A Nice Review of the FDCPA and 12(b)(6) Motions to Dismiss - Nevada 2014

Plaintiff filed a complaint alleging that the Defendant filed suit based upon a time-barred debt.  The Defendant filed a motion to dismiss alleging in part that the statute of limitations had not expired, that they were not a collection agency rather they were the owner of the debt and that the Plaintiff failed to dispute the debt within 30 days of the first communication.  The Court on a 12(b)(6) motion must determine if the factual allegations contained in the complaint together with all reasonable inferences state a plausible claim for relief. 


The Defendant's arguments may have had some validity but this was not a motion for summary judgment.  As a result, the majority of the causes of actions by the Plaintiff were sustained and only 1 cause of action was dismissed. 


The following is a brief statement by the Court on 12(b)(6) motions and an overview of the Act:




On a 12(b)(6) motion, the court must determine "whether the complaint's factual allegations, together with all reasonable inferences, state a plausible claim for relief." Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., 637 F.3d 1047, 1054 (9th Cir. 2011) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).
When  [4] determining the sufficiency of a claim, "[w]e accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the non-moving party[; however, this tenet does not apply to] . . . legal conclusions . . . cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (citation and internal quotation marks omitted). "Therefore, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Id. (citation and internal quotation marks omitted); see also Iqbal, 556 U.S. at 678 ("A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" (quoting Twombly, 550 U.S. at 555)).




The FDCPA creates civil liability for "any debt collector who fails to comply with any provision [of the Act] . . . with respect to any person . . . ." 15 U.S.C. § 1692k(a). The Act defines a debt collector as "any person . . . in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect . . . debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). This definition "'would include those who collect for others in the regular course of business.'" Romine v. Diversified Collection Servs., Inc., 155 F.3d 1142, 1146 (9th Cir. 1998)  [6] (quoting S. Rep. No. 95-382 (1977)). The FDCPA does not, however, apply to a "creditor," who is "any person who offers or extends credit creating a debt or to whom a debt is owed." 15 U.S.C. § 1692a(4). Notably, assignees of debt may be considered creditors only if the "'debt was not in default at the time it was assigned.'" Nool v. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009) (quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985)). Thus, a person who collects a defaulted debt assigned or transferred "solely for the purpose of facilitating collection of such debt for another" is a debt collector, not a creditor. See 15 U.S.C. § 1692a(4).








Todorov v. Easy Loans Corp., 2014 U.S. Dist. LEXIS 84484
United States District Court for the District of Nevada
June 19, 2014, Decided; June 19, 2014, Filed
Case No. 2:13-cv-01264-MMD-GWF