, and/or collection-related
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Id.
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litigation matters pursued, over the relevant
period(s), (2) the frequency of such communications and/or litigation activity, including
whether any patterns of such activity are
discernable, (3) whether the entity has
personnel specifically assigned to work on
debt collection activity, (4) whether the
entity has systems or contractors in place to
facilitate such activity, and (5) whether the
activity is undertaken in connection with
ongoing client relationships with entities
that have retained the lawyer or firm to
assist in the collection of outstanding
consumer debt obligations.
{Footnote omitted.] Facts relating to the role debt collection work plays in the practice as a whole
should also be considered to the extent they
bear on the question of regularity of debt
collection activity (debt collection constituting 1% of the overall work or revenues of a
very large entity may, for instance, suggest
regularity, whereas such work constituting 1%
of an individual lawyer’s practice might not).
Whether the law practice seeks debt collection
business by marketing itself as having debt
collection expertise may also be an indicator
of the regularity of collection as a part of
the practice.
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Goldstein, 374 F.3d at 62-63.
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In the present case, Andexler asserts that Clarke “derived
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.97%
of
[his]
revenue
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defendant in Goldstein who was found to be a “debt collector”
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derived only .05% of its overall revenue from collection activi-
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ties.
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based on more than just the percentage of revenue.
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in the case was shown to have issued 145 debt collection notices in
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a twelve-month period, with more than ten notices issued in each of
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at least seven months and more than fifteen notices issued in three
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months.
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the repetitive pattern of issuance of multiple notices each month,
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clearly could support a determination that [the defendant’s] debt
Dkt. #31, p. 9.
from
collection
practices,”
while
the
However, the Goldstein court’s holding was
The defendant
The court found that these numbers, “taken together with
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collection practices were regular.”
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addition,
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relationship with “apparently affiliated entities for which it
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repeatedly sent collection notices within the one-year period under
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scrutiny[.]”
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is no evidence in the record that Clarke engaged in a similar
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magnitude of collection activities, or that he had an ongoing
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relationship to collect debts for any particular client.
the
record
Id.
showed
the
Id., 374 F.3d at 63.
defendant
had
an
In
ongoing
The evidence here is not as compelling.
There
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Summary judgment should be rendered “if the movant shows that
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there is no genuine dispute as to any material fact and the movant
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is entitled to judgment as a matter of law.”
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56(c)(2).
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support
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Andexler “to designate specific facts demonstrating the existence
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of genuine issues for trial.”
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Litigation, 627 F.3d 376, 387 (9th Cir. 2010) (citing Celotex Corp.
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v. Catrett, 477 U.S. 317, 324, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d
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265 (1986)).
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is not a light one”:
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Fed. R. Civ. P.
Clarke has shown there is an absence of evidence to
Andexler’s
case.
Accordingly,
the
burden
shifts
to
In re Oracle Corp. Securities
The Ninth Circuit has explained that “[t]his burden
The non-moving party must show more than the
mere existence of a scintilla of evidence.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
252, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
The non-moving party must do more than show
there is some “metaphysical doubt” as to the
material facts at issue.
Matsushita Elec.
Indus. Co., Ltd. v. Zenith Radio Corp., 475
U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d
528 (1986).
In fact, the non-moving party
must come forth with evidence from which a
jury could reasonably render a verdict in the
non-moving party’s favor. Anderson, 477 U.S.
at 252, 106 S. Ct. 2505.
In determining
whether a jury could reasonably render a
verdict in the non-moving party’s favor, all
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justifiable inferences are to be drawn in its
favor. Id. at 255, 106 S. Ct. 2505.
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3
Id.
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In the present case, a review of the factors identified by the
5
Goldstein court leads to the conclusion that Clarke is not a “debt
6
collector” for purposes of the FDCPA.
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failed to “make a showing sufficient to support a determination
8
that [Clarke] was a debt collector” at the time he obtained the
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writ of garnishment on Butcher’s behalf.
Moreover, Andexler has
See Goldstein, 374 F.3d
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at 60-61.
She has offered no citations to materials in the record
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that establish Clarke was (or is) a “debt collector,” nor has she
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offered evidence to establish the existence of a material issue of
13
fact.
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she has failed to “come forth with evidence from which a jury could
15
reasonably render a verdict in [her] favor.”
16
627 F.3d at 387 (citation omitted).
17
U.S. ___, 129 S. Ct. 1937, 1949 (2009) (noting Rule 8’s pleading
18
standard “demands more than an unadorned, the-defendant-unlawfully-
19
harmed-me accusation”) (citing Bell Atlantic Corp. v. Twombly, 550
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U.S. 544, 555, 127 S. Ct. 1955, 1964, 167 L. Ed. 2d 929 (2007)).
21
I find that Clarke was not a “debt collector” for purposes of
22
liability under the FDCPA.
Even taking all justifiable inferences in Andexler’s favor,
In re Oracle Corp.,
Cf. Ashcroft v. Iqbal, 556
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CONCLUSION
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2
3
4
For the reasons discussed above, Clarke’s motion for summary
judgment (Dkt. #19) is granted.
IT IS SO ORDERED.
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Dated this 20th day of June, 2011.
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/s/ Dennis J. Hubel
_____________________________________
Dennis James Hubel
Unites States Magistrate Judge
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