Ariel Rios v. NC Financial Solutions of California Llc

NOTICE OF MOTION AND MOTION to Dismiss Plaintiff's Complaint and/or Strike Plaintiff's Complaint

C.D. Cal.November 28, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NETCREDIT’S NOTICE OF MOTION AND MOTION TO CASE NO. 2:16-CV-7989-AB(ASX) DISMISS AND/OR STRIKE; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF ROBERT S. MCWHORTER (SBN 226186) JARRETT S. OSBORNE-REVIS (SBN 289193) LECLAIRRYAN, LLP 400 Capitol Mall, Suite 1500 Sacramento, CA 95814 Telephone: 916.246.1140 Facsimile: 916.246.1155 Attorneys for Defendant NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC dba NETCREDIT UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION ARIEL RIOS, Plaintiff, v. NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC dba NETCREDIT, Defendant. Case No.: 2:16-cv-7989-AB (ASx) DEFENDANT NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC DBA NETCREDIT’S NOTICE OF MOTION AND MOTION TO DISMISS AND/OR STRIKE PLAINTIFF’S COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF THEREOF Date: January 9, 2017 Time: 10:00 am Place: United States Courthouse, 312 N. Spring St., Los Angeles, CA 90012, Courtroom 4, 2nd Floor Before: Hon. Andre Birotte Jr. Complaint Filed: October 26, 2016 Trial Date: None Set Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 1 of 21 Page ID #:22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i NETCREDIT’S NOTICE OF MOTION AND MOTION TO CASE NO. 2:16-CV-7989-AB(ASX) DISMISS AND/OR STRIKE; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF TABLE OF CONTENTS Page MEMORANDUM OF POINTS AND AUTHORITIES .......................................... 1 I. INTRODUCTION .......................................................................................... 1 II. FACTUAL BACKGROUND ......................................................................... 2 III. LEGAL ANALYSIS ....................................................................................... 3 A. Standard Of Review.............................................................................. 3 B. Plaintiff Lacks Standing Due to His Pending Bankruptcy ................... 4 C. Plaintiff’s First Cause of Action For Violation of TCPA Fails ........... 7 1. Plaintiff Lacks Standing to Bring This Action Because He Has Not Suffered a Concrete Injury ........................................... 7 2. The First Cause of Action Fails To State A Valid Claim ........ 10 D. The Second Cause Of Action For Violation Of The Rosenthal Act Fails ..................................................................................................... 11 IV. CONCLUSION ............................................................................................. 14 Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 2 of 21 Page ID #:23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii NETCREDIT’S NOTICE OF MOTION AND MOTION TO CASE NO. 2:16-CV-7989-AB(ASX) DISMISS AND/OR STRIKE; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF TABLE OF AUTHORITIES Page Cases Arikat v. JP Morgan Chase & Co., 430 F.Supp.2d 1013, 1027 (N.D.Cal.2006) .......................................................... 13 Arteaga v. Asset Acceptance, LLC, 733 F. Supp. 2d 1218, 1227-1229 (E.D.Cal. 2010) .............................................. 13 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) .......................................................................... 1, 2, 3, 11 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2006) ........................................................................ 3, 4, 10, 11 Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1155 (2013) .................................................................................. 1 Cloud v. Northrop Grumman Corp., 67 Cal. App. 4th 995, 1003–04 (1998) ................................................................... 6 Daniels v. ComUnity Lending, Inc., 2014 WL 51275, at *5 (S.D. Cal. Jan. 6, 2014) ................................................... 11 Engman v. Nationstar Mortg. LLC, 2015 WL 12660412, at *2 (S.D. Cal. Dec. 4, 2015) ...................................... 10, 11 Estate of Spirtos v. One San Bernardino County Superior Court Case Numbered SPR 02211 (In re Estate of Spirtos), 443 F.3d 1172, 1176 (9th Cir.2006) ....................................................................... 4 Feldman v. 1100 Park Lane Associates, 160 Cal. App. 4th 1467, 1487 (2008) ................................................................... 14 Flores v. Adir Int’l, LLC, 2015 WL 4340020, at *3–6 (C.D. Cal. July 15, 2015) ......................................... 11 Gardner v. American Home Mortg. Servicing, Inc., 691 F. Supp.2d 1192, 1198 (E.D. Cal. 2010) ....................................................... 13 Green v. Creditor Iustus Remedium, LLP, 2013 WL 6000967, at *3 (E.D. Cal. Nov. 12, 2013) ............................................ 12 Hakakha v. CitiMortgage, Inc., 2015 WL 4873561, at *7 (C.D. Cal. Aug. 13, 2015) ........................................... 13 Henderson v. J.M. Smucker Co., 2012 WL 12878672, at *2 (C.D. Cal. Oct. 23, 2012) ............................................ 4 In re Bailey, 306 B.R. 391, 392–93 (Bankr. D.D.C. 2004) ..................................................... 4, 5 In re Buckenmaier, 127 B.R. 233, 237 (B.A.P. 9th Cir. 1991) .............................................................. 9 In re Davidovich, 901 F.2d 1533, 1539 (10th Cir. 1990) .................................................................... 9 In re De Laurentiis Entm't Grp., Inc., No. CV 90 6039 JGD, 1991 WL 340567, at *5 (C.D. Cal. Mar. 5, 1991) ............. 9 In re Gebhart, 621 F.3d 1206, 1210 (9th Cir.2010) ....................................................................... 5 In re Macklin, 2011 WL 2015520, at *3 (Bankr. E.D. Cal. May 19, 2011) .......................... 4, 5, 6 In re Salazar, 449 B.R. 890, 899 (Bankr. N.D. Tex. 2011) .......................................................... 6 In re Zavala, 444 B.R. 181, 189 (Bankr. E.D. Cal. 2011) ............................................................ 6 Jiminez v. Accounts Receivable Mgmt., 2010 WL 5829206 at *6 (C.D.Cal.2010) ............................................................. 13 Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 3 of 21 Page ID #:24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii NETCREDIT’S NOTICE OF MOTION AND MOTION TO CASE NO. 2:16-CV-7989-AB(ASX) DISMISS AND/OR STRIKE; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Juarez v. Citibank, N.A., 2016 WL 4547914, at *2 (N.D. Cal. Sept. 1, 2016) ........................................... 4, 9 Jurgens v. Dudendorf, 2015 WL 4910536, at *2 (E.D. Cal. Aug. 17, 2015) .............................................. 3 Lassen v. Nissan N. Am., Inc., 2016 WL 5868101, at *8 (C.D. Cal. Sept. 30, 2016) ............................................. 8 Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, n. 1 ........................................................................................... 8 Meyer v. Portfolio Recovery Assoc., LLC, 707 F.3d 1036, 1043 (9th Cir. 2012) .................................................................... 10 Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001) ........................................................................... 3 Quinlan v. Citimortgage, Inc., 2013 WL 3325961, at *2 (E.D. Cal. July 1, 2013) ............................................... 12 Romero v. Department Stores National Bank, et al., --- F.Supp.3d ---, 2016 WL 4184099, at *2 (S.D. Cal. Aug. 5, 2016) .............. 8, 9 Rusheen v. Cohen, 37 Cal. 4th 1048, 1057 (2006) .............................................................................. 14 Schwab v. Reilly, 560 U.S. 770, 782 (2010) ........................................................................................ 5 Sengchanthalangsy v. Accelerated Recovery Specialists, Inc., 473 F.Supp.2d 1083, 1088 (S.D. Cal. 2007) ........................................................ 14 Silberg v. Anderson, 50 Cal. 3d 205, 212 (1990) ................................................................................... 14 Smith v. Aitima Med. Equip., Inc., 2016 WL 4618780, at *4 (CD. Cal. July 29, 2016) ................................................ 8 Smith v. Arthur Andersen LLP, 421 F.3d 989, 1002 (9th Cir. 2005) ........................................................................ 4 Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016), as revised (May 24, 2016) .............................. 1, 7, 8 Vieira v. Woodford, 2002 WL 1226852, at *1 (N.D. Cal. May 30, 2002) .............................................. 3 11 U.S.C. § 108 ............................................................................................................................ 12 341 .............................................................................................................................. 6 541(a). ......................................................................................................................... 4 553(a) .......................................................................................................................... 9 554(a) .......................................................................................................................... 6 554(b) ......................................................................................................................... 6 554(c) .......................................................................................................................... 6 554(d) ........................................................................................................................ 6 323 .............................................................................................................................. 1 323(a), (b) ................................................................................................................... 4 Federal Rules of Civil Procedure 12(b)(1) ............................................................................................................. 2, 3, 10 12(b)(6) ............................................................................................................. 2, 3, 10 12(f) .............................................................................................................. 2, 3, 4, 10 15 U.S.C. § 1692k(d) ................................................................................................................... 12 Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 4 of 21 Page ID #:25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv NETCREDIT’S NOTICE OF MOTION AND MOTION TO CASE NO. 2:16-CV-7989-AB(ASX) DISMISS AND/OR STRIKE; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 28 U.S.C. § 157(b)(2)(B) ............................................................................................................... 6 47 U.S.C. § 227 .............................................................................................................................. 1 227(a) ........................................................................................................................ 11 227(a)(1) ................................................................................................................... 10 227(b)(1) ................................................................................................................... 10 Bankruptcy Rule 4003(b) ....................................................................................................................... 6 Cal. Civ. Code § 1788.30(b) ................................................................................................................ 13 1788.30(f) ................................................................................................................. 12 47(b) ......................................................................................................................... 14 1788 ............................................................................................................................ 1 1788.30(f) ................................................................................................................... 2 1788.11(d) ................................................................................................................ 12 California Code of Civil Procedure section 703.140(b)(1) .............................................................................................................. 7 703.140(b)(5) .............................................................................................................. 7 703.140(b)(5) .............................................................................................................. 7 Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 5 of 21 Page ID #:26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 NETCREDIT’S NOTICE OF MOTION AND MOTION TO CASE NO. 2:16-CV-7989-AB(ASX) DISMISS AND/OR STRIKE NOTICE OF MOTION AND MOTION TO PLAINTIFF AND TO ITS ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on January 9, 2017 at 10:00 a.m. in the courtroom of the Honorable André Birotte Jr., located in Courtroom 4 on the 2nd Floor of the United States Courthouse, 312 North Spring Street, Los Angeles, California 90012, Defendant NC Financial Solutions of California, LLC, d/b/a NetCredit (“NetCredit”) will and hereby does move (1) to dismiss Plaintiff Ariel Rios’ (“Plaintiff”) Complaint, including the First and Second Causes of Action, pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, (2) to strike any claims in the Second Cause of Action of the Complaint to the extent that they arose prior to October 16, 2015, and (3) to obtain other relief as is just and equitable. As set forth in the accompanying Memorandum, Plaintiff lacks standing to bring the legal claims asserted in this Complaint. Further, his claims failed to state a valid claim upon which relief can be granted and may be time barred. This Motion is based on the Memorandum of Points and Authorities, the concurrently filed Declaration of Robert S. McWhorter, the accompanying Request for Judicial Notice, and on such oral argument and evidence that may be presented at the hearing. This Motion is made following the conference of counsel pursuant to L.R. 7- 3 which took place on November 28, 2016, as affirmed by the Declaration of Robert S. McWhorter. (McWhorter Decl., ¶ 3.) DATED: November 28, 2016 LECLAIRRYAN, LLP By: /s/ Robert S. McWhorter Robert S. McWhorter Attorneys for Defendant NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC dba NETCREDIT Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 6 of 21 Page ID #:27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION To bring an action in federal court, a plaintiff must meet two minimum thresholds: (1) he or she must have standing to bring a legal claim; and (2) his or her complaint must “state a claim to relief that is plausible on its face” containing factual allegations to permit “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1155 (2013); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Plaintiff, Ariel Rios (“Plaintiff”) cannot satisfy either of these standards. His Complaint alleges that NC Financial Solutions of California, LLC, d/b/a NetCredit (“NetCredit”) violated the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. (“TCPA”) and California’s Rosenthal Fair Debt Collection Practices Act, Civil Code § 1788 et seq. (“Rosenthal Act”) by calling his cellular phone ostensibly with using an artificial prerecorded voice or an automatic telephone dialing system (“ATDS”) to collect its outstanding loan from Plaintiff. Plaintiff lacks standing to assert these claims. He filed a bankruptcy proceeding just days before he filed this action even though this action constitutes property of his bankruptcy estate over which the Chapter 7 trustee has exclusive control and authority to sue. 11 U.S.C. §§ 323. Moreover, he has not, and cannot, plead that he suffered any concrete or particularized injury from NetCredit’s alleged cellular phone calls, thereby lacks standing to assert a claim under the TCPA pursuant to the United States Supreme Court’s recent ruling in Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016), as revised (May 24, 2016) (“Spokeo”). Plaintiff also fails to plead facts establishing a plausible claim against NetCredit. Rather than pleading specific facts, Plaintiff pleads barebones, conclusions that contain a formulaic recitation of the elements under the TCPA and the Rosenthal Act. However, “[t]hreadbare recitals of the elements of a cause of Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 7 of 21 Page ID #:28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. Moreover, Plaintiff’s Rosenthal Act claim is premised on alleged conduct that occurred in 2015, which should be struck or dismissed by this Court to the extent they are barred by one-year statute of limitations established under California Civil Code section 1788.30(f). As a result of these insurmountable deficiencies, this Court should dismiss Plaintiff’s Complaint pursuant to Rules 12(b)(1), 12(b)(6) and 12(f) of the Federal Rules of Civil Procedure and/or strike Plaintiff’s Rosenthal Act’s claim to the extent it is time barred. II. FACTUAL BACKGROUND Since at least 2015, NetCredit made short term, high-interest personal “payday loans” to Plaintiff. (Complaint, ¶ 11.) After Plaintiff defaulted on these loans, NetCredit allegedly called Plaintiff’s cellular phone to collect this delinquent loan. (Complaint, ¶¶ 13, 14.) During these calls, Plaintiff spoke with NetCredit’s representatives about repaying these loans. (Complaint, ¶ 15.) At some point, Plaintiff purportedly requested that NetCredit stop calling his cellular phone. (Id.) Despite Plaintiff’s request, NetCredit allegedly continued to place calls to Plaintiff’s cellular phone on a near daily basis. (Complaint, ¶ 16.) Plaintiff claims that NetCredit “owned, operated and/or controlled an ‘automatic telephone dialing system” that originated the calls to his cellular phone. (Complaint, ¶ 18.) On October 17, 2016, Plaintiff filed a Voluntary Petition under Chapter 7 of the Bankruptcy Code in the case entitled In re: Ariel Mauricio Rios, U.S. Bankruptcy Court for the Central District of California, Case No: 2:16-bk-23717- NB (the “Bankruptcy Action”). (Declaration of Robert S. McWhorter (“McWhorter Decl.”), Ex. 1.) Sam S. Leslie (the “Trustee”) was appointed as the Chapter 7 Trustee in the Bankruptcy Action. (McWhorter Decl., Ex. 2.) Nine (9) days later, on October 29, 2016, Plaintiff filed a Complaint against Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 8 of 21 Page ID #:29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE NetCredit alleging violations of the TCPA and the Rosenthal Act. For the reasons set forth below, this Court should dismiss Plaintiff’s Complaint pursuant to Rules 12(b)(1), 12(b)(6) and 12(f) of the Federal Rules of Civil Procedure and/or strike Plaintiff’s Rosenthal Act’s claim to the extent it is time barred. III. LEGAL ANALYSIS A. STANDARD OF REVIEW NetCredit brings this motion to dismiss and/or to strike pursuant to Rules 12(b)(1), 12(b)(6) and 12(f) of Federal Rules of Civil Procedure. Dismissal is appropriate under Rule 12(b)(1) when the district court lacks subject matter jurisdiction over the claim. Fed.R.Civ.P. 12(b)(1). Subject matter jurisdiction is a threshold issue which goes to the power of the court to hear the case. Therefore, a 12(b)(1) motion must be decided before other motions, as they will become moot if dismissal is granted. Vieira v. Woodford, 2002 WL 1226852, at *1 (N.D. Cal. May 30, 2002). The “lack of Article III standing requires dismissal for lack of subject matter jurisdiction under Federal Rule 12(b)(1).” Jurgens v. Dudendorf, 2015 WL 4910536, at *2 (E.D. Cal. Aug. 17, 2015). The burden of proof in a 12(b)(1) motion is on the party asserting jurisdiction. Vieira, 2002 WL 1226852, at *1. Argumentative inferences favorable to the pleader will not be drawn and the court will presume a lack of jurisdiction until the pleader proves otherwise. Id. A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678, quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2006). A claim is facially plausible when the factual allegations permit “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A plaintiff must establish “more than a sheer possibility that a defendant has acted unlawfully,” but show that plausible entitlement to relief. Id. An entitlement to Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 9 of 21 Page ID #:30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Under Rule 12(f), a court may strike from a pleading any redundant, immaterial, impertinent, or scandalous matter. Fed.R.Civ.P. 12(f). The function of a motion to strike under Rule 12(f) is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing of those issues before trial. Juarez v. Citibank, N.A., 2016 WL 4547914, at *2 (N.D. Cal. Sept. 1, 2016). B. PLAINTIFF LACKS STANDING DUE TO HIS PENDING BANKRUPTCY The filing of a bankruptcy petition creates a bankruptcy estate. 11 U.S.C. § 541(a). Under settled rules, “[t]he property of the estate includes all legal or equitable interests of the debtor in property as of the commencement of the case, including the debtor’s causes of action.” Smith v. Arthur Andersen LLP, 421 F.3d 989, 1002 (9th Cir. 2005). “Legal claims that accrued before the filing of the bankruptcy petition are property of the bankruptcy estate.” Henderson v. J.M. Smucker Co., 2012 WL 12878672, at *2 (C.D. Cal. Oct. 23, 2012). The trustee is the representative of the bankruptcy estate and has the capacity to sue. 11 U.S.C. §§ 323(a), (b). As a result, in a Chapter 7 case, the Chapter 7 Trustee alone has the ability to sue on behalf of the bankruptcy estate. Estate of Spirtos v. One San Bernardino County Superior Court Case Numbered SPR 02211 (In re Estate of Spirtos), 443 F.3d 1172, 1176 (9th Cir.2006); In re Macklin, 2011 WL 2015520, at *3 (Bankr. E.D. Cal. May 19, 2011). As one court noted: [A]ny unliquidated lawsuits initiated by a debtor prepetition (or that could have been initiated by the debtor prepetition) become part of the bankruptcy estate subject to the sole direction and control of the trustee, unless exempted or abandoned or otherwise revested in the debtor. The debtor lacks standing in a chapter 7 case to prosecute claims that are property of the estate. In re Macklin, 2011 WL 2015520, at *3 quoting In re Bailey, 306 B.R. 391, 392–93 (Bankr. D.D.C. 2004). To the extent that the claims remain property of the estate, Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 10 of 21 Page ID #:31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE the trustee must be substituted as the real party-in-interest, or at the very least he or she must approve the debtor’s acting on behalf of the estate if dismissal is to be avoided. See In re Bailey, 306 B.R. 391, 393 (Bankr. D. D. C. 2004). Here, Plaintiff lacks standing to prosecute claims in this case because they are property of his bankruptcy estate and the Trustee has exclusive authority over those claims. Plaintiff filed bankruptcy under Chapter 7 of the Bankruptcy Code on October 17, 2016. (McWhorter Decl., Ex. 1.) With the meeting of creditors only recently held on November 21, 2016, the Trustee has not administered the assets of the estate. (McWhorter Decl., Exs. 2 and 3.) The Complaint does not allege that the Trustee formally approved Plaintiff’s suing on the bankruptcy estate’s behalf or the employment of Plaintiff’s counsel to act on the bankruptcy estate’s behalf. Moreover, the Complaint does not allege the basis upon which Plaintiff has standing to file suit given his pending bankruptcy proceeding. Plaintiff will likely argue that he has standing to bring this action because he attempted to exempt this lawsuit on Schedule C of his Schedules of Assets and Liabilities (the “Schedules”). (McWhorter Decl., Ex. 1.) However, this argument is misplaced because despite Plaintiff’s claimed exemption, this litigation remains property of the estate subject to the exclusive control of the Trustee because an exemption does not remove the asset from the bankruptcy estate. In re Macklin, 2011 WL 2015520, at *3. Exemptions remove only a monetary “interest” in a debtor’s asset, rather than the asset itself, from the property of the bankruptcy estate. Schwab v. Reilly, 560 U.S. 770, 782 (2010) (“Reilly”)1; In re Gebhart, 621 F.3d 1206, 1210 (9th Cir.2010) (“The homestead exemptions available to the 1 In Reilly, 560 U.S. at 775, the debtor took a wildcard exemption that underestimated the value of the exempt property at the time of filing. The court noted that when a debtor claims an exemption in an amount that is equal to the full value of the property as stated in the petition and the trustee fails to object, the asset itself remains in the estate, at least if its value at the time of filing is in fact higher than the exemption amount. Id. at 776-792. Instead, what is removed from the estate is an “interest” in the property equal to the value of the exemption claimed at filing. Id. at 780. Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 11 of 21 Page ID #:32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE debtors ... do not permit the exemption of entire properties, but rather specific dollar amounts.”); In re Zavala, 444 B.R. 181, 189 (Bankr. E.D. Cal. 2011) (An exemption only entitles the debtor to the proceeds of the asset, not the asset itself). A debtor cannot remove property from the bankruptcy by claiming an exemption within statutory limits until the trustee abandons the property. In re Salazar, 449 B.R. 890, 899 (Bankr. N.D. Tex. 2011). Property that is neither abandoned nor administered by the bankruptcy trustee remains property of the bankruptcy estate. 11 U.S.C. § 554(d); see Cloud v. Northrop Grumman Corp., 67 Cal. App. 4th 995, 1003–04 (1998). Here, the Trustee has not abandoned this litigation or manifested any intent to do so.2 The Trustee did not, and could not have, evidence such an intent to abandon given that this action was filed nine (9) days after Plaintiff commenced the Bankruptcy Action and twenty-five (25) days before the meeting of creditors under 11 U.S.C. § 341. (McWhorter Decl., Exs. 2 and 3.) Moreover, Plaintiff’s claimed exemption is improper and has not been allowed by the Bankruptcy Court. Allowance of exemptions is a “core proceeding” within the bankruptcy court’s jurisdiction. 28 U.S.C. § 157(b)(2)(B). Pursuant to Bankruptcy Rule 4003(b), the deadline to object to Plaintiff’s exemptions in the Bankruptcy Action is December 21, 2016. (McWhorter Decl., Exs. 2 and 3.) This action constitutes an unliquidated, contingent claim, which does not allege any specific amount of damages. Instead, Plaintiff’s Complaint seeks unspecified 2 Property of a bankruptcy estate can be abandoned by three methods: (1) After notice and hearing, the trustee may unilaterally abandon property that is “burdensome ... or ... of inconsequential value” (11 U.S.C. § 554(a)); (2) After notice and hearing, the court may order the trustee to abandon such property (11 U.S.C. § 554(b)); (3) Any property which has been scheduled, but which has not been administered by the trustee at the time of closing of a case, is abandoned by operation of law (11 U.S.C. § 554(c)). See Cloud, 67 Cal. App. 4th at 1003. In re Macklin, 2011 WL 2015520, at *3, the court deviated from these limited methods and permitted a debtor to file suit for injunctive relief by finding that a trustee manifested an intention to take no action to the alleged rights to seek issuance of a restraining order concerning a secured creditor’s prepetition foreclosure sale. This case is a far cry from In re Macklin given its early stages and the underlying facts. Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 12 of 21 Page ID #:33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE “statutory damages,” “punitive damages,” “prejudgment interest” and “attorneys’ fees, costs, and expenses.” (Complaint, p. 9:12-17.) Despite the vague Complaint, Plaintiff sought exemption of this suit in Schedule C of his Schedules pursuant to the “wildcard exemption” under California Code of Civil Procedure section 703.140(b)(5), which includes all unused amounts of exception under California Code of Civil Procedure section 703.140(b)(1) ($24,060.00) plus an additional amount contained in section 703.140(b)(5) ($1,280.00), for a total maximum dollar amount of $25,340.00. Code Civ. Proc. § 703.140(b)(5). On Schedule C of the Schedules, Plaintiff exempted certain tax refunds and checking account funds totaling $4,500 as well as three admittedly “speculative,” lawsuits against NetCredit and California Check Cashing, which Plaintiff values at $14,500. (McWhorter Decl., Ex. 2, pp. 16-17.) Given the unliquidated, unmatured, and unspecified nature of Plaintiffs’ claims, it is unclear whether these three lawsuits fall within the scope of the “wildcard exemption” under section 703.140(b)(5). C. PLAINTIFF’S FIRST CAUSE OF ACTION FOR VIOLATION OF TCPA FAILS In the First Cause of Action, Plaintiff alleges that NetCredit violated the TCPA because it made unsolicited telephone calls to his cell phone to demand repayment of delinquent loans. (Complaint, ¶¶ 11-28.) This allegation fails. 1. Plaintiff Lacks Standing to Bring This Action Because He Has Not Suffered a Concrete Injury This Court should dismiss the First Cause of Action because Plaintiff lacks standing to bring a TCPA claim because he does not allege, and cannot establish, any concrete harm or injury as result of the alleged cellular telephone calls. (Id.) To establish Article III standing, a plaintiff must: (1) have suffered an injury in fact; (2) that is fairly traceable to the challenged conduct of the defendant; and (3) that is likely to be redressed by a favorable judicial decision. Spokeo, 136 S. Ct. at 1547; Lassen v. Nissan N. Am., Inc., 2016 WL 5868101, at *8 (C.D. Cal. Sept. Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 13 of 21 Page ID #:34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE 30, 2016). The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing these elements. Spokeo, 136 S. Ct. at 1547. “Where, as here, a case is at the pleading stage, the plaintiff must “clearly ... allege facts demonstrating” each element.” Id. Injury in fact is “the ‘[f]irst and foremost’ of Article III standing’s three elements.” Id. A plaintiff bringing a claim based on a statutory violation must still allege a concrete and particularized injury as a “plaintiff does not automatically satisfy the injury-in-fact requirement whenever a statute grants a right and purports to authorize a suit to vindicate it.” Id. at 1549. “‘For an injury to be ‘particularized,’ it ‘must affect the plaintiff in a personal and individual way.’” Id. at 1547-1548, quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, n. 1. For an injury to beconcrete, the injury must actually exist; it “must be ‘defacto.’” Id. A “bare procedural violation, divorced from any concrete harm,” does not satisfy the injury-in-fact requirement of Article III. Id. Applying Spokeo, courts have found a plaintiff lacks Article III standing to bring claims under the TCPA due to the failure to establish a concrete any “concrete harm” or injury as a result of its phone calls. See Romero v. Department Stores National Bank, et al., --- F.Supp.3d ---, 2016 WL 4184099, at *2 (S.D. Cal. Aug. 5, 2016); Smith v. Aitima Med. Equip., Inc., 2016 WL 4618780, at *4 (CD. Cal. July 29, 2016). In Smith, 2016 WL 4618780, at *1, a plaintiff who received one unwanted phone call from defendant “using an autodialer and/or an artificial or prerecorded voice.” The court dismissed the plaintiff’s TCPA claim for lack of standing despite allegations that both tangible and intangible harms – the drainage of cell phone battery, aggravation, and invasion of privacy by finding that “Plaintiff’s de minimus injury is not sufficient to confer standing.” Id. at *4. Similarly, in Romero, the court found that a plaintiff, who had received 272 phone calls from a debt collector, could not establish standing under the TCPA because Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 14 of 21 Page ID #:35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE she could not show that any individual phone call had caused sufficient lost time, aggravation, and distress to constitute a concrete injury. Romero, 2016 WL 4184099 at *4. Juarez v. Citibank, N.A., 2016 WL 4547914, at *2 (N.D. Cal. Sept. 1, 2016). In our case, Plaintiff does not plead any facts establishing that he suffered any concrete or particularized injury. In fact, Plaintiff does not allege that he suffered any damages whatsoever as a result of any alleged violations of the TCPA. (Complaint, ¶¶ 11-28.) At best, Plaintiff has simply alleged a bare procedural violation, which is insufficient to establish standing. It is important to note that Plaintiff’s failure to plead a specific, concrete injury is particularly noteworthy in this case. In the Bankruptcy Action, Plaintiff listed NetCredit as an unsecured creditor in the amount of $7,400. (McWhorter Decl., Ex. 1, p. 22.) To establish any recoverable actual injury, Plaintiff must plead specific facts establishing that he suffered damages in excess of that amount given that NetCredit has the right to setoff against any damages caused by a violation of the TCPA. 11 U.S.C. § 553(a) expressly recognizes that, with certain exceptions not applicable here, “title [11] does not affect any right of a creditor to offset....” “This language has been interpreted to mean that a creditor's right to setoff a mutual, pre-petition debt survives even the discharge of the debtor, because it would ‘be unfair to deny a creditor the right to recover an established obligation while requiring the creditor to fully satisfy a debt to a debtor.’” A valid setoff claim cannot be defeated by a discharge in bankruptcy. In re Buckenmaier, 127 B.R. 233, 237 (B.A.P. 9th Cir. 1991), quoting In re Davidovich, 901 F.2d 1533, 1539 (10th Cir. 1990). In In re De Laurentiis Entm't Grp., Inc., No. CV 90 6039 JGD, 1991 WL 340567, at *5 (C.D. Cal. Mar. 5, 1991), this court recognized that “Congress acknowledged the concept of the setoff right by creating § 553” and that Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 15 of 21 Page ID #:36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE “the historical antecedents of setoff rights are long and venerable and are based on the common sense notion that ‘a man should not be compelled to pay one moment what he will be entitled to recover back the next.’” Accordingly, this Court should dismiss the First Cause of Action pursuant to Rules 12(b)(1), 12(b)(6) and/or 12(f) of the Federal Rules of Civil Procedure. 2. The First Cause of Action Fails To State A Valid Claim Even if this Court somehow finds that Plaintiff has standing to bring his TCPA claim, this Court should nevertheless dismiss the First Cause of Action because Plaintiff cannot establish the requisite elements to assert such a claim. To properly plead a TCPA claim, a plaintiff must establish three elements: (1) the defendant called a cellular telephone number; (2) the defendant used an ATDS; (3) the telephone call was made without the recipient’s prior consent. Meyer v. Portfolio Recovery Assoc., LLC, 707 F.3d 1036, 1043 (9th Cir. 2012), citing 47 U.S.C. § 227(b)(1); see also Engman v. Nationstar Mortg. LLC, 2015 WL 12660412, at *2 (S.D. Cal. Dec. 4, 2015). An ATDS is defined as equipment that “has the capacity ... to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.” 47 U.S.C. § 227(a)(1). Plaintiff vaguely asserts in his Complaint that NetCredit used “an artificial prerecorded voice or an automatic telephone dialing system” in connection with NetCredit’s collection of its debt from Plaintiff. (Complaint, ¶26(b).) However, Plaintiff provides no facts at all from which NetCredit or this Court may discern how or whether an ATDS was actually used. Such allegations are nothing more than a “formulaic recitation of the elements” of Plaintiff’s TCPA claims, which is sufficient to state a claim. See Twombly, 550 U.S. at 555. Courts have routinely held that such barebones allegations are insufficient to state a claim. See e.g., Engman v. Nationstar Mortg. LLC, 2015 WL 12660412, at *2 (S.D. Cal. Dec. 4, Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 16 of 21 Page ID #:37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE 2015) (dismissed TCPA claim finding that mere allegation that defendant used prerecorded voice or ATDS is insufficient to state a valid claim); Flores v. Adir Int’l, LLC, 2015 WL 4340020, at *3–6 (C.D. Cal. July 15, 2015) (dismissing complaint with prejudice for failing to allege sufficient factual allegations to support inference that defendant used an ATDS in sending text messages to plaintiff regarding collection of debt). TCPA claims must be pled with factual specificity. Daniels v. ComUnity Lending, Inc., 2014 WL 51275, at *5 (S.D. Cal. Jan. 6, 2014). Furthermore, the only facts pled by Plaintiff establish that the alleged calls do not appear to be random, but rather are alleged specifically to be directed toward Plaintiff. 47 U.S.C. § 227(a). He admits that he “spoke with [NetCredit’s] representatives.” (Complaint, ¶ 15.) He further admits that NetCredit called him directly to collect on Plaintiff’s unpaid, delinquent loan. (Complaint, ¶¶ 11-14.) Given the foregoing, these phone calls were conceivably done by hand, and not by using an ATDS. See Daniels, 2014 WL 51275, at *5 (S.D. Cal. Jan. 6, 2014) (court dismissed TCPA claim because bank’s text messages to collect debt could conceivably be made by hand; rejected formulaic allegations). Plaintiff’s TCPA’s claim fails because it is not plausible on its face. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 570. Thus, the First Cause of Action fails to plausibly allege facts to support the conclusion that NetCredit made a call to Plaintiffs’ cellular telephone number using an ATDS. D. THE SECOND CAUSE OF ACTION FOR VIOLATION OF THE ROSENTHAL ACT FAILS In the Second Cause of Action, Plaintiff ambiguously claims that NetCredit violated the Rosenthal Act by purportedly: (i) “causing a telephone to ring repeatedly or continuously to annoy the person called;” (ii) communicating by telephone or in person with such frequency as to be unreasonable and to constitute an harassment of the debtor; and (iii) failing to comply with unspecified statutory Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 17 of 21 Page ID #:38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE regulations. (Complaint, ¶ 31.) These claims fail for multiple reasons. First, the statutes of limitations for private claims under the Rosenthal Act is one year from the date of the violation. Cal. Civ. Code § 1788.30(f); violation. 15 U.S.C. § 1692k(d); Quinlan v. Citimortgage, Inc., 2013 WL 3325961, at *2 (E.D. Cal. July 1, 2013). Here, the Complaint alleges that NetCredit made calls to Plaintiff “since approximately 2015.” (Complaint, ¶¶ 11, 13.) Plaintiff filed bankruptcy and this action on October 17 and 26, 2016, respectively. (McWhorter Decl., Ex. 1.) To the extent that purported debt collection activities occurred prior October 16, 2015, those claims are time barred.3 This Court should strike any such time barred claims pursuant to Rule 12(f) of the Federal Rules of Civil Procedure. Second, Plaintiff’s allegations are vague and conclusory and do not sufficiently explain the facts on which he bases his claim. He does not allege sufficient facts establishing a violation of the Rosenthal Act. Other than an incorporation paragraph, Plaintiff’s Rosenthal Act claim consists of a single paragraph that merely recites the statutory language in California Civil Code sections 1788.11(d) and 1788.11(e) without providing any specific facts or how NetCredit participated in those acts. (Complaint, ¶ 31.) Under these sections, whether “there is actionable harassment or annoyance turns not only on the volume of calls made, but also on the pattern of calls.” Green v. Creditor Iustus Remedium, LLP, 2013 WL 6000967, at *3 (E.D. Cal. Nov. 12, 2013). Plaintiff does not plead any facts setting forth: (i) how NetCredit caused Plaintiff’s telephone to ring repeatedly or continuously; (ii) when NetCredit caused Plaintiff’s telephone to ring repeatedly or continuously; (iii) how NetCredit’s alleged conduct unreasonably annoyed Plaintiff; (iv) how frequently NetCredit caused Plaintiff’s telephone to ring repeatedly or continuously or communicated by telephone or in person; (v) how NetCredit allegedly harassed Plaintiff; (vi) what specific statutory 3 Under 11 U.S.C. § 108, any statute of limitations tolled as of the Petition Date. Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 18 of 21 Page ID #:39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE regulations NetCredit violated; and/or (vii) how NetCredit alleged unspecified statutory regulations. Such allegations are too vague to give rise to any inference that NetCredit violated the Rosenthal Act. Courts have regularly dismissed Rosenthal Act claims that are vague and fail to plead specific facts. See e.g., Hakakha v. CitiMortgage, Inc., 2015 WL 4873561, at *7 (C.D. Cal. Aug. 13, 2015) (dismissed Rosenthal Act claim that was “vague and conclusory”); Gardner v. American Home Mortg. Servicing, Inc., 691 F. Supp.2d 1192, 1198 (E.D. Cal. 2010) (dismissed Rosenthal Act claim based on vague allegations); Arikat v. JP Morgan Chase & Co., 430 F.Supp.2d 1013, 1027 (N.D.Cal.2006) (dismissed as too vague, Rosenthal Act claim that alleged all violations against all defendants without specifying each defendant’s individual conduct). Third, Plaintiff does not plead any facts establishing that NetCredit intended to no annoy, abuse or harass Plaintiff or that NetCredit willfully or knowingly violated the Rosenthal Act, which is a necessary showing to recover statutory damages. Cal. Civ. Code § 1788.30(b). At most, Plaintiff alleges that NetCredit called “on a near daily basis.” (Complaint, ¶ 16.) However, this claim alone does not establish annoyance or harassment. See e.g., Arteaga v. Asset Acceptance, LLC, 733 F. Supp. 2d 1218, 1227-1229 (E.D.Cal. 2010) (court granted summary judgment in favor of a bill collector on claims brought under section 1788.11(d) of the Rosenthal Act despite testimony from the plaintiff that the bill collector called her “daily” or “nearly daily.”); Jiminez v. Accounts Receivable Mgmt., 2010 WL 5829206 at *6 (C.D.Cal.2010) (granting defendant collection company summary judgment because there was no evidence of defendant’s intent to annoy, abuse or harass where defendant placed sixty-nine calls over a 115 day period, placed more than two calls in a day, but did not make calls to defendant’s work, and never received a response to defendant’s voice messages). Without pleading such facts, Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 19 of 21 Page ID #:40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE Plaintiff’s claims under Rosenthal Act fail. Accordingly, this Court should dismiss the Second Cause of Action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Finally, Plaintiff contends that NetCredit’s collection activities form that basis of his Rosenthal Act claims. To the extent these efforts were in preparation of litigation, Plaintiff’s Rosenthal Act claims are barred, in whole or in part, by the litigation privilege. Cal. Civ. Code § 47(b). This privilege applies to any communication: (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action. Silberg v. Anderson, 50 Cal. 3d 205, 212 (1990). “[Co]mmunications with some relation to judicial proceedings are absolutely immune from tort liability by the litigation privilege. It is not limited to statements made during trial or other proceedings, but may extend to steps taken prior thereto, or afterwards.” Rusheen v. Cohen, 37 Cal. 4th 1048, 1057 (2006). Pre-litigation communications are protected by the litigation privilege if they relate to litigation that is under consideration. See Feldman v. 1100 Park Lane Associates, 160 Cal. App. 4th 1467, 1487 (2008). “California courts have long extended statements beyond actual judicial proceedings to include prelitigation, such as demand letters, as well as out-of-court statements.” Sengchanthalangsy v. Accelerated Recovery Specialists, Inc., 473 F.Supp.2d 1083, 1088 (S.D. Cal. 2007). The purpose of the litigation privilege is to “afford litigants and witnesses the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions.” Feldman, 160 Cal. App. 4th. at 1479. IV. CONCLUSION As set forth above, this Court should enter an order dismissing Plaintiff’s Complaint pursuant to Rules 12(b)(1), 12(b)(6) and or 12(f) of the Federal Rules of Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 20 of 21 Page ID #:41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 NETCREDIT’S MEMORANDUM OF POINTS CASE NO. 2:16-CV-7989-AB(ASX) AND AUTHORITIES ISO MOTION TO DISMISS AND/OR STRIKE Civil Procedure, striking any claims in the Second Cause of Action to the extent that they arose prior to October 16, 2015, and granting other relief as is just and equitable. DATED: November 28, 2016 LECLAIRRYAN, LLP By: /s/ Robert S. McWhorter ________ Robert S. McWhorter Attorneys for Defendant NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC dba NETCREDIT Case 2:16-cv-07989-AB-AS Document 10 Filed 11/28/16 Page 21 of 21 Page ID #:42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 REQUEST FOR JUDICIAL NOTICE IN SUPPORT CASE NO.: 2-16-CV-7989-AB (ASX) OF DEFENDANT’S MOTION TO DISMISS ROBERT S. MCWHORTER (SBN 226186) JARRETT S. OSBORNE-REVIS (SBN 289193) LECLAIRRYAN, LLP 400 Capitol Mall, Suite 1500 Sacramento, CA 95814 Telephone: 916.246.1140 Facsimile: 916.246.1155 Attorneys for Defendant NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC dba NETCREDIT UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION ARIEL RIOS, Plaintiff, v. NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC dba NETCREDIT, Defendant. Case No.: 2:16-cv-7989-AB (ASx) DEFENDANT NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC DBA NETCREDIT’S REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION TO DISMISS AND/OR STRIKE PLAINTIFF’S COMPLAINT Date: January 9, 2017 Time: 10:00 a.m. Place: United States Courthouse, 312 N. Spring St., Los Angeles, CA 90012, Courtroom 4, 2nd Floor Before: Hon. Andre Birotte Jr. Complaint Filed: October 26, 2016 Trial Date: None Set Case 2:16-cv-07989-AB-AS Document 10-1 Filed 11/28/16 Page 1 of 3 Page ID #:43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 REQUEST FOR JUDICIAL NOTICE IN SUPPORT CASE NO.: 2-16-CV-7989-AB (ASX) OF DEFENDANT’S MOTION TO DISMISS Defendant NC Financial Solutions of California, LLC, d/b/a NetCredit (“NetCredit”) hereby requests that this Court take judicial notice of Exhibits 1-3 attached to the Declaration of Robert S. McWhorter (the “McWhorter Declaration”) which are described below, pursuant to Federal Rules of Evidence, Rule 201 and the authorities cited below. This request is made in connection with NetCredit’S Motion to Dismiss and/to Strike (the “Motion”), and the papers filed in support thereof, which are filed contemporaneously herewith. Document Title Exhibit No. Chapter 7 Voluntary Petition, Schedules and Statement of Financial Affairs (Bankruptcy Docket No. 1) Exhibit 1 Docket for the Bankruptcy Action Exhibit 2 Notice of Chapter 7 Bankruptcy Case (Bankruptcy Docket No. 6) Exhibit 3 I. BASIS FOR REQUESTING JUDICIAL NOTICE A court may take judicial notice of matters of public record in accordance with rule 201 of the Federal Rules of Evidence. Lee v. City of Los Angeles, 250 F.3d 668, 688-689 (9th Cir. 2001) (citing Mack v. South Bay Beer Distributors, Inc., 798 F.2d 1279, 1282 (9th Cir. 1986)). Courts may take judicial notice of documents outside of the complaint that are capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Fed. R. Evid. 201(b)(2); Wietschner v. Monterey Pasta Co., 294 F. Supp. 2d 1117, 1109 (N.D. Cal. 2003). The court “must take judicial notice if a party requests it and the court is supplied with the necessary information.” Fed. R. Evid. 201(d). As explained further below, the Court may take judicial notice of the Exhibits. II. Legal Analysis The Federal Rules of Evidence permits judicial notice of facts that are not subject to reasonable dispute in that they are capable of accurate and ready Case 2:16-cv-07989-AB-AS Document 10-1 Filed 11/28/16 Page 2 of 3 Page ID #:44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 REQUEST FOR JUDICIAL NOTICE IN SUPPORT CASE NO.: 2-16-CV-7989-AB (ASX) OF DEFENDANT’S MOTION TO DISMISS determination by resort to sources whose accuracy cannot be reasonably questioned. Fed. R. Evid 201(b)(2). A court may take judicial notice of a judicial proceeding occurred or that a document was filed in another case. Spitzer v. Aljoe, 2016 WL 3275148, at *1 (N.D. Cal. June 15, 2016); see also Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (courts “may take judicial notice of court filings and other matters of public record.”); White v. Martel, 601 F.3d 882, 885 (9th Cir. 2010) (taking notice of docket sheet, proceedings in another habeas case, and state bar records showing disciplinary proceedings against former counsel in deciding if prisoner was entitled to equitable tolling of statute of limitations); United States v. Howard, 381 F.3d 873, 876, fn. 1 (9th Cir.2004) (“The Court may take judicial notice of matters of public record, including duly recorded documents, and court records available to the public through the PACER system via the internet.”). Here, Exhibits 1 through 3 are judicially noticeable because they consist of court filings and a docket of a bankruptcy case pending in this district. Specifically, Exhibits 1 and 3 consists of documents filed in Plaintiff’s bankruptcy case. Exhibit 2 consists of a copy of the docket in that case. Each of these exhibits are matters of public record and are capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably questioned. III. CONCLUSION Due to the foregoing, NetCredit respectfully request that the Court take judicial notice of Exhibits 1-3 attached to the McWhorter Declaration. DATED: November 28, 2016 LECLAIRRYAN, LLP By: /s/ Robert S. McWhorter Robert S. McWhorter Attorneys for Defendant NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC dba NETCREDIT Case 2:16-cv-07989-AB-AS Document 10-1 Filed 11/28/16 Page 3 of 3 Page ID #:45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF ROBERT S. MCWHORTER IN CASE NO.: 2:16-CV-7989-AB(ASX) SUPPORT OF DEFENDANT’S MOTION TO DISMISS ROBERT S. MCWHORTER (SBN 226186) JARRETT S. OSBORNE-REVIS (SBN 289193) LECLAIRRYAN, LLP 400 Capitol Mall, Suite 1500 Sacramento, CA 95814 Telephone: 916.246.1140 Facsimile: 916.246.1155 Attorneys for Defendant NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC dba NETCREDIT UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION ARIEL RIOS, Plaintiff, v. NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC dba NETCREDIT, Defendant. Case No.: 2:16-cv-7989-AB (ASx) DECLARATION OF ROBERT S. MCWHORTER IN SUPPORT OF DEFENDANT NC FINANCIAL SOLUTIONS OF CALIFORNIA, LLC DBA NETCREDIT’S MOTION TO DISMISS AND/OR STRIKE PLAINTIFF’S COMPLAINT Date: January 9, 2017 Time: 10:00 a.m. Place: United States Courthouse, 312 N. Spring St., Los Angeles, CA 90012, Courtroom 4, 2nd Floor Before: Hon. Andre Birotte Jr. Complaint Filed: October 26, 2016 Trial Date: None Set Case 2:16-cv-07989-AB-AS Document 10-2 Filed 11/28/16 Page 1 of 70 Page ID #:46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 DECLARATION OF ROBERT S. MCWHORTER IN CASE NO.: 2:16-CV-7989-AB(ASX) SUPPORT OF DEFENDANT’S MOTION TO DISMISS DECLARATION OF ROBERT S. MCWHORTER I, Robert S. McWhorter, declare as follows: 1. I have personal knowledge of the facts in this declaration and if called to testify, I could and would competently testify to the matters stated herein. 2. I am an attorney licensed to practice law in the State of California and admitted to practice before the United States District Court for the Central District of California. I am an attorney with the law firm of LeClairRyan, LLP, attorneys for Defendant NC Financial Solutions of California, LLC, d/b/a NetCredit (“NetCredit”) in this action. 3. On November 28, 2016, Mathew Rosenthal, counsel for Plaintiff, Ariel Rios (“Plaintiff”), and I conducted a conference via telephone pursuant to Local Rule 7-3 to discuss the substance of NetCredit’s contemplated Motion to Dismiss and/or to Strike. This conference did not resolve this motion as Plaintiff’s counsel disagreed with the arguments presented. 4. Periodically from November 21, 2016 to November 27, 2016, I accessed PACER for U.S. Bankruptcy Court for the Central District Court to obtain case information relating to Case No: 2:16-bk-23717-NB involving Ariel Mauricio Rios (the “Bankruptcy Action”). From this website, I printed the following documents regarding the Bankruptcy Action, true and correct copies of which are attached as indicated as Exhibits: Document Title Exhibit No. Chapter 7 Voluntary Petition, Schedules and Statement of Financial Affairs (Bankruptcy Docket No. 1) Exhibit 1 Docket for the Bankruptcy Action Exhibit 2 Notice of Chapter 7 Bankruptcy Case (Bankruptcy Docket No. 6) Exhibit 3 Case 2:16-cv-07989-AB-AS Document 10-2 Filed 11/28/16 Page 2 of 70 Page ID #:47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 DECLARATION OF ROBERT S. MCWHORTER IN CASE NO.: 2:16-CV-7989-AB(ASX) SUPPORT OF DEFENDANT’S MOTION TO DISMISS I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. Executed on the 28th day of November, 2016 at Sacramento, California. /s/ Robert S. McWhorter Robert S. 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