9th Cir. Finds No Vicarious Liability for Creditor under FDCPA/Rosenthal Act; Finds UCL Inappropriate Vehicle to Challenge Collection Practices

In Makreas v. Moore Law Group, A.P.C., — Fed.Appx. —-, 2014 WL 2979018 (9th Cir. 2014), the Court of Appeals for the Ninth Circuit held that a Plaintiff failed to demonstrate that a creditor was vicariously liable under the FDPCA/Rosenthal Act or that the UCL was a proper vehicle to obtain relief under those statutes.

The district court properly dismissed Makreas’s claim under California’s Rosenthal Fair Debt Collection Practices Act against defendant Citibank because Makreas failed to alleged facts sufficient to show that Citibank itself engaged in debt collection activities, or that the Moore Law Group acted as Citibank’s agent when it engaged in debt collection activities, thereby making Citibank vicariously liable for its acts. See Cal. Civ.Code §§ 1788.1(b), 1788.2(c) (explaining that purpose of Act is “to prohibit debt collectors from engaging in unfair or deceptive acts or practices in the collection of consumer debts” and defining “debt collector”); Fenton v. Freedman, 748 F.2d 1358, 1361–62 (9th Cir.1984) (listing requirements for establishing agency under California law); see also Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1173 (9th Cir.2006) (addressing vicarious liability under federal Fair Debt Collection Practices Act). ¶ The district court properly dismissed Makreas’s unfair competition claim because Makreas failed to allege facts sufficient to show that he sought injunctive relief, or that defendants obtained money or property from him as a result of their alleged misconduct, warranting restitution. See Korea Supply Co. v. Lockhead Martin Corp., 63 P.3d 937, 943–45 (Cal.2003) (explaining that under California’s Unfair Competition Law, Cal. Bus. & Prof.Code § 17200, relief is generally limited to injunctive relief and restitution, and defining restitution); see also Los Angeles v. Lyons, 461 U.S. 95, 111 (1983) (injunctive relief is “unavailable absent a showing of irreparable injury, a requirement that cannot be met where there is no showing of any real or immediate threat that the plaintiff will be wronged again”).