The Court of Appeals for the Ninth Circuit has affirmed a lower court’s ruling that refused to enjoin an action filed in state court in California that accused Credit One Bank of violating the Rosenthal Fair Debt Collection Practices Act by employing a vendor to make “extensive harassing debt collection” calls to California residents.
A copy of the ruling in the case of Credit One Bank v. Michael Hestrin can be accessed by clicking here.
In 2021, four District Attorneys, including the defendant, filed suit against the plaintiff. The plaintiff turned around and sued the DA’s, arguing that it is pre-empted from state law as a result of its national bank charter. As the Ninth Circuit noted, this case has had a “tortuous” history in state and federal court dating back almost four years, when Hestrin started his investigation, alleging the plaintiff made “millions of improper automated debt collection phone calls” to tens of thousands of consumers.
The District Court — and subsequently the Ninth Circuit — ruled that the Younger abstention, in which a federal court refrains from hearing constitutional challenges to state actions when federal actions would be regarded as an improper intrusion on the state’s authority to enforce its laws in its own courts, applied.
The ruling from the Ninth Circuit goes into great detail on Younger and federal pre-emption of state actions and all the reasons why the defendant did not violate the National Bank Act’s visitorial powers, which gives regulators the power to investigate and examine the organizations subject to the Act.