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COMES NOW Defendant/Cross-Complainant, MARIA ANTONIA CANUL by and through
counsel Fred W. Schwinn, Raeon R. Roulston, and Matthew C. Salmonsen of Consumer Law Center,
Inc., and hereby submits this Memorandum in opposition to Cross-Defendants’ Motion for Summary
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Afewerki v. Anaya Law Grp. (9th Cir. 2017) 868 F.3d 771...........................................................
Aguilar v. Mandarich Law Grp., LLP ................................................................
Angelucci v. Century Supper Club
Bunzel v. American Academy of Orthopaedic Surgeons
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Donohue v. Quick Collect, Inc. (9th Cir. 2010) 592 F.3d 1027...........................................................
Federal Election Comm’n v. Akins (1998) 524 U.S. 11............................................................................11
Folsom v. Butte County Assn. of Governments ......................................................11
GameStop, Inc. v. Superior Court
Gollust v. Mendell (1991) 501 U.S. 115.....................................................................................................
Gonzales v. Arrow Fin. Servs., LLC (9th Cir. 2011) 660 F.3d 1055....................................................
Gonzales v. Arrow Financial Servs., LLC (S.D.Cal. 2007) 489 F.Supp.2d 1140.....................................
Grosset v. Wenaas (2008) 42 Cal.4th 1100.................................................................................................
Hernandez v. Town of Apple Valley ................................................................
Holmes v. Cal. Nat. Guard ......................................................................
Hughes v. Board of Architectural Examiners .......................................................
Huntington Cont’l Townhouse Ass’n, Inc. v. Miner ....................................
Johnson v. Superior Court ............................................................................
Johnson v. United Cerebral Palsy/Spastic Children’s Foundation
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Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310............................................................................
Limon v. Circle K Stores Inc. .................................................................
Lujan v. Defenders of Wildlife ...................................................................................
Mabee v. Nurseryland Garden Centers, Inc. .................................................11
Maldonado v. Fast Auto Loans, Inc .............................................................
Martinez v. Public Employees’ Retirement System (2019) 33 Cal.App.5th 1156.....................................
Michael J. v. Los Angeles County Dept. of Adoptions ...................................
Midpeninsula Citizens for Fair Housing v. Westwood Investors .................
Monster, LLC v. Superior Court .................................................................11
Murphy v. Kenneth Cole Productions Inc. .........................................................
People v. Bryant ..........................................................................................
People v. Morris ........................................................................................................
Puerta v. Torres (2011) 195 Cal.App.4th 1267.........................................................................................
Robertson v. Health Net of California, Inc. ..............................................
Roger H. Proulx & Co. v. Crest-Liners, Inc. ..................................................
Salazar v. S. Cal. Gas Co.
Sanchez v. Hillerich & Bradsby Co. .............................................................
Skov v. U.S. Bank National Assn. ..........................................................
St. Cyr v. Workers’ Comp. Appeals Bd ........................................................
Terran v. Kaplan (9th Cir.1997) 109 F.3d 1428........................................................................................
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Y.K.A. Industries, Inc. v. Redevelopment Agency of City of San Jose
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STATUTES
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Defendant/Cross-Complainant and Class Representative, MARIA ANTONIA CANUL
brought this consumer class action to address Cross-Defendant, VELOCITY
INVESTMENTS, LLC’s (“VELOCITY”) and its alter ego Cross-Defendant, VELOCITY
PORTFOLIO GROUP, INC.’s (“VPGI”) (collectively “Cross-Defendants”) violations of the California
Fair Debt Buying Practices Act, California Civil Code §§ 1788.50-1788.64 (“CFDBPA”), which sets
forth specific documentation that debt buyers must maintain and produce in a legal action to collect a
charged-off consumer debt. Cross-Defendants’ violations stem from their routine practice of filing and
serving collection Complaints, like the one filed against and served on CANUL and the Class, which do
not comply with the CFDBPA, California Civil Code §§ 1788.52(b), 1788.58(a)(6), 1788.58(a)(9), and
Because the violations are apparent on the face of the lawsuit documents, Cross-Defendants
seek summary judgment by two specious arguments. The first is that CANUL lacks standing to
prosecute her Cross-Complaint, despite the fact that Cross-Defendants haled CANUL into court
filing the subject unlawful Complaint. The second is based on the concept of “materiality” – Cross-
Defendants urge that even if they violated the CFDBPA, their violations are immaterial and therefore
not actionable. However, the Court cannot adopt either of these arguments without disregarding the
Legislature’s intent in enacting the CFDBPA – which is to protect CANUL and consumer debtors,
specifically in scenarios like the case at bar. Cross-Defendants’ first argument relies on a novel and
unsupported legal theory that would redefine “statutory damages” into just another form of actual
damages, while chilling enforcement of consumer notice statutes. Cross-Defendants’ second argument
fails because no court has adopted materiality as an exception to liability under the CFDBPA, and in
any event, Cross-Defendants’ failure to maintain and produce specifically enumerated documentation
For the limited purposes of this opposition only, CANUL incorporates by this reference
Paragraphs 1- , 5-12, 14-18, 20-25 and 27 of Cross-Defendants’ Separate Statement of Undisputed
Material Facts and Supporting Evidence in Support of Cross-Defendants’ Motion for Summary
Judgment as to Cross-Complainant Maria Canul’s First Amended Class Action Cross-Complaint filed
The summary judgment procedure is drastic and must be used with caution in order that it may
not become a substitute for existing methods in the determination of issues of fact. See, Michael J.
v. Los Angeles County Dept. of Adoptions (1988) 201 Cal.App.3d 859, 865. Accordingly, declarations
of the moving party are strictly construed, those of the opposing party are liberally construed, and
doubts as to whether a summary judgment should be granted must be resolved in favor of the opposing
party. Johnson v. United Cerebral Palsy/Spastic Children’s Foundation, (2009) 173 Cal.App.4th 740,
754. The court focuses on issue finding; it does not resolve issues of fact. The court seeks to find
contradictions in the evidence, or inferences reasonably deducible from the evidence that raise a triable
issue of material fact. ; see also Roger H. Proulx & Co. v. Crest-Liners, Inc. (2002) 98 Cal.App.4th
“Courts must abide by the strong public policy favoring disposition on the merits over judicial
efficiency.” Johnson v. Superior Court (2006) 143 Cal.App.4th 297, 304. “Because summary judgment
is a drastic measure that deprives the losing party of trial on the merits, it may not be invoked unless it
is clear from the declarations that there are no triable issues of material fact.” , citing Bunzel v.
satisfy his or her initial burden before the opposing party must controvert anything” Y.K.A. Industries,
Inc. v. Redevelopment Agency of City of San Jose (2009) 174 Cal.App.4th 339, 353, and cannot do so
by simply challenging the opposing party to prove his case by opposition. See id. The moving party’s
papers are strictly construed, accepting as fact only those portions that are not contradicted by opposing
papers, while the opposing party’s papers are liberally construed, all facts therein being accepted as
true. Salazar v. S. Cal. Gas Co. (1997) 54 Cal.App.4th 1370, 1376. In ruling on the motion, any doubts
are to be resolved against granting the motion. Sanchez v. Hillerich & Bradsby Co., (2002) 104
Cross-Defendants argue that does not have standing to bring this CFDBPA action
based on an expansive reading of the Fifth Appellate District’s opinion regarding the federal Fair Credit
Reporting Act (“FCRA”) in Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671, and the
misleading assertion that CANUL “repeatedly acknowledged that she has no actual damages.”
However, there is no argument that CANUL is beneficially interested in the outcome of the litigation.
Limon and the cases cited therein are factually distinguishable from the case at bar.
Limon was wrongly decided. Cross-Defendants’ position should not be the standard for
determining the standing of a California resident to bring an action in a California state court alleging
violations of a California state law enacted by the California Legislature specifically for the benefit of
certain California residents. All that need be shown is that CANUL is an intended beneficiary of the
“Standing requirements will vary from statute to statute based upon the intent of the Legislature
and the purpose for which the particular statute was enacted.” Midpeninsula Citizens for Fair Housing
v. Westwood Investors (1990) 221 Cal.App.3d 1377, 1385 (noting that no “concrete injury” was
required under previous version of Unfair Competition Law). By contrast, California’s Unfair
Competition Law authorizes relief only when a plaintiff has suffered an injury-in-fact as defined for
purposes of Article III standing. Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322-24. Thus,
The term “standing” is often used as shorthand for a precondition to seeking relief in federal
court rooted in Article III of the United State Constitution. The Rossdale Group, LLC v. Walton (2017)
12 Cal.App.5th 936, 944. “Article III of the federal Constitution imposes a ‘case-or-controversy
limitation on federal court jurisdiction,’ requiring [a plaintiff to allege] ‘such a personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of
issues.’” Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1117, fn. 13, quoting Gollust v. Mendell (1991)
501 U.S. 115, 125-126; Lujan v. Defenders of Wildlife (1992) 504 U.S. 555, 560-561 [standing under
Article III requires the plaintiff to establish three elements: (1) an injury-in fact that is “concrete and
particularized” and “actual or imminent,” (2) the injury must be “fairly trace[able] to the challenged
action of the defendant,” and (3) it must be “likely” that a favorable decision will redress the injury].)
“‘There is no similar requirement in [California’s] state Constitution.’” , 12 Cal.App.5th at
944, quoting , 42 Cal.4th at 1117, fn. 13 and citing Cal. Const., art. VI, § 10. Thus, there is no
requirement that a plaintiff establish the existence of a case or controversy, as that term has been
In California courts, the term standing is more broadly defined as “the right to relief in court.”
, 12 Cal.App.5th at 944-45 [internal quotation marks and citation omitted]; GameStop, Inc. v.
Superior Court (2018) 26 Cal.App.5th 502, 510. “In general terms, in order to have standing, the
plaintiff must be able to allege injury—that is, some ‘invasion of the plaintiff’s legally protected
interests.’ [Citation.]” Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 175. “A complaining
party’s demonstration that the subject of a particular challenge has the effect of infringing some
constitutional or statutory right may qualify as a legitimate claim of beneficial interest sufficient to
As a threshold matter, Cross-Defendants are attempting to mislead the Court regarding
CANUL’s position on actual damages in this case. While Cross-Defendants assert that CANUL has
admitted she no actual damages, in fact CANUL has merely waived the right to the actual
damages that she does have. At CANUL’s deposition, the following exchange occurred between
MR. ROULSTON: Following our off-the-record discussion, I’d just like to state for
purposes of the record that neither Ms. Canul or the class are seeking any emotional
distress or out-of-pocket pecuniary damages. This is statutory damages only. Is that all
Moreover, in her Declaration submitted herewith, CANUL outlines the actual damages that she
does have, in the form of attorney fees and costs incurred as a result of Cross-Defendants’ unlawful
lawsuit against her. See Declaration of Maria Antonia Canul 12-13, and Exhibit “A.” Additionally,
the discovery responses submitted by Cross-Defendants reflect only that CANUL a claim to
actual damages, but do not ever state that she no actual damages. Ultimately, CANUL waived her
actual damages in part because seeking only statutory damages simplifies the litigation, and makes a
potential class settlement easier to accomplish. See generally, Monster, LLC v. Superior Court (2017)
12 Cal.App.5th 1214, 1228; Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 678,
fn. 16; and Mabee v. Nurseryland Garden Centers, Inc. (1979) 88 Cal.App.3d 420, 425. If not for this
class action, Cross-Defendants would be able to retain the benefits of their unlawful debt collection
Even if CANUL had not been forced to incur and pay attorney fees and costs as a result of
Cross-Defendants’ unlawful collection lawsuit against her, CANUL still suffered an informational
injury because she did not receive information to which she was statutorily entitled. The concept of
informational injury is not well-developed in California case law, though federal courts have
recognized injuries resulting from some kinds of withheld information in the United States
Constitution, article III context. See , Federal Election Comm’n v. Akins (1998) 524 U.S. 11, 21 (“a
plaintiff suffers an ‘injury in fact’ when the plaintiff fails to obtain information which must be publicly
disclosed pursuant to a statute.”). An informational injury is distinct from a mere procedural right. In
Wilderness Soc’y Inc. v. Rey (9th Cir. 2010) 622 F.3d 1251, the court looked to the purpose of a statute
to determine whether the withheld information was the kind that the legislature meant to ensure access
to (indicating informational injury), or whether the plaintiffs were merely deprived of a procedural
Here, it is clear the California Legislature intended to require attachment of the actual contract
evidencing the debt which is the subject of Cross-Defendants’ collection complaint. In creating the
CFDBPA, the Legislature found the “[t]he collection of debt purchased by debt buyers has become a
significant focus of public concern due to the adequacy of documentation required to be maintained by
the industry in support of its collection activities and litigation.” Finding that California law did not
See Senate Bill No. 233, Stats. 2013, ch. 64, § 1(a); available online at:
http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_0201-0250/sb_233_bill_20130711_chaptered.pdf
adequately “prescribe the specific nature of documentation that a debt buyer must maintain and produce
in a legal action on the debt”, the Legislature found it “important to create documentation and process
standards for the collection of consumer debt that all interested parties can easily understand.” The
Legislature specifically noted its intention in enacting the CFDBPA was to “impose enforceable
standards upon the collection and litigation of consumer debt that has been purchased by a debt buyer
following the consumer debt’s charge off by a creditor” which will “protect consumers, provide needed
clarity to courts, and establish clearer criteria for debt buyers and the collection industry.” Pursuant to
its stated legislative intent, the CFDBPA mandates that when a debt buyer’s claim is based on debt for
which a signed contract exists, a copy of that signed contract must be attached to the complaint. Civil
Code § 1788.58(b). This is an easily understood documentation and process standard. CANUL’s
alleged consumer debt is based upon signed contracts (specifically promissory notes) which Cross-
Cross-Defendants have seized upon the Fifth Appellate District’s FCRA opinion in Limon
attempt to dispose of this statutory damages case on the basis of standing. However, does not
stand for the blanket proposition that no consumer has standing to bring a statutory damages-only
In , the Fifth District found no standing where the plaintiff alleged that his employer
violated the FCRA (a federal statute) by failing to provide him with proper FCRA disclosures when it
sought and received his authorization to obtain a consumer report about him in connection with his
application for employment, and by actually obtaining the consumer report in reliance on that
Digging deeper, in addressing injury, Limon claimed the non-compliant disclosure violated his
interests in privacy and access to information. , at p. 703. In response, Circle K argued Limon
received all information required under the FCRA and any “confusion” was insufficient to constitute
injury because, in part, Limon testified he would have authorized Circle K to run a consumer report
even if he received an “indisputably compliant FCRA form.” , at p. 704. In concluding that
Limon failed to allege an injury sufficient to support standing under the FCRA, the Fifth District
explained “there was no injury to Limon’s protected interest in ensuring fair and accurate credit (or
background) reporting” because he received a copy of the report, it did not contain injurious or false
information, and he did not allege any material risk of future harm. , at p. 705. The Fifth District
also noted “Limon undoubtedly understood he was advising Circle K he was willing to have it conduct
a background check on him prior to being hired” based on his deposition testimony. , at pp. 705-
706. Likewise, the Fifth District rejected Limon’s claim of an informational injury because “an
informational injury that causes no adverse effect is insufficient to confer standing upon a private
The facts here are different. First and foremost, the federal FCRA and California’s CFDBPA are
different statutes, with different subject matter, and different legislative intent. As the Fifth District
noted, Limon received an accurate copy of his credit report, which was in keeping with the aims of the
FCRA and with Limon’s protected interest in ensuring fair and accurate credit reporting. Here, CANUL
did not receive the “specific … documentation that a debt buyer must maintain and produce in a legal
action on the debt” – documentation for which the California Legislature found it “important to create
documentation and process standards.” E Limon “acknowledge[d] the Legislature’s power to confer
standing on a class of persons irrespective of whether they suffered injury.” at p. 695. When a
plaintiff asserts a statutory claim, his or her right to relief or “standing” depends upon the statute and
“may vary according to the intent of the Legislature and the purpose of the enactment.” , 41
Cal.4th at 175. Showing that Cross-Defendants have violated a statutory right “may qualify as a
legitimate claim of beneficial interest sufficient to confer standing on that party.” , 90
Cal.App.4th at 314-315. Moreover, unlike in , where plaintiff’s testimony established that he
consented to the ultimate act of Circle K running a consumer credit report – regardless of the
compliance of the FCRA form – CANUL did not consent to allow Cross-Defendants to file a lawsuit
containing falsehoods and omissions of specifically enumerated documents. See Declaration of Maria
Antonia Canul 8-11. Moreover, a consumer cannot waive the protections of the CFDBPA. See
California Civil Code 1788.64 (“Any waiver of the provisions of this title is contrary to public policy,
Though this Court would be bound by the decision in the – if it was on point – courts of
appeal “are not bound by an opinion of another district court of appeal, however persuasive it might
be.” Martinez v. Public Employees’ Retirement System (2019) 33 Cal.App.5th 1156, 1176, quoting
Wolfe v. Dublin Unified School Dist. (1997) 56 Cal.App.4th 126, 137. Still, “courts of appeal ordinarily
follow the decisions of other districts without good reason to disagree.” , supra. Thus, CANUL
CANUL respectfully submits that was incorrectly decided, because the Fifth District’s
exceedingly narrow conception of standing in the consumer protection context subverts the intent of the
California Legislature regarding the liberal construction of such statutes. Moreover, has opened
the door to even more consumer abuse – as evidenced by the arguments advanced by Cross-Defendants
here, regarding a different consumer protection statute from that addressed by . It is clear that the
Fifth District believed Limon should not have prevailed on the facts of that case, but a loss on the
merits of the FCRA claim was arguably more appropriate than the sweeping ruling regarding standing
Based on the above, we conclude the statutory damages provision is intended to
compensate a plaintiff for injury. It is designed to provide redress where damages are
“difficult or impossible to quantify or prove.” It is not intended to penalize a
However, such a holding is a dramatic rewriting of the long-held understanding of statutory
damages in the consumer protection context. If statutory damages are merely “difficult or impossible to
quantify” actual damages, then virtually no consumer will ever have standing to enforce a consumer
notice case. This interpretation would significantly chill enforcement of consumer protection statutes by
consumers acting as private attorneys-general, contrary to the intent of the California Legislature. The
effect would not only be harmful to consumers who are denied a day in court, but would be a boon to
unscrupulous debt collectors and debt buyers, whose collection activities these statutes are explicitly
designed to regulate. Allowing to stand runs afoul of the judicial maxim that “it is fundamental
that a statute should not be interpreted in a manner that would lead to absurd results.” People v. Bryant
B. CROSS-DEFENDANTS’ ENUMERATED VIOLATIONS OF THE CFDBPA MUST
Cross-Defendants’ second argument is again not one on the merits. Cross-Defendants assert that
any violations of the CFDBPA were “immaterial.” However there is not one single case that has ever
held that materiality is an element of the CFDBPA. Cross-Defendants employ some sleight-of-hand to
attempt to manufacture authority where there is none, first citing federal Fair Debt Collection Practices
Act (“FDCPA”) cases like Afewerki v. Anaya Law Grp. (9th Cir. 2017) 868 F.3d 771, which hold that
whether a communication is misleading under section 1692e of that Act is determined from the
perspective of the “least sophisticated consumer.” Next, Cross-Defendants cite federal FDCPA cases
which hold that whether a 1692e misrepresentation is material is a corollary to the least sophisticated
consumer inquiry. Then, Cross-Defendants cite the recent California case of Aguilar v. Mandarich Law
Grp., LLP, 87 Cal.App.5th 607, which discussed whether a violation of the CFDBPA was a violation of
the section of California’s Rosenthal Fair Debt Collection Practices Act (“RFDCPA”) which is
derivative of section 1692e of the FDCPA. From all of these disparate threads, Cross-Defendants then
baldly assert, “[t]hus, per California’s own statutes and prior case law, claims brought under the
CFDBPA, like Canul’s are also subject to the materiality requirement.” There is simply no authority
whatsoever for this statement. There is no mention of “materiality,” or even the word “material”
anywhere in the text of the CFDBPA, even though the concept of materiality emerged in 2010, four
years before enactment of the CFDBPA, and the Legislature was certainly aware of it. Nor is there case
he materiality affirmative defense under the FDCPA has been expanding ever since that
doctrine was first established by Donohue v. Quick Collect, Inc. (9th Cir. 2010) 592 F.3d 1027, the
seminal case on materiality. The materiality gambit started as a last ditch summary judgment tactic
when the violation was indisputable; now, debt collector defendants have made this argument a
centerpiece of their attempts to avoid liability for obvious violations of consumer protection statutes. It
is important to understand what holds, and what it does not. The Court in stated:
“immaterial statements, by definition, do not affect a consumer’s ability to make intelligent decisions.”
at 1034. Continuing, the court held “that the materiality requirement functions as a
corollary inquiry into whether a statement is likely to mislead an unsophisticated consumer. The
materiality inquiry focuses our analysis on the same ends that concerned us in Clark--protecting
The facts of show why the years-long expansion of the materiality affirmative defense
in both federal and now California state courts is improper and harmful to consumers. In , the
debt collector accurately stated the correct amount owed by the consumer, but merely misstated how
Turning to the merits, we conclude that the Complaint did not violate §§ 1692e or 1692f.
The Complaint correctly calculated the total debt Donohue owed, accurately stated the
principal owed, and accurately listed the total non-principal amount owed inclusive of
interest and finance charges. The Complaint sought recovery of sums to which Quick
Collect was clearly and lawfully entitled, including $ 270.99 in principal, $ 24.07 in late
fees assessed pursuant to Children's Choice’s Office Financial Policy signed by
Donohue, and $ 8.82 in interest assessed at a lawful rate. The Complaint did not contain
a false, deceptive, or misleading representation for purposes of liability under §§ 1692e
or 1692f just because $ 32.89, labeled as 12% interest on principal, was actually
comprised of finance charges of $ 24.07 and post-assignment interest of $ 8.82, but not
Thus, in there was literally no misrepresentation in the amount being collected by the
debt collector. While the complaint’s characterization of the amount was technically false, the Ninth
Circuit determined that it did not matter. The total amount due was correct, and the mistake, it was
concluded, would “not affect a consumer’s ability to make intelligent decisions.” . at 1034. Frankly,
was a case that should not have been brought by the consumer, and was never supposed to
open the door to more substantive misrepresentations by debt collectors. Yet the decision has
There was no California appellate authority regarding the materiality affirmative defense until
the January 2023 decision in Aguilar v. Mandarich Law Group, LLP (2023) 87 Cal.App.5th 607. In
, the defendant debt collector filed a successful anti-SLAPP Motion in response to a consumer
protection action. On review, the Sixth District held that misrepresentation of the name of the charge-
does not stand for the proposition that all violations of state consumer protection
statutes like the CFDBPA are immaterial. The opinion seemed to turn on the specific facts of
that case, as the Sixth District stated: “The misidentification of the charge-off creditor in this instance
(OneMain Financial instead of OneMain Financial Issuance Trust) falls squarely within the category of
“mere technical falsehoods that mislead no one.” , 87 Cal.App.5th at 627 (emphasis added).
Whether a California Civil Code § 1788.58(a)(6) violation where the names of the actual charge-off
creditor and the inaccurately disclosed entity were not so similar would be held to be a material
FDCPA/RFDCPA violation is left unsaid. Moreover, discusses by contrast how failure to
properly identify the original creditor (versus the charge-off creditor) be material. To be clear,
the Sixth District held that a violation of California Civil Code § 1788.58(a)(6) was not a
material violation of section 1692e of the FDCPA, as incorporated by Civil Code 1788.17 of the
RFDCPA. does not hold that omissions of specifically enumerated disclosure provisions of the
As in , but not in , the issue here is whether violation of a California disclosure
statute enacted for the benefit of consumer debtors is material. Additionally, Cross-Defendants
misconstrue , . In , the Ninth Circuit reversed a granting of summary judgment
to the debt collector, who had obtained a default judgment in an amount higher than the debtor owed.
However, Afewerki does not stand for the proposition that Cross-Defendants may omit the enumerated
Because the materiality inquiry focuses on the objective question of how the least
himself would actually have done differently had Anaya Law Group not misstated the
amount of his debt is irrelevant in determining materiality. As we have explained: [A]
consumer possesses a right of action even where the defendant’s conduct has not caused
him or her to suffer any pecuniary or emotional harm. An FDCPA plaintiff need not
even have actually been misled or deceived by the debt collector's representation;
instead, liability depends on whether the hypothetical “least sophisticated debtor” likely
The district court’s determination that Afewerki would not have proceeded differently
absent the error might mean that he did not suffer actual damages and might disqualify
him from obtaining such damages, but that determination does not mean that [the debt
While it is easy for an attorney to posit to a judge that it is obvious what was really meant by a
pleading, the understanding of a trained legal professional is is not the standard for evaluating debt
collector communications, but instead that of the “least sophisticated consumer.” “We are not, however,
to read the language from the perspective of a savvy consumer, and consumers are under no obligation
to seek explanation of confusing or misleading language in debt collection [communications].”
3. Even if the Court Finds That Materiality is an Element of a CFDBPA Claim, Cross-
CANUL does not concede that materiality is an element of the CFDBPA. However, assuming,
, Cross-Defendants’ violations need to be material to be actionable, CANUL can show that
Section 1788.58(a)(6) of the CFDBPA provides that in an action brought by a debt buyer on a
consumer debt, the complaint “shall allege … (6) The name and an address of the charge-off creditor at
the time of charge off and the charge-off creditor’s account number associated with the debt. The
charge-off creditor’s name and address shall be in sufficient form so as to reasonably identify the
charge-off creditor.” Here, despite the fact that the charge-off creditor is LC TRUST I (as a trustee for
the 144 separate promissory note holders), Cross-Defendants’ Complaint falsely states that, “[t]he name
and address of the charge-off creditor at the time of charge-off is: LENDINGCLUB
the burden to CANUL to “prove that misidentifying LendingClub as the charge-off creditor in anyway
impacted her decision making or prevented her from making an informed, intelligent decision as to how
to proceed in the collection lawsuit.” For this proposition, Cross-Defendants rely on various deposition
excerpts to demonstrate CANUL’s after-the-fact knowledge and recall. As noted above, materiality is a
corollary to the “least sophisticated debtor” standard in an FDCPA case. The “least sophisticated
debtor” standard is objective, not subjective. Terran v. Kaplan (9th Cir.1997) 109 F.3d 1428, 1432. It is
“lower than simply examining whether particular language would deceive or mislead a reasonable
debtor,” , and “is designed to protect consumers of below average sophistication or intelligence, or
those who are uninformed or naïve.” , 660 F.3d at 1061. A debtor is not required to present
evidence that the least sophisticated debtor would be misled. Gonzales v. Arrow Financial Servs., LLC
(S.D.Cal. 2007) 489 F.Supp.2d 1140, 1149, aff’d, 660 F.3d 1055 (9th Cir. 2011) (“The cases that have
addressed whether a collection letter’s language violates Section 1692e’s provisions have done so
without looking at extrinsic evidence defendant’s argument that the lack of evidentiary support
Thus, whether CANUL herself even realized (before retaining counsel) that Cross-Defendants’
communication in the collection action contained a false representation is not the test. Nor does the fact
that a consumer obtained a lawyer after being subject to collection abuse render the violation
immaterial. The CFDBPA’s purpose is to protect consumers by regulating debt buyers’ collection
conduct, especially in the context of litigation. Simply put, Cross-Defendants cannot evade their
statutory liability just because they may have communicated a misrepresentation to a consumer who
may not have been misled. The fact that the specific consumer may not understand the violation enough
Section 1788.58(b) of the CFDBPA provides that, “A copy of the contract or other document
described in subdivision (b) of Section 1788.52 shall be attached to the complaint.” In turn, Section
(b) A debt buyer shall not make any written statement to a debtor in an attempt to collect
a consumer debt unless the debt buyer has access to a copy of a contract or other
which no signed contract or agreement exists, the debt buyer shall have access to a copy
of a document provided to the debtor while the account was active, demonstrating that
the debt was incurred by the debtor. For a revolving credit account, the most recent
monthly statement recording a purchase transaction, last payment, or balance transfer
did not comply with the requirements of Section 1788.58(b) because they did
not attach copies of the relevant contracts to their complaint, instead attaching a “Truth in Lending
Disclosure Statement”, which is inadequate to comply with the statute. A close reading of Civil Code
1788.52(b) in conjunction with the facts of this case makes it clear that Cross-Defendants were required
to attach a copies of CANUL’s Promissory Notes to the collection Complaint they filed against
CANUL. The first sentence of section 1788.52(b) states “a copy of a contract other document
evidencing the debtor’s agreement to the debt” (emphasis added). The use of the word “or” in a statute
indicates an intention to use it disjunctively so as to designate alternative or separate categories. St. Cyr
v. Workers’ Comp. Appeals Bd. (1987) 196 Cal.App.3d 468, 472. In this case the separate category
following the word “or” is “other document evidencing the debtor’s agreement to the debt”, which is
meant to apply when the debt being collected is the subject of a signed contract. In this regard, the
second sentence of section 1788.52(b) serves to further clarify that “or other document evidencing the
debtor’s agreement to the debt” only applies in cases where there is no signed contract. This sentence
unambiguously states “If the claim is based on debt for which no signed contract or agreement exists
the debt buyer shall have access to a copy of a document provided to the debtor while the account was
active, demonstrating that the debt was incurred by the debtor” (emphasis added). Hence logically,
the debt being collected is the subject of a signed contract, that signed contract is document
that the debt buyer must attach to the collection complaint. Only if there is no signed contract may the
debt buyer resort to using another document evidencing the debtor’s agreement to the debt; the second
sentence merely explains the requirements of that other document, namely that it must have been
“provided to the debtor while the account was active, demonstrating that the debt was incurred by the
debtor.” Civil Code 1788.52(b). In this case, the “or other document” language is not applicable
because there is a signed contract, ending the inquiry into which is the appropriate document. As stated
by the California Supreme Court, “[i]f the statutory language is clear and unambiguous our inquiry
ends.” Murphy v. Kenneth Cole Productions Inc. (2007) 40 Cal.4th 1094, 1103. In this case, there is a
signed contract or agreement—the Promissory Notes signed by CANUL’s expressly authorized
Moreover, the canons of statutory construction support this reading of the statute. As the
Our fundamental task in interpreting a statute is to determine the Legislature’s intent so
as to effectuate the law’s purpose. We first examine the statutory language, giving it a
plain and commonsense meaning. We do not examine that language in isolation, but in
the context of the statutory framework as a whole in order to determine its scope and
purpose and to harmonize the various parts of the enactment. If the language is clear,
courts must generally follow its plain meaning unless a literal interpretation would result
in absurd consequences the Legislature did not intend. If the statutory language permits
more than one reasonable interpretation, courts may consider other aids, such as the
Exemplars of these promissory notes are submitted with CANUL’s Motion for Summary Judgment.
Not only does the “plain and commonsense” language of s 1788.52(b) mandate that, a
signed contract exists, that signed contract is document that must be available to the debt buyer
and is document that must be attached to any collection complaint, this statutory interpretation is
also consistent with the Legislature’s intent. As discussed above, the Legislature was clear that its
intention in enacting the CFDBPA was to create documentation standards “that all interested parties
can easily understand.” The Legislature specifically declared the CFDBPA “will protect consumers,
provide needed clarity to courts, and establish clearer criteria for debt buyers and the collection
California Appellate Courts routinely remind us that “California’s consumer protection laws
must be liberally, not narrowly, applied” in order to effectuate their purpose to protect consumers.
Only if “no signed contract or agreement exists” may the debt buyer possess and use another
“document evidencing the debtor’s agreement to the debt,” as long as it was “provided to the debtor
while the account was active,” and “demonstrating that the debt was by the debtor.” “In
construing statutes, the use of verb tense by the Legislature is considered significant.” Hughes v. Board
of Architectural Examiners (1998) 17 Cal.4th 763, 776. Therefore, even if, , there was no
signed contract in this case, the Truth in Lending Disclosure Statement that Cross-Defendants attached
to the collection Complaint is neither a document that was “provided to the debtor while the account
When there is no signed contract, the necessary document in accordance with Civil Code
1788.52(b) must “evidenc[e] the debtor’s agreement to the debt.” The Truth in Lending Disclosure
Statement provided to CANUL the loan transaction does not meet that requirement, as it was
provided to any debt agreement. Specifically, the Truth in Lending Disclosure Statement is a
prior to the extension of credit. “TILA mandates that creditors make specific disclosures before
extending credit to consumers. 15 U.S.C. § 1638(a), (b).” Tripp v. Charlie Falk’s Auto Wholesale, Inc
(4th Cir. 2008) 290 Fed.Appx. 622, 626. The purpose of TILA is to “assure a meaningful disclosure of
credit terms so that the consumer will be able to compare more readily the various credit terms
available to him and avoid the uninformed use of credit.” 15 U.S.C. § 1601(a). To that end, the creditor
must make the specified disclosures “clearly and conspicuously in writing, in a form that the consumer
may keep” “ consummation of the transaction.” 12 C.F.R. § 1026.17(b) and 12 C.F.R. §
226.17(a), (b) (emphasis added). In accordance with federal law, the Truth in Lending Disclosure
Statement was provided by WebBank to CANUL so she could take the document, with its disclosed
credit terms, and comparison shop for other credit terms available to her. Although CANUL was
stated clearly on the face of the document. Simply stated, a federally required TILA disclosure
statement, provided eight days before the loan transaction was consummated, does “demonstrat[e]
Additionally, the “other document evidencing the debtor’s agreement to the debt” must have
been “provided to the debtor while the account was active, demonstrating that the debt was incurred by
the debtor.” Documents produced by LendingClub show that the Truth in L
Preview
COMES NOW Defendant/Cross-Complainant, MARIA ANTONIA CANUL by and through counsel Fred W. Schwinn, Raeon R. Roulston, and Matthew C. Salmonsen of Consumer Law Center, Inc., and hereby submits this Memorandum in opposition to Cross-Defendants’ Motion for Summary ................................................................................................................................ ........................................................................................................................... ......................................................................................................................... .......................................................................................................... .......................................... .............................................................................................. ........................... .................................................... ................................................................................... ................................................................................................... ............................................................................................ ................................................................................ ....................................... ............................................................................... ................................................................................... ................................................................................................................................... Afewerki v. Anaya Law Grp. (9th Cir. 2017) 868 F.3d 771........................................................... Aguilar v. Mandarich Law Grp., LLP ................................................................ Angelucci v. Century Supper Club Bunzel v. American Academy of Orthopaedic Surgeons ........................................................................................................................ ............................................ ................. ............................................................... ........................................................................................................................ ................................................... Donohue v. Quick Collect, Inc. (9th Cir. 2010) 592 F.3d 1027........................................................... Federal Election Comm’n v. Akins (1998) 524 U.S. 11............................................................................11 Folsom v. Butte County Assn. of Governments ......................................................11 GameStop, Inc. v. Superior Court Gollust v. Mendell (1991) 501 U.S. 115..................................................................................................... Gonzales v. Arrow Fin. Servs., LLC (9th Cir. 2011) 660 F.3d 1055.................................................... Gonzales v. Arrow Financial Servs., LLC (S.D.Cal. 2007) 489 F.Supp.2d 1140..................................... Grosset v. Wenaas (2008) 42 Cal.4th 1100................................................................................................. Hernandez v. Town of Apple Valley ................................................................ Holmes v. Cal. Nat. Guard ...................................................................... Hughes v. Board of Architectural Examiners ....................................................... Huntington Cont’l Townhouse Ass’n, Inc. v. Miner .................................... Johnson v. Superior Court ............................................................................ Johnson v. United Cerebral Palsy/Spastic Children’s Foundation ....................................................................................................................... Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310............................................................................ Limon v. Circle K Stores Inc. ................................................................. Lujan v. Defenders of Wildlife ................................................................................... Mabee v. Nurseryland Garden Centers, Inc. .................................................11 Maldonado v. Fast Auto Loans, Inc ............................................................. Martinez v. Public Employees’ Retirement System (2019) 33 Cal.App.5th 1156..................................... Michael J. v. Los Angeles County Dept. of Adoptions ................................... Midpeninsula Citizens for Fair Housing v. Westwood Investors ................. Monster, LLC v. Superior Court .................................................................11 Murphy v. Kenneth Cole Productions Inc. ......................................................... People v. Bryant .......................................................................................... People v. Morris ........................................................................................................ Puerta v. Torres (2011) 195 Cal.App.4th 1267......................................................................................... Robertson v. Health Net of California, Inc. .............................................. Roger H. Proulx & Co. v. Crest-Liners, Inc. .................................................. Salazar v. S. Cal. Gas Co. Sanchez v. Hillerich & Bradsby Co. ............................................................. Skov v. U.S. Bank National Assn. .......................................................... St. Cyr v. Workers’ Comp. Appeals Bd ........................................................ Terran v. Kaplan (9th Cir.1997) 109 F.3d 1428........................................................................................ ........................................................ .................................. ........................... .................................................................... ........................................................... Y.K.A. Industries, Inc. v. Redevelopment Agency of City of San Jose ....................................................................................................................... STATUTES .................................................................................................................................... ............................................................................................................................. .................................................................................................................................. ....................................................................................................................................... ......................................................................................................................... .................................................................................................................... ............................................................................................................. ......................................................................................................................... .................................................................................................................... ......................................................................................................................... ............................................................................................................................. ...................................................................................... Defendant/Cross-Complainant and Class Representative, MARIA ANTONIA CANUL brought this consumer class action to address Cross-Defendant, VELOCITY INVESTMENTS, LLC’s (“VELOCITY”) and its alter ego Cross-Defendant, VELOCITY PORTFOLIO GROUP, INC.’s (“VPGI”) (collectively “Cross-Defendants”) violations of the California Fair Debt Buying Practices Act, California Civil Code §§ 1788.50-1788.64 (“CFDBPA”), which sets forth specific documentation that debt buyers must maintain and produce in a legal action to collect a charged-off consumer debt. Cross-Defendants’ violations stem from their routine practice of filing and serving collection Complaints, like the one filed against and served on CANUL and the Class, which do not comply with the CFDBPA, California Civil Code §§ 1788.52(b), 1788.58(a)(6), 1788.58(a)(9), and Because the violations are apparent on the face of the lawsuit documents, Cross-Defendants seek summary judgment by two specious arguments. The first is that CANUL lacks standing to prosecute her Cross-Complaint, despite the fact that Cross-Defendants haled CANUL into court filing the subject unlawful Complaint. The second is based on the concept of “materiality” – Cross- Defendants urge that even if they violated the CFDBPA, their violations are immaterial and therefore not actionable. However, the Court cannot adopt either of these arguments without disregarding the Legislature’s intent in enacting the CFDBPA – which is to protect CANUL and consumer debtors, specifically in scenarios like the case at bar. Cross-Defendants’ first argument relies on a novel and unsupported legal theory that would redefine “statutory damages” into just another form of actual damages, while chilling enforcement of consumer notice statutes. Cross-Defendants’ second argument fails because no court has adopted materiality as an exception to liability under the CFDBPA, and in any event, Cross-Defendants’ failure to maintain and produce specifically enumerated documentation For the limited purposes of this opposition only, CANUL incorporates by this reference Paragraphs 1- , 5-12, 14-18, 20-25 and 27 of Cross-Defendants’ Separate Statement of Undisputed Material Facts and Supporting Evidence in Support of Cross-Defendants’ Motion for Summary Judgment as to Cross-Complainant Maria Canul’s First Amended Class Action Cross-Complaint filed The summary judgment procedure is drastic and must be used with caution in order that it may not become a substitute for existing methods in the determination of issues of fact. See, Michael J. v. Los Angeles County Dept. of Adoptions (1988) 201 Cal.App.3d 859, 865. Accordingly, declarations of the moving party are strictly construed, those of the opposing party are liberally construed, and doubts as to whether a summary judgment should be granted must be resolved in favor of the opposing party. Johnson v. United Cerebral Palsy/Spastic Children’s Foundation, (2009) 173 Cal.App.4th 740, 754. The court focuses on issue finding; it does not resolve issues of fact. The court seeks to find contradictions in the evidence, or inferences reasonably deducible from the evidence that raise a triable issue of material fact. ; see also Roger H. Proulx & Co. v. Crest-Liners, Inc. (2002) 98 Cal.App.4th “Courts must abide by the strong public policy favoring disposition on the merits over judicial efficiency.” Johnson v. Superior Court (2006) 143 Cal.App.4th 297, 304. “Because summary judgment is a drastic measure that deprives the losing party of trial on the merits, it may not be invoked unless it is clear from the declarations that there are no triable issues of material fact.” , citing Bunzel v. satisfy his or her initial burden before the opposing party must controvert anything” Y.K.A. Industries, Inc. v. Redevelopment Agency of City of San Jose (2009) 174 Cal.App.4th 339, 353, and cannot do so by simply challenging the opposing party to prove his case by opposition. See id. The moving party’s papers are strictly construed, accepting as fact only those portions that are not contradicted by opposing papers, while the opposing party’s papers are liberally construed, all facts therein being accepted as true. Salazar v. S. Cal. Gas Co. (1997) 54 Cal.App.4th 1370, 1376. In ruling on the motion, any doubts are to be resolved against granting the motion. Sanchez v. Hillerich & Bradsby Co., (2002) 104 Cross-Defendants argue that does not have standing to bring this CFDBPA action based on an expansive reading of the Fifth Appellate District’s opinion regarding the federal Fair Credit Reporting Act (“FCRA”) in Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671, and the misleading assertion that CANUL “repeatedly acknowledged that she has no actual damages.” However, there is no argument that CANUL is beneficially interested in the outcome of the litigation. Limon and the cases cited therein are factually distinguishable from the case at bar. Limon was wrongly decided. Cross-Defendants’ position should not be the standard for determining the standing of a California resident to bring an action in a California state court alleging violations of a California state law enacted by the California Legislature specifically for the benefit of certain California residents. All that need be shown is that CANUL is an intended beneficiary of the “Standing requirements will vary from statute to statute based upon the intent of the Legislature and the purpose for which the particular statute was enacted.” Midpeninsula Citizens for Fair Housing v. Westwood Investors (1990) 221 Cal.App.3d 1377, 1385 (noting that no “concrete injury” was required under previous version of Unfair Competition Law). By contrast, California’s Unfair Competition Law authorizes relief only when a plaintiff has suffered an injury-in-fact as defined for purposes of Article III standing. Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322-24. Thus, The term “standing” is often used as shorthand for a precondition to seeking relief in federal court rooted in Article III of the United State Constitution. The Rossdale Group, LLC v. Walton (2017) 12 Cal.App.5th 936, 944. “Article III of the federal Constitution imposes a ‘case-or-controversy limitation on federal court jurisdiction,’ requiring [a plaintiff to allege] ‘such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues.’” Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1117, fn. 13, quoting Gollust v. Mendell (1991) 501 U.S. 115, 125-126; Lujan v. Defenders of Wildlife (1992) 504 U.S. 555, 560-561 [standing under Article III requires the plaintiff to establish three elements: (1) an injury-in fact that is “concrete and particularized” and “actual or imminent,” (2) the injury must be “fairly trace[able] to the challenged action of the defendant,” and (3) it must be “likely” that a favorable decision will redress the injury].) “‘There is no similar requirement in [California’s] state Constitution.’” , 12 Cal.App.5th at 944, quoting , 42 Cal.4th at 1117, fn. 13 and citing Cal. Const., art. VI, § 10. Thus, there is no requirement that a plaintiff establish the existence of a case or controversy, as that term has been In California courts, the term standing is more broadly defined as “the right to relief in court.” , 12 Cal.App.5th at 944-45 [internal quotation marks and citation omitted]; GameStop, Inc. v. Superior Court (2018) 26 Cal.App.5th 502, 510. “In general terms, in order to have standing, the plaintiff must be able to allege injury—that is, some ‘invasion of the plaintiff’s legally protected interests.’ [Citation.]” Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 175. “A complaining party’s demonstration that the subject of a particular challenge has the effect of infringing some constitutional or statutory right may qualify as a legitimate claim of beneficial interest sufficient to As a threshold matter, Cross-Defendants are attempting to mislead the Court regarding CANUL’s position on actual damages in this case. While Cross-Defendants assert that CANUL has admitted she no actual damages, in fact CANUL has merely waived the right to the actual damages that she does have. At CANUL’s deposition, the following exchange occurred between MR. ROULSTON: Following our off-the-record discussion, I’d just like to state for purposes of the record that neither Ms. Canul or the class are seeking any emotional distress or out-of-pocket pecuniary damages. This is statutory damages only. Is that all Moreover, in her Declaration submitted herewith, CANUL outlines the actual damages that she does have, in the form of attorney fees and costs incurred as a result of Cross-Defendants’ unlawful lawsuit against her. See Declaration of Maria Antonia Canul 12-13, and Exhibit “A.” Additionally, the discovery responses submitted by Cross-Defendants reflect only that CANUL a claim to actual damages, but do not ever state that she no actual damages. Ultimately, CANUL waived her actual damages in part because seeking only statutory damages simplifies the litigation, and makes a potential class settlement easier to accomplish. See generally, Monster, LLC v. Superior Court (2017) 12 Cal.App.5th 1214, 1228; Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 678, fn. 16; and Mabee v. Nurseryland Garden Centers, Inc. (1979) 88 Cal.App.3d 420, 425. If not for this class action, Cross-Defendants would be able to retain the benefits of their unlawful debt collection Even if CANUL had not been forced to incur and pay attorney fees and costs as a result of Cross-Defendants’ unlawful collection lawsuit against her, CANUL still suffered an informational injury because she did not receive information to which she was statutorily entitled. The concept of informational injury is not well-developed in California case law, though federal courts have recognized injuries resulting from some kinds of withheld information in the United States Constitution, article III context. See , Federal Election Comm’n v. Akins (1998) 524 U.S. 11, 21 (“a plaintiff suffers an ‘injury in fact’ when the plaintiff fails to obtain information which must be publicly disclosed pursuant to a statute.”). An informational injury is distinct from a mere procedural right. In Wilderness Soc’y Inc. v. Rey (9th Cir. 2010) 622 F.3d 1251, the court looked to the purpose of a statute to determine whether the withheld information was the kind that the legislature meant to ensure access to (indicating informational injury), or whether the plaintiffs were merely deprived of a procedural Here, it is clear the California Legislature intended to require attachment of the actual contract evidencing the debt which is the subject of Cross-Defendants’ collection complaint. In creating the CFDBPA, the Legislature found the “[t]he collection of debt purchased by debt buyers has become a significant focus of public concern due to the adequacy of documentation required to be maintained by the industry in support of its collection activities and litigation.” Finding that California law did not See Senate Bill No. 233, Stats. 2013, ch. 64, § 1(a); available online at: http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_0201-0250/sb_233_bill_20130711_chaptered.pdf adequately “prescribe the specific nature of documentation that a debt buyer must maintain and produce in a legal action on the debt”, the Legislature found it “important to create documentation and process standards for the collection of consumer debt that all interested parties can easily understand.” The Legislature specifically noted its intention in enacting the CFDBPA was to “impose enforceable standards upon the collection and litigation of consumer debt that has been purchased by a debt buyer following the consumer debt’s charge off by a creditor” which will “protect consumers, provide needed clarity to courts, and establish clearer criteria for debt buyers and the collection industry.” Pursuant to its stated legislative intent, the CFDBPA mandates that when a debt buyer’s claim is based on debt for which a signed contract exists, a copy of that signed contract must be attached to the complaint. Civil Code § 1788.58(b). This is an easily understood documentation and process standard. CANUL’s alleged consumer debt is based upon signed contracts (specifically promissory notes) which Cross- Cross-Defendants have seized upon the Fifth Appellate District’s FCRA opinion in Limon attempt to dispose of this statutory damages case on the basis of standing. However, does not stand for the blanket proposition that no consumer has standing to bring a statutory damages-only In , the Fifth District found no standing where the plaintiff alleged that his employer violated the FCRA (a federal statute) by failing to provide him with proper FCRA disclosures when it sought and received his authorization to obtain a consumer report about him in connection with his application for employment, and by actually obtaining the consumer report in reliance on that Digging deeper, in addressing injury, Limon claimed the non-compliant disclosure violated his interests in privacy and access to information. , at p. 703. In response, Circle K argued Limon received all information required under the FCRA and any “confusion” was insufficient to constitute injury because, in part, Limon testified he would have authorized Circle K to run a consumer report even if he received an “indisputably compliant FCRA form.” , at p. 704. In concluding that Limon failed to allege an injury sufficient to support standing under the FCRA, the Fifth District explained “there was no injury to Limon’s protected interest in ensuring fair and accurate credit (or background) reporting” because he received a copy of the report, it did not contain injurious or false information, and he did not allege any material risk of future harm. , at p. 705. The Fifth District also noted “Limon undoubtedly understood he was advising Circle K he was willing to have it conduct a background check on him prior to being hired” based on his deposition testimony. , at pp. 705- 706. Likewise, the Fifth District rejected Limon’s claim of an informational injury because “an informational injury that causes no adverse effect is insufficient to confer standing upon a private The facts here are different. First and foremost, the federal FCRA and California’s CFDBPA are different statutes, with different subject matter, and different legislative intent. As the Fifth District noted, Limon received an accurate copy of his credit report, which was in keeping with the aims of the FCRA and with Limon’s protected interest in ensuring fair and accurate credit reporting. Here, CANUL did not receive the “specific … documentation that a debt buyer must maintain and produce in a legal action on the debt” – documentation for which the California Legislature found it “important to create documentation and process standards.” E Limon “acknowledge[d] the Legislature’s power to confer standing on a class of persons irrespective of whether they suffered injury.” at p. 695. When a plaintiff asserts a statutory claim, his or her right to relief or “standing” depends upon the statute and “may vary according to the intent of the Legislature and the purpose of the enactment.” , 41 Cal.4th at 175. Showing that Cross-Defendants have violated a statutory right “may qualify as a legitimate claim of beneficial interest sufficient to confer standing on that party.” , 90 Cal.App.4th at 314-315. Moreover, unlike in , where plaintiff’s testimony established that he consented to the ultimate act of Circle K running a consumer credit report – regardless of the compliance of the FCRA form – CANUL did not consent to allow Cross-Defendants to file a lawsuit containing falsehoods and omissions of specifically enumerated documents. See Declaration of Maria Antonia Canul 8-11. Moreover, a consumer cannot waive the protections of the CFDBPA. See California Civil Code 1788.64 (“Any waiver of the provisions of this title is contrary to public policy, Though this Court would be bound by the decision in the – if it was on point – courts of appeal “are not bound by an opinion of another district court of appeal, however persuasive it might be.” Martinez v. Public Employees’ Retirement System (2019) 33 Cal.App.5th 1156, 1176, quoting Wolfe v. Dublin Unified School Dist. (1997) 56 Cal.App.4th 126, 137. Still, “courts of appeal ordinarily follow the decisions of other districts without good reason to disagree.” , supra. Thus, CANUL CANUL respectfully submits that was incorrectly decided, because the Fifth District’s exceedingly narrow conception of standing in the consumer protection context subverts the intent of the California Legislature regarding the liberal construction of such statutes. Moreover, has opened the door to even more consumer abuse – as evidenced by the arguments advanced by Cross-Defendants here, regarding a different consumer protection statute from that addressed by . It is clear that the Fifth District believed Limon should not have prevailed on the facts of that case, but a loss on the merits of the FCRA claim was arguably more appropriate than the sweeping ruling regarding standing Based on the above, we conclude the statutory damages provision is intended to compensate a plaintiff for injury. It is designed to provide redress where damages are “difficult or impossible to quantify or prove.” It is not intended to penalize a However, such a holding is a dramatic rewriting of the long-held understanding of statutory damages in the consumer protection context. If statutory damages are merely “difficult or impossible to quantify” actual damages, then virtually no consumer will ever have standing to enforce a consumer notice case. This interpretation would significantly chill enforcement of consumer protection statutes by consumers acting as private attorneys-general, contrary to the intent of the California Legislature. The effect would not only be harmful to consumers who are denied a day in court, but would be a boon to unscrupulous debt collectors and debt buyers, whose collection activities these statutes are explicitly designed to regulate. Allowing to stand runs afoul of the judicial maxim that “it is fundamental that a statute should not be interpreted in a manner that would lead to absurd results.” People v. Bryant B. CROSS-DEFENDANTS’ ENUMERATED VIOLATIONS OF THE CFDBPA MUST Cross-Defendants’ second argument is again not one on the merits. Cross-Defendants assert that any violations of the CFDBPA were “immaterial.” However there is not one single case that has ever held that materiality is an element of the CFDBPA. Cross-Defendants employ some sleight-of-hand to attempt to manufacture authority where there is none, first citing federal Fair Debt Collection Practices Act (“FDCPA”) cases like Afewerki v. Anaya Law Grp. (9th Cir. 2017) 868 F.3d 771, which hold that whether a communication is misleading under section 1692e of that Act is determined from the perspective of the “least sophisticated consumer.” Next, Cross-Defendants cite federal FDCPA cases which hold that whether a 1692e misrepresentation is material is a corollary to the least sophisticated consumer inquiry. Then, Cross-Defendants cite the recent California case of Aguilar v. Mandarich Law Grp., LLP, 87 Cal.App.5th 607, which discussed whether a violation of the CFDBPA was a violation of the section of California’s Rosenthal Fair Debt Collection Practices Act (“RFDCPA”) which is derivative of section 1692e of the FDCPA. From all of these disparate threads, Cross-Defendants then baldly assert, “[t]hus, per California’s own statutes and prior case law, claims brought under the CFDBPA, like Canul’s are also subject to the materiality requirement.” There is simply no authority whatsoever for this statement. There is no mention of “materiality,” or even the word “material” anywhere in the text of the CFDBPA, even though the concept of materiality emerged in 2010, four years before enactment of the CFDBPA, and the Legislature was certainly aware of it. Nor is there case he materiality affirmative defense under the FDCPA has been expanding ever since that doctrine was first established by Donohue v. Quick Collect, Inc. (9th Cir. 2010) 592 F.3d 1027, the seminal case on materiality. The materiality gambit started as a last ditch summary judgment tactic when the violation was indisputable; now, debt collector defendants have made this argument a centerpiece of their attempts to avoid liability for obvious violations of consumer protection statutes. It is important to understand what holds, and what it does not. The Court in stated: “immaterial statements, by definition, do not affect a consumer’s ability to make intelligent decisions.” at 1034. Continuing, the court held “that the materiality requirement functions as a corollary inquiry into whether a statement is likely to mislead an unsophisticated consumer. The materiality inquiry focuses our analysis on the same ends that concerned us in Clark--protecting The facts of show why the years-long expansion of the materiality affirmative defense in both federal and now California state courts is improper and harmful to consumers. In , the debt collector accurately stated the correct amount owed by the consumer, but merely misstated how Turning to the merits, we conclude that the Complaint did not violate §§ 1692e or 1692f. The Complaint correctly calculated the total debt Donohue owed, accurately stated the principal owed, and accurately listed the total non-principal amount owed inclusive of interest and finance charges. The Complaint sought recovery of sums to which Quick Collect was clearly and lawfully entitled, including $ 270.99 in principal, $ 24.07 in late fees assessed pursuant to Children's Choice’s Office Financial Policy signed by Donohue, and $ 8.82 in interest assessed at a lawful rate. The Complaint did not contain a false, deceptive, or misleading representation for purposes of liability under §§ 1692e or 1692f just because $ 32.89, labeled as 12% interest on principal, was actually comprised of finance charges of $ 24.07 and post-assignment interest of $ 8.82, but not Thus, in there was literally no misrepresentation in the amount being collected by the debt collector. While the complaint’s characterization of the amount was technically false, the Ninth Circuit determined that it did not matter. The total amount due was correct, and the mistake, it was concluded, would “not affect a consumer’s ability to make intelligent decisions.” . at 1034. Frankly, was a case that should not have been brought by the consumer, and was never supposed to open the door to more substantive misrepresentations by debt collectors. Yet the decision has There was no California appellate authority regarding the materiality affirmative defense until the January 2023 decision in Aguilar v. Mandarich Law Group, LLP (2023) 87 Cal.App.5th 607. In , the defendant debt collector filed a successful anti-SLAPP Motion in response to a consumer protection action. On review, the Sixth District held that misrepresentation of the name of the charge- does not stand for the proposition that all violations of state consumer protection statutes like the CFDBPA are immaterial. The opinion seemed to turn on the specific facts of that case, as the Sixth District stated: “The misidentification of the charge-off creditor in this instance (OneMain Financial instead of OneMain Financial Issuance Trust) falls squarely within the category of “mere technical falsehoods that mislead no one.” , 87 Cal.App.5th at 627 (emphasis added). Whether a California Civil Code § 1788.58(a)(6) violation where the names of the actual charge-off creditor and the inaccurately disclosed entity were not so similar would be held to be a material FDCPA/RFDCPA violation is left unsaid. Moreover, discusses by contrast how failure to properly identify the original creditor (versus the charge-off creditor) be material. To be clear, the Sixth District held that a violation of California Civil Code § 1788.58(a)(6) was not a material violation of section 1692e of the FDCPA, as incorporated by Civil Code 1788.17 of the RFDCPA. does not hold that omissions of specifically enumerated disclosure provisions of the As in , but not in , the issue here is whether violation of a California disclosure statute enacted for the benefit of consumer debtors is material. Additionally, Cross-Defendants misconstrue , . In , the Ninth Circuit reversed a granting of summary judgment to the debt collector, who had obtained a default judgment in an amount higher than the debtor owed. However, Afewerki does not stand for the proposition that Cross-Defendants may omit the enumerated Because the materiality inquiry focuses on the objective question of how the least himself would actually have done differently had Anaya Law Group not misstated the amount of his debt is irrelevant in determining materiality. As we have explained: [A] consumer possesses a right of action even where the defendant’s conduct has not caused him or her to suffer any pecuniary or emotional harm. An FDCPA plaintiff need not even have actually been misled or deceived by the debt collector's representation; instead, liability depends on whether the hypothetical “least sophisticated debtor” likely The district court’s determination that Afewerki would not have proceeded differently absent the error might mean that he did not suffer actual damages and might disqualify him from obtaining such damages, but that determination does not mean that [the debt While it is easy for an attorney to posit to a judge that it is obvious what was really meant by a pleading, the understanding of a trained legal professional is is not the standard for evaluating debt collector communications, but instead that of the “least sophisticated consumer.” “We are not, however, to read the language from the perspective of a savvy consumer, and consumers are under no obligation to seek explanation of confusing or misleading language in debt collection [communications].” 3. Even if the Court Finds That Materiality is an Element of a CFDBPA Claim, Cross- CANUL does not concede that materiality is an element of the CFDBPA. However, assuming, , Cross-Defendants’ violations need to be material to be actionable, CANUL can show that Section 1788.58(a)(6) of the CFDBPA provides that in an action brought by a debt buyer on a consumer debt, the complaint “shall allege … (6) The name and an address of the charge-off creditor at the time of charge off and the charge-off creditor’s account number associated with the debt. The charge-off creditor’s name and address shall be in sufficient form so as to reasonably identify the charge-off creditor.” Here, despite the fact that the charge-off creditor is LC TRUST I (as a trustee for the 144 separate promissory note holders), Cross-Defendants’ Complaint falsely states that, “[t]he name and address of the charge-off creditor at the time of charge-off is: LENDINGCLUB the burden to CANUL to “prove that misidentifying LendingClub as the charge-off creditor in anyway impacted her decision making or prevented her from making an informed, intelligent decision as to how to proceed in the collection lawsuit.” For this proposition, Cross-Defendants rely on various deposition excerpts to demonstrate CANUL’s after-the-fact knowledge and recall. As noted above, materiality is a corollary to the “least sophisticated debtor” standard in an FDCPA case. The “least sophisticated debtor” standard is objective, not subjective. Terran v. Kaplan (9th Cir.1997) 109 F.3d 1428, 1432. It is “lower than simply examining whether particular language would deceive or mislead a reasonable debtor,” , and “is designed to protect consumers of below average sophistication or intelligence, or those who are uninformed or naïve.” , 660 F.3d at 1061. A debtor is not required to present evidence that the least sophisticated debtor would be misled. Gonzales v. Arrow Financial Servs., LLC (S.D.Cal. 2007) 489 F.Supp.2d 1140, 1149, aff’d, 660 F.3d 1055 (9th Cir. 2011) (“The cases that have addressed whether a collection letter’s language violates Section 1692e’s provisions have done so without looking at extrinsic evidence defendant’s argument that the lack of evidentiary support Thus, whether CANUL herself even realized (before retaining counsel) that Cross-Defendants’ communication in the collection action contained a false representation is not the test. Nor does the fact that a consumer obtained a lawyer after being subject to collection abuse render the violation immaterial. The CFDBPA’s purpose is to protect consumers by regulating debt buyers’ collection conduct, especially in the context of litigation. Simply put, Cross-Defendants cannot evade their statutory liability just because they may have communicated a misrepresentation to a consumer who may not have been misled. The fact that the specific consumer may not understand the violation enough Section 1788.58(b) of the CFDBPA provides that, “A copy of the contract or other document described in subdivision (b) of Section 1788.52 shall be attached to the complaint.” In turn, Section (b) A debt buyer shall not make any written statement to a debtor in an attempt to collect a consumer debt unless the debt buyer has access to a copy of a contract or other which no signed contract or agreement exists, the debt buyer shall have access to a copy of a document provided to the debtor while the account was active, demonstrating that the debt was incurred by the debtor. For a revolving credit account, the most recent monthly statement recording a purchase transaction, last payment, or balance transfer did not comply with the requirements of Section 1788.58(b) because they did not attach copies of the relevant contracts to their complaint, instead attaching a “Truth in Lending Disclosure Statement”, which is inadequate to comply with the statute. A close reading of Civil Code 1788.52(b) in conjunction with the facts of this case makes it clear that Cross-Defendants were required to attach a copies of CANUL’s Promissory Notes to the collection Complaint they filed against CANUL. The first sentence of section 1788.52(b) states “a copy of a contract other document evidencing the debtor’s agreement to the debt” (emphasis added). The use of the word “or” in a statute indicates an intention to use it disjunctively so as to designate alternative or separate categories. St. Cyr v. Workers’ Comp. Appeals Bd. (1987) 196 Cal.App.3d 468, 472. In this case the separate category following the word “or” is “other document evidencing the debtor’s agreement to the debt”, which is meant to apply when the debt being collected is the subject of a signed contract. In this regard, the second sentence of section 1788.52(b) serves to further clarify that “or other document evidencing the debtor’s agreement to the debt” only applies in cases where there is no signed contract. This sentence unambiguously states “If the claim is based on debt for which no signed contract or agreement exists the debt buyer shall have access to a copy of a document provided to the debtor while the account was active, demonstrating that the debt was incurred by the debtor” (emphasis added). Hence logically, the debt being collected is the subject of a signed contract, that signed contract is document that the debt buyer must attach to the collection complaint. Only if there is no signed contract may the debt buyer resort to using another document evidencing the debtor’s agreement to the debt; the second sentence merely explains the requirements of that other document, namely that it must have been “provided to the debtor while the account was active, demonstrating that the debt was incurred by the debtor.” Civil Code 1788.52(b). In this case, the “or other document” language is not applicable because there is a signed contract, ending the inquiry into which is the appropriate document. As stated by the California Supreme Court, “[i]f the statutory language is clear and unambiguous our inquiry ends.” Murphy v. Kenneth Cole Productions Inc. (2007) 40 Cal.4th 1094, 1103. In this case, there is a signed contract or agreement—the Promissory Notes signed by CANUL’s expressly authorized Moreover, the canons of statutory construction support this reading of the statute. As the Our fundamental task in interpreting a statute is to determine the Legislature’s intent so as to effectuate the law’s purpose. We first examine the statutory language, giving it a plain and commonsense meaning. We do not examine that language in isolation, but in the context of the statutory framework as a whole in order to determine its scope and purpose and to harmonize the various parts of the enactment. If the language is clear, courts must generally follow its plain meaning unless a literal interpretation would result in absurd consequences the Legislature did not intend. If the statutory language permits more than one reasonable interpretation, courts may consider other aids, such as the Exemplars of these promissory notes are submitted with CANUL’s Motion for Summary Judgment. Not only does the “plain and commonsense” language of s 1788.52(b) mandate that, a signed contract exists, that signed contract is document that must be available to the debt buyer and is document that must be attached to any collection complaint, this statutory interpretation is also consistent with the Legislature’s intent. As discussed above, the Legislature was clear that its intention in enacting the CFDBPA was to create documentation standards “that all interested parties can easily understand.” The Legislature specifically declared the CFDBPA “will protect consumers, provide needed clarity to courts, and establish clearer criteria for debt buyers and the collection California Appellate Courts routinely remind us that “California’s consumer protection laws must be liberally, not narrowly, applied” in order to effectuate their purpose to protect consumers. Only if “no signed contract or agreement exists” may the debt buyer possess and use another “document evidencing the debtor’s agreement to the debt,” as long as it was “provided to the debtor while the account was active,” and “demonstrating that the debt was by the debtor.” “In construing statutes, the use of verb tense by the Legislature is considered significant.” Hughes v. Board of Architectural Examiners (1998) 17 Cal.4th 763, 776. Therefore, even if, , there was no signed contract in this case, the Truth in Lending Disclosure Statement that Cross-Defendants attached to the collection Complaint is neither a document that was “provided to the debtor while the account When there is no signed contract, the necessary document in accordance with Civil Code 1788.52(b) must “evidenc[e] the debtor’s agreement to the debt.” The Truth in Lending Disclosure Statement provided to CANUL the loan transaction does not meet that requirement, as it was provided to any debt agreement. Specifically, the Truth in Lending Disclosure Statement is a prior to the extension of credit. “TILA mandates that creditors make specific disclosures before extending credit to consumers. 15 U.S.C. § 1638(a), (b).” Tripp v. Charlie Falk’s Auto Wholesale, Inc (4th Cir. 2008) 290 Fed.Appx. 622, 626. The purpose of TILA is to “assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.” 15 U.S.C. § 1601(a). To that end, the creditor must make the specified disclosures “clearly and conspicuously in writing, in a form that the consumer may keep” “ consummation of the transaction.” 12 C.F.R. § 1026.17(b) and 12 C.F.R. § 226.17(a), (b) (emphasis added). In accordance with federal law, the Truth in Lending Disclosure Statement was provided by WebBank to CANUL so she could take the document, with its disclosed credit terms, and comparison shop for other credit terms available to her. Although CANUL was stated clearly on the face of the document. Simply stated, a federally required TILA disclosure statement, provided eight days before the loan transaction was consummated, does “demonstrat[e] Additionally, the “other document evidencing the debtor’s agreement to the debt” must have been “provided to the debtor while the account was active, demonstrating that the debt was incurred by the debtor.” Documents produced by LendingClub show that the Truth in L