3 UNITED STATES DISTRICT COURT
4 DISTRICT OF NEVADA
5 * * *
6 DANA M. SHAFER, Case No. 3:20-cv-00525-MMD-CLB
7 Plaintiff, ORDER v. 8 THE MOORE LAW GROUP, 9 Defendant. 10 11 I. SUMMARY 12 This is a Fair Debt Collections Practices Act (“FDCPA”) case. Plaintiff Dana M. 13 Shafer brings this action against Defendant The Moore Law Group for violation of 15 14 U.S.C. §§ 1692c(a)(2) and 1692d. (ECF No. 1.) Before the Court is Defendant’s motion 15 to dismiss.1 (ECF No. 8.) Also before the Court is Plaintiff’s motion to strike an argument 16 Defendant raised for the first time in its reply brief.2 (ECF No. 19.) As further explained 17 below, the Court will grant Plaintiff’s motion to strike and deny Defendant’s motion to 18 dismiss. 19 II. BACKGROUND 20 Plaintiff allegedly incurred a debt (“the debt”) to Department Stores National Bank 21 sometime before February 2017.3 (ECF No. 1 at 3.) Defendant was assigned the right to 22 collect on the debt. (Id.) Defendant sued Plaintiff in Lyon County Justice Court (“the 23 Collections Case”) regarding the debt at sometime around June 2018. (Id.) 24 /// 25 26 1Plaintiff responded (ECF No. 16) and Defendant replied (ECF No. 17). 27 2Defendant responded (ECF No. 26) and Plaintiff replied (ECF No. 29). 28 3Plaintiff states in the Complaint and the Court agrees that the validity of the debt 2 to prosecute. (ECF No. 8 at 2.) Over a year later, on November 18, 2019, Defendant filed 3 and served an “Ex Parte Motion to Vacate Dismissal.” (Id.) The state court granted 4 Defendant’s motion on July 15, 2020. (Id.; ECF No. 10.) On or about August 27, 2020, 5 Defendant filed a “Notice of Entry of Order Granting Motion to Vacate Dismissal.” (ECF 6 Nos. 8 at 2, 11.) 7 Plaintiff contends (and Defendant does not deny) that Defendant became aware 8 Plaintiff was represented by an attorney in the Collections Case as of at least March 2020. 9 (ECF No. 1 at 3.) Accordingly, by July 2020, Defendant knew that Plaintiff was 10 represented by counsel in the Collections Case. (Id.) Plaintiff’s counsel did not file an 11 appearance in the Collections Case until September 3, 2020, when he filed an answer to 12 the complaint. (ECF No. 8 at 2.) Prior to September 3, 2020, Defendant served Plaintiff 13 personally with pleadings pertaining to its Ex Parte Motion to Vacate Dismissal. (Id. at 3.) 14 Plaintiff filed this action asserting claims under the FDCPA on September 16, 2020. 15 (ECF No. 1.) Plaintiff alleges that despite knowing she was represented by counsel, 16 Defendant continued to communicate with her directly in violation of 15 U.S.C. § 17 1692c(a)(2). (Id. at 4.) Defendant does not dispute that it knew Plaintiff was represented 18 by counsel, but claims its conduct is excepted from the FDCPA because the court gave 19 it “express permission” to contact Plaintiff directly. (ECF No. 8 at 4.) 20 The Court will consider Plaintiff’s motion to strike first, as its outcome affects what 21 arguments the Court may consider, then will turn to Defendant’s motion to dismiss. 22 III. MOTION TO STRIKE 23 Plaintiff moves to strike an argument that Defendant raised for the first time in its 24 reply. (ECF No. 19.) In its motion to dismiss, Defendant’s sole argument is that its conduct 25 was permissible under the FDCPA because it had “express permission” from the state 26 court to contact Plaintiff. (ECF No. 8 at 4-5.) However, in its reply, Defendant further 27 argues that serving court documents does not constituted a “communication” under the 28 2 raised communication argument. 3 “[T]o the extent that a party raises a new argument or proffers new evidence and 4 information in a reply brief, that argument or evidence is improper because the opposing 5 party is deprived of an opportunity to respond.” Oracle USA, Inc. v. Rimini Street, Inc., 6 Case No. 2:10-cv-0106-LRH-VCF, 2016 WL 6208254, at *2 (D. Nev. Oct. 24, 2016); see 7 also Tovar v. U.S. Postal Serv., 3 F.3d 1271, 1274 (9th Cir. 1993) (striking information 8 raise for the first time in a reply brief); Lindner v. Ford Motor Co., Case No. 2:10-cv-00051- 9 LDG(VCF), 2012 WL 3598269, at *2 (D. Nev. Aug. 17, 2012) (granting a motion to strike 10 new arguments in a reply that did not arise out of the initial reconsideration motion). 11 Defendant argues that it is permitted to raise this new argument because it was 12 responding to an argument in Plaintiff’s opposition brief.4 (ECF No. 26 at 2.) The Court 13 disagrees. The sentences Defendant claims to be responding to state, “The 14 communications should have been sent to the firm, not to Plaintiff,” and “The FDCPA 15 prohibits communication with a debtor ‘if the debt collector knows the consumer is 16 represented by an attorney with respect to such debt.’” (Id. (quoting ECF No. 16 at 4).) 17 Nothing in those sentences contains information the Defendant did not previously have. 18 Moreover, the argument in Defendant’s reply does not dispute where the communications 19 should be sent, but rather what constitutes a communication under the FDCPA. Nothing 20 of the kind of is raised in Plaintiff’s opposition brief. 21 Because Plaintiff did not have the opportunity to respond to the newly raised 22 “communications” argument, the Court will grant Plaintiff’s motion to strike and will not 23 consider it when deciding the motion to dismiss. 24 IV. MOTION TO DISMISS 25 Defendant moves to dismiss Plaintiff’s complaint under Federal Rule of 12(b)(6). 26 (ECF No. 8.) Specifically, Defendant argues that it had “express permission of a court of 27 4Plaintiff cites to the Local Rules of Criminal Practice, which are not applicable 28 here. See LCR 12-1(a)(3). However, because its argument is relevant to the equities of the motion to strike, the Court will consider the argument’s substance. 2 prohibition on debt collectors from communicating with a consumer the debt collector 3 knows is represented by an attorney. (Id. at 5.) Plaintiff counters that Defendant never 4 received such permission and therefore violated the FDCPA. (ECF No. 16 at 4-5.) 5 A. Legal Standard 6 A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which 7 relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pleaded complaint must provide 8 “a short and plain statement of the claim showing that the pleader is entitled to relief.” 9 Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While 10 Rule 8 does not require detailed factual allegations, it demands more than “labels and 11 conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. 12 Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). “Factual allegations 13 must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to 14 survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a 15 claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 16 U.S. at 570). 17 In Iqbal, the Supreme Court clarified the two-step approach district courts are to 18 apply when considering motions to dismiss.
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3 UNITED STATES DISTRICT COURT
4 DISTRICT OF NEVADA
5 * * *
6 DANA M. SHAFER, Case No. 3:20-cv-00525-MMD-CLB
7 Plaintiff, ORDER v. 8 THE MOORE LAW GROUP, 9 Defendant. 10 11 I. SUMMARY 12 This is a Fair Debt Collections Practices Act (“FDCPA”) case. Plaintiff Dana M. 13 Shafer brings this action against Defendant The Moore Law Group for violation of 15 14 U.S.C. §§ 1692c(a)(2) and 1692d. (ECF No. 1.) Before the Court is Defendant’s motion 15 to dismiss.1 (ECF No. 8.) Also before the Court is Plaintiff’s motion to strike an argument 16 Defendant raised for the first time in its reply brief.2 (ECF No. 19.) As further explained 17 below, the Court will grant Plaintiff’s motion to strike and deny Defendant’s motion to 18 dismiss. 19 II. BACKGROUND 20 Plaintiff allegedly incurred a debt (“the debt”) to Department Stores National Bank 21 sometime before February 2017.3 (ECF No. 1 at 3.) Defendant was assigned the right to 22 collect on the debt. (Id.) Defendant sued Plaintiff in Lyon County Justice Court (“the 23 Collections Case”) regarding the debt at sometime around June 2018. (Id.) 24 /// 25 26 1Plaintiff responded (ECF No. 16) and Defendant replied (ECF No. 17). 27 2Defendant responded (ECF No. 26) and Plaintiff replied (ECF No. 29). 28 3Plaintiff states in the Complaint and the Court agrees that the validity of the debt 2 to prosecute. (ECF No. 8 at 2.) Over a year later, on November 18, 2019, Defendant filed 3 and served an “Ex Parte Motion to Vacate Dismissal.” (Id.) The state court granted 4 Defendant’s motion on July 15, 2020. (Id.; ECF No. 10.) On or about August 27, 2020, 5 Defendant filed a “Notice of Entry of Order Granting Motion to Vacate Dismissal.” (ECF 6 Nos. 8 at 2, 11.) 7 Plaintiff contends (and Defendant does not deny) that Defendant became aware 8 Plaintiff was represented by an attorney in the Collections Case as of at least March 2020. 9 (ECF No. 1 at 3.) Accordingly, by July 2020, Defendant knew that Plaintiff was 10 represented by counsel in the Collections Case. (Id.) Plaintiff’s counsel did not file an 11 appearance in the Collections Case until September 3, 2020, when he filed an answer to 12 the complaint. (ECF No. 8 at 2.) Prior to September 3, 2020, Defendant served Plaintiff 13 personally with pleadings pertaining to its Ex Parte Motion to Vacate Dismissal. (Id. at 3.) 14 Plaintiff filed this action asserting claims under the FDCPA on September 16, 2020. 15 (ECF No. 1.) Plaintiff alleges that despite knowing she was represented by counsel, 16 Defendant continued to communicate with her directly in violation of 15 U.S.C. § 17 1692c(a)(2). (Id. at 4.) Defendant does not dispute that it knew Plaintiff was represented 18 by counsel, but claims its conduct is excepted from the FDCPA because the court gave 19 it “express permission” to contact Plaintiff directly. (ECF No. 8 at 4.) 20 The Court will consider Plaintiff’s motion to strike first, as its outcome affects what 21 arguments the Court may consider, then will turn to Defendant’s motion to dismiss. 22 III. MOTION TO STRIKE 23 Plaintiff moves to strike an argument that Defendant raised for the first time in its 24 reply. (ECF No. 19.) In its motion to dismiss, Defendant’s sole argument is that its conduct 25 was permissible under the FDCPA because it had “express permission” from the state 26 court to contact Plaintiff. (ECF No. 8 at 4-5.) However, in its reply, Defendant further 27 argues that serving court documents does not constituted a “communication” under the 28 2 raised communication argument. 3 “[T]o the extent that a party raises a new argument or proffers new evidence and 4 information in a reply brief, that argument or evidence is improper because the opposing 5 party is deprived of an opportunity to respond.” Oracle USA, Inc. v. Rimini Street, Inc., 6 Case No. 2:10-cv-0106-LRH-VCF, 2016 WL 6208254, at *2 (D. Nev. Oct. 24, 2016); see 7 also Tovar v. U.S. Postal Serv., 3 F.3d 1271, 1274 (9th Cir. 1993) (striking information 8 raise for the first time in a reply brief); Lindner v. Ford Motor Co., Case No. 2:10-cv-00051- 9 LDG(VCF), 2012 WL 3598269, at *2 (D. Nev. Aug. 17, 2012) (granting a motion to strike 10 new arguments in a reply that did not arise out of the initial reconsideration motion). 11 Defendant argues that it is permitted to raise this new argument because it was 12 responding to an argument in Plaintiff’s opposition brief.4 (ECF No. 26 at 2.) The Court 13 disagrees. The sentences Defendant claims to be responding to state, “The 14 communications should have been sent to the firm, not to Plaintiff,” and “The FDCPA 15 prohibits communication with a debtor ‘if the debt collector knows the consumer is 16 represented by an attorney with respect to such debt.’” (Id. (quoting ECF No. 16 at 4).) 17 Nothing in those sentences contains information the Defendant did not previously have. 18 Moreover, the argument in Defendant’s reply does not dispute where the communications 19 should be sent, but rather what constitutes a communication under the FDCPA. Nothing 20 of the kind of is raised in Plaintiff’s opposition brief. 21 Because Plaintiff did not have the opportunity to respond to the newly raised 22 “communications” argument, the Court will grant Plaintiff’s motion to strike and will not 23 consider it when deciding the motion to dismiss. 24 IV. MOTION TO DISMISS 25 Defendant moves to dismiss Plaintiff’s complaint under Federal Rule of 12(b)(6). 26 (ECF No. 8.) Specifically, Defendant argues that it had “express permission of a court of 27 4Plaintiff cites to the Local Rules of Criminal Practice, which are not applicable 28 here. See LCR 12-1(a)(3). However, because its argument is relevant to the equities of the motion to strike, the Court will consider the argument’s substance. 2 prohibition on debt collectors from communicating with a consumer the debt collector 3 knows is represented by an attorney. (Id. at 5.) Plaintiff counters that Defendant never 4 received such permission and therefore violated the FDCPA. (ECF No. 16 at 4-5.) 5 A. Legal Standard 6 A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which 7 relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pleaded complaint must provide 8 “a short and plain statement of the claim showing that the pleader is entitled to relief.” 9 Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While 10 Rule 8 does not require detailed factual allegations, it demands more than “labels and 11 conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. 12 Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). “Factual allegations 13 must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to 14 survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a 15 claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 16 U.S. at 570). 17 In Iqbal, the Supreme Court clarified the two-step approach district courts are to 18 apply when considering motions to dismiss. First, a district court must accept as true all 19 well-pleaded factual allegations in the complaint; however, legal conclusions are not 20 entitled to the assumption of truth. See id. at 678. Mere recitals of the elements of a cause 21 of action, supported only by conclusory statements, do not suffice. See id. Second, a 22 district court must consider whether the factual allegations in the complaint allege a 23 plausible claim for relief. See id. at 679. A claim is facially plausible when the plaintiff’s 24 complaint alleges facts that allow a court to draw a reasonable inference that the 25 defendant is liable for the alleged misconduct. See id. at 678. Where the complaint does 26 not permit the Court to infer more than the mere possibility of misconduct, the complaint 27 has “alleged—but it has not show[n]—that the pleader is entitled to relief.” Id. at 679 28 (alteration in original) (internal quotation marks and citation omitted). That is insufficient. 2 the complaint must be dismissed. See Twombly, 550 U.S. at 570. 3 B. Discussion 4 The FDCPA was enacted “to eliminate abusive debt collection practices by debt 5 collectors, to ensure that those debt collectors who refrain from using abusive debt 6 collection practices are not competitively disadvantaged, and to promote consistent State 7 action to protect consumers against debt collection abuses.” See 15 U.S.C. § 1692(e). 8 Congress passed the FDCPA in light of “abundant evidence” of abusive and deceptive 9 practices that contribute to bankruptcy, marital instability, loss of employment, and 10 invasions of individual privacy. See Wade v. Reg’l Credit Ass’n, 87 F.3d 1098, 1099 (9th 11 Cir. 1996) (citing 15 U.S.C. § 1692(a)). 12 Part of this protective scheme includes limiting when, where, and how debt 13 collectors may communicate with consumers. Section 1692c(a)(2) of the FDCPA states, 14 in relevant part: 15 Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt 16 collector may not communicate with a consumer in connection with the collection of any debt . . . if the debt collector knows the consumer is 17 represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the 18 attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to 19 direct communication with the consumer.
20 15 U.S.C. § 1692c(a)(2). 21 Plaintiff alleges that, despite knowing she was represented by counsel in the 22 Collections Case, Defendant continued to attempt to communicate with her directly in its 23 efforts to recover the debt. (ECF No. 1 at 4.) Defendant notably does not deny that it knew 24 Plaintiff was represented by an attorney, but instead argues that it was justified in 25 communicating with Plaintiff because it had “the express permission of a court of 26 competent jurisdiction.” (ECF No. 8 at 5.) 27 Defendant’s support for this argument is inapposite. Relying on a Seventh Circuit 28 case interpreting Illinois law and the local rules of the Third Judicial District Court of the 2 with Plaintiff until her attorney makes an appearance in the court where she is being sued. 3 (Id.) Defendant argues that the Third Judicial District’s Local Rule 7(A) “requires that the 4 moving party serve all parties with a memorandum setting forth the points and authorities 5 relied upon in support of the motion.” (Id.) It then extrapolates from the holding in Holcomb 6 v. Freedman Anselmo Lindberg, LLC, 900 F.3d 990, 7 Plaintiff notes that, first, the Collections Case was brought in Lyon County Justice 8 Court, not the Third Judicial District. Accordingly, the Third Judicial District’s local rules 9 did not even apply to the Collections Case, much less did they mandate that Defendant 10 serve Plaintiff directly even knowing she was represented by an attorney. (ECF No. 16 at 11 5.) Defendant attempts to correct this error in its reply brief by citing to Rule 5 of the 12 Justice Court Rules of Civil Procedure, which state: “Except as otherwise provided in 13 these rules, every order required by its terms to be served, . . . shall be served upon each 14 of the parties.” (ECF No. 17 at 3.) 15 Defendant argues that Rule 7(A) and, later, Rule 5, provide the express permission 16 that excepts its conduct from § 1692c(a)(2)’s communication prohibition. Defendant cites 17 to Holcomb v. Freedman Anselmo Lindberg, LLC, in which the Seventh Circuit found that 18 a rule requiring service on a party constituted “express permission” under § 1692c. 900 19 F.3d 990, 992-93 (7th Cir. 2018). But in Holcomb, the Court was faced with Illinois 20 Supreme Court Rule 11, which states: “If a party is represented by an attorney of record, 21 service shall be made upon the attorney. Otherwise service shall be made upon the 22 party.” Id. at 992 (emphasis in original). The Holcomb court concluded that “[a] court rule 23 expressly requiring a certain action obviously permits that action, so a rule requiring 24 service directly on a party expressly permits such service.” Id. at 993 (emphasis in 25 original). 26 But Plaintiff argues that the state court rules Defendant cites do not similarly 27 mandate service on an individual. (ECF No. 16 at 5.) Instead, they require only that a 28 party be served. Moreover, even under Holcomb, a represented party must be served 1 || through their attorney. Given Congress’ protective intent when enacting the FDCPA, the 2 || Court will not extend the reasoning in Holcomb to this situation, where no local rule 3 || expressly required serving Plaintiff directly. 4 Finally, Defendant’s argument that Plaintiff's counsel should have simply filed a 5 || notice of appearance does not make sense as a matter of policy or logic. An attorney 6 || appearance is not required to trigger the protections of § 1692c(a)(2). Indeed, courts have 7 || found that even “more informal” communications have supported findings of violations of 8 || § 1692c(a)(2). See Washington v. Portfolio Recovery Assocs., LLC, 211 F. Supp. 3d 9 || 1041, 1055 (N.D. Ill. 2016) (collecting cases). The FDCPA’s protections are not limited to 10 || litigation, and indeed cover persons who are or are not represented by attorneys. 11 || Moreover, at the time of the communications in question, the Collections Case had been 12 || dismissed and Defendant was seeking to reopen litigation. There is no fathomable reason 13 || that Plaintiff's attorney would have entered a notice of appearance prior to the Ex Parte 14 || Motion to Vacate Dismissal. 15 || V. CONCLUSION 16 The Court notes that the parties made several arguments and cited to several 17 || cases not discussed above. The Court has reviewed these arguments and cases and 18 || determines that they do not warrant discussion as they do not affect the outcome of the 19 || motions before the Court. 20 It is therefore ordered that Defendant’s motion to dismiss (ECF No. 8) is denied. 21 It is further ordered that Plaintiff's motion to strike (ECF No. 19) is granted. 22 DATED THIS 14" Day of September 2021.
24 □□ MIRANDA M. DU 25 CHIEF UNITED STATES DISTRICT JUDGE 26 27 28