Gonzales v. Arrow Financial Services, LLC

Opinion by Judge B. FLETCHER; Dissent by Judge N.R. SMITH.

OPINION

Appellant Arrow Financial Services (“Arrow”) appeals the district court’s decision, on summary judgment, that letters sent by Arrow to nearly 40,000 California residents constituted “false, deceptive, or misleading representation^] ... in connection with the collection of any debt” in violation of the federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692e. It also appeals a jury’s award, after trial, of statutory damages under both the FDCPA and California’s Rosenthal Fair Debt Collection Practices Act (“Rosenthal Act”), California Civil Code § 1788 et seq. Arrow contends that the Rosenthal Act does not permit class actions, and that permitting class plaintiffs to recover statutory damages under both the FDCPA and Rosenthal Act violates the FDCPA. We have jurisdiction under 28 U.S.C. § 1291 . We disagree with Arrow’s contentions and affirm the district court.

I.

Arrow Financial Services is a debt buyer and collector. It purchases consumer debts that have been written off by the original creditor. Most debt buyers acquire the debts for a fraction of the balance, but then attempt to collect the…

dissenting in section IV of the majority opinion.

I must dissent from the majority opinion, because plaintiffs cannot obtain a double statutory damages recovery under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. The plaintiffs in this case cannot receive duplicative statutory damages awards under California law, because the California legislature adopted identical provisions of the FDCPA when it amended California’s Rosenthal Fair Debt Collection Practices Act (Rosenthal Act), Cal. Civ.Code § 1788 et seq. Additionally, construing adopted FDCPA remedy provisions to provide duplicative awards must invite preemption, because such awards will undermine the statute’s protective cap on statutory damages.

The California legislature replaced substantial portions of the Rosenthal Act with the FDCPA to harmonize California and federal debt collection practices law. See California Bill Analysis, Senate Judiciary Committee, A.B. 969, 1999-2000 Regular Session, July 15, 1999, p. 5, available at ftp://leginfo.public.ca.gov/pub/99-00/bill/ asm/ab_0951-1000/ab_969_cfa_l 9990708_133036_sen_comm.html (last visited Aug. 5, 2011). California Civil Code § 1788.17, which…

David M. Schultz, Joel David Bertocchi, and Jennifer W. Weller, Hinshaw & Culbertson, LLP, Chicago, IL, for the defendant-appellant.

Elizabeth J. Arleo, Arleo Law Firm, Ramona, CA, Owen Randolph Bragg and Craig M. Shapiro, Horwitz, Horwitz & Associates, Chicago, IL, Shaun Khojayan, Beverly Hills, CA, and Richard John Rubin, Santa Fe, NM, for the plaintiff-appellee.

Before: BETTY B. FLETCHER and N. RANDY SMITH, Circuit Judges, and JAMES S. GWIN, District Court Judge. [*]

Opinion by Judge B. FLETCHER; Dissent by Judge N.R. SMITH.

B. FLETCHER, Circuit Judge:

Appellant Arrow Financial Services ("Arrow") appeals the district court's decision, on summary judgment, that letters sent by Arrow to nearly 40,000 California residents constituted "false, deceptive, or misleading representation[s] . . . in connection with the collection of any debt" in violation of the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692e. It also appeals a jury's award, after trial, of statutory damages under both the FDCPA and California's Rosenthal Fair Debt Collection Practices Act ("Rosenthal Act"), California Civil Code § 1788 et seq. Arrow contends that the Rosenthal Act does not…