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Rodriguez v. Your First Choice, LLC

United States District Court, D. Nevada

October 25, 2017




         Plaintiff Irma Rodriguez obtained a payday loan from defendant Your First Choice, LLC (First Choice). She defaulted on the loan, and First Choice attempted to collect on the debt. In response to these attempts, Rodriguez sued First Choice for alleged violations of Nevada's debt collection practices statute. Rodriguez learned as part of discovery that First Choice obtained her credit report after it answered the initial complaint. Rodriguez then filed an amended complaint, alleging First Choice violated the Fair Credit Reporting Act (FCRA).

         First Choice moves to dismiss or for summary judgment. Because both parties rely on discovery responses in addition to the pleadings, I treat the motion as one for summary judgment. First Choice argues that it cannot be held liable for its debt collection practices because it is not covered by the federal Fair Debt Collections Practices Act (FDCPA), which is incorporated into the Nevada statute. First Choice also argues that Rodriguez consented to First Choice obtaining her credit report, which it did for a statutorily permissible purpose. Alternatively, First Choice contends Rodriguez does not have standing to bring the FCRA claim because she has not sufficiently pleaded an injury in fact.

         Rodriguez responds that the Nevada debt collection practices statute applies to businesses such as First Choice even if they could not be held liable under the FDCPA. As to the FCRA claim, Rodriguez argues that once her complaint in this case was filed, First Choice no longer had her consent or authorization to obtain her credit report. She also argues that the report was obtained for use in this litigation, which is not a permissible purpose under FCRA. Finally, she argues that the violation of FCRA's limitation on permissible purposes for obtaining a credit report and the invasion of her privacy are concrete injuries sufficient for Article III standing.

         I deny First Choice's motion for summary judgment. First Choice has failed to show that as a matter of law it cannot be liable under the Nevada debt collection practices statute, which applies to a business like First Choice even if it would not be liable under the FDCPA. With respect to the FCRA claim, there is a genuine dispute whether First Choice obtained Rodriguez's credit report for a statutorily permissible purpose. While First Choice has shown Rodriguez consented to a credit check, it has not shown as a matter of law that this consent authorized it to obtain her credit report for an impermissible purpose. Finally, Rodriguez has alleged a sufficiently concrete injury-the violation of her legally protected interest in the privacy of her credit information-to meet the requirements for Article III standing.

         I. BACKGROUND

         Rodriguez obtained a payday loan from First Choice. ECF No. 21 at 4-5.[1] First Choice is licensed in Nevada as a business engaged in “Deferred Deposit Loans, High-interest loans, Title Loans and Check-Cashing.” Id. at 3. As part of her loan application, Rodriguez signed a document titled “Consumer Credit Disclosure - Promissory Note.” ECF No. 22, Ex. A, Ex. B. This document included a “Credit Reporting” provision stating “You agree that we may make inquiries concerning your credit history and standing . . . .” Id., Ex. B. After Rodriguez defaulted on the loan, First Choice attempted to collect the debt, calling her multiple times and sending representatives to her home. ECF No. 26, Ex. 1.

         On October 20, 2016, Rodriguez filed suit, alleging First Choice's collection activities violated Nevada Revised Statutes § 604A.415. ECF No. 1. On January 13, 2017, First Choice answered. ECF No. 9. As part of the discovery that followed, First Choice disclosed a copy of a TransUnion credit report for Rodriguez dated January 18, 2017. See ECF No. 26, Ex. 2. Thereafter, Rodriguez filed an amended complaint to add a claim alleging that by obtaining this report without a permissible purpose, First Choice violated FCRA. First Choice now moves for summary judgment on both claims.

         II. ANALYSIS

         Summary judgment is appropriate if the pleadings, discovery responses, and affidavits demonstrate “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000). I view the evidence and draw reasonable inferences in the light most favorable to the non-moving party. James River Ins. Co. v. Herbert Schenck, P.C., 523 F.3d 915, 920 (9th Cir. 2008).

         a. Nevada Revised Statutes § 604A.415[2]

         Nevada Revised Statutes § 604A.415 states that “[i]f a customer defaults on a loan, the licensee may collect the debt owed to the licensee only in a professional, fair, and lawful manner. When collecting such a debt, the licensee must act in accordance with and must not violate . . . the federal Fair Debt Collection Practices Act . . . even if the licensee is not otherwise subject to the provisions of that Act.” A licensee is defined in the statute as “any person who has been issued one or more licenses to operate a check-cashing service, deferred loan deposit service, high-interest loan service, or title loan service . . . .” Nev. Rev. Stat. § 604A.075.

         The FDCPA regulates debt collection practices by debt collectors, defined as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). The term does not include “any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor” or “any person collecting or attempting to collect any debt owed or ...

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