Free Order on Motion to Dismiss - District Court of California - California

Case 4:05-cv-04993-SBA

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1 2 3 4 5 6 7 8 9 10 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court

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For the Northern District of California

BRANDY HUNT, Plaintiff, v. CHECK RECOVERY SYSTEMS, Defendant. /

No. C05-04993 MJJ ORDER DENYING MOTION TO DISMISS

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INTRODUCTION Before the Court is Check Recovery Systems' ("Defendant") Motion to Dismiss.1 This motion is opposed by Brandy Hunt ("Plaintiff"). For the following reasons, the Court DENIES Defendant's Motion to Dismiss.

FACTUAL BACKGROUND On September 29, 2005, Plaintiff filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California. In listing her assets, Plaintiff included a possible claim for statutory damages against Defendant for a violation of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA"). On December 5, 2005, Plaintiff filed the instant class action complaint in the United States

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Docket No. 10, Filed Feb. 22, 2006.

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District Court, alleging that Defendant violated several provisions of the FDCPA. Defendant now brings the instant Motion to Dismiss for lack of jurisdiction, or, in the alternative, to transfer the case to the bankruptcy court, or to stay the proceedings pending the resolution of the bankruptcy action.

ANALYSIS Defendant argues that the Court does not have jurisdiction to hear this case. Pursuant to Northern District of California General Order 24, Part I, § 1.01, all cases arising under or related to cases arising Chapter 11 of the United States Bankruptcy Code must be referred to the Bankruptcy Court. Defendant argues that this case will require the Court to determine "the balance due on the underlying debt" which Defendant asserts is an issue that must be decided by the Bankruptcy Court. Defendant contends that therefore, the Court does not have jurisdiction pursuant to General Order 24. The Court does not agree. Proceedings "arise under" title 11 if they involve a cause of action created or are determined by a statutory provision of title 11. In re Harris Pine Mills, 44 F.3d 1431, 1435 (9th Cir. 1995). In the instant action, Plaintiff alleges that Defendant violated the FDCPA by using, "false, deceptive, or misleading representation[s] or means in connection of any debt...falsely representing the character, amount, or legal status of any debt...using unfair or unconscionable means to collect or attempt to collect any debt." (Complaint at 18). Plaintiff does not assert any causes of action arising out of title 11. The alleged FDCPA violations that Plaintiff asserts here have nothing to do with the Plaintiff's Chapter 7 bankruptcy proceeding. The Court therefore finds that Plaintiff's claims in the instant action do not arise under title 11 and are not related to Plaintiff's bankruptcy action.2 Accordingly, the Court DENIES Defendant's Motion to Dismiss, Transfer, Or Stay.

United States District Court

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For the Northern District of California

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Moreover, contrary to Defendant's assertion, this action doesn't necessarily require the Court to determine the balance due on the underlying debt. "The [FDCPA] is designed to protect consumers who have been victimized by unscrupulous debt collectors, regardless of whether a valid debt actually exists." Baker v. G. C. Services Corp., 677 F.2d 775, 777 (9th Cir. 1982). Thus, it is not necessary for a court to determine the balance due on any underlying debt in order to adjudicate a FDCPA violation. A plaintiff can bring a FDCPA claim regardless of the value of an underlying debt and even when no debt exists.

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Case 4:05-cv-04993-SBA

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1 2 3 4 5 6 7 8 9 10 Dated: March 29, 2006 IT IS SO ORDERED.

CONCLUSION

For the foregoing reasons, the Court DENIES Defendant's Motion to Dismiss.

MARTIN J. JENKINS UNITED STATES DISTRICT JUDGE

United States District Court

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For the Northern District of California

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