Jackson v. Red Rock Credit Solutions, LLC

Background

Kelly T. Jackson moved for default judgment against Red Rock Credit Solutions, LLC. The opinion states that Jackson asserted a claim under the Credit Repair Organizations Act, a federal law governing credit-repair organizations, and cited both federal and California law in seeking damages, attorney’s fees, and costs. The complaint described Red Rock as a Nevada limited liability company with its principal place of business in Tulalip, Washington.

Personal jurisdiction

Before entering default judgment, the court had to confirm that it had personal jurisdiction—the power to exercise authority over the defendant—and subject-matter jurisdiction. The court held that Jackson had not established personal jurisdiction over Red Rock.

The court explained that, because Red Rock was not alleged to be based in California, Jackson had to show that Red Rock had sufficient contacts with California. For the tort-like claim under the Credit Repair Organizations Act, this required showing that Red Rock intentionally acted, expressly aimed its conduct at California, and caused harm it knew was likely to be suffered there. Neither the complaint nor the default-judgment motion provided facts establishing that Red Rock purposefully directed its activities toward California.

The court rejected Jackson’s reliance on her California residence and her assertion that substantial events occurred in the Northern District of California. The court explained that personal jurisdiction focuses on the defendant’s contacts with the forum, while venue concerns the place where a case may be heard.

Damages

Jackson requested $997 in actual damages under the Credit Repair Organizations Act and California Civil Code section 1789.21. The court stated that, although factual allegations generally are treated as true after a defendant defaults, damages must be supported by testimony, declarations, calculations, or other admissible evidence. Jackson submitted no declaration or other evidence substantiating the requested $997, so she had not proved the amount of her damages.

Attorney’s fees and costs

Jackson requested $5,415 in attorney’s fees and costs. The billing chart, however, listed a total of $3,886.50, consisting of $3,243.75 in attorney’s fees and $642.75 in costs. The court also required a renewed motion to provide evidence supporting the requested billing rates, an attorney declaration accompanying the billing and cost information, and an explanation of why Jackson could recover fees for time spent drafting and filing an arbitration demand referenced in the billing chart.

Disposition

The court denied Jackson’s motion for default judgment without prejudice to filing a renewed motion addressing the issues discussed in the order. The renewed motion was due by October 2, 2023. The order did not decide whether Jackson would ultimately prevail on her claims or whether she was entitled to the requested damages, fees, or costs.