District Court (Cal.) Finds Plaintiff Failed to Plead FDCPA Claim Against Debt Collector’s Owner/Officer

In Shapiro v. Professional Collection Consultants, 2011 WL 4500114 (C.D.Cal. 2011), Judge Wright discussed the pleading standards necessary to state a claim against a debt collector’s principal/owner liable for the actions of the business:

With respect to Hopp, the parties dispute as to whether Hopp can be held liable pursuant to the FDCPA as PCC’s owner. District courts have interpreted FDCPA’s definition of “debt collector” to include not only debt collection businesses, but under certain circumstances, employees of those business as well. See 15 U.S.C. § 1692a(6); see also Robinson, 654 F.Supp.2d at 1059 (holding that employees of a debt collection organization may be held personally liable as debt collectors for acts committed during the scope of employment). In order to allege a claim against an individual employee under the FDCPA, Plaintiff must allege that the employee: “(1) materially participated in collecting the debt at issue; (2) ‘exercise[d] control over the affairs of [the] business’; (3) was ‘personally involved in the collection of the debt at issue’; or (4) ‘was regularly engaged, directly … [or] indirectly, in the collection of debts.’ “ Schwarm v. Craighead, 552 F.Supp.2d 1056, 1073 (E.D.Cal.2008) (citations omitted). Merely serving as a shareholder, officer, or a director of a debt collecting corporation is not, in itself, sufficient to establish individual liability. Schwarm, 552 F.Supp.2d at 1073.  ¶  In this case, Plaintiff’s allegations, beyond the fact that Hopp is the owner of PCC, are conclusory. Particularly, Plaintiff alleges that Hopp is the owner of PCC and, that “as an officer, shareholder and/or director of PCC,” he was responsible for the success of the company. (SAC ¶ 5.) Plaintiff, in addition, asserts generally that Hopp was “regularly engaged, albeit more often indirectly than directly, in the collection of debts.” (SAC ¶ 5.) Allegations, however, that Hopp was “regularly engaged” in PCC’s business, without more, do not state a plausible claim establishing individual liability. See King v. Nat’l Credit Works, Inc., No. 10–cv–02413–AWI–SKO, 2011 WL 3847018 at *5 (E.D.Cal. Aug.30, 2011). Accordingly, Plaintiff’s SAC fails to sufficiently allege that Hopp is a “debt collector” pursuant to the FDCPA.