In Alonso v. Blackstone Financial Group LLC, 2013 WL 3992122 (E.D.Cal. 2013), Magistrate Judge Boone found that payment of an otherwise legally owed obligation that was collected on by a means prohibited by the FDCPA was a “damage” under the FDCPA.
Following the July 24, 2013 hearing, the parties were granted leave to file supplemental briefing regarding whether the $100 paid on the debt would be actual damages. Defendants respond that after an extensive search, they are unable to find any case addressing the issue and ask the Court to find that the payment is not actual damages based on California Civil Code Section 1606 which states that an existing obligation is good consideration for a promise. (Supp. P. & A. Filed Post Hearing 1–2, ECF No. 65.) Plaintiff filed supplemental briefing identifying three “out of circuit” cases, Hamid v. Stock & Grimes, LLP, 876 F.Supp.2d 500 (E.D.Pa.2012); Abby v. Page, No. 1:10–cv–23589, 2013 WL 141145 (S.D.Fla. Jan. 11, 2013); and Gervais v. O’Connell, Harris & Associates, Inc., 297 F.Supp.2d 435, 439 (D.Conn.2003), that have found that payments made due to violative debt collection practices are damages under the FDCPA. ¶ In Hamid, the court considered whether a debtor could recover money that had been paid to settle the underlying state court action filed by the debt collector in a subsequent FDCPA action. 876 F.Supp.at 503. The court stated that “[i]f her payment was not a proper element of actual damages under the FDCPA, a debt collector could harass a debtor in violation of the FDCPA, as a result of that harassment collect the debt, and thereafter retain what it collected. We do not believe that Congress intended this result.” Id. at 503. ¶ The defendant in Abby, argued that under state law the amount paid to settle a disputed debt was not actual damages under the FDCPA. 2013 WL 141145, at *9. The court had previously held that state law defenses were not relevant to the federal law claim, and stated “because the FDCPA permits a plaintiff to recover for violations of the law even when he de-faulted on a debt, it follows that debtors may recover the amount paid to settle a debt if the debt collector violated the FDCPA in connection with collecting that debt.” Id. (internal punctuation and citation omitted). ¶ In addition to these cases, the Court found an additional case “in circuit” which addressed actual damages, but in the context of a state law claim, not a claim under the FDCPA, Moritz v. Daniel N. Gordon, P.C., 895 F.Supp.2d 1097 (W.D.Wash.2012). In Mortiz, the court held that payments that were less than the amount that the debtor owed are not actual damages. Relying on several state cases, the court in Moritz distinguished its case from Hamid by noting that in Hamid the statute of limitations barred the action in state court. 895 F.Supp.2d at 1117–18. However, Hamid’s holding was not based on the statute of limitations issue. In Hamid, the court stated: “It is clear from its underlying purpose that debtors may recover for violations of the FDCPA even if they have defaulted on a debt. It follows that debtors may recover the amount paid to settle a debt, if the debt collector violated the FDCPA in making the collection, as occurred here. H amid paid some or all of the money she owed to Discover Bank only as a result of the untimely lawsuit filed by S & G on behalf of the Bank. If her payment was not a proper element of actual damages under the FDCPA, a debt collector could harass a debtor in violation of the FDCPA, as a result of that harassment collect the debt, and thereafter retain what it collected. We do not believe that Congress intended this result.” 876 F.Supp.2d at 503. Since the Moritz court did not consider the intent of the FDCPA in deciding whether a payment made due to a violation of the statute was actual damages, the court does not con-sider it persuasive authority in this instance. Overall, the Court agrees with the reasoning of Hamid, that allowing a debt collector to keep the amount received by violating the FDCPA is not consistent with the stated purpose of the FDCPA which is “to eliminate abuse debt collection practices by debt collectors….” 15 U.S.C. § 1692(e). Allowing debt collectors to retain money that was collected by violating the FDCPA would encourage misconduct, especially in cases where large amounts of debt are owed. Because the language seems to make this a strict liability statute, it should be interpreted liberally. Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1175–76 (9th Cir.2006). ¶ In this case, Defendant Blackstone purchased Plaintiff’s debt and received an assignment of the debt from the original creditor. Accordingly, Blackstone would be unjustly enriched if it were allowed to retain the payments on the debt that it received as a result of its violation of the FDCPA.FN8 Accordingly, the Court finds that, consistent with the stated purpose of the FDCPA, the $100 which Plaintiff paid due to the alleged violations of the FDCPA can be considered as actual damages with the meaning of the FDCPA. Therefore, as a matter of law, the motion for summary judgment to preclude evidence of these damages is denied. [FN8. The outcome may be different in a scenario where an innocent creditor retains the service of a third-party agent who violates the FDCPA and remits the improperly obtained payments to the innocent creditor, who had no involvement in the FDCPA violations. Since such facts are not presented in this case, the issue of whether payments in that situation could be regarded as “actual damages” is left unresolved.]
Judge Boone also held that a debtor need not meet the standard of IIED to recover emotional distress damages under the FDCPA.
Again, courts have split on the degree of specificity that is needed to sustain emotional distress damages. Nelson v. Equifax Informational Systems, 522 F.Supp.2d 1222, 1235 (C.D.Cal.2007). While other circuits may require objective evidence requirements to prove emotional distress damages, that is not the law in this circuit. Passantino v. Johnson & Johnson Consumer Products, Inc., 212 F.3d 493, 513 (9th Cir.2000).Defendants ask the Court to adopt the same standard as the Fifth and Seventh Circuits which requires that a plaintiff must present medical or psy-chological evidence to support her emotional distress claim. See Cousin v. Trans Union Corp., 246 F.3d 359, 371 (5th Cir.2001); Wantz v. Experian Information Solutions, 386 F.3d 829, 834 (7th Cir.2004). However, the Ninth Circuit has stated that “[w]hile objective evidence requirements may exist in other circuits, such a requirement is not imposed by case law in … the Ninth Circuit, or the Supreme Court.” Zhang v. American Gem Seafoods, Inc., 339 F.3d 1020, 1040 (9th Cir.2003). Based on Circuit precedent, the Court finds that a plaintiff’s testimony alone can be enough to support emotional distress damages. See Zhang, 339 F.3d 1020, 1040 (9th Cir.2003); Chalmers v. City of Los Angeles, 762 F.2d 753, 761 (9th Cir.1985) (upholding emotional distress damages based upon plaintiff’s testimony); Johnson v. Hale, 13 F.3d 1351, 1352 (9th Cir.1994) (emotional distress damages can be awarded based upon testimony or appropriate inference from the circumstances); Nelson, 522 F.Supp.2d at 1235 (finding a plaintiff’s testimony can sufficiently establish emotional distress damages in an FDCPA action); Acton v. Bank One Corp., 293 F.Supp.2d 1092, 1101 (D.Ariz.2003) (finding same in FCRA action). ¶ Defendants contend that Plaintiff must show more than mere transitory symptoms of emotional distress, which she has not done in this instance. (ECF No. 65 at 3.) However, in the Ninth Circuit a plaintiff may recover for actual damages resulting from emotional distress as long as she has tendered evidence substantiating that she suffered emotional distress as a result of the defendant’s FDCPA violations. Riley, 631 F.Supp.2d at 1315. Plaintiff has testified that she had symptoms of severe body and joint pain, nausea, fatigue, headaches and insomnia which lasted for several months after the incident alleged.