District Court (Cal.) Dismisses Rosenthal Act Claim Because Collection on a Residential Lease Did Not Render the Defendant a “Debt Collector”

Defendant Greystar argues that the Rosenthal Act does not apply to late fees in residential leases. Doc. No. 23-1 at pgs. 13-16. Defendant contends that the Act only applies to debt collection in credit transactions. Id. at pgs. 14-15.  In opposition, Plaintiff argues that the Rosenthal Act applies for all types of consumer debt collection. Doc. No. 28 at pgs. 4-5. Plaintiff contends that courts have held non-credit consumer obligations are considered consumer debt within the Act. Id.  The Court agrees with Greystar and finds that Plaintiff’s claim fails to establish that Defendant was engaged in consumer debt collection. “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). Under the FDCPA, a debt collector is 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 any 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 FDCPA’s definition of debt collector “does not include the consumer’s creditors, a mortgage servicing company, or any assignee of the debt, so long as the debt was not in default at the time it was assigned.” Nool v. HomeQ Serv., 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009) (citing Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir.1985)).  Plaintiffs fail to allege that either the “principal purpose” of Defendant’s business is to collect debts, or that Defendant is a person who “regularly” collect debts on behalf of others. See Izenberg v. ETS Servs., LLC, 589 F. Supp. 2d 1193, 1198 (C.D. Cal. 2008) (“To be liable for violation of the FDCPA, a Defendant must—as a threshold requirement—fall within the Act’s definition of a ‘debt collector.’ ”) (citations omitted). “The Court is not aware of any cases holding that rent collection equates to “debt collection” or that rent involves a “consumer credit transaction” under the Rosenthal Act. Plaintiffs have not established that Creekside Meadows, as a landlord, extends credit to tenants.” Leasure v. Willmark Communities, Inc., No. 11-CV-00443 BEN DHB, 2013 WL 6097944, at *4 (S.D. Cal. Mar. 14, 2013)  Accordingly, this Court GRANTS Defendant’s motion to dismiss the Rosenthal Act claim.