District Court (Cal.) Says CCP 98 Declaration in Underlying State-Court Debt Collection Action Did Not Violate FDCPA Because Declarant Was Out-of-State

Defendants’ seventeenth affirmative defense asserts: “A debt collector does not make misrepresentations in violation of [the FDCPA] by using section 98 declarations in lieu of personal testimony at trial in California even though a declarant was physically located more than 150 miles from place of trial ….” Ans. at 10. And Defendants’ sixteenth affirmative defense states: “Plaintiff failed to take any steps to compel Defendant Moore to trial in California at the address provided for in her Declaration, and thus, the allegations of the Complaint related to a defective section 98 Declaration are not provable based on Plaintiffs [sic] own failure to take appropriate legal action for service of process in the underlying collection case.” Ans. at 10. These defenses appear to be responsive to the Plaintiff’s allegation that the Moore Declaration, submitted in the State Court Action in lieu of live testimony pursuant to California Code of Civil Procedure § 98, contained “false statements and false representations.” Compl. ¶¶ 29–30. Section 98 provides: “A party may, in lieu of presenting direct testimony, offer the prepared testimony of relevant witnesses in the form of affidavits or declarations under penalty of perjury. The prepared testimony may include, but need not be limited to, the opinions of expert witnesses, and testimony which authenticates documentary evidence. To the extent the contents of the prepared testimony would have been admissible were the witness to testify orally thereto, the prepared testimony shall be received as evidence in the case, provided that either of the following applies: (a) A copy has been served on the party against whom it is offered at least 30 days prior to the trial, together with a current address of the affiant that is within 150 miles of the place of trial, and the affiant is available for service of process at that place for a reasonable period of time, during the 20 days immediately prior to trial. (b) The statement is in the form of all or part of a deposition in the case, and the party against whom it is offered had an opportunity to participate in the deposition.”  Plaintiff alleges that the Moore Declaration violated the FDCPA and RFDCPA by falsely stating that Moore was available for service of process in San Francisco per § 98 when she in fact lived and worked in the state of Georgia. Compl. ¶ 33. Plaintiff also alleges that the Moore Declaration falsely stated that Moore had personal knowledge of the facts stated therein. Id. ¶¶ 34–35. Defendants counter that these claims are “barred” by Ciganek v. Portfolio Recovery Associates, LLC, 190 F. Supp. 3d 908 (N.D. Cal. 2016). Ans. at 10.  In Ciganek, Judge Koh held that a debt collector did not violate the FDCPA by submitting a § 98 declaration even though the declarant was physically located more than 150 miles from place of trial. The court noted that the plain language of § 98 only requires that a declarant be “available for service for process” at the provided address, without specifying that she must be physically available for personal service at that address, as opposed to available for service by mail. Ciganek, 190 F. Supp. 3d at 915. Nor did the legislative history of § 98 suggest that § 98 requires the declarant to be physically located within 150 miles of the place of trial. Id. at 918. Accordingly, Ciganek determined that a debt collector does not violate the FDCPA by relying on a declaration that provides an address within 150 miles of the place of trial where the declarant is not physically present for personal service. Id. at 920–21. Parties’ counsel informed the Court at the hearing that the issues raised in Ciganek and the sixteenth and seventeenth affirmative defense—whether a § 98 declarant must be physically available for personal service, and whether a party challenging a § 98 declaration must first attempt to compel the declarant to trial—are currently before the California Supreme Court in a case scheduled for oral argument in January 2019.  *5 In light of Ciganek, and pending the California Supreme Court’s word on the matter, Defendants have a plausible argument that, even if it is true that Moore was living in Georgia when she stated in her § 98 declaration that she was available for service of process in San Francisco, such a statement would not give rise to liability under the FDCPA. Thus, Defendants have sufficiently pled the sixteenth and seventeenth affirmative defenses.