In Ordinario v. LVNV Funding, LLC, 2016 WL 852843, at *1-2 (S.D.Cal., 2016), Judge Burns denied summary judgment to an FDCPA plaintiff because he had failed to demonstrate that his allegedly personal debts were not commercial.
The FDCPA and RFDCPA apply only to consumer debt, not business loans. See Bloom v. I.C. Sys., Inc., 972 F.2d 1067, 1068 (9th Cir. 1992); 15 U.S.C. § 1692a(5); Cal. Civ. code § 1788.2(e). The proper classification of the credit card debt is therefore a central question in this case. LVNV points out that the credit card account at issue here was a business account. LVNV therefore argues Ordinario cannot bring a claim under either statute. Ordinario in reply argues that he used the credit card for personal purposes, and that it is the actual use of the credit card that counts. As Bloom explains, “[n]either the lender’s motives nor the fashion in which the loan is memorialized are dispositive of” whether the debt is a business or consumer debt. 972 F.2d at 1068. Ordinario contends that, although his account was characterized as being for business purposes, he actually never had a business and instead used it exclusively for personal or household purposes, bringing it within the scope of the two statutes. The law is more nuanced than Ordinario’s arguments would suggest. When determining the purpose of a loan, courts typically examine “the transaction as a whole, paying particular attention to the purpose for which the credit was extended.” Bloom, 972 F.2d at 1068. See also Slenk v. Transworld Systems, Inc., 236 F.3d 1072, 1075 (9th Cir. 2001) (analyzing facts of a transaction). Here, credit was explicitly extended for business purposes, Ordinario on the application agreed to use the card for business purposes only, and the account statements call it a business account. Ordinario points to his own declaration (Docket no. 26-5) as evidence of the use he made of the credit. Although much of it is purely conclusory, saying little more than that the charges were for personal consumer uses and not for business purposes, it does say he used the card to buy restaurant meals, gasoline, groceries, medicine, movie tickets, and other consumer goods and services for his own personal use. (Ordinario Decl., ¶ 9.) He also says he has never owned a business. (Id., ¶ 10.) That being said, one need not be a business owner to have business debt; individuals can engage in business activities. See, e.g., Piper v. Portnoff Law Assocs., 215 F.R.D. 495, 502 n.10 (E.D. Pa. 2003) (noting that individuals can own real property for business purposes, rendering their obligations business debts). While the kinds of purchases Ordinario mentions are not typically business purchases, it is impossible to be sure. This is particularly true because Ordinario does not remember the reasons for all his charges. Taken together, these facts are enough to create a genuine issue as to the nature of the debt, and to preclude summary judgment for either side on this issue.