David Tourgeman brought a putative class and representative action against Dell Financial Services, L.P. (Dell Financial Services),
Tourgeman voluntarily dismissed his action against respondents. After the action was dismissed, respondents filed a motion for attorney fees. (§ 425.16, subd. (c)(1).)
On appeal, Tourgeman contends that the trial court erred in concluding that his action was not subject to the public interest exception (§ 425.17, subd. (b)) to the anti-SLAPP statute. We conclude that Tourgeman's action satisfied each of the requirements of the public interest exception and that his complaint was therefore not subject to a special motion to strike. The trial court thus erred in awarding respondents attorney fees and costs pursuant to the anti-SLAPP statute. Accordingly, we reverse the judgment and the attorney fees and costs order and remand the matter to the trial court with directions to deny respondents' motion for attorney fees and costs.
In May 2012, Tourgeman filed a complaint against Dell Financial Services and respondents. In his complaint, Tourgeman alleged that he purchased a Dell computer in November 2001 and that Dell Financial Services had arranged for Tourgeman to obtain a loan from CIT Online Bank. Tourgeman alleged that in January 2007, Nelson & Kennard "generated ... a collection letter to [Tourgeman] on a form template" that misidentified the original creditor of Tourgeman's loan. Tourgeman further alleged that Scott Kennard had "spent very little time reviewing this letter, and did not review [Tourgeman's] file or account notes, before signing it." Tourgeman claimed that as a result, Kennard had not been "`meaningfully involved,'" in connection with the collection of the debt as required by the FDCPA.
Tourgeman further alleged that Nelson & Kennard had "sent collection letters to hundreds of consumers that falsely identified the consumer's original creditor." Tourgeman also alleged that Scott Kennard had not conducted any "meaningful review" before signing these letters.
Tourgeman claimed that Nelson & Kennard had filed a lawsuit against him that misidentified the original creditor of Tourgeman's loan, that he had
Tourgeman stated that he was bringing the action on behalf of himself and the following classes:
Tourgeman alleged a single cause of action against Dell Financial Services and respondents for violation of the UCL on behalf of himself, "members of the [c]lass, and of the general public." Tourgeman claimed that respondents continued to send collection letters and file collection lawsuits without "enact[ing] measures to ensure that they obtain complete and accurate information about consumers before sending out collection letters and/or filing suits."
In his prayer for relief Tourgeman sought:
In August 2012, respondents filed a special motion to strike pursuant to the anti-SLAPP statute. Tourgeman subsequently dismissed this action against respondents without prejudice. After the dismissal, respondents filed a motion for attorney fees and costs pursuant to the anti-SLAPP statute.
Tourgeman opposed the motion, contending that respondents were not entitled to an award of attorney fees and costs pursuant to the anti-SLAPP statute because they would not have prevailed on their special motion to strike. Specifically, Tourgeman argued that the action was exempt from application of the anti-SLAPP statute pursuant to the public interest exception (§ 425.17).
In support of his claim that the action was exempt from the anti-SLAPP statute, Tourgeman emphasized that he had not sought "any monetary damages or restitution for himself," and that the sole remedy that he had sought in his complaint was injunctive relief designed to ensure that California consumers were not harmed by respondents' allegedly unfair, unlawful and fraudulent debt collection practices in the future. Tourgeman further argued that he had not sought any benefit for himself and that instead, he had brought this case "purely for the benefit [of] a large class of Californians who might one day wind up on the receiving end of a collections letter or lawsuit from [respondents] that violates the FDCPA." Tourgeman also argued that his action would benefit the public interest, and that private enforcement was necessary and placed a disproportionate burden on him.
Respondents filed a reply in which they argued that Tourgeman's action did not meet the three requirements of the public interest exception to the anti-SLAPP statute (§ 425.17). With respect to the first prong, i.e., that the plaintiff have sought no greater or different relief than that sought for the general public or class, respondents contended that in a related federal action, "Tourgeman sought relief personal to himself, different from and far greater than the injunctive relief he sought on behalf of the class" in this action. With respect to the second prong, i.e., that the action would enforce an important right affecting the public interest, respondents argued that Tourgeman had "provided argument, but no evidence." Specifically, respondents contended that Tourgeman had failed to present evidence as to how many of its collection letters and lawsuits had misidentified the consumer's original creditor. Finally, with respect to the third prong, i.e., that private enforcement was necessary and placed a disproportionate burden on the plaintiff, respondents argued that the Federal Trade Commission and Consumer Financial Protection Bureau were authorized to enforce compliance with the FDCPA, and that they had done so in several recent cases. Respondents further argued
On November 16, 2012, the trial court entered an order granting respondents' motion for attorney fees and costs. The court concluded that Tourgeman's action did not come within the public interest exception to the anti-SLAPP statute, reasoning: "Plaintiff's complaint in this action sought only injunctive relief, and it is unlikely Plaintiff would have benefitted from the requested injunction. However, Plaintiff has not shown an important public interest that affected a large group of persons would have been vindicated by his complaint or that private enforcement was necessary and placed any financial burden on Plaintiff greater than his stake in this action."
The court noted that Tourgeman had not otherwise opposed the anti-SLAPP motion: "Plaintiff does not dispute his sole claim for violation of Business and Professions Code section 17200 arose from the [respondents'] exercise of their constitutional right to petition. Plaintiff also does not attempt to demonstrate he could meet his burden of establishing a probability of prevailing on the merits of his section 17200 claim."
The court awarded respondents attorney fees and costs pursuant to section 425.16, subdivision (c)(1) in the amount of $11,581.02. On December 26, the trial court entered a judgment in favor of respondents against Tourgeman for $11,581.02.
Tourgeman timely appeals.
Tourgeman contends that the trial court erred in awarding respondents attorney fees and costs pursuant to section 425.16, subdivision (c)(1).
Citing Coltrain v. Shewalter (1998) 66 Cal.App.4th 94 [77 Cal.Rptr.2d 600] (Coltrain), respondents contend that we may affirm the trial court's attorney fees and costs order on the ground that they realized their objectives in the litigation, irrespective of whether they would have prevailed on their special motion to strike.
In Coltrain, a panel of the Fourth Appellate District, Division Two,
Thus, under Liu and other cases that have adopted its reasoning, "the trial court's adjudication of the merits of a defendant's motion to strike is an essential predicate to ruling on the defendant's request for an award of fees and costs." (Liu, supra, 69 Cal.App.4th at p. 752; see ibid. [disagreeing with Coltrain to the extent that it permits an award of attorney fees and costs "`regardless of whether the action is a SLAPP suit or not'" (quoting Coltrain, supra, 66 Cal.App.4th at p. 107)]; accord, Pfeiffer, supra, 101 Cal.App.4th at p. 218 ["the statement in Coltrain[, supra, at page 107], that `the trial court has discretion to determine whether the defendant is the prevailing party for purposes of attorney's fees under Code of Civil Procedure section 425.16, subdivision (c),' is not accurate"].)
We agree with the Liu court and disagree with Coltrain to the extent that Coltrain permits the trial court to award attorney fees and costs pursuant to section 425.16, subdivision (c)(1) without first determining whether the defendant would have prevailed on the special motion to strike. Subject to exceptions not applicable here, section 425.16, subdivision (c)(1) authorizes an award of attorney fees and costs to a "prevailing defendant on a special motion to strike." (Italics added.) Thus, a determination of whether a defendant would have prevailed on its motion to strike is an essential prerequisite to an award of attorney fees and costs pursuant to section 425.16, subdivision (c)(1). (Liu, supra, 69 Cal.App.4th at p. 752; Pfeiffer, supra, 101 Cal.App.4th at p. 218.)
Accordingly, we conclude that we may not affirm the trial court's award of attorney fees and costs on the alternative ground that the trial court had discretion to determine that respondents were the prevailing party under
Tourgeman claims that his action was not subject to a special motion to strike because it was protected by the public interest exception to the anti-SLAPP statute (§ 425.17, subd. (b)).
Section 425.17, subdivision (b) provides:
In Club Members for an Honest Election v. Sierra Club (2008) 45 Cal.4th 309, 316 [86 Cal.Rptr.3d 288, 196 P.3d 1094] (Club Members), the Supreme Court explained that "[i]n 2003, the Legislature enacted section 425.17 to curb the `disturbing abuse' of the anti-SLAPP statute. (§ 425.17, subd. (a).)" "According to the sponsor of ... section 425.17, Senator Sheila Kuehl, the same types of businesses who used the SLAPP action were inappropriately using the anti-SLAPP motion against their public-interest adversaries. Hence, the Legislature expressly designed subdivision (b) of section 425.17 to prevent the use of the anti-SLAPP device against `specified public interest actions,' among others. [Citation.]" (Blanchard v. DIRECTV, Inc. (2004) 123 Cal.App.4th 903, 913 [20 Cal.Rptr.3d 385] (Blanchard).)
"The three conditions of ... section 425.17, subdivision (b)(1) through (3) mirror the three elements for determining the eligibility for a fee award under
To determine whether Tourgeman's lawsuit met those definitions, "we rely on the allegations of the complaint because the public interest exception is a threshold issue based on the nature of the allegations and scope of relief sought in the prayer." (Strathmann, supra, 210 Cal.App.4th at p. 499; see Club Members, supra, 45 Cal.4th at p. 316 ["If a complaint satisfies the provisions of the applicable exception, it may not be attacked under the anti-SLAPP statute." (italics added)]; accord, Carpenters, supra, 124 Cal.App.4th at p. 300 [concluding action was brought solely in the public interest based on allegations of the complaint].)
In light of the nature of Tourgeman's claim and the relief that he sought, we conclude that Tourgeman's action was brought "solely in the public interest." (§ 425.17, subd. (b); see Strathmann, supra, 210 Cal.App.4th at p. 501 ["Section 425.17[, subdivision] (b) was intended to exempt ... private attorney general actions from the anti-SLAPP statute ..."]; Carpenters, supra, 124 Cal.App.4th at p. 300 [concluding putative class action seeking enforcement of city's prevailing wage policy was brought solely in public interest]; cf. Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 741 [9 Cal.Rptr.3d 544] ["By preventing `a failure of justice in our judicial system' [citation], the class action not only benefits the individual litigant but serves the public interest in the enforcement of legal rights and statutory sanctions."].)
Accordingly, we conclude that Tourgeman did not seek any relief greater than or different from the relief that he sought for the general public. (§ 425.17, subd. (b)(1).)
As noted above, Tourgeman's complaint alleged that respondents violated the FDCPA (15 U.S.C. § 1692 et seq.), and in so doing committed an unlawful, unfair, or fraudulent business practice under Business and Professions Code section 17200. Specifically, Tourgeman claimed that respondents sent him collection letters and filed an action against him based on a false representation as to the identity of the creditor to whom he purportedly owed a debt. Tourgeman brought his UCL claim on behalf of himself, "members of the Class and members of the general public," and sought an injunction requiring respondents to "enact sufficient measures that will ensure they include the name of the correct original creditor on any collections letters they send out or in any lawsuits that they file in the future."
In enacting the FDCPA, Congress stated that it had found "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors." (15 U.S.C. § 1692(a).) Congress enacted the FDCPA in order "to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." (15 U.S.C. § 1692(e).) The FDCPA attempts to achieve this purpose through provisions regulating the practices of debt collectors. (See 15 U.S.C. § 1692 et seq.) Federal courts have concluded that a false representation as to a creditor's name may constitute a violation of the FDCPA. (See Wallace v. Washington Mutual Bank, F.A. (6th Cir. 2012) 683 F.3d 323, 327 ["District courts have decided, and we agree, that a clearly false representation of the creditor's name may constitute a `false representation ... to collect or attempt to collect any debt' under [15 U.S.C.] Section 1692e."].) In his lawsuit, Tourgeman seeks to enjoin respondents from continuing to violate a federal law enacted to protect the general public from abusive debt collection practices. We therefore conclude that Tourgeman's action, if successful,
Respondents' arguments to the contrary are unpersuasive. Respondents do not dispute that the FDCPA provides important rights to the general public, or that Tourgeman's complaint sought to further the public policy goals of the FDCPA. Rather, respondents contend, as they did in the trial court, that Tourgeman failed to present evidence that his action, if successful, would benefit the public. Specifically, respondents contend that Tourgeman failed to present "evidence of how many of [respondents'] letters or lawsuits allegedly misidentified the original creditor or otherwise ran afoul of the law." (Italics added.)
In a related argument, respondents contend that Tourgeman failed to demonstrate that this action would benefit the public because a federal court rejected related claims on the merits. Section 425.17, subdivision (b)(2) states that a court is to assume that the challenged action will be successful in considering whether the action benefits the public. (Ibid. ["The action, if successful, would enforce an important right affecting the public interest, and would confer a significant benefit ... on the general public or a large class of persons." (italics added)].) The merits of Tourgeman's claim are thus irrelevant in determining whether the action meets the public benefit requirement of section 425.17, subdivision (b)(2).
"`"[C]ongress chose a `private attorney general' approach to assume enforcement of the FDCPA"' [citation]." (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1003 [156 Cal.Rptr.3d 26].) Our Legislature also has authorized private attorney general actions with respect to the enforcement of the UCL (Bus. & Prof. Code, § 17200 et seq.). (See Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 691 [99 Cal.Rptr.2d 809] ["a claim for injunctive relief under ... Business and Professions Code section 17200 et seq. is brought by a plaintiff acting in the capacity as a private attorney general"].) Thus, concluding that Tourgeman's action is within the ambit of the public interest exemption is fully consistent both with Congress's intent in enacting FDCPA and the Legislature's intent in enacting the UCL and section 425.17. (See Ingels, supra, 129 Cal.App.4th at p. 1066 ["the qualifying language would clearly encompass claims brought under the Unfair Competition Law (Business and Professions Code section 17200 et. seq.) ..." (quoting the legislative history of § 425.17)].)
It is undisputed that no public entity has sought to enforce the rights that Tourgeman sought to vindicate in his lawsuit. Under these circumstances, we conclude that private enforcement was necessary to enforce the right at issue in Tourgeman's action. (See Strathmann, supra, 210 Cal.App.4th at p. 504 ["In this case, private enforcement is necessary because neither the Attorney General nor the Insurance Commissioner has intervened to prosecute the action."]; Carpenters, supra, 124 Cal.App.4th at p. 301 [concluding "private enforcement action is necessary `[b]ecause the City of Hercules has failed to take any action to enforce the City's Wage Policy on the Project'"].)
In this case, as discussed above, Tourgeman did not seek any financial benefit from the lawsuit, and, as the trial court noted, it is unlikely that Tourgeman would have benefitted from any potential injunctive relief, since it is doubtful that he will again be the subject of respondents' debt collection efforts. This fact, alone, supports the conclusion that the financial burden on Tourgeman is disproportionate to his stake in the action. (See Carpenters, supra, 124 Cal.App.4th at p. 301 [concluding the "financial burden on the Plaintiffs is disproportionate to their stake in the action" because plaintiffs "bring the action to vindicate a public interest relating to enforcement of the Prevailing Wage Policy but do not themselves belong to the under-compensated class of nonunion workers"]; compare with Blanchard, supra,
Further, Tourgeman could reasonably have expected to incur significant litigation costs in attempting to prove that respondents violated the FDCPA and that injunctive relief was an appropriate remedy to deter future violations.
In arguing to the contrary, Respondents again contend, without citation to authority, that Tourgeman was required to make an evidentiary showing in order to establish this prong, arguing that Tourgeman failed to "submit any evidence of the financial burden this litigation would have imposed on him relative to his stake in the matter." (Italics added.) We reject this argument. As discussed previously, the applicability of the public interest exception is determined by examining the complaint. (See, e.g., Strathmann, supra, 210 Cal.App.4th at p. 499.)
Accordingly, given the circumstances discussed above, we conclude that Tourgeman's filing this action placed a disproportionate financial burden on him in relation to his stake in the matter.
Because Tourgeman's action satisfied each of the requirements of the public interest exception to the anti-SLAPP statute, we conclude that Tourgeman's action was exempt from application of the anti-SLAPP statute.
The judgment and the trial court's order granting respondents' motion for attorney fees and costs are reversed. The matter is remanded to the trial court
McDonald, Acting P. J., and Irion, J., concurred.
"SLAPP" stands for strategic lawsuit against public participation. (See Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57 [124 Cal.Rptr.2d 507, 52 P.3d 685].)
In any event, respondents' argument is meritless. For the reasons stated in part III.A., ante, the trial court was required to determine whether respondents would have prevailed on their special motion to strike before it could award respondents attorney fees pursuant to section 425.16, subdivision (c)(1). Thus, Tourgeman timely raised his claim by arguing in opposition to respondents' motion for attorney fees that respondents would not have prevailed on their special motion to strike because his complaint was subject to the public interest exception.
