In Freeman v. ABC Legal Services, Inc., 2012 WL 2589965 (N.D.Cal. 2012), Judge Chen held in consolidated proceedings alleging multiple claims of ‘sewer’ or ‘gutter’ service of process by a debt collector that the Plaintiffs lacked Article III standing to bring a UCL claim based on the FDCPA.  The defendant collected no money from the defendants, so restitution was not at issue.  The only issue was whether the possibility of injunctive relief under the UCL conferred Article III standing.  Judge Chen held that it did not.  

Plaintiffs in each of these individual actions have filed suit against ABC Legal Services, Inc., (“ABC”), and individual process servers who worked for ABC. ABC is in the business of filing and processing legal forms. Each Plaintiff raises claims against ABC and the process servers for alleged instances of “sewer service.” See Freeman v. ABC Legal Services Inc., 827 F.Supp.2d 1065, 2011 WL 6090699, at *1 n. 1 (N.D.Cal.2011) (“Sewer service is defined as ‘failing to serve a debtor and filing a fraudulent affidavit attesting to service so that when the debtor later fails to appear in court, a default judgment is entered against him.’ ”) (quoting Spiegel v. Judicial Atty. Servs., 2011 WL 382809, 2011 U.S. Dist. LEXIS 9350 (N.D.Ill. Feb.1, 2011)). Plaintiffs assert claims under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 (“FDCPA”), the Rosenthal Fair Debt Collection Practices Act, California Civil Code § 1788 (“RFDCPA”), and California Business and Professions Code § 17200 (“UCL”). Currently pending before the Court are Defendant ABC’s motions for judgment on the pleadings, motions to dismiss, and motions to strike Plaintiffs’ injunctive relief claims under § 17200. See Mot., 11–3007, Docket No. 61. ¶. . . The UCL statutory standing requirements differ from standing requirements in federal court. Cal. Bus. & Prof.Code § 17204 provides that a plaintiff “who has suffered injury in fact and has lost money or property as a result of the unfair competition” has standing to seek relief under the UCL. Only two forms of relief are available: restitution and/or an injunction. Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134, 1144, 131 Cal.Rptr.2d 29, 63 P.3d 937 (2003) (citations omitted). Plaintiffs seek only injunctive relief. See Opp., Docket No. 66, at 8 (“The only UCL remedy sought by Plaintiff in this case is an injunction.”). Although courts have previously debated the question, it is now settled under California law that a plaintiff need not prove eligibility for restitution in order to have standing to seek injunctive relief. See Pom Wonderful LLC v. Coca–Cola Co., ––– F.3d ––––, 10–55861, 2012 WL 1739704, at *6 (9th Cir. May 17, 2012) (citing Kwikset Corp. v. Superior Ct., 51 Cal.4th 310, 120 Cal.Rptr.3d 741, 246 P.3d 877 (Cal.2011); Clayworth v. Pfizer, Inc., 49 Cal.4th 758, 111 Cal.Rptr.3d 666, 233 P.3d 1066 (Cal.2010)). In California state courts, a Plaintiff may seek an injunction if he merely satisfies the harm requirements of § 17204, “whether or not restitution is also available.” Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 336, 120 Cal.Rptr.3d 741, 246 P.3d 877 (2011) (citing Clayworth v. Pfizer, Inc., 49 Cal.4th at 789–80, 111 Cal.Rptr.3d 666, 233 P.3d 1066 (“If a party has standing under section 17204 …, it may seek injunctive relief under section 17203.”). In short, standing for injunctive relief under § 17204 does not require the showing mandated by Lujan and Lyons. ¶  Plaintiffs argue that the § 17204 standard should apply here, as the California Supreme Court has held that once a plaintiff satisfies § 17204, which ABC does not dispute Plaintiffs satisfy, she may seek injunctive relief under the UCL. However, in federal court, a plaintiff must still demonstrate Article III standing to seek injunctive relief, even if she would otherwise have standing in state court. In Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1022 (9th Cir.2004), the Ninth Circuit held that “ ‘a plaintiff whose cause of action [under § 17204] is perfectly viable in state court under state law may nonetheless be foreclosed from litigating the same cause of action in federal court, if he cannot demonstrate the requisite injury’ to establish Article III standing,” quoting Lee v. Am. Nat’l Ins. Co., 260 F.3d 997, 1001–02 (9th Cir.2001) and citing Cal. Bus. & Prof.Code § 17204).) See VonGrabe v. Sprint PCS, 312 F.Supp.2d 1313, 1323 (S.D.Cal.2004) (same). In Hangarter, the court concluded that the plaintiff had no standing to seek injunctive relief under the UCL because he “currently has no contractual relationship with Defendants and therefore is not personally threatened by their conduct.” 373 F.3d at 1022; see also Krzyzanowsky v. Orkin Exterminating Co., Inc., C 07–05362 SBA, 2009 WL 481267, at *14 (N.D.Cal. Feb.24, 2009) (holding that because the plaintiff “has no contract with Orkin, nor has produced any evidence he intends to obtain one in the future, he cannot show that he is realistically threatened by a repetition of Orkin’s conduct”). Thus, under Hangarter, UCL plaintiffs must still satisfy federal constitutional standing requirements, including those pertinent to injunctive relief.  ¶. . . Despite the variousness among lower courts, Ninth Circuit authority is clear on the question. The Ninth Circuit’s recent opinion in Pom Wonderful LLC does not change this conclusion. In that case, the court merely confirmed the California Supreme Court’s holding that a plaintiff need not demonstrate eligibility for restitution in order to seek injunctive relief. 679 F.3d 1170, 2012 WL 1739704 at *6. However, that a plaintiff need not show she could obtain restitution does not mean she is absolved from also demonstrating that she is entitled to seek an injunction. The court only held that restitution does not operate as a separate bar to standing. See also Allergan, Inc. v. Athena Cosmetics, Inc., 640 F.3d 1377, 1382 (Fed.Cir.2011) (“[T]he availability of injunctive relief under section 17203 is not contingent on a party’s ability to plead an injury compensable by restitution.”). Pom Wonderful LLC did not overrule Hangarter ‘s requirement that federal standing rules apply to a state UCL claim for injunctive relief.  ¶. . . Here, although it is a close call whether Plaintiffs have adequately alleged a realistic threat of future harm, the Court concludes that their current allegations fall short. ¶. . . The problem for Plaintiffs is that, as currently alleged, whether they are subject to ABC’s purportedly unlawful conduct in the future depends largely on undefined contingencies. A defendant’s practices, even if allegedly routine, must still distinguish the plaintiff from “any other citizen” in order for the plaintiff to demonstrate entitlement to an injunction. Lyons, 461 U.S. at 111. As alleged, whether Plaintiffs face repeated harm is largely outside their control, as it depends solely on whether someone sues them and happens to use Defendant ABC to serve them with process. It is also uncertain, as debt collection litigation is not something one could conclude, without further facts, that an average person encounters regularly.  Here, no Plaintiff alleges, e.g., that he or she has additional consumer debt that has or may be sent to collection, that he or she has been a defendant in other lawsuits in the past or has a reasonable prospect of being subjected to additional litigation in the near future. Nor have Plaintiffs alleged ABC’s share of the process server market is such that if they were sued again there is a reasonable likelihood that the creditor’s attorneys would employ ABC. Thus, even if Defendants’ practices are routine, the Court cannot conclude based on the current allegations that any predicted future harm is more than speculative.