Ramirez v. Midland Credit Management, Inc.

Background

Adrianna Herrera Ramirez sued Midland Credit Management, Inc., and others. The order addresses Capital One’s motion to dismiss. Ramirez’s only claim against Capital One arose under the Rosenthal Act, a California debt-collection law that incorporates the federal Fair Debt Collection Practices Act (FDCPA). She alleged that Capital One violated Section 1692e of the FDCPA, which prohibits debt collectors from using false, deceptive, or misleading representations or methods in connection with collecting a debt.

Court’s Analysis

The alleged conduct was Capital One’s sale of the debt at issue to Midland Credit Management. The court said that this conduct did not appear to be “in connection with” collecting the debt, at least under the ordinary meaning of collection. The court also noted that Ramirez had provided no authority supporting her position. Instead, cases cited by her counsel during the hearing suggested that selling a debt is an alternative to collecting it.

The court stated that a claim might exist for Capital One’s allegedly negligent sale of a debt that it knew, or had reason to know, did not belong to the purported debtor. But it concluded that Section 1692e did not provide that claim by its terms, and the court was unaware of case law supporting Ramirez’s proposed interpretation.

Ruling

The court granted Capital One’s motion to dismiss. The dismissal was with leave to amend, and any amended complaint had to be filed within 21 days of the order. Judge Vince Chhabria did not rule in this order on whether a separate negligence claim might be available.