In Davis v. Hollins Law, — F.Supp.2d —-, 2013 WL 4863849 (E.D.Cal. 2013), Judge Karlton held that the fact that a debtor took out a business card was not dispositive of the (in)applicability of the FDCPA and Rosenthal Act.  In Davis, it was indisputed that the debtor incurred the debt on a business credit card, that the credit card was an American Express TrueEarnings Business Card, that the debtor then used the business card to purchase personal items, such as “standard household items bought through Costco,” gas purchased at Costco, “Pampers and milk,” “a bar tab,” and “school books”, and that defendant’s representative placed a telephone call to plaintiff and left plaintiff a voicemail message without giving the mini-Miranda.  The Defendant claimed that the Rosenthal Act did not apply because it was a commercial debt.  Judge Karlton denied both parties’ cross-summary judgment motions.

The difficulty for defendant is that the passage quoted above from Bloom appears to stand, at most, for the proposition that, in determining whether the FDCPA applies, courts must examine the transaction between lender and debtor as a whole, while paying attention to the purpose for which the credit was extended. See, e.g., Sun v. Rickenbacker Collection, No. 10–CV01055, 2011 WL 704437, 2011 U.S. Dist. LEXIS 16742 (N.D.Cal. Feb. 18, 2011) (Koh, J .) (quoting Bloom for the proposition that the court must “examine the transaction as a whole, paying particular attention to the purpose for which the credit was extended in order to determine whether [the] transaction was primarily consumer or commercial in nature.”); Simmonds and Narita, 566 F.Supp.2d at 1017 (same). There is no authority in Bloom, nor Slenk, 236 F.3d at 1072, nor Turner, 362 F.3d at 1219, for categorically exempting certain obligations from FDCPA protection on the basis of TILA or Regulation Z. Further, the Bloom plaintiff (rather than the defendant, as in the present case) sought to have the court apply Regulation Z; but the court explicitly refrained from doing so. Instead, the Bloom court wrote, “ Thorns [v. Sundance Properties, 726 F.2d 1417 (9th Cir.1984) ] held that the factors employed by the Federal Reserve Board under Regulation Z … are relevant in determining whether a transaction is commercial or personal for the purposes of [ TILA]…. Even if we were to apply the factors identified in Thorns, it would not alter our conclusion.” 972 F.2d at 1069. Examining the “transaction as a whole” is consonant with the test set forth above—that plaintiffs alleging FDCPA violations must be able to show that the obligation giving rise to the challenged collection efforts arose from a transaction, first, involving a consensual dealing, and second, the subject of which was primarily for per-sonal, family, or household purposes. The fact that the obligation was extended for business purposes is relevant to the inquiry, but is not, as defendant would have it, dispositive. Consequently, defendant’s Regulation Z-based argument against FDCPA coverage is unavailing. Similarly, defendant’s argument that, since California’s Song– Beverly Credit Card Act, Cal. Civ.Code §§ 1747–1748.95, does not apply to business credit cards, the Rosenthal Act must similarly be excepted, also fails.

Judge Karlton explained his public policy syllogism:  a commercial debt collector who purports to act beyond the proscriptions of the FDCPA better be sure that the FDCPA doesn’t apply, then.

Two further points merit mention. First, the FDCPA does not prohibit debt collection—only unfair debt collection. The standards imposed by the FDCPA—contacting debtors at reasonable times and places (15 U.S.C. § 1692c), avoiding threats and profanity (15 U.S.C. § 1692d), refraining from false or misleading representations (15 U.S.C. § 1692e), and so on—are not so onerous as to in any way impair lawful debt collection practices. Debt collectors seeking to go beyond the FDCPA’s limits to collect on alleged non-consumer debts will merely have to verify that the debts in question were not incurred primarily for personal, family, or household purposes. Placing the onus on the debt collector in this manner is consonant with the strong consumer protection policy that underlies the FDCPA. It also reflects a growing public awareness that many debt collectors have been less than diligent in verifying information about the debts that they are attempting to collect,  ¶  The second point to note is that the standard ap-plied herein cuts both ways. An individual who obtains a credit card (or other debt obligation) under the pretense that it is for personal purposes, but uses it primarily to finance business expenditures, cannot then seek the FDCPA’s and/or the Rosenthal Act’s protections. This, of course, is the teaching of Bloom, which concluded that “[t]he fact that a loan is informal or that the lender may have loaned the money for personal reasons does not make it a personal loan under the FDCPA.” 972 F.2d at 1068. ¶  In sum, although plaintiff herein may have ostensibly obtained the American Express card for business purposes, it does not follow as a matter of law that collection efforts on that card are exempted from the FDCPA and the Rosenthal Act. An inquiry must be made into what he purchased in allegedly incurring an unpaid obligation. Accordingly, defendant’s motion for summary judgment is denied.