In Gonzalez v. Chase Bank, USA, Case No.: 3:18-cv-00431-CAB-AGS, 2018 WL 2461490 (S.D. Cal. June 1, 2018), the District Court allowed a TCPA/FDCPA defendant creditor to counter-claim against the Plaintiff for the debt due and owing.
The Court is inclined to follow the majority of Ninth Circuit district courts cited above, and finds that supplemental jurisdiction exists over a defendant’s state-law counterclaim related to the debt underlying a plaintiff’s RFDCPA and/or TCPA claim. See Sparrow, 385 F. Supp. 2d at 1070 (“[B]ecause Defendant’s counterclaims bear a logical and factual relationship to Plaintiff’s claims in that they are related to a single debt incurred by Plaintiff, supplemental jurisdiction exists over Defendant’s counterclaims under § 1367(a).”). Here, both Plaintiff’s and Chase’s claims are related to the two underlying credit card debts owed by Plaintiff to Chase. These claims may be fairly classified as part of the same “case or controversy”; therefore, the Court may exercise supplemental jurisdiction over Chase’s counterclaims pursuant to 28 U.S.C. § 1367(a). . . .Even if supplemental jurisdiction exists, district courts may decline to exercise supplemental jurisdiction over a counterclaim or third-party claim if: (1) it raises a novel or complex issue of state law; (2) it substantially predominates over the claim(s) over which the court has original jurisdiction; (3) the court has dismissed all claims over which it has original jurisdiction; or (4) there are other compelling reasons for declining jurisdiction. 28 U.S.C. § 1367(c). . . . Several district courts within the Ninth Circuit have agreed with Plaintiff on this issue. See Robles, 2013 WL 28773, at *5. These courts noted that the FDCPA’s primary purpose is to protect individuals from unfair debt collection practices, so “strong public policy reasons exist for declining to exercise jurisdiction” over debt collector defendants’ counterclaims. See Campos, 404 F. Supp. 2d at 1170. These courts have also recognized that exercising supplemental jurisdiction over defendants’ debt collection counterclaims based on the underlying debt might have a “chilling effect” on plaintiffs “who otherwise might and should bring suits under the FDCPA.” Sparrow, 385 F. Supp. 2d at 1071 (“Given the remedial nature of the FDCPA ‘and the broad public policy which it serves, federal courts should be loath to become immersed in the debt collection suits of…the target of the very legislation under which’ a FDCPA plaintiff states a cause of action.”) (quoting Leatherwood, 115 F.R.D. at 50). Though a plaintiff should not “expect a court to tolerate evasion of lawful debts,” the Seventh Circuit has held that “arguments under § 1367(c) are addressed to the district court’s discretion.” See Channell, 89 F.3d at 386-87. However, the Court is not persuaded to exercise its discretion to decline supplemental jurisdiction in this case. While strong public policy reasons may exist for declining jurisdiction in FDCPA cases where a plaintiff’s potential recovery is relatively low, here Plaintiff has a federal TCPA claim in addition to her state-law RFDCPA claim. Plaintiff’s alleged damages for her TCPA claim alone are over $150,000.00. [Doc. No. 1 at 15.] On the other hand, as both parties have admitted, Plaintiff owes Chase $6,653.40 plus interest for her underlying credit card debt. [Doc. No. 16 at 2.] The amount of damages sought by Plaintiff in her Complaint vastly exceed the amount sought by Chase in its counterclaims. Thus given the relatively small amount of the debt compared to the large amount sought by Plaintiff, the likelihood of Chase’s counterclaims having a “chilling effect” on Plaintiff’s TCPA claim is much lower than in the FDCPA cases cited above. While Plaintiff argues that Chase could “easily obtain a judgment in excess of $100,000.00” for its attorney’s fees and costs, this is unlikely given that Plaintiff has already admitted to the debt owed to Chase, so there are not many outstanding issues to litigate on a debt-collection claim. [Doc. No. 16 at 5.] Further, any judgment obtained by Plaintiff could be offset by any judgment obtained by Chase, so a judgment for Chase would likely not result in the life-altering loss that Plaintiff contends it will. [Id. at 5.]. Additionally, the likelihood of creating a “chilling effect” on future TCPA claims by other plaintiffs would also be low. Most TCPA claims will not involve such debt collection counterclaims like Chase’s here, as debt-collection calls are exempt from the TCPA’s prohibitions.2 See Meadows v. Franklin Collection Serv., Inc., 414 Fed. Appx. 230, 235 (11th Cir. 2011). As a result, cases involving both TCPA claims and debt-collection counterclaims are not common enough to find that a “chilling effect” would be created for future TCPA plaintiffs.