A District Court judge in California has granted a defendant’s motion to dismiss with prejudice and motion compel arbitration in a class-action case alleging violations of the Fair Debt Collection Practices Act and Telephone Consumer Protection Act over an unpaid credit card debt.
A copy of the lengthy 45-page ruling in the case of Hartranft v. Encore Capital Group can be accessed by clicking here.
The plaintiff took out a credit card and ran up $16,000 of charges on it. At some point, the original creditor changed the type of card and provided the plaintiff with a new set of the terms and conditions. The new set of terms and conditions — like the original agreement — had an arbitration clause in it.
The defendant purchased the unpaid debt from the original creditor and attempted to collect on it by making 24 phone calls during a two-week span to the plaintiff’s cell phone using an automated telephone dialing system.
The plaintiff filed suit, originally claiming violations of the TCPA, but subsequently amended the complaint to include the FDCPA claim, after being notified that the defendant was already engaged in a multi-district litigation involving TCPA claims. Two years of stays, hearings, and the plaintiff’s attorney failing to show for a settlement conference and a hearing to determine whether the attorney should not be sanctioned, the judge was finally free to issue his ruling in the case.
Ultimately, the defendant did not waive its right to arbitrate the plaintiff’s claims, ruled Judge Roger Benitez of the District Court for the Southern District of California.
“The Court disregards as unreasonable and implausible Plaintiff’s allegation that any calls he received related to amounts unpaid arising out of his Costco card were unlawful in light of the Card Agreement, which expressly authorized Citibank or its assignees to call Plaintiff once Plaintiff accepted the Card Agreement by using the card,” Judge Benitez wrote. “When disregarding this allegation, the remaining facts show that Plaintiff (1) used a credit card from Citibank, which later assigned its rights to Defendant’s subsidiary; (2) failed to pay balances owed on the card; and (3) was called regarding amounts he owed, as authorized by the Card Agreement. As a matter of law, this made Defendant Plaintiff’s creditor, and as a creditor, Defendant had every right to call him so long as the calls were consistent with the FDCPA . Plaintiff’s complaint does not plead sufficient facts to show the calls made were inconsistent with the FDCPA as it contains nothing more than one conclusory allegation that Defendant violated the FDCPA bereft of any supporting facts.”