In Claflin v. Mandarich Law Group, LLP, 2014 WL 688962 (N.D.Cal. 2014), Judge Alsup refused to stay a federal FDCPA claim filed against the debt collector’s lawyers in an underlying state court debt collection lawsuit. The FDCPA plaintiffs argued that the debt collector’s lawyers had improperly filed the state court action in a distant forum in violation of the FDCPA. Judge Alsup found abatement improper, and allowed the federal FDCPA action to proceed.
Two non-binding decisions from the District of Arizona are not helpful. Stone v. Baum, 409 F.Supp.2d 1164, 1177 (D.Ariz. 2005); Fernandez v. Virgillo, No. 2:12–cv–02475–JWS, 2013 U.S. Dist. LEXIS 20959, at *10–11 (D.Ariz. Feb. 15, 2013). In Stone, the district court held that abatement was proper when vexatious litigants named the same parties in later actions. Stone at 1167–68. Here, the parties are not the same. In Fernandez, the district court held that abatement was not proper because defendants in the two actions were not in privity. Fernandez, 2013 U.S. Dist. LEXIS 20959, at *11–13. Indeed, the outcome in Fernandez seems to support a finding that abatement is not properly found here. ¶ . . . The Supreme Court has stated: [w]hen a district court decides to dismiss or stay under Colorado River, it presumably concludes that the parallel state-court litigation will be an adequate vehicle for the complete and prompt resolution of the issues between the parties. If there is any substantial doubt as to this, it would be a serious abuse of discretion to grant the stay or dismissal at all. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 28 (1983). As the state action presently exists, it will not necessarily resolve all the issues between the parties in this action because Mandarich and Attorney Vos are not named parties. In sum, this order declines to stay or dismiss this action under Colorado River. Accordingly, the motion is DENIED.
However, Judge Alsup stayed certain discovery against the lawyers that would be targeted toward their strategy in the state court debt collection suit.
Notwithstanding the foregoing, on its own motion, the Court sees a potential problem. In the event that plaintiff herein seeks discovery from the lawyer defendants herein directed to their strategy in the co-pending state action, any such discovery should be postponed until the completion of the state-court action, or at least until a reasonable period of time has elapsed to bring that case to a conclusion. The state-court action has been pending in Alameda County for a year and can be expected to go to trial or terminate before the end of this calendar year. Therefore, any depositions or discovery directed at the lawyer defendants concerning their strategy in the state-court litigation will be stayed at least until FRIDAY, OCTOBER 10 this year without further order of this court. If the state-court action is terminated sooner, then discovery into the unprivileged matters relating to strategy may be pursued. No other discovery in this case will be stayed. All discovery in the state case will also be usable in this case.