ORDER RE: CROSS-MOTIONS FOR SUMMARY JUDGMENT
This action arises out of the attempted collection of debt incurred by Plaintiff Andrew Lee (“Plaintiff’) as a result of his alleged misuse of his employee discount and for changing the oil on his car while at work at Defendant The Pep Boys Manny Moe & Jack of California (“Pep Boys”). Plaintiff alleges that the settlement demand letter that Defendants Palmer Rei-fler & Associates (“Palmer”) and Patricia Hastings (“Hastings”) sent to him violated various provisions of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, and the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200. Now pending before the Court are Defendants’ motion for summary judgment and Plaintiffs cross-motion for partial summary judgment.' (Dkt. Nos’ 180, 181.)
BACKGROUND
A. Summary Judgment Evidence
. Pep Boys, a California corporation with retail auto stores throughout the state, employed Plaintiff at their Pasadena location beginning in 2004. (Dkt. No. 180-3 at 4.) As of 2012, Plaintiff worked as an “Express Service Technician.” (Id at 18.) On April 17, 2012, Plaintiff was terminated for allegedly performing an oil change on his own car at Pep Boys’ garage and for improperly using his employee discount. (Dkt. No. 181-2-¶ 2.)
1. Pep Boys’ Policies
Pep Boys enacted written policies governing employees’ work, including rules about employees working on their own cars while on the job and use of their employee discounts. Plaintiff saw those policies for the first time sometime in 2010—that is, prior to his termination. (Dkt. No. 180-3 at 17, 32-35.)
With respect to employees servicing their own cars, at the time of Plaintiffs incident in 2011 Pep Boys had implemented a written policy entitled “Standard Operational Procedures” regarding the company’s “Working on My Own Vehicle Program[.]” (Dkt. No. 136-1 ¶ 5; id. at 7-8.) The policy permits certain employees—specifically, “flat rate” associates working as “Master Technicians, EP Technicians, Technicians A & B, and Mechanics”—to service, maintain, and replace parts on their own cars at the Pep Boys location where they work subject to certain restrictions. (Id. at 7.) The policy also clearly states that “non-flat rate associates are not permitted this benefit, No exceptions.” (Id.) Those employees eligible for the program must meet a number of requirements in order to service
As for the employee discount, a section of Pep Boys’ Standard Operational Procedures entitled “Associate Discount” permitted employees to purchase most merchandise at a 20 percent discount. (Dkt. No. 136-1 ¶ 5; id. at 5.) Pep Boys had several iterations of the written policy in place. In one document, the policy provides that the discount “is for personal use and the use of the [employee’s] spouse and dependent ehildren[.]” (Id. at 5.) Elsewhere, in an employee handbook, the rule is written to apply only to an employee’s spouse. (See Dkt. No. 181-1 at 254 (“Pep Boys associate discount program is for individual personal usage by the associate and/or their spouse.”),) A separate page of an employee training manual entitled “Associate Dishonesty” clarifies that employees are “ONLY allowed to give some discounts to your spouse, dependent children or dependent parents” and labels providing the employee discount to friends as internal theft. (Dkt. No. 180-3 at 32 (emphasis in original),) Mr. MacDonald conceded that it could be confusing to an associate to have these policies with varied terms. (Dkt. No. 181-1 at 176.) He also told Plaintiff that ten different employees could have ten different interpretations of the policy. (Id. at 175.) Regardless, both Mr. MacDonald and Pasadena Shop Service Manager Jeff Hayden averred that Pep Boys never permitted employees to extend the merchandise discount to friends. (Dkt. No. 136-3 ¶ 10; Dkt. No. 136-2 ¶6.) At least one version of the policy explicitly stated as much. Training on this employee discount policy is part of Pep Boys’ initial employee training. (Dkt. No. 136-2 ¶ 6.)
In any event, when Pep Boys employees give their discount to qualified individuals, the family member brings the merchandise to the cashier, identifies the employee and the employee’s number, and the cashier rings up the transaction for the qualified family member. (Dkt. No. 136-3 ¶ 12.)
2. Plaintiffs Purported Misconduct, Investigation & Termination
On April 12, 2012, after clocking into work, Plaintiff serviced his own car using oil and an oil filter that he had purchased earlier. (Dkt. No. 180-3 at 7, 27; Dkt. No. 181-1 at 182-183.) Plaintiff was not eligible for the Working on My Own Vehicle Program because he was an Express Tech compensated on a piece-rate basis, not a flat-rate technician. (Dkt. No. 181-1 at ISO-81.) Plaintiff did not seek permission from a manager either before or after he did the work. (Dkt. No. 180-3 at 7-8.)
Plaintiff also admitted to allowing his friend Michelle Bacca to use his employee discount privilege. (Dkt. No. 180-3 at 12; see also Dkt. No. 136-3 ¶ 11.) Ms. Bacca was the customer in the transaction; Plaintiff was not present in the store at the time. (Dkt. No. 180-3 at 11.) Plaintiff testified that his shop service advisor, Mr. Hayden, gave him permission to have friends use the discount. (Dkt. No. 136-10 at 30-32; Dkt. No. 136-11 at 18-19.) Mr. Hayden, in contrast, averred that no such conversation occurred, that he never gave Plaintiff permission to extend the discount to his friend, and that he did not approve, authorize, or handle the transaction. (Dkt. No. 136-2 ¶ 7.) During Pep Boys’ internal investigation of the incident, Plaintiff stat
Mr. MacDonald conducted an internal investigation on Pep Boys’ behálf, and Pep Boys ultimately terminated Plaintiffs employment. In a written statement at the end of the investigation, Plaintiff represented that “[t]he total loss that [he] caused for the company is $20 and [he is] willing to pay back Pep Boys.” (Dkt. No. 180-3 at 28.) Mr. MacDonald testified that normally, based on an admission like that, Pep Boys would deduct $20 from the employee’s paycheck, but he did not know if Pep Boys did so or not. (Dkt. No. 181-1 at 184-185.) Similarly, Plaintiff avers that at the conclusion of the interview, he and Mr. MacDonald “came to an agreement for [Plaintiff] to pay $20.00 to Pep Boys as compensation for performing . the oil change and for use of the employee discount.” (Dkt. No. 181-2 ¶ 3.) Mr. MacDonald informed Plaintiff that “Pep Boys could civilly collect any monetary damages civilly from you depending on the investigation[.]” (Dkt. No. 136-3 ¶4.) Mr. MacDonald also had Plaintiff sign a document entitled “Civil Demand Notice,”, which similarly advised that Pep Boys might seek damages from Plaintiff, including “the costs of security and any other damages/penalties permitted by law” and that any questions should be directed to Palmer. (Id. ¶¶ 5-6.)
Plaintiff paid Pep Boys $20 pursuant to the agreement he reached with Mr. MacDonald.
3. Palmer’s Debt Collection Efforts
Palmer is a Florida-based law firm that serves retail clients, including Pep Boys, seeking to recover monetary losses from customers who have been accused of shoplifting and employees accused of acts of theft or dishonesty. (Dkt. No. 120-2 at 48.) In May 2012, Plaintiff received a letter from Palmer sent on Pep Boys’ behalf. The letter provides in relevant part:
This Law Firm represents Pep Boys concerning its civil claim against you in connection with an incident in their store 607 on 4/17/2012.
Pursuant to Cal. Penal Code § 490.5 “Theft of retail merchandise; civil liability”, Pep Boys may consider moving forward with a statutory civil damages claim against you.
We ask that you settle this matter by making payment to us in the amount of $350.00 within twenty (20) days of the date of this letter. Upon receipt of full payment and clearance of funds, you will receive a written release of the statutory civil “penalty” claim.
(Dkt. No. 181-2 at 5 (emphasis in original).) Plaintiff received a second letter from Palmer dated June 12, 2012 with substantially similar language; the only thing that changed was the amount and payment deadline: this time, the letter provided that “[a]t this time, our client is requesting that you settle this matter by
Plaintiff responded in a letter dated June 7, 2012, writing that because Pep Boys “has failed to provide adequate proof for the grounds for my termination, and has not delivered paperwork detailing the itemized expenses it seeks to recover from this incident, I see no reason to make payment.” (Dkt. No. 136-6 at 13.) A couple of weeks later Plaintiffs attorney sent a further response to Palmer’s settlement demand letters, contending that California Penal Code § 490.5 does not apply because Plaintiff did not take any merchandise, and if anything he used Pep Boys’ labor in completing his own oil change, so Plaintiff would not be paying Palmer. (Id. at 15-16.) Palmer responded with a letter to Plaintiffs attorney explaining that it would no longer pursue the settlement demand against Plaintiff and that the civil matter arising out of the Pep Boys incident was “considered to be fully and finally resolved between the parties[J” (Dkt. No. 136-6 at 2 ¶ 17; id. at 21.) Plaintiff never paid any money to Pep Boys as Palmer’s letters requested. (Dkt. No. 180-3 at 19.) Pep Boys never filed any complaint against him.
B. Procedural History
Plaintiff brings two claims against Defendants. First, Plaintiff contends that Palmer and Hastings violated the FDCPA: (a) Section 1692g(a)(4) by failing to include in the settlement demand letter a statement that if the consumer disputes the debt, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification will be mailed to the consumer by the debt collector; (b) Section 1692g(a) by demanding payment of the alleged debt in less than 30 days; and (c) Section 1692e(ll) by failing to state that the communications were sent on behalf of a debt collector. On this FDCPA claim Plaintiff seeks actual and statutory damages as well as declaratory and injunctive relief. Second, Plaintiff alleges that Palmer, Hastings, and Pep Boys engaged in unfair business practices in violation of California law by sending settlement demand letters seeking more than the $500 maximum that Penal Code § 490.5 permits, which Plaintiff contends violates the Unfair Competition Law’s unlawful prong (predicated on a violation of the FDCPA), and the unfair prong (as the letters unfairly and incorrectly imply to the reader that Palmer could seek more than $500 pursuant to that statutory section). As a result of this violation, Plaintiff seeks restitution and to enjoin Defendants from continuing to engage in their unlawful business practices.
By Order dated December 23, 2015, the Court denied Plaintiffs motion for class certification on either claim. Lee v. The Pep Boys-Manny Moe & Jack of Cal., No. 12-cv-05064-JSC,
DISCUSSION
A. First. Claim for Relief: Violation of the FDCPA
Both parties seek summary judgment on various aspects of the FDCPA claim. As a preliminary matter, in the SAC Plaintiff brought this claim solely against Palmer and Hastings. {See Dkt. No. ,25 at 10.) And indeed, during the course of this litigation, Plaintiff has consistently alleged that Palmer and Hastings violated the FDCPA, while all Defendants (including Pep Boys) should be held liable under the UCL. (See, e.g., Dkt. No. 119 at 17; Dkt. No. 120.) Now, for the first time in a footnote in his motion for partial summary judgment, Plaintiff suggests that he is also entitled to judgment against Pep Boys on the FDCPA claim. {See Dkt. No. 181 at 19 n.l (“Ninth Circuit authority supports a finding of liability against Pep Boys as well.”) (citation omitted).) Without weighing in on whether this is true, Plaintiff has not brought the FDCPA claim against Pep Boys and has not sought leave to amend the SAC to do so. There is no FDCPA claim against Pep Boys in this lawsuit.
As for the FDCPA claim against Palmer and Hastings, Defendants argue that there is no genuine dispute that Plaintiffs financial obligation to Pep Boys did not arise from a consensual transaction and therefore the FDCPA does not apply to the letters at issue. Plaintiff, for his part, seeks partial judgment in his favor on two discrete legal issues relevant to this claim: first, that there is no genuine dispute that there was a mutually consensual transaction—the same issue in Defendants’ motion—and second, that the letters’ language violates the FDCPA.
1. Whether Plaintiffs Claim Involves an FDCPA Debt
The FDCPA provides a cause of action for consumers who have been exposed to “abusive debt collection practices by debt collectors.” Fleming v. Pickard,
For example, in Fleming, the Ninth Circuit held that a cause of action for tortious conversion does not constitute a “debt” within the meaning of the FDCPA. 581
Here, the two transactions that Plaintiff has long argued underlie his financial obligations are Plaintiffs performance of an oil change on his own car while on the clock and his misuse of his employee' discount. Plaintiff also argues now for the first time that his later agreement with internal investigator Shaun MacDonald to pay Pep Boys $20 separately satisfies the consensual transaction requirement. The Court will address each in turn.
a. The Oil Change
The financial obligation Plaintiff allegedly owed Pep Boys as a result of the unauthorized oil change did not arise from a consensual transaction. It is undisputed that Pep Boys did not permit non-flat rate associates, like Plaintiff, to work on their own cars. (Dkt. No. 136-1 ¶ 5; id. at 7-8; Dkt. No. 181-1 at 180.) Moreover, even if Plaintiff had been working in a position that made him eligible to work on his own car at work, he concedes that he did seek a manager’s permission in advance as required and worked on the car while he was on the clock, contrary to policy. (See Dkt. No. 136-1 at 7; Dkt. No. 181-1 at 180, 182-183.) Nor is there any evidence in the record suggesting that Plaintiff met any of the other prerequisites to working on his own car, such as obtaining a release or work order. (See Dkt. No. 136-1 ¶ 5; id. at 7.) In short, there is no genuine dispute that Plaintiffs unauthorized work on his own car was not consensual because Pep Boys did not allow him to perform the work.
Plaintiffs insistence that an employee/employer relationship always creates an FDCPA debt is wrong. The cases upon which Plaintiff relies do not so hold. In Berman v. GC Services Limited Partnership,
Plaintiffs reliance on Kreisler v. Latino Union, Inc., No. 06 cv 3968,
Plaintiffs suggestion that the “transaction” underlying the oil change financial obligation is Plaintiffs purchase of oil and an oil filter fares no better. Pep Boys has never contested that Plaintiff properly paid for the oil and oil filter he used; instead, the record is undisputed that the financial obligation comes from Plaintiffs on-the-clock performance of personal services.
Plaintiffs heavy reliance on the Court’s Order granting in part and denying in part Defendants’ motion to dismiss is similarly misplaced. There the Court concluded that the “FAC supports an inference that it was Pep Boys’ policy that if an employee changed his oil at work, the employee must pay for his labor[,]” which was enough to plausibly allege that Plaintiffs “obligation to pay arose out of the agreement that if an employee changes the oil in his car he must pay for his labor.” (Dkt. No. 23 at 8.) Based on this reasoning, Plaintiff urges that “it is undisputed” that the oil-change transaction was consensual and voluntary, This argument ignores Plaintiffs summary judgment burden. While the FAC allegations might have given rise to a plausible inference that was such a policy, the evidence now before the Court leaves no dispute that Pep Boys’ policy did not allow Plaintiff to change the oil on his car, no exceptions. In other words, tile evidence does not support an inference that Pep Boys had a policy that permitted Plaintiff to perform the oil change provided he repay the cost of labor. Instead, Pep Boys’ policy did not allow Plaintiff to perform the work in the first place, so the provision of services was not a consensual transaction. At bottom, Plaintiff does not cite any authority that supports his position that unauthorized use of employee services can give rise to an FDCPA debt. And indeed, concluding as much would be contrary to Fleming and other Ninth Circuit authority.
Plaintiffs reliance on bad check cases is unpersuasive. He cites Irwin v. Mascott,
b. Misuse of Plaintiffs Employee Discount
Plaintiff’s misuse of his employee discount presents a different picture. In their motion, Defendants focus on Plaintiffs provision of his employee discount to Ms. Bacca, contending that it is undisputed that Plaintiffs financial obligation arising out of that incident was not consensual and therefore not a debt within the meaning of the FDCPA. Plaintiff argues that his use of his employee discount both for Ms. Bac-ca and for his mother are each consensual transactions that qualify as FDCPA debts,
i. Use of the Discount for Ms. Bacca
It is well-established that the purchase of merchandise is the type of consumer transaction that gives rise to a debt within the FDCPA’s reach. See, e.g., Gold v. Midland Credit Mgmt., Inc.,
Plaintiffs insistence that the policy was not clear—and thus, that there remains a genuine dispute about whether the transaction was consensual—is unavailing. Despite the existence of more than one iteration of the same policy, including one that indicated that employees may only provide their discount for spouses, one that listed spouses and children, and one that listed spouses, children, and any dependents, and even Mr. MacDonald’s statement that different employees could have more than one interpretation of the same policy regarding what family members were permitted to use the discount,
Moreover, the Bacca transaction fails to garner Plaintiff protection as an FDCPA debt for another reason: it is undisputed that he was not a party to the underlying
Plaintiffs attempts to distinguish Helsel are unpersuasive. Plaintiff argues that Helsel is inapposite because there, the employer filed lawsuits for conversion and fraud against the plaintiffs relating to use of the plaintiffs’ employee discount, whereas here Plaintiff brings his FDCPA claim against a debt collector, not his employer. (See Dkt. No. 184 at 18.) This is beside the point. The relevant analysis in Helsel is the genesis of the initial debt, not the manner in which a particular entity sought to collect it. See
Plaintiffs reliance on Ruth v. Tenen, No. 3:12cv40-WHA,
Contrary to Plaintiffs assertion, this conclusion is not inconsistent with the Court’s Order concluding that the FAC adequately alleged a consumer transaction. The FAC had alleged that Plaintiff purchased the goods for family and friends, and the Court reasoned that this allegation, taken as true, was enough to conclude that there was a consensual consumer transaction giving rise to a debt. But the evidence now before the Court with regard to Ms. Bacca’s purchase belies that allegation. Accordingly, it is undisputed that the financial obligation Plaintiff owed Pep Boys due to Ms. Bacca’s unauthorized use of his employee discount was not a consensual transaction that gave rise to an FDCPA debt.
ii. Use of the Discount for Plaintiffs Mother
In addition to Ms. Bacca, Plaintiff also used his employee discount for the car of his mother, Chung Wah Lee, and on that occasion the transaction was between Plaintiff and Pep Boys, not the third party and Pep Boys. (Dkt. No. 180-3 at 11; see also Dkt. No. 181-2 ¶ 2.) Thus, unlike Ms. Bacca’s transaction, this instance of Plaintiffs misuse of the employee discount does reflect that Plaintiff entered into a consumer transaction with Pep Boys.
Further, a genuine dispute exists as to whether that transaction was consensual. Mr. MacDonald testified that Pep Boys’ policy permits an employee to use the discount himself and for his spouse, children, and dependents on tax returns, and explained that the three relevant versions of the policy provide that the discount can be used for (1) spouses, (2) spouses and dependents, and (3) spouses and dependent children. (Dkt. No. 181-1 at 175,177.) Plaintiff told Mr. MacDonald that he was supporting his parents. (Id. at 178.) Plaintiff repeatedly emphasizes in his papers, albeit without citing to any factual support, that he resides with his mother. (See, e.g,, Dkt. No. 186 at 14.) The Court has found testimony from Plaintiff stating that he lived with his mother at the time of the incidents. (Dkt. No. 136-10 at 37.) Aside from living together, Plaintiff has not offered any admissible evidence that his mother was a dependent (rendering the transaction consensual), but nor has Defendant offered any evidence that Plaintiffs mother was not a dependent (rendering the transaction nonconsensual). Thus, there remains a genuine dispute whether Plaintiffs use of his employee discount for his mother was a consensual transaction giving rise to an FDCPA debt.
Defendants nonetheless contend that it is undisputed that Palmer’s letters
As explained above, although Defendants have established beyond dispute that the oil change and Ms. Bacca’s transaction were not consensual and therefore did not give rise to FDCPA debts, it remains disputed whether Plaintiffs use of his employee discount for his mother was consensual and whether that transaction served as the basis for the collection letters he later received. If a fact finder were to answer both questions in the affirmative, then Defendants’ letters could have arisen from an FDCPA debt.
c. Plaintiffs $20 Payment to Pep Boys
Next, Plaintiff urges that even if the incidents described above were non-consensual transactions in the first instance, “Pep Boys’ acceptance of Plaintiffs $20 “constitutes the consent necessary for the FDCPA to apply” (Dkt. No. 186 at 13); put another way, he contends that Pep Boys’ acceptance of Plaintiffs $20 payment for outstanding financial obligations arising out of the oil change and employee discount transactions rendered those earlier transactions consensual.
Assuming, without deciding, that there is a genuine dispute about whether the $20 that Plaintiff paid Pep Boys was meant to satisfy all of the alleged violations, Plaintiff does not cite any authority to support his position that later payment can render an earlier nonconsensual transaction consensual. Ruth actually hurts Plaintiffs argument: there the court concluded that the plaintiffs later agreement to repay money owed was a debt-creating consensual transaction because it arose out of an earlier consensual transaction—i.e., the plaintiffs qualifying purchase. See
In sum, Defendants are entitled to summary judgment on the question of whether an FDCPA debt exists with respect to the oil change and Ms. Bacea’s transaction, as it is undisputed that these two transactions were not consensual and therefore cannot serve as FDCPA debts and the $20 payment to Pep Boys did not render these earlier transactions consensual. However, there remains a genuine dispute about what money Defendants were collecting when they sent Plaintiff the letters at issue. To the extent the jury finds that the letters sought to collect only on the oil change and Ms. Bacca transaction, as Defendants argue, they will be entitled to judgment. However, because a jury could find that the letters were also collecting on the financial obligation arising out of Plaintiffs use of his employment discount for his mother, which a jury reasonably could deem to be a consensual transaction, Defendants are not entitled to summary judgment regarding the existence of an FDCPA debt.
2. Whether Defendants’ Letters Violated the FDCPA
Plaintiff also seeks a ruling that the demand letters violate several provisions of the FDCPA; that is, assuming the statute applies, the letters ran afoul of it. Specifically, Plaintiff argues that the letters violate: (1) Section 1692g(a)(4) by failing to including a statement that if the consumer disputes the debt, the debt collector will send verification to the consumer; (2) Section 1692g(a) by demanding payment of the alleged debt in less than 30 days; (3) Section 1692e(ll) by failing to state that the communications were sent on behalf of a debt collector; and (4) Section 1692f(l) by threatening a demand of attorneys’ fees when there is no underlying statute that permits the debt collector to seek fees from the debtor.
Defendants do challenge the fourth alleged violation—that the letters violate Section 1692f(l) by demanding attorneys’ fees. That provision specifies that it is a violation of the FDCPA to “collect[ ]... any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” The letters state: “Pep Boys may in the future consider filing a lawsuit, in
Plaintiff has not established that he is entitled to summary judgment on this claim. The letters do not involve the attempted collection of attorneys’ fees. The letters state that if Pep Boys files a lawsuit, it may seek attorneys’ fees and if successful in that lawsuit, it make seek to recover attorneys’ fees. The letters do not themselves attempt to recover any attorneys’ fees from Plaintiff. And no lawsuit was ever filed.
The only authority cited by Plaintiff is unhelpful. Del Campo v. American Corrective Counseling Services, Inc.,
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It is undisputed that if the FDCPA applies, Defendants’ letters violate the first three FDCPA sections alleged: 1692g(a)(4), 1692g(a), and 1692e(ll). Plaintiffs are therefore entitled to partial summary judgment that if the FDCPA applies, then Defendants’ letters violated those provisions as a matter of law. Plaintiffs motion for partial summary judgment on the Section 1692f(l) claim is denied as he has not shown as a matter of law that stating in a collection letter that attorneys’ fees might be sought in a subsequent lawsuit violates that provision.
B. Second Claim for Relief: Violation of the UCL
Both parties also seek judgment in then-favor on the UCL claim, which Plaintiff brings against all Defendants. Defendants contend that they are entitled to summary judgment because Plaintiff is not entitled to either restitution or injunctive relief— the only remedies for a UCL violation. Plaintiff counters that the Court should grant partial summary judgment in his favor on the UCL claim by making the following conclusions of law: (1) Plaintiff has standing to seek injunctive relief and restitution; (2) Defendants’ debt collection letters are unfair and unlawful because they violate the FDCPA; and (3) Defendants’ debt collection letters are unlawful because they violate California Penal Code Section 490.5.
1. Legal Standard
The UCL prohibits any “unlawful, unfair or fraudulent business practice[.]” Cal, Bus. & Prof. Code § 17200. Because the statute is written in the disjunctive, it prohibits three separate types of unfair competition: (1) unlawful acts and practices, (2) unfair acts or practices, and (3) fraudulent acts or practices. Cel-Tech
2, Analysis
Plaintiff has alleged an “unlawful” UCL claim premised on a finding of a violation of the FDCPA. Plaintiff also has remaining a UCL “standalone” claim based on his allegation that it was “unfair” for Defendants to seek from Plaintiff in the second demand letter more than the $600 awarda-ble under California Penal Code section 490.6. (Dkt. No. 77.)
а. Defendants’ Motion: Whether Plaintiff is Entitled to UCL Remedies
The Court begins with Defendants’ motion, which does not address the merits of the UCL claim but instead argues that Plaintiffs UCL claim fails because he is not entitled to restitution or injunctive relief. These are the only remedies available under the UCL. See Madrid v. Perot Sys. Corp.,
i. Restitution
“[I]n the context of the UCL, ’restitution’ is limited to monies given to the defendant or benefits in which the plaintiff has an ownership interest.” Korea Supply Co. v. Lockheed Martin Co.,
Plaintiff appears to concede that he cannot seek restitution from Palmer or Hastings. (See Dkt. No. 181 at 21.) However, apart from the settlement demand letter, he contends that Pep Boys coerced and forced him under duress to pay $20 for the disputed debt and that he is entitled to restitution of that amount.
ii. Injunctive Relief
Defendants contend that because they dropped their . settlement demand against Plaintiff, he is “not entitled to an injunction prohibiting Defendants from sending more letters because he is not. in danger of getting any.” (Dkt. No. 180 at 14:21-23.) As support for this argument, Defendants cite to this Court’s Order denying Plaintiffs motion for class certification. The Court noted in that'Order that injunctive relief is generally limited to ongoing wrongs, or wrongs with a likelihood of occurring in the future. Lee,
Some courts have nonetheless expressed doubt as to whether a plaintiff who proves a violation of the UCL should be precluded from obtaining injunctive relief merely because the plaintiff faces no realistic threat of suffering an injury from the defendant’s conduct in the future. See, e.g., Lilly v. Jamba Juice Co., No. 13-cv-02998-JST,
Plaintiffs supplemental submission also cites several cases in which a court held that a plaintiff could pursue injunctive relief on behalf of aggrieved members of the public under the UCL notwithstanding not proceeding as a class action. (Dkt. No. 190 at 1.) However, each of these cases was decided prior to the Proposition 64 amendment to the UCL.
Taking the last requirement—causation—first, as to the “unlawful” UCL claim premised on the FDCPA violation, a single FDCPA claim remains for trial: namely, the claim arising from the settlement demand letters premised on the allegedly consensual transaction involving Plaintiff using his employee discount for his mother. If, and only if, Plaintiff ultimately prevails on this claim does the Court need to determine whether injunctive relief under the UCL is appropriate. It is worth noting, however, that given the nature of the claim, any such injunctive relief would be quite limited as it would only apply to consensual transactions, a circumstance that likely makes injunctive relief inappropriate if not impossible to craft and likewise difficult to enforce, if the debate into the consensual nature of Plaintiffs transactions is any indicator. Further, the Court would have to find that the violation—the unfair competition—caused Plaintiff to lose money or property. See Cal. Bus. & Prof. Code § 17204; Kwikset,
Injunctive relief premised on the alleged “unfair” UCL violation arising from the demand for more money than is allowed by Penal Code Section 490.5 is much easier to construct: if Plaintiff prevails on this claim the Court could enjoin Defendants from demanding more than the Penal Code permits if that is the only claim pursuant to which Defendants are making a demand. But again, to be entitled to injunctive relief Plaintiff must prove that the unfair competition—the demand for more money than what Plaintiff believes was statutorily unfair—caused Plaintiff to lose money. Again, it is highly unlikely that Plaintiff can meet this burden given that he did not pay Palmer any money in response to the settlement demand. And as the Court noted in its Order denying class certification, “a fact finder could easily conclude that Plaintiffs $100 attorney fee had nothing to do with the request to pay more than Section 490.5 permits.” Lee,
At bottom, Plaintiff has not cited a single case in which a plaintiff brought individual claims under the UCL, presented no
iii. Reconsideration
Plaintiffs supplemental brief asks this Court to reconsider the decision denying class certification of the UCL claim for injunctive relief. (Dkt. No. 190 at 2 (“Plaintiff respectfully submits that this Court should reconsider its Order denying class certification”).) This request is improper. As Plaintiff himself states in the very same letter brief on the very same page (albeit referring to Defendants), to seek reconsideration a party, must comply with Local Rule 7-9. (Id.) Plaintiff does not explain why Local Rule 7-9 applies to Defendants but not to Plaintiff. Of course, it applies to both. Plaintiffs request is knowingly procedurally improper, which is reason enough to deny it.
But there is more: Plaintiffs request also misconstrues the Court’s class certification ruling. The Court denied Plaintiffs motion for Rule 23(b)(2) certification of a UCL injunctive relief class because his claims, including the injunctive relief claim, are not typical of the class as he did not pay any money to Defendants in response to their letter. Lee,
* * *
Defendants have established that on the UCL claim,s remaining in this case Plaintiff does not have any claim for restitution. Accordingly, the Court will grant summary judgment in Defendants’ favor on the UCL claim seeking restitution. Although the Court has grave doubts as to Plaintiffs ability to prove an entitlement to any in-junctive relief, the Court denies Defendants’ motion for summary judgment on the injunctive relief claim at this time.
b. Plaintiffs Motion: Whether There is Unfair or Unlawful Business Conduct
Even assuming injunctive relief is a possibility, Plaintiff is not entitled to partial summary judgment on his UCL claim because he has failed to establish that Defendants’ conduct actually violates the UCL. To the contrary, genuine disputes of fact remain.
i. Underlying FDCPA Violation
Plaintiff argues that it is undisputed that Defendants violated the UCL’s “unlawful” prong based on a predicate violation of the FDCPA. However, because there is a genuine dispute about whether there was an FDCPA violation, so too is there a genuine dispute about whether Defendants engaged in unlawful business activity by violating the FDCPA. The Court therefore denies Plaintiffs motion for partial summary judgment on this question of law.
ii. Underlying Penal Code Violation
Plaintiff next contends that partial summary judgment should be granted in his favor on the UCL claim based on Defen
Even if this UCL claim were still in the case, the Court would not grant Plaintiffs request for summary judgment. And indeed, as he did in the context of the motion for judgment on the pleadings, Plaintiff relies on Irwin v. Mascott, in which a court in this district granted the plaintiff declaratory relief finding that the defendant “acted unlawfully in seeking damages pursuant to California Penal Code § 490.5[.]”
The other case that Plaintiff cites, Stop Youth Addiction, Inc. v. Lucky Stores, Inc.,
iii. Unfair Business Activity
Aside from alleging that Defendants’ conduct was “unlawful,” Plaintiff also argues that he is entitled to summary judgment under the UCL’s “unfair” prong. Under the unfairness prong of the UCL, “a practice may be deemed unfair even if not specifically proscribed by some other law.” Korea Supply Co.,
(1) a practice that offends established public policy, or is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers; (2) a practice the utility of which is outweighed by the gravity of harm to the victim; and ... a practice that is (i) substantially injurious to the consumer, where (iij the injury is not outweighed by countervailing benefits to consumers or competition, and (iii) the injury is not one that consumers themselves could reasonably have avoided.
Id. at 921-22 (citations omitted).
Plaintiff seeks summary judgment on the unfair UCL claim on several different grounds. Applying the first test, he contends that there is “no utility to Defendants’ practices” because even though Plaintiff “paid $20 to resolve all of his debts to Pep Boys[,]” Defendants still sent him letters that “served no purpose other than to harass and intimidate [him]” (Dkt. No. 181 at 25), and that the letter is unfair because it implicates the public policy behind the FDCPA. (See Dkt. No. 186 at 17.) Relatedly, applying the second, which “involves an examination of’that practice’s impact on its alleged victim, balanced against the reasons, justifications and motives of the alleged wrongdoer[,]” Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp.,
Plaintiff waived any such arguments and cannot bring them now. As mentioned above, during a court-ordered telephone call, Plaintiff explained that his standalone UCL claim is based on the allegations in SAC Paragraph 34(a) and (b), which allege violations based on Defendants “seeking charges from alleged debtors in excess of those expressly permitted by [Penal Code Section] 490.5” and '“accusing alleged debtors [of] violating [Section] 490.5 without determining whether [that statute] applied to the debtors. In other words, whether the debtors have been convicted of the actual alleged theft.” (Dkt. No. 70-1 at 7:18-23, 25; id. at 8:1-4; id. at 13:6-9 (confirming that the only standalone claims Plaintiff brings under the UCL are in Paragraph 34(a) and (b) for “seeking more than the amount allowed under 490.5, and then seeking these claims against peoplé who have not been convicted of any crimes.”); see also Dkt. No. 73 at 22-24; Dkt. No. 25 ¶ 34; Dkt: No. 77 at 4:6-9.) Plaintiff is limited to these identified bases of unfairness and thus cannot prevail on his “utility” and public policy arguments.
The Court granted Defendants’ motion for judgment on the pleadings as to Plain
But even if this were unfair, Plaintiff has offered no evidence from which a reasonable fact finder could conclude that Plaintiffs alleged harm (paying $20 to Pep Boys and $100 to his attorneys) resulted from the unfairness alleged here—that is, the practice of seeking more than Penal Code Section 490.5 permits. To the contrary, neither Plaintiffs own response to Palmer’s letters nor his attorney’s letter even mentioned that the letters were unfair because Palmer sought penalties in excess of the statutory maximum. See Lee,
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Accordingly, even if Plaintiff were entitled to restitution or injunctive relief, the Court still would not grant partial summary judgment in Plaintiffs favor on the UCL claim because Plaintiff has not proven that Defendants’ conduct was either unlawful or unfair as a matter of law.
CONCLUSION
For the reasons described above, the Court GRANTS IN PART Defendants’ motion for summary judgment and GRANTS IN PART Plaintiff’s motion for partial summary judgment. Specifically, as for the FDCPA claim, Defendants are entitled to partial summary judgment that the oil change and Ms. Bacca transaction did not create FDCPA debts. But there remains a genuine dispute over whether Defendants sought to collect on an FDCPA debt based on Plaintiffs use of the employee discount for his mother. Plaintiff is entitled to partial summary judgment that, if the FDCPA were to apply, then the language of the letters would violate the first three FDCPA subdivisions alleged, but the Court denies summary judgment on whether the letters violate Section 1692f(l) by demanding attorneys’ fees.
As for the UCL claim, Defendants are entitled to summary judgment on Plaintiffs UCL claim for restitution. However, the Court declines to grant summary judgment on the claim for injunctive relief. To be clear, the only UCL claims that remain in this lawsuit are (1) an “unlawful” claim predicated on an underlying FDCPA violation, but not an underlying violation of Penal Code Section 490.5; and (2) an “unfair” claim based on Defendants’ practice of seeking more in penalties than Penal Code Section 490.5 permits. Factual disputes preclude partial summary judgment in Plaintiffs favor on these claims.
The Court will hold a further case management conference on June 16, 2016 at 1:80 p.m. The parties shall submit an updated case management conference state
This Order disposes of Docket Numbers 180 and 181.
IT IS SO ORDERED.
Notes
. Record citations are to material in the Electronic Case File (“ECF''); pinpoint citations are to the ECF-generated page numbers at the top of the documents.
. There is no evidence in the record that Plaintiff actually paid that amount: Plaintiff has not submitted deposition testimony or a declaration averring as much, and Defendants have not submitted any information either. Nevertheless, Defendants concede that Pep Boys deducted $20 from Plaintiff's paycheck pursuant to that agreement. (See Dkt. No. 185 at 7.)
. Plaintiff suggests in his opposition to Defendants’ motion and in his motion for partial summary judgment that MacDonald testified as Pep Boys’ corporate representative regarding the employee discount policy and therefore implies that his testimony should be binding on the company. (See Dkt. No. 181 at 17 (noting that "Defendants have identified Shaun MacDonald as the witness most knowledgeable concerning Pep Boys' discount policy and practices” then describing his testimony).) While Plaintiff so identified MacDonald initially, Plaintiff did not notice MacDonald’s deposition as a Rule 30(b)(6) witness but only in his individual capacity since he no longer worked at Pep Boys. (See 183-2 at 4.) While Plaintiff’s counsel asked questions during the deposition further suggesting that MacDonald was a 30(b)(6) witness (see, e.g., Dkt. No. 181-1 at 171), defense counsel was under Court Order to refrain from objecting. (See Dkt. No. 118.) The Court construes MacDonald’s testimony as being made in his individual capacity-
. Contrary to Defendants’ interpretation, Plaintiff is not arguing that the $20 payment itself is the consensual transaction that constitutes the FDCPA debt. (See Dkt. No. 183 at 13.)
. Plaintiff's Notice of Motion for Partial Summary Judgment identifies the fourth issue as whether Defendants violated 15 U.S.C. § 1692f(l) by (1) seeking more than permitted by California Penal Code section 490.5 and (2) “threatening a demand of attorneys' fees when there is no underlying statute which permits attorneys’ fees to be sought from the debtor.” (Dkt. No. 181 at 2:22-25.) The memorandum in support of the motion, however, only addresses the attorneys’ fees argument. (Id. at 19:17-19, 20.) The Court will therefore address only the attorneys' fees argument.
. In doing so, Plaintiff cites allegations in the FAC that he lost the $20 when Pep Boys deducted it from his paycheck (Dkt. No. 814 ' at 20 (citing FAC ¶ 24)), but the same allegation appears in the SAC. (Dkt. No. 25 ¶ 23.)
. Montano v. Bonnie Brae Convalescent Hospital, Inc.,
. In any event, these arguments would fail. The two utility arguments are premised on the notion that Plaintiff’s $20 payment to Pep Boys resolved all of the company’s claims against him, so there was no purpose to the collection letters and thus they served only to harass and intimidate him. As explained above in the context of Plaintiff’s FDCPA claim, Plaintiff has not demonstrated that the $20 payment to Pep Boys resolved all of the company’s claims against him. See, supra Section A.2,a.iii. As for the public policy argument, Plaintiff maintains without further explanation or argument that the letter is unfair because it implicates the public policy behind the FDCPA. (See Dkt. No. 186 at 17 (“Plaintiff has shown that there is a significant public policy in Congress' enactment of the FDCPA.”) (citation omitted).) While such public policy exists, merely referencing the public policy behind the statute does not establish unfair business practices .as a matter of law.