Wells v. Guzman

• Court: District Court, D. Nevada
• Decided: September 28, 2021
• Docket: 3:19-cv-00407
• Status: Unknown

Opinion

3 UNITED STATES DISTRICT COURT

4 DISTRICT OF NEVADA

5 * * *

6 MICHAEL J. WELLS, Case No. 3:19-cv-00407-MMD-CLB Plaintiff, 7 v. ORDER

8 ISABELLA GUZMAN, Administrator of the Small Business Administration of 9 the United States,1 Defendant. 10 11 I. SUMMARY 12 Plaintiff Michael Wells brings this action relating to a contractual dispute involving 13 the United States Small Business Administration (the “SBA”). (ECF No. 1.) Defendant 14 Isabella Guzman, in her official capacity as Administrator of the SBA, has moved to 15 dismiss Plaintiff’s claims under Federal Rules of Civil Procedure 12(b)(1), or in the 16 alternative for summary judgment. (ECF No. 33 (“Motion”).)2 Because the Court finds that 17 a state-law challenge to the debt collection process under 31 U.S.C. § 3720D may be 18 preempted by the Debt Collection Improvement Act of 1996 (“DCIA”), 31 U.S.C. § 3701, 19 et seq., but that summary judgment is not warranted—as further discussed below— 20 Defendant’s Motion is granted in part and denied in part. The Court further grants Plaintiff 21 leave to amend his complaint. 22 /// 23 /// 24

1In his complaint, Plaintiff asserts claims against Chris Pilkerton in his official 25 capacity as the Acting Administrator of the United States Small Business Administration. (ECF No. 1.) However, Isabella Guzman is the current Administrator and is thus the 26 proper Defendant. See Fed. R. Civ. P. 25(d) (“An action does not abate when a public officer who is a party in an official capacity . . . ceases to hold office while the action is 27 pending. The officer’s successor is automatically substituted as a party.”). 28 2The Court has additionally reviewed the parties’ corresponding response and 1 II. BACKGROUND 2 The following facts are undisputed unless stated otherwise. On December 28, 3 2007, the Nevada State Development Corporation—serving as a lender—made a loan to 4 Frontier Fun Center, Inc. (ECF No. 33 at 2.) The named borrower on the note was Main 5 Street Galleria, LLC. (Id.) Plaintiff Michael Wells later became an investor and LLC 6 manager of Main Street Galleria, LLC. (Id.) 7 On January 2, 2009, Plaintiff signed and entered into an unconditional guarantee 8 (“UG” or “Form Number 148”) with the SBA. (Id.) Section 6 of the UG was entitled “rights, 9 notices, and defenses that the Guarantor waives.” (ECF No. 1 at 19.) It stated that “to the 10 extent permitted by law,” Plaintiff waived certain rights, notices, and defenses, and 11 proceeded to specifically list those waivers. (Id.) Sometime between February 1, 2010, 12 and April 30, 2010, default on the note occurred. (ECF No. 33 at 2.) On March 1, 2010, 13 the SBA honored its guarantee and purchased the loan. (Id.) 14 Thereafter on December 21, 2010, Umpqua Bank executed a notice of default and 15 election to sell (“Notice of Default”) Plaintiff’s property. (Id.; see also ECF No. 33-1 at 4.)3 16 The property was subsequently sold, a notice of sale was recorded, and a copy was sent 17 to “the then owner of the property hereinafter described and to all other parties entitled 18 by law to such notice[.]” (ECF No. 33-1 at 4-5.)4 19 On March 4, 2014, the SBA referred the loan to the United States Department of 20 the Treasury (“Treasury”) to enforce collection through the Treasury Offset Program. 21 (ECF No. 33 at 3.) The following day, the Treasury sent Plaintiff a notice of unpaid 22 delinquent debt. (Id.) Plaintiff disputed this debt. (Id.) The Treasury eventually referred 23

3Relevant to this order, the Court notes that Defendant included with her Motion 24 an attached exhibit evidencing that Umpqua Bank executed a Notice of Default on December 21, 2010, and that it was sent by certified mail to the property owners and all 25 other parties entitled by law. (See ECF No. 33-1.) 26 4Plaintiff appears to dispute that he received notice at this time. Plaintiff states in his response that his “complaint specifically avers that the first notice which was received 27 by [Plaintiff] which indicated that things had gone awry came not from the SBA, but from the U.S. Treasury, which on or about March 5, 2014, sent Plaintiff a notice of unpaid 28 delinquent debt which had been referred to them by the SBA.” (ECF No. 37 at 10 (internal 1 the debt to Performat Recovery, Inc., and later Plaintiff received a collection notice from 2 the CBE Group, both are private collection companies. (Id.) The CBE Group sent Plaintiff 3 an administrative wage garnishment notice. (Id.) As a result, Plaintiff requested a hearing 4 and raised eight objections to the garnishment. (ECF Nos. 33 at 3, 37-1 at 3.) 5 On September 26, 2017, the Administrative Wage Hearing Officer of the SBA 6 (“SBA Hearing Officer”) issued its Garnishment Hearing Decision (“Decision”). (ECF No. 7 37-1.) The Decision, in summarizing the procedures to date, noted the SBA had “received 8 [Plaintiff’s] request for an appeal of the SBA’s intent to initiate administrative wage 9 garnishment” and Plaintiff “dispute[s] the existence and amount of the debt and the right 10 of the SBA to initiate administrative wage garnishment.” (Id. at 2.) Nevertheless, the 11 Decision ordered 15% of Plaintiff’s disposable pay from his wages at the time be withheld 12 and declared that this was “the final decision for the purposes of judicial review under the 13 Administrative Procedure Act (5 U.S.C. 701 et seq.). For further appeals, the proper 14 avenue for reconsideration of administrative wage garnishment rulings is through judicial 15 review in the federal district court.” (Id. at 6-7.) 16 Plaintiff filed his complaint in this Court on July 18, 2019. (ECF No. 1.) He alleges 17 the following claims: (1) breach of contract, (2) breach of the implied covenant of good 18 faith and fair dealing, (3) equitable subrogation, (4) procedural due process, and (5) 19 declaratory relief/judgment.5 (Id. at 5-9.) Relevant to this order, Plaintiff alleges “the SBA 20 improperly referred the loan to the Treasury.” (Id. at 3.) He further alleges that his 21 “[o]bjections to the collection of a purportedly delinquent debt (owed to the SBA) through 22 wage garnishment actions were lodged by [his] counsel via correspondence on July 19, 23 2017, and September 7, 2017.” (Id. at 4.) And that a “common theme” to his objections 24 regarding “the debt at issue and collection tactics” within the Decision, was his waiver of 25 common notice requirements, etc. in signing the UG. (Id. at 5.) 26 /// 27

28 5Plaintiff also alleges a claim for injunctive relief. (ECF No. 1 at 9.) The Court, 1 III. DISCUSSION 2 Defendant’s Motion seeks to dismiss Plaintiff’s claims for lack of subject matter 3 jurisdiction and, alternatively, seeks summary judgment in Defendant’s favor. Specifically, 4 Defendant argues that Plaintiff’s claims should be dismissed because (1) the DCIA bars 5 Plaintiff’s claims and (2) Plaintiff’s claims were not exhausted, and that Defendant is 6 entitled to summary judgment because (3) Plaintiff’s claims are timed barred under 7 Nevada’s statute of limitations and (4) non-party Umpqua Bank caused damages to 8 Plaintiff, not the SBA. (ECF No. 33 5-8.) The Court agrees in part with Defendant and will 9 discuss her arguments in turn, but will grant Plaintiff leave to amend. 10 A. Debt Collection Improvement Act of 1996 (“DCIA”) 11 Defendant argues that Plaintiff’s claims are barred by the DCIA because Congress 12 intended to utilize a single federal scheme to regulate debt collection by federal agencies 13 “notwithstanding any provision of State law.” (ECF No. 33 at 5-7 (quoting 31 U.S.C. § 14 3720D(a)).6) Because the SBA ordered the garnishment of Plaintiff’s wages, Defendant 15 further argues that Plaintiff is prohibited from challenging the debt under state law in this 16 action. (Id. at 7.) Plaintiff counters that his complaint attacks the UG thus he is “attacking 17 the very process itself,” whereas the DCIA concerns debt already delinquent and the 18 collection of the delinquent debt. (ECF No. 37 at 3-8.) Additionally, Plaintiff counters that 19 the DCIA has never been used to “challenge the application of federal common law (of 20 the forum state) to personal guarantees.” (Id. at 8.) Because it remains unclear to the 21 Court if Plaintiff is lodging a state-law challenge to the collection process, the Court agrees 22 in part with Defendant. 23 “The Debt Collection Improvement Act provides the relevant statutory and 24 regulatory standards for the Government’s debt-collection efforts.” Confederated Tribes 25

26 6“Notwithstanding any provision of State law, the head of an executive, judicial, or legislative agency that administers a program that gives rise to a delinquent nontax debt 27 owed to the United States by an individual may in accordance with this section garnish the disposable pay of the individual to collect the amount owed, if the individual is not 28 currently making required repayment in accordance with any agreement between the 1 & Bands of the Yakama Nation v. United States, 89 Fed. Cl. 589, 606 (2009). As a general 2 mater, the DCIA “requires that debt-collection efforts be initiated by the head of the 3 agency from whose activities the debt arose[.]” Id. The DCIA “authorizes federal agencies 4 to use administrative wage garnishment to collect outstanding debts ‘[n]otwithstanding 5 any provision of State law.’” Frew v. Van Ru Credit Corp., Case No. 05-5297, 2006 WL 6 2261624, *3 (E.D. Pa. Aug. 7, 2006 (quoting 31 U.S.C. §3720D(a))). “[T]he DCIA 7 language preempts ‘those provisions of state law that would otherwise prohibit or hinder 8 the ability of a guaranty to garnish a debtor’s wages.’” Id. (quoting Cliff v. Payco Gen. Am. 9 Credits, Inc., 363 F.3d 1113, 1125 (11th Cir. 2004)). 10 In his complaint, Plaintiff alleges that “the SBA improperly referred the loan to the 11 Treasury for Enforced Collection through the Treasury Offset Program.” (ECF No. 1 at 3.) 12 On May 7, 2014, the Treasury referred Plaintiff’s alleged debt to Performant Recovery, 13 Inc., for further enforcement and collection. (Id.) Nearly a year later, Plaintiff received a 14 collection notice from CBE Group. (Id.) Plaintiff alleges that his “[o]bjections to the 15 collection of a purportedly delinquent debt (owed to the SBA) through wage garnishment 16 actions were lodged by [his] counsel via correspondence on July 19, 2017, and 17 September 7, 2017.” (Id. at 4.) Plaintiff further alleges that a “common theme” to his 18 objections regarding “the debt at issue and collection tactics” within the Decision was his 19 waiver of common notice requirements—and other rights—in signing the UG. (Id. at 5 20 (emphasis added).) Moreover, in the Decision, the SBA Hearing Officer noted the 21 following: “On or about July 23, 2015, we received your request for an appeal on the 22 SBA’s intent to initiate administrative wage garnishment. In your request, you dispute the 23 existence and amount of the debt and the right of the SBA to initiate administrative wage 24 garnishment.” (Id. at 12 (emphasis added).) 25 Plaintiff acknowledges § 3720D of the DCIA was written to preempt the application 26 of state law concerning garnishment by the Treasury. (ECF No. 37 at 6.) But based on 27 his allegations and the SBA Hearing Officer’s summary of Plaintiff’s appeal of the wage 28 garnishment, to the extent Plaintiff’s claims are characterized as a state-law challenge to 1 the collection of the delinquent debt by the Treasury, the Court may not have jurisdiction 2 pursuant to § 3720D. The Court agrees with Defendant, in part, in that if Plaintiff is seeking 3 to bring a state-law challenge regarding the Treasury’s efforts to collect on the debt owed, 4 the DCIA preempts conflicting state-law challenges. See 31 U.S.C. § 3720(D)(a); see also 5 Frew, 2006 WL 2261624 at *3 (finding that state law in question was preempted by § 6 3720D of the DCIA); United States v. S.C. Dep’t of Corr., Case No. 3-04-22066-MJP, 7 2006 WL 8446769, *11 (D.S.C. June 14, 2006) (finding that a state law prohibiting the 8 type of garnishment set forth in the DCIA was expressly preempted by § 3720D(a)). 9 However, Plaintiff’s complaint includes allegations that appear to, in part challenge 10 the UG he signed and entered into with the SBA. (ECF No. 1 at 3-4.)7 As Plaintiff puts it, 11 he is “attacking the unconditional guarantee” and “the very process itself” as the 12 “language in the guarantee waived practically every known consumer protection which 13 Nevada law could afford its residents[.]” (ECF No. 37 at 4.) While Plaintiff states the 14 “[d]elinquent debt being collected by the Treasury is largely irrelevant to this suit,” (Id. at 15 5), it is not clear to the Court, as discussed above, if Plaintiff state-law challenges conflict 16 with the DCIA. Nor is it clear to the Court if Plaintiff is even seeking to assert a state-law 17 challenge to the debt collection process by the Treasury, which could be preempted by 18 the DCIA. As such, the Court will grant Plaintiff leave to amend his complaint. 19 B. Exhaustion 20 Defendant appears to argue that Plaintiff failed to exhaust his administrative 21 remedies with respect to his state law claims and additionally fails to assert federal-law 22 challenges regarding the Decision in this action. (ECF No. 33 at 8 n.6.) Plaintiff counters 23 that the Decision expressly states it was a “final agency decision for purposes of judicial 24 review under the Administrative Procedure Act.” (ECF No. 37 at 12-13.) Based on how 25 7But the allegations specific to Plaintiff’s claims appear to be related to the 26 collection of the underlying debt and the Treasury’s collection process. (ECF No. 1 at 6 (stating in support of the breach of contract claim that “the SBA breached the agreement 27 by, among other things and as aforesaid, failing to timely provide notice of default and demand in the manner delineated in the Deed of Trust and failing to act in any type of 28 commercially reasonable manner pertaining to its collection efforts under the SBA loan 1 the Decision was represented to him, Plaintiff further counters that failure to exhaust 2 administrative remedies is not an available defense to the SBA. (Id. at 13.) In her reply, 3 Defendant points out the Decision was only final as to the claims Plaintiff asserted, and 4 Plaintiff’s response failed to discuss the specific claims raised during the administrative 5 proceedings. (ECF No. 41 at 4-5.) The Court finds Defendant’s argument unconvincing. 6 “The doctrine of exhaustion of administrative remedies is well established in the 7 jurisprudence of administrative law.” McKart v. United States, 395 U.S. 185, 193 (1969). 8 “[P]roper exhaustion of administrative remedies . . . means using all steps that the agency 9 holds out, and doing so properly (so that the agency addresses the issues on the merits).” 10 Woodford v. Ngo, 548 U.S. 81, 90 (2006) (quotation and emphasis omitted). “As a general 11 rule, [courts] will not consider issues not presented before an administrative proceeding 12 at the appropriate time.” Marathon Oil Co. v. United States, 807 F.2d 759, 767-68 (9th 13 Cir. 1986). “However, [courts] have repeatedly held that the exhaustion requirement 14 should be interpreted broadly.” Nat’l Parks & Conservation Ass’n v. BLM, 606 F.3d 1058, 15 1065 (9th Cir. 2010). Plaintiffs fulfill the requirement if their appeal “provided sufficient 16 notice to the [agency] to afford it the opportunity to rectify the violations that the plaintiffs 17 alleged.” Native Ecosystems Council v. Dombeck, 304 F.3d 886, 899 (9th Cir. 2002). 18 Plaintiffs do not need to state their claims in precise legal terms, rather, plaintiffs need 19 only to raise an issue “with sufficient clarity to allow the decision maker to understand the 20 rule on the issue raised, but there is no bright-line standard as to when this requirement 21 has been met.” Great Basin Mine Watch v. Hankins, 456 F.3d 955, 968 (9th Cir. 2006) 22 (internal quotations omitted). 23 Here, Plaintiff made eight objections to the collection of the delinquent debt owed 24 to the SBA through wage garnishment. (ECF No. 37-1 at 3.) Seven of those objections 25 are as follows: 26 1) The SBA purchased the loan from its participating Certified Development Company, Nevada State Development 27 Corporation, without notifying [Plaintiff]. 28 1 2no) tifyinTgh [eP laSinBtiAff] . formalized a Liquidation Plan without 2 3) The SBA did not provide [Plaintiff] with notice of default. 4) Had [Plaintiff] been given notice of default, [Plaintiff 3 believes he] could have saved the business. 5) The SBA charged the loan off and made demand for 4 payment in full without notifying [Plaintiff]. 5 6) The SBA did not diligently pursue the other guarantors, specifically Jaffra Masad, allowing the guarantors to dissipate 6 their assets in the process. 7) The SBA did not obtain an appraisal of the property. 7 8 (Id.) On September 26, 2017, the SBA Hearing Officer issued the Decision, which 9 expressly states: “This is the final agency decision for purposes of judicial review under 10 the Administrative Procedure Act (5 U.S.C. 701 et seq.). For further appeals, the proper 11 avenue for reconsideration of administrative wage garnishment rulings I through judicial 12 review in the federal district court.” (Id. at 7.) 13 Plaintiff’s seven objections stated above mirror his four claims in this action— 14 breach of contract, breach of the implied covenant of good faith and fair dealing, equitable 15 subrogation, and procedural due process. In fact, Defendant acknowledges this when she 16 states in her Motion that Plaintiff “raised administrative challenges that are similar to those 17 asserted [in this action]—except he based his administrative claims on federal rather than 18 state law.” (ECF No. 33 at 6-7 (emphasis added).) Although Plaintiff did not use precise 19 legal terms, and in interpreting the exhaustion requirement broadly, the Court finds that 20 Plaintiff had raised his claims with sufficient clarity to provide notice to the SBA of his 21 claims so that the agency could rectify the violation. Plaintiff now alleges the same claims 22 in this action and therefore exhausted his administrative remedies upon receiving the 23 “final agency decision” from the SBA. 24 As to Defendant’s contention that Plaintiff failed to assert federal-law challenges 25 regarding the Decision as part of this Court’s Administrative Procedure Act review, the 26 Court’s prior order found “no reason why state law may not serve as the applicable federal 27 common law in this case under Kimbell Foods and Frazier.” (ECF No. 17 at 10.) See 28 United States v. Kimbell Foods, Inc., 440 U.S. 715 (1979); Great Sw. Life Ins. Co. v. 1 Frazier, 860 F.2d 896 (9th Cir. 1988). As such, the Court finds that Plaintiff has properly 2 exhausted his claims and has not failed to assert federal-law challenges to the Decision 3 in this action. 4 C. Statute of Limitations 5 Defendant argues Plaintiff’s claims are timed barred under Nevada’s statute of 6 limitation with respect to contracts and should thus be dismissed pursuant to Rule 7 12(b)(1).8 (ECF No. 33 at 7.) Specifically, Defendant argues Plaintiff should have been 8 aware of his claims when his property was foreclosed and sold in 2011, and yet he failed 9 to assert his claims until 2019, when he filed this action. (Id.) Plaintiff counters that 10 Defendant does not offer any evidence to support this contention and that there is a 11 dispute of material fact. (ECF No. 37 at 8.) Plaintiff additionally counters the discovery 12 rule applies to his contract action because the statutory period of limitation was tolled until 13 he discovered, or should have discovered, the facts giving rise to this action. (Id. at 9-10.) 14 According to Plaintiff, he did not have notice until the Treasury sent him notice about the 15 unpaid delinquent debt on March 5, 2014. (Id. at 10.) The Court disagrees with Defendant. 16 Under Nevada law, an action based upon a written contract must be brought within 17 six years. See NRS § 11.190(1)(b). The exact date in which a statute of limitations begins 18 to accrue is usually a question of fact and courts may determine that date as a matter of 19 law only when the uncontroverted evidence irrefutably demonstrates the accrual date.

20 8Defendant’s Motion specifically raises this argument citing to Fed. R. Civ. P. 12(b)(1). (ECF No. 33 at 7.) However, a statute of limitations defense is more appropriate 21 pursuant to Fed. R. Civ. P. 12(b)(6). See Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 969 (9th Cir. 2010) (articulating that a claim may be dismissed 22 under Rule 12(b)(6) “on the ground that it is barred by the applicable statute of limitations . . . .”); Aldrich v. NCAA, 484 F. Supp. 3d 779, 796-98 (N.D. Cal. 2020) (citation omitted) 23 (“A statute of limitations defense can require dismissal under Rule 12(b)(6) if it is apparent from the face of the complaint that the claims are time-barred.”) 24 Additionally, “[i]f, on a motion under Rule 12(b)(6) . . . matters outside the pleadings 25 are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d). Here, Defendant included with 26 her Motion an exhibit evidencing that Umpqua Bank executed a Notice of Default on December 21, 2010. (See ECF No. 33-1 at 4.) As such, the Court construes this argument 27 under a summary judgment standard pursuant to Fed. R. Civ. P. 56. The Court notes that in her reply, Defendant states that she is entitled to summary judgment because Plaintiff’s 28 claims are time barred. (ECF No. 41 at 6.) 1 See Winn v. Sunrise Hosp. & Med. Ctr., 277 P.3d 458, 458, 462-63 (Nev. 2012). “The 2 general rule concerning statutes of limitations is that a cause of action accrues when the 3 wrong occurs and a party sustains injuries for which relief could be sought.” Petersen v. 4 Bruen, 792 P.2d 18, 20 (Nev. 1990). The Nevada Supreme Court, however, has provided 5 an exception to the general rule—referred to as the “discovery rule”—under which “the 6 statutory period of limitations is tolled until the injured party discovers or reasonably 7 should have discovered facts supporting a cause of action.” Id. 8 While Plaintiff asserts Defendant did not offer evidence to support her contention 9 that the statute of limitations began to accrue with notice of the 2011 foreclosure, the 10 Court disagrees as Defendant’s Motion expressly states that “on December 21, 2010, the 11 Umpqua Bank executed a Notice of Default and Election to Sell Plaintiff’s property” and 12 Defendant cites to an attached exhibit in support. (ECF No. 33 at 2.) The exhibit is a 13 recorded document—dated December 22, 2011—affirming Defendant’s proposition and 14 further states that “on March 31, 2010, a copy of said Notice of Default and Election to 15 Sell was mailed by certified mail to the then owner of the property hereinafter described 16 and to all other parties entitled by law to such notice[.]” (ECF No. 33-1 at 4.) Nevertheless, 17 the Court finds the recorded document offered by Defendant does not irrefutably 18 demonstrates the accrual date. 19 Although the recorded document is expressly clear the Notice of Default was 20 mailed to the property owner and other parties—which presumably would have included 21 Plaintiff—the document does not offer evidence that Plaintiff received actual notice but 22 rather that the Notice of Default was likely mailed to Plaintiff. Moreover, Plaintiff’s 23 complaint states the “first notice” Plaintiff received of the unpaid delinquent debt was on 24 March 5, 2014. (ECF No. 1 at 3.) As such, and in viewing all facts and drawing inferences 25 in the light most favorable to Plaintiff, Defendant has not met her burden showing there 26 are no genuine issues of material fact as to when Plaintiff had notice of the facts giving 27 rise to his contract claim. The Court thus need not address the discovery rule in this 28 instance as the Court finds that Defendant is not entitled to summary judgment. 1 D. Umpqua Bank 2 Defendant appears to argue she is entitled to summary judgment because non- 3 party Umpqua Bank—not the SBA—foreclosed on Plaintiff’s property, therefore the SBA 4 did not cause the damages to Plaintiff. (ECF No. 33 at 8.) Plaintiff counters that Defendant 5 has not proffered evidence to support this argument as to the role of Umpqua Bank, or 6 the Bank’s effect on Plaintiff’s claims. (ECF No. 37 at 11.) The Court agrees with Plaintiff. 7 Plaintiff’s complaint does not mention Umpqua Bank nor alleges any facts against 8 the Bank. (See generally ECF No. 1.) Rather, Plaintiff alleges that he entered an 9 unconditional guarantee with the SBA via standard Form Number 148. (ECF No. 1 at 2- 10 3.) As a result of the SBA’s breach of the parties’ agreement, Plaintiff suffered damages. 11 (Id. at 6.) It is not clear to the Court exactly what Defendant is arguing and the relevance 12 of Umpqua Bank. Defendant has offered no evidence or case law to support her argument 13 but a mere reference to Fed. R. Civ. P. 56(a) to conclude that she is entitled to summary 14 judgment. (ECF No. 33 at 8.) Without more, Defendant has not demonstrated that she is 15 entitled to summary judgment. 16 IV. LEAVE TO AMEND 17 The Court has discretion to grant leave to amend and should freely do so “when 18 justice so requires.” Allen, 911 F.2d at 373 (quoting Fed. R. Civ. P. 15(a)). Because the 19 Court finds that Plaintiff may be barred from a state-law challenge to the Treasury’s debt 20 collection process and because it is not clear if Plaintiff is even bringing such a challenge, 21 Plaintiff is granted leave to amend his complaint. Plaintiff will have 30 days from the date 22 of this order to file an amended complaint. 23 V. CONCLUSION 24 The Court notes that the parties made several arguments and cited to several 25 cases not discussed above. The Court has reviewed these arguments and cases and 26 determines that they do not warrant discussion as they do not affect the outcome of the 27 issues before the Court. 28 /// 4 It is therefore ordered that Defendant Isabella Guzman’s motion to dismiss, and in 2 || the alternative, motion for summary judgment (ECF No. 33) is granted in part and denied 3 || in part. Pursuant to 31 U.S.C. § 3720D, any state law challenge by Plaintiff Michael Wells 4 || to the United States Department of the Treasury’s debt collection process is preempted 5 || if it conflicts with the Debt Collection Improvement Act of 1996, 31 U.S.C. § 3701, et seq. 6 It is further ordered that Wells will have 30 days from the date of this order to file 7 |} an amended complaint. Failure to file an amended complaint will result in dismissal of this 8 || action. 9 The Clerk of Court is directed to substitute Chris Pilkerton with Isabella Guzman 10 || pursuant to Fed. R. Civ. P. 25(d). 11 DATED THIS 28" Day of September 2021. 12

14 MIRANDA M. DU 15 CHIEF UNITED STATES DISTRICT JUDGE

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