Freeman v. ABC LEGAL SERVICES, INC.
827 F. Supp. 2d 1065
N.D. Cal.2011Background
- Freeman sued ABC Legal Services Inc. and Granville Smith III for FDCPA, Rosenthal FDCPA, California 17200; alleges seller of false Proof of Service and “sewer service” to obtain default judgments.
- Plaintiff alleges Defendants manufactured and filed fraudulent Proof of Service to obtain Alameda County default judgment against her, while she claims non-service.
- Defendants allegedly marketed process service to debt collectors and used registered process servers to file false Proofs of Service, enabling debt collection-related defaults.
- Plaintiff asserts Defendants violated California Business and Professions Code provisions and failed to implement quality controls for service of process.
- Defendants moved to dismiss the FDCPA claim, strike state-law claims under Cal. Civ. Proc. Code § 425.16 (anti-SLAPP), and Plaintiff moved for discovery under Rule 56(d).
- Court denied the motion to dismiss, granted discovery, and denied without prejudice the anti-SLAPP motion to strike.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendants are FDCPA debt collectors. | Freeman contends ABC and Smith regularly assist debt collectors to obtain default judgments. | Defendants argue process servers fall within FDCPA exemption when serving process. | Defendant is a debt collector under FDCPA for regular debt-collection activity. |
| Whether process-server exemption applies given alleged sewer service. | Sewer service forfeits process-server exemption so FDCPA applies. | Exemption shields process servers when merely serving; no forfeiture. | Plaintiff sufficiently alleged forfeiture of exemption due to sewer service. |
| Whether Plaintiff can obtain discovery before ruling on anti-SLAPP motion. | Rule 56(d) requires discovery to oppose summary judgment. | Discovery should be stayed under § 425.16; evidence already present. | Rule 56(d) discovery granted before ruling on anti-SLAPP motion. |
| Whether Plaintiff stated a viable FDCPA claim and viability of vicarious liability. | Sewer service and agency control show liability; ABC liable for Smith's acts. | Independent contractor defense and lack of control reduce liability. | FDCPA claim plausibly pled; ABC may be vicariously liable; dismissal denied. |
Key Cases Cited
- Romine v. Diversified Collection Servs., 155 F.3d 1142, 155 F.3d 1142 (9th Cir.1998) (indirect debt collection liability under FDCPA exists)
- Heintz v. Jenkins, 514 U.S. 291, 514 U.S. 291 (U.S.1995) (definition of debt collector extends to lawyers who collect debts)
- Fox v. Citicorp Credit Services, Inc., 15 F.3d 1507, 15 F.3d 1507 (9th Cir.1994) (vicarious liability under FDCPA when both actor and client are debt collectors)
- Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 76 F.3d 103 (6th Cir.1996) (discusses FDCPA vicarious liability concepts)
- Pollice v. National Tax Funding, 225 F.3d 379, 225 F.3d 379 (3d Cir.2000) (vicarious liability for attorney misconduct where client is a debt collector)
- Argentieri v. Fisher Landscapes, Inc., 15 F.Supp.2d 55, 15 F.Supp.2d 55 (D.Mass.1998) (courtly noted judicial supervision of litigation; not applicable here)
- SEC v. Internet Solutions for Bus., Inc., 509 F.3d 1161, 509 F.3d 1161 (9th Cir.2007) (summary judgment and discovery standards in FDCPA context)
- Sykes v. Mel Harris and Associates, LLC, 757 F.Supp.2d 413, 757 F.Supp.2d 413 (S.D.N.Y.2010) (sewer service allegations can support FDCPA claims)