In Tourgeman v. Collins Financial Services, Inc., 2016 WL 3854540, at *2-4 (S.D.Cal. 2016), Judge Bencivengo dismissed FDCPA class allegations because the Plaintiff had no evidence of the defendant’s net worth.
In support of his position, Plaintiff cites to the fact that the FDCPA statutory award is a punitive in nature, i.e., the jury considers defendant’s conduct and provides for an amount intended to deter future violations. The limit or ceiling on the award of class statutory damages is intended to “ensure that ‘punishment [is] meted out according to a business’s ability to absorb the penalty.’ ” Gonzales v. Arrow Fin. Servs, LLC, 660 F.3d 1055, 1068 (9th Cir. 2011) citing Sanders v. Jackson, 209 F.3d 998, 1002 (7th Cir. 2000). “The primary purpose of the net worth provision is a protective one. It ensures that defendants are not forced to liquidate their companies in order to satisfy an award of punitive damages.” Sanders, 209 F.3d at 1002. Consequently, Plaintiff argues that evidence at trial to limit the awardable amount is properly the Defendant’s burden to prove as it inures to Defendant’s benefit, citing Kemezy v. Peters, 79 F.3d 33 (7th Cir. 1996) (holding it is the defendant’s burden to prove net worth in the punitive damages phase of a § 1983 case). While this argument may have superficial appeal, it overlooks the essential fact that the elements of the damage award sought by Plaintiff in this case are specifically delineated by the statute and, unlike a tort punitive damage claim, Plaintiff cannot simply make an undefined demand to the jury. A plaintiff must provide evidence to support the claim. See Faria v. M/V Louise, 945 F.2d 1142, 1143 (9th Cir. 1991) (it is one of the most basic propositions of law that the plaintiff bears the burden of proving his case, including the amount of damages). The FDCPA makes the Defendant’s finances an element of the Plaintiff’s damage claim as any award must be related to the Defendant’s net worth. The Plaintiff proposes in this case to ask the jury to award damages “not to exceed one per cent of the Defendant’s net worth” and then leave it to the jury to speculate what the Defendant’s net worth is. Plaintiff is not, however, seeking a mere declaration by the jury that the class is entitled to damages from the Defendant in the abstract. He is asking the jury to award real money and determine a specific amount. Given the express language of the statute, absent evidence of the Defendant’s net worth, the amount would be purely speculative, so evidence of the Defendant’s net worth is an essential element of the Plaintiff’s claim. See e.g., Adams v. Murakami, 54 Cal. 3d 105, 119-20 (1991) (requiring a plaintiff to introduce evidence of defendant’s financial condition at trial because it is essential to the claim for relief.) The policy behind the damages cap does not relieve the Plaintiff from his obligation to provide the evidence to support the appropriateness of the relief he seeks. III. Defendant’s Prior Assertions of Negative Net Worth Does Not Transform this Element into an Affirmative Defense. Plaintiff contends that because the Defendant asserts it has a negative net worth, it becomes an affirmative defense. A defendant may offer evidence to counter evidence a plaintiff introduces as to the defendant’s net worth, including evidence that it is in fact less than zero. This does not make establishing the debt collector’s net worth in the first instance the defendant’s burden. There is identified one affirmative defense to liability for a violation of the FDCPA, the ‘bona fide error” defense. 15 U.S.C. § 1692k(c). The proof of net worth is not identified as an exemption under the FDCPA. Defendant may defend against Plaintiff’s claim, by offering contrary evidence, but by indicating its intentions to do so, the Defendant has not transformed the Plaintiff’s burden to prove damages into an affirmative defense. The Court finds no authority for shifting this evidentiary burden to the Defendant. Further, Plaintiff misconstrues the Court’s prior ruling on Defendant’s motion for summary judgment as a determination that burden of proof of net worth at trial is the Defendant’s obligation. Defendant moved for summary judgment asserting that the undisputed evidence established its current net worth is negative. The Court found that based on the evidence presented the Defendant had not met its burden to establish as a matter of law that it had a negative net worth, but instead found a dispute of material facts. The Defendant failed to meet its burden as the moving party on a motion for summary judgment. This was not a finding that at trial Defendant would be burdened with having to establish the element of net worth as part of Plaintiff’s damage claim. Finally, Plaintiff argues that this financial information is in the Defendant’s control and therefore Defendant should bear the responsibility of producing it at trial. Certainly, the Defendant has the required financial information. In many cases, defendants often have the evidence plaintiffs need to establish the elements of their claims. This alone does not justify shifting the burden of proof to Defendant. A protective order was entered in this case to provide Plaintiff access to Defendant’s financial information. The issue of the Defendant’s net worth has been the subject of motions for years throughout this litigation. A review of the docket and various orders by both the Magistrate Judge and the District Judge show that Plaintiff has requested and Defendant was ordered to produce financial information, including a recent update of information so Plaintiff could determine Defendant’s current net worth. Plaintiff had every opportunity to obtain the financial records needed by a certified accountant to do a proper audit in compliance with GAAP, to prepare evidence to introduce at trial of the Defendant’s net worth. If financial records were incomplete or not made available in response to discovery or the Court’s various orders, Plaintiff did not seek relief such as requesting the Court to order Defendant to produce a GAAP-compliant audited balance sheet. Plaintiff sought monetary sanctions and evidentiary sanctions with regard to other issues in this case, but left this element of his case to chance. Plaintiff is now without competent evidence of the Defendant’s net worth and can only speculate as to this element of his claim for class statutory damages. Accordingly, the class claim is DISMISSED.