District Court (Cal.) Says UD Collection Communications Not Protected by Litigation Privilege

In Rodriquez v. Law Office of Robert King, — F.Supp.3d —-, 2016 WL 3638119 (C.D. Cal. 2016), Judge Otero found that collections communications made in the course of a state law UD action were not protected by the litigation privilege.

As a threshold matter, Defendants argue that, if the FDCPA or Rosenthal Act applied, the eviction notice would be subject to absolute privilege under California Civil Code section 47 (“Section 47”). (See Mot. 4-5.) Section 47 provides a privilege for a publication or broadcast in, inter alia, a judicial proceeding, with the purpose of affording litigants and witnesses free access to the courts without fear of being harassed subsequently by derivative tort actions. See Jacob B. v. Cnty. of Shasta, 40 Cal. 4th 948, 956 (2007) (citing Cal. Civ. Code § 47(b)). Defendants’ arguments fail for various reasons. First, the eviction notice is not the communication at issue. Rather, the dispute centers around the telephone call in which LOAK’s paralegal represented that “if Plaintiff vacated the residence by an agreed date, the landlord would dismiss the unlawful detainer action and not seek damages from Plaintiff.” (Compl. ¶ 20.) Nonetheless, regardless of which communication is at issue, the litigation privilege does not apply to either the FDCPA or Rosenthal Act claim, as discussed herein.  Defendants’ Section 47 argument with respect to the FDCPA claim fails because “the California litigation privilege does not apply to federal causes of action, including FDCPA claims.” Oei v. N. Star Capital Acquisitions, LLC, 486 F. Supp. 2d 1089, 1098 (C.D. Cal. 2006) (collecting cases). As for the Rosenthal Act, “[n]o published California case appears to have examined the interaction between the litigation privilege and the Rosenthal Act.” Id. at 1098; see Huy Thanh Vo v. Nelson & Kennard, 931 F. Supp. 2d 1080, 1096-97 (E.D. Cal. 2013) (noting that the California Supreme Court has not decided whether the litigation privilege bars such claims, and district courts in the Ninth Circuit have split on the issue). The Court is persuaded by the reasoning in Oei and its progeny which concluded that applying the Section 47 privilege to communications made under the statute would “effectively vitiate the Rosenthal Act and render the protections it affords meaningless.” See Oei, 486 F. Supp. 2d at 1100 (applying the principle of statutory construction that the later, more specific Rosenthal Act prevails over the earlier, more general Section 47 privilege); accord, Butler v. Resurgence Fin., LLC, 521 F. Supp. 2d 1093, 1095 (C.D. Cal. 2007) (“Although there is a split of authority on whether the litigation privilege applies to the Rosenthal Act, we think the better view is that [it] does not.”). Thus, the Section 47 litigation privilege does not bar Plaintiff’s claims under either the Rosenthal Act or the FDCPA. The Court turns to the merits of Plaintiff’s claims.

The District Court also dismissed the Rosenthal Act claim against the lawyer, but not his law firm, since the Rosenthal Act excludes lawyers from its coverage.

Plaintiff sues under the Rosenthal Act as a supplemental state claim. “The Rosenthal Act mimics or incorporates by reference the FDCPA’s requirements … and makes available the FDCPA’s remedies for violations.” Riggs v. Prober & Raphael, 681 F.3d 1097, 1100 (9th Cir. 2012) (citing Cal. Civ.Code § 1788.17). Accordingly, to maintain a Rosenthal Act claim, the plaintiff must allege that he is a “debtor,” that the defendant is a “debt collector,” and that the defendant committed a violation of the FDCPA. See Robinson, 654 F. Supp. 2d at 1058. “[A]ny conduct by a debt collector which violates the federal FDCPA necessarily violates the California FDCPA [otherwise known as the Rosenthal Act] as well.” Id. at 1060. Unlike the FDCPA, the Rosenthal Act expressly excludes “an attorney or counselor at law.” Cal. Civ.Code § 1788.2(c). Thus, Plaintiff’s Rosenthal Act claim is dismissed as against King.  However, the statute does not exclude law firms. See Robinson, 654 F. Supp. 2d at 1061 (citing Abels v. JBC Legal Grp., P.C., 227 F.R.D. 541, 547-48 (N.D. Cal. 2005)) (“Since the legislature specifically excluded attorneys from the statute but was silent on law firms, this Court presumes that the legislature did not intend to exclude law firms.”). Taking the Complaint’s allegations as true, Defendant LOAK is a “debt collector[ ] as that is defined by … [Section] 1788.2” because it regularly engages in debt collection through the mail, telephone and filing lawsuits in California. (Compl. ¶ 9.) As discussed above, Plaintiff sufficiently alleges that he is a “debtor” and that Defendants’ conduct constituted a violation of Section 1692e. Thus, it follows that LOAK’s conduct necessarily violates the Rosenthal Act.