In Moten v. Transworld Sys., Inc., No. E078871, 2023 WL 8709724, at *7–9 (Cal. Ct. App. Dec. 18, 2023), the Court of Appeal in an unpublished decision addressed whether the trial court had interpreted the litigation privilege properly in an anti-SLAPP motion filed relative to a Rosenthal Act case.
“Communications in judicial proceedings are privileged under section 47, subdivision (b)(2). ‘[T]he privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.’ ” (Komarova, supra, 175 Cal.App.4th at p. 336.) In Komarova, the court rejected that the litigation privilege applied to the Rosenthal Act claims. In that case, the debt collector’s conduct consisted primarily of making threatening phone calls to the plaintiff, both before and after the debt collector filed an arbitration claim, and it commenced judicial proceedings without proper service of process. These were the alleged violations of the Rosenthal Act. (Komarova, supra, 175 Cal.App.4th at 331-336.) The court held that the debt collector could not argue that the threatening phone calls were tied to the filing of the arbitration claim, which was protected by the litigation privilege, and evade the Rosenthal Act’s prohibitions against calling without disclosing an identity, frequent calling amounting to harassment, and communications with an employer. (Id. at pp. 338-340.) It found, “We must … be mindful of the ease with which the [Rosenthal] Act could be circumvented if the litigation privilege applied. In that event, unfair debt collection practices could be immunized merely by filing suit on the debt…. [W]e conclude that the [Rosenthal] Act would be significantly inoperable if it did not prevail over the privilege, where, as here, the two conflict.” (Id. at p. 340.) In Oei v. N. Star Capital Acquisitions, LLC (C.D.Cal.2006) 486 F.Supp.2d 1089, the plaintiffs alleged multiple instances of harassing communications and conduct occurring prior to the debt collection action being filed. The plaintiffs filed their own action raising violations of the Rosenthal Act. The defendant contended that the causes of action should be dismissed as they were protected under the litigation privilege. (Id. at p. 1092, 1098.) The court found that applying the litigation privilege to immunize this conduct would “vitiate the Rosenthal Act and render the protections it affords meaningless.” (Id. at p. 1100.)
In People v. Persolve, supra, 218 Cal.App.4th 1267, the People filed an action under the unfair competition law (Bus. & Prof. Code, § 17200), based on communications that allegedly violated specific provisions of the Rosenthal Act and the Federal Act. The appellate court found that the action was not barred by the litigation privilege. (Persolve, at pp. 1275-1277.) “Applying the privilege to unlawful practices based on specific violations of the [Rosenthal] Act and the Federal Act would effectively render the protections afforded by those acts meaningless…. Civil statutes for the protection of the public should be interpreted broadly in favor of their protective purpose. Accordingly, the People’s unfair competition law claims that are based on conduct that is specifically prohibited by the [Rosenthal] Act and/or the Federal Act are not barred by the litigation privilege.” (Id. at pp. 1276-1277.) Here, Moten contended that the Substitute Rosters attached to the complaint in the Lawsuit were created by Transworld and were fraudulent. They were to be used to show the chain of assignment of Moten’s loans. This was a violation of the Rosenthal Act—that debt collectors are barred from using any false, deceptive or misleading representations in connection with the collection of any debt. (15 U.S.C., § 1692e; Civ. Code, §§ 1788.13, subd. (i), 1788.17.) To bar, at the pleading stage, Moten’s allegations that Transworld fabricated evidence in order to collect on the debt would undermine the gravamen of the Rosenthal Act. Transworld relies on Boon v. Professional Collection Consultants (S.D. Cal. 2013) 978 F.Supp.2d 1157, and Lopez Reyes v. Kenosian & Miele, LLP (N.D. Cal. 2007) 525 F.Supp.2d 1158, to argue that Komarova should be viewed narrowly. In those cases, the courts found that the only causes of action were limited to filings in state court, and therefore, clearly fell within the litigation privilege. In Lopez, the court found, “The only allegedly wrongful debt collection practices in the present case occurred entirely in the context of the filing of a state court complaint to recover a debt. The [Rosenthal Act] does not explicitly regulate the content of complaints or other pleadings that are transmitted in connection with an actual legal proceeding and only prohibits the use of the courts as a means to collect a debt in a few specific ways, none of which are at issue here.” (Lopez Reyes v. Kenosian & Miele, LLP, supra, 525 F.Supp.2d at p. 1164.) In Boon, which was decided after Komarova, the court interpreted Komarova narrowly by finding that Komarova depended on the fact that the plaintiff alleged, in addition to the state court action, that the debt collector made threatening phone calls to the plaintiff. Since the plaintiff in Boon only alleged that the filing of the state court action violated the statute of limitations, the litigation privilege did not apply. It stated that there must be proof of other attempts to collect on the debt other than the filing of the state court action. (Boon v. Professional Collection Consultants, supra, 978 F. Supp. 2d at p. 1161.) Initially, this court is not bound by federal district court decisions. (Choate v. County of Orange (2000) 86 Cal.App.4th 312, 327-328.) Moreover, we do not view Komarova so narrowly. Another court has interpreted Komarova more broadly to decline to apply the litigation privilege to most debt collection legal actions involving violations of the Rosenthal Act. (See Minser v. Collect Access, LLC (2023) 92 Cal.App.5th 781, 791-792.) We follow Komarova and find that the trial court erred by finding the litigation privilege applied. Moreover, as stated, Moten alleged more than just the filing of the Lawsuit that violated the Rosenthal Act. Rather, her claim was based on a violation of the Rosenthal Act because Transworld falsely represented that the Substitute Rosters provided to prove ownership of the debt were the original documents showing the NCSLT 2007-3 was the owner of the loan. Assuming Moten’s allegations are true that these documents were fraudulent, this violated the Rosenthal Act by using false or deceptive means to collect or attempt to collect the debt. Conceivably, the Substitute Rosters could have been shown to Moten prior to the filing of the lawsuit to prove that she owed the money to NCSLT 2007-3. Assuming the phone calls made in Komarova occurred only during the arbitration, the court certainly would not have found differently. Both were violations of the Rosenthal Act regardless of when the violation occurred. The trial court erred by finding that the litigation privilege applied to Moten’s claims. Transworld also argues that Moten could not show a probability of prevailing because her Rosenthal Act, Declaratory Relief, and UCL claims will fail on their merits. It is apparent from the brief written ruling from the trial court that it only considered the litigation privilege in considering the probability that Moten would prevail on her claims. Remand is necessary in order for the trial court to consider whether, without applying the litigation privilege, and considering the evidence presented, Moten would prevail on her claims. (See Hunter v. CBS Broadcasting, Inc. (2013) 221 Cal.App.4th 1510, 1527 [“[T]he more prudent course is to remand the matter to the trial court to determine in the first instance whether [the plaintiff] demonstrated a reasonable probability of prevailing on the merits of his causes of action”].) We will reverse the order granting the anti-SLAPP Motion and direct the trial court to consider the matter on its merits.