In Young v. Midland Funding, Nos. A161843, A162784, 2022 Cal. App. LEXIS 843, at *33-41 (Ct. App. Oct. 7, 2022), the Court of Appeal held that the Rosenthal Act’s incorporation of the FDCPA incorporates the FDCPA’s strict liability standard.
Young’s failure to make a prima facie case that the Midland parties deliberately ignored their obligation to serve her draws into sharp relief the parties’ competing interpretations of sections 1788.15, subdivision (a) and 1788.17. Thus, we now turn to whether Young’s prima facie showing that the Midland parties unknowingly made false representations Young had been served violated the Rosenthal Act. This requires us to address a question that, so far as we are aware, is a matter of first impression in the California courts. Analytically, the issue arises as follows. Section 1788.15, subdivision (a) provides, “No debt collector shall collect or attempt to collect a consumer debt by means of judicial proceedings when the debt collector knows that service of process, where essential to jurisdiction over the debtor or his property, has not been legally effected.” (Italics added.) Further, as our First District, Division One colleagues have held, under section 1788.15, subdivision (a), “[u]se of judicial proceedings to collect a debt without service of process [citation] will also be a continuing course of conduct insofar as the conduct involves multiple acts, such as obtaining and collecting on a judgment, that extend over a period of time before the proceedings are concluded.” (Komarova v. National Credit Acceptance, Inc. (2009) 175 Cal.App.4th 324, 344 (Komarova).) In light of the repeated pattern of conduct violating multiple provisions of the Rosenthal Act, the Komarova court held, the plaintiff satisfactorily showed a violation of “section 1788.15, subdivision (a), which prohibits an ‘attempt to collect a consumer debt by means of judicial proceedings’ when service of process has been knowingly neglected.” (Komarova, at p. 345, italics added.) To overcome the hurdle section 1788.15, subdivision (a) creates, Young relies on section 1788.17, which states in relevant part, “Notwithstanding any other provision of this title, every debt collector collecting or attempting to collect a consumer debt shall comply with the provisions of Sections 1692b to 1692j, inclusive, of, and shall be subject to the remedies in Section 1692k of, Title 15 of the United States Code.” According to Young, “[t]he linchpin” of the Midland parties’ efforts to wage a “shoddy” collection campaign against her is their “false representation that they had properly served YOUNG, and thus that the Court had jurisdiction over YOUNG to enter [the 2010 default judgment]. This false representation in an attempt to collect a debt is a clear violation of Civil Code [section] 1788.17, incorporating by reference 15 U.S.C. [sections] 1692e and 1692e(10). Each subsequent representation by [the Midland parties] in an attempt to collect the void Judgment necessarily incorporates this false representation, repeats it, and becomes another false representation in an attempt to collect a debt.” We agree with Young that section 1788.17 governs. Section 1692e of title 15 of the United States Code is a part of the FDCPA. (Meza v. Portfolio Recovery Associates, LLC (2019) 6 Cal.5th 844, 851.) In legal effect, what we have here is a federal liability standard embedded in state law. “The Rosenthal Act . . . incorporates the FDCPA, so that a violation of the FDCPA is per se a violation of the Rosenthal Act.” (Best v. Ocwen Loan Servicing, LLC (2021) 64 Cal.App.5th 568, 576, citing § 1788.17.) Section 1692e provides in relevant part that a debt collector may not use any “false . . . representation or means in connection with the collection of any debt,” including but not limited to regarding “the character, amount, or legal status of any debt” (15 U.S.C. § 1692e(2)(A), italics added), “[t]he threat to take any action that cannot legally be taken or that is not intended to be taken” (15 U.S.C. § 1692e(5)), and “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt . . . concerning a consumer” (15 U.S.C. § 1692e(10), italics added). As Young points out, each of these FDCPA provisions is incorporated in section 1788.17. To be sure, Young does not cite any California case, and we have not found one, that establishes whether section 1788.17, by incorporating title 15 United States Code section 1692e, prohibits a debt collector from unknowingly making or relying on a false representation about the legal status of a debt, a threat to take legal action that legally cannot be taken, or a false representation to collect or attempt to collect any debt of a consumer. Numerous non-California courts have held that a debt collector is liable under the FDCPA for unknowingly making false representations.9 (See, e.g., Clark v. Capital Credit & Collection Servs. (9th Cir. 2006) 460 F.3d 1162, 1174-1176 [agreeing with the Second and Seventh Circuits that “‘[title 15 United States Code] § 1692e applies even when a false representation was unintentional'”], citing Gearing v. Check Brokerage Corp. (7th Cir. 2000) 233 F.3d 469, 472, Turner v. J.V.D.B. & Assoc., Inc. (7th Cir. 2003) 330 F.3d 991, 995, and Russell v. Equifax A.R.S. (2d Cir. 1996) 74 F.3d 30, 36; White v. First Step Group LLC (E.D.Cal., Sept. 19, 2017, No. 2:16-cv-02439-KJM-GGH) 2017 U.S.Dist. LEXIS 153569 at pp. *25-*26 [debt collector’s “argument that it was entitled to reasonably rely on the debt amount as reported to it . . . is unavailing in the face of the FDCPA as a strict liability statute that does not require the collector’s knowing or intentional violation”]; Gonzalez v. Cullimore (Utah 2018) 417 P.3d 129, 132, 139-140 [the “overwhelming majority of jurisdictions . . . have almost unanimously held that the FDCPA is a strict liability statute . . . [a]nd most . . . have explicitly stated that [title 15 United States Code] § 1692e is a strict liability provision” and that “‘a consumer need not show intentional conduct by the debt collector to be entitled to damages'”].) Further, two unpublished federal district court cases10 have recognized that an FDCPA claim can be brought under title 15 United States Code section 1692e(10) based on a false representation about service of process, even if made unknowingly. In Hooper v. Midland Funding, LLC (N.D.Ala., July 30, 2021, No. 2:19-cv-01601-HNJ) 2021 U.S.Dist. LEXIS 142587, Hooper sued Midland Funding for violating the FDCPA based on the contention that Midland Funding failed to effect service of process on him in a prior state court collection lawsuit. (Hooper, at pp. *1-*2.) He contended that Midland Funding “filed a false proof of service in the collection action, which enabled it to obtain a default judgment and ultimately garnish his wages.” (Id. at p. *2.) In considering Midland Funding’s motion for summary judgment and Hooper’s motion for partial summary judgment (ibid.), the district court rejected Midland Funding’s contention that Hooper’s claim failed for lack of evidence that Midland Funding knowingly filed a falsified service return form because, the court determined, the FDCPA “‘typically subjects debt collectors to liability even when violations are not knowing or intentional.'” (Hooper, at p. *18, quoting Owen v. I. C. Sys., Inc. (11th Cir. 2011) 629 F.3d 1263, 1270.) Although the court ultimately granted Midland Funding’s motion for summary judgment and denied Hooper’s motion for partial summary judgment on other grounds (Hooper v. Midland Funding, LLC, supra, at pp. *19-*36), it concluded that “Midland’s good faith bears no relevance upon the issue whether it may incur liability for filing the allegedly falsified service return form.” (Id. at p. *18.) Similarly, in Mirshafiei v. Legal Recovery Law Offices, Inc. (C.D.Cal. Oct. 5, 2016, No. SACV-5-00873-CJC (DFMx)) 2016 U.S.Dist. LEXIS 143625, Mirshafiei sued Legal Recovery Law Offices, Inc. (Legal Recovery) for violating the FDCPA, including under title 15 United States Code section 1692e, for filing an invalid proof of service with the state court. (Mirshafiei, at pp. *3-*6.) Legal Recovery or its process server filed a proof of service of summons in a state court action filed by Legal Recovery against Mirshafiei to recover a debt, which proof of service represented that substituted service had been effected on Mirshafiei, although she “had not lived at the address listed on the proof of service for two years, as the property went through foreclosure.” (Id. at p. *4.) In granting Mirshafiei’s motion for partial summary judgment in substantial part, the district court concluded that there was “no genuine dispute of material fact that the proof of service was a ‘false representation’ that [Mirshafiei] had been properly served, and that [Legal Recovery] specifically employed this false representation to collect a debt against [her].” (Id. at pp. *13-*14, see p. *31.) The court rejected Legal Recovery’s argument that “it was unaware that [Mirshafiei] did not reside at that address at that time” because “[t]he FDCPA does not require knowledge.” (Id. at p. *14.) Based on this well-established body of case law, we hold that section 1788.17, by its incorporation of title 15 United States Code section 1692e, permits a Rosenthal Act plaintiff to state a prima facie case for liability where a defendant unknowingly made or relied on a false representation about the legal status of a debt or employed a false representation as a means to attempt the collection of a debt.