In People v. Alorica Inc., 77 Cal. App. 5th 60, 62-63 (2022), the Court of Appeal affirmed the authority of a District Attorney to issue a subpoena to determine whether an entity was subject to the Rosenthal Act.  The basis of the dispute was as follows.

According to the Riverside County District Attorney’s Office, in January 2019, the district attorneys’ offices of the counties of Riverside, Los Angeles, San Diego, and Santa Clara began investigating Alorica for compliance with the Rosenthal Fair Debt Collection Practices Act (the Rosenthal Act; Civ. Code, § 1788 et seq.) and the Telephone Consumer Protection Act of 1991 (47 U.S.C. § 227). (We refer to these district attorneys’ offices collectively as the People.) In November 2019, the People served Alorica with an investigative subpoena. The subpoena contained 11 separate document requests and covered the time period from February 2015 through the date the subpoena was served. The People directed Alorica to respond by December 13, 2019, and to specify whether any of the requested records were no longer in Alorica’s “possession, custody or control.” The People sought the collection services agreements and other agreements between Alorica and its top five clients as defined on an annual basis by the volume of consumer debt calls made, by the amount of debt sent for collection, and by the number of individuals engaged in making such calls (Request No. 2). The People sought all of the call records of all debt collection calls made for these clients to California residents during the relevant period (Request No. 11). The People also directed Alorica to identify any company that monitored or audited Alorica for compliance with debt collection practice laws (Request No. 3), to produce all policies and procedures Alorica followed related to collecting debt in California (Request No. 4), and to provide organizational charts regarding Alorica’s corporate structure along with specific identifying information regarding that structure (Requests Nos. 5, 6). In addition, the People sought records related specifically to Alorica’s clients, Credit One Bank, N.A. (Credit One), and another bank, including any specific policies followed or dialing systems used for these clients and specified information related to those dialing systems (Requests Nos. 7, 8). The People directed Alorica to provide all of the call records of all debt collection calls Alorica made for Credit One and the other bank to California residents during the relevant period (Requests Nos. 9, 10). In December 2019, Alorica served its objections and responses to the subpoena. Alorica objected to most of the requests and argued that the requests violated Alorica’s right to privacy and right against unreasonable searches and seizures. Alorica claimed that it did not have any debt collection clients, so it denied having any of the requested agreements with clients related to debt collection, policies and procedures relating to the collection of consumer debt, or call records of debt collection calls as to the defined top five clients.

The Court of Appeal affirmed the authority to issue the subpoena.

Alorica does not dispute that the People have the authority to investigate whether debt collectors comply with the Rosenthal Act. Alorica instead claims that it is not a debt collector under the statute, so the subpoena seeks information that is not reasonably relevant to the People’s authority to investigate compliance with the Rosenthal Act. In support of that argument, Alorica claims that it does not regularly engage in debt collection services because only 1 percent of its business consists of making outbound account-related calls, and those calls are made on behalf of only four clients. CA(4) (4) Alorica’s argument lacks merit. An agency has the power to investigate a matter within its jurisdiction “‘merely on suspicion that the law is being violated, or even just because it wants assurance that it is not.’” (Brovelli, supra, 56 Cal.2d at p. 529.) Encompassed within that investigative power is “the authority to conduct an investigation and to subpoena records to determine whether the entity under investigation is subject to the agency’s jurisdiction and whether there have been violations of provisions over which the agency has jurisdiction.” (Millan, supra, 14 Cal.App.4th at p. 487.) CA(5) (5) Accordingly, the People have the authority to subpoena records from Alorica in order to determine whether Alorica—which concedes that it makes “outbound calls on behalf of and in the name of its clients to consumers who are late paying active accounts”—is a debt collector under the Rosenthal Act. It follows that Alorica cannot resist the subpoena by claiming that it is not a debt collector.

The Court of Appeal found no pre-emption by the NBA either.

Alorica argues that Requests Nos. 9 and 11 of the subpoena are invalid and unenforceable because the requests amount to an impermissible “visitation” upon Credit One under the National Bank Act. We are not persuaded.  The National Bank Act provides: “No national bank shall be subject to any visitorial powers except as authorized by Federal law, vested in the courts of justice or such as shall be, or have been exercised or directed by Congress or by either House thereof or by any committee of Congress or of either House duly authorized.” (12 U.S.C. § 484(a).) Under that provision, only the federal Office of the Comptroller of the Currency (the OCC) “or an authorized representative of the OCC may exercise visitorial powers with respect to national banks.” (12 C.F.R. § 7.4000(a)(1) (2022); see Cuomo v. Clearing House Assn., L. L. C. (2009) 557 U.S. 519, 524 [174 L. Ed. 2d 464, 129 S. Ct. 2710].) Visitorial powers include examining a national bank, inspecting a national bank’s records, regulating activities permitted under federal banking law, and “[e]nforcing compliance with any applicable Federal or state laws concerning those activities, including through investigations that seek to ascertain compliance through production of non-public information by the bank … .” (12 C.F.R. § 7.4000(a)(2) (2022).) State officials “may not exercise visitorial powers with respect to national banks, such as conducting examinations, inspecting or requiring the production of books or records of national banks, or prosecuting enforcement actions, except in limited circumstances authorized by federal law.” (12 C.F.R. § 7.4000(a)(1) (2022).) The People do not claim to have been authorized by federal law to exercise visitorial powers as to a national bank. Moreover, the parties do not dispute that Alorica is not a national bank and thus is not itself subject to the provisions of the National Bank Act. Alorica instead argues that the subpoena is an impermissible visitation upon Credit One because (1) the National Bank Act prohibits state officials from examining the “records of national banks” (12 C.F.R. § 7.4000(a)(1) (2022), and (2) “[a]ny records Alorica possesses regarding Credit One” constitute records “of” a national bank within the meaning of the regulations. The only authority that Alorica cites for its expansive interpretation of the regulations is a dictionary definition of the word “of,” which of course has many meanings. Alorica’s interpretation is implausible on its face. For example, if a licensed general contractor performs construction work for a national bank, then the contractor will have records regarding that work. A state agency investigating the contractor for compliance with state licensing requirements should be able to access such records in the contractor‘s possession. But if Alorica were right that any record regarding a national bank is beyond the reach of state officials, then the state agency would be barred from examining those records or requiring the contractor to produce them. Such an interpretation would make no sense as a matter of policy. The point of the prohibition on “visitation” by state agents is to protect the exclusive regulatory authority of the OCC concerning national banks. But the OCC has no ability to enforce state licensing requirements for general contractors, or otherwise to investigate or prosecute wrongdoing by other third parties providing services to national banks. Thus, if Alorica’s interpretation were correct, the National Bank Act and associated regulations would arbitrarily curtail state law enforcement authority without creating an equivalent federal law enforcement authority to fill the gap. It is not reasonable to infer that such a result was intended. Fortunately, there are alternatives to Alorica’s interpretation. One ordinary meaning of the word “of” is “to indicate belonging or a possessive relationship.” (Merriam-Webster Dict. Online (2022) <> [as of Mar. 14, 2022].) We are not aware of any basis to interpret “of” in the federal regulations in any other way—the regulations prohibit state officials from examining or requiring production of records possessed by national banks. But the regulations do not prohibit state officials from examining or requiring production of other individuals’ or entities’ records of their dealings with national banks. The trial court’s order is therefore consistent with the regulations, because it requires Alorica to produce only records in Alorica’s possession. Because Alorica is not a national bank, the National Bank Act does not apply to Alorica. We accordingly conclude that the National Bank Act does not preclude the People from subpoenaing the debt collection call records in Alorica’s custody, control, or possession that Alorica made for Credit One.3 The People’s requests for those documents (Requests Nos. 9 & 11) are consequently valid and enforceable.