In Camacho v. Jefferson Capital Sys., LLC, 2015 WL 3454070, at *3-4 (N.D. Cal. 2015), Judge Freeman rejected a debt collector’s contention that the words used by the debtor’s counsel did not convey that the debtor was represented by counsel.
Under both the FDCPA and Rosenthal Act, a debt collector may not directly communicate with an individual debtor in connection with his or her debt when the collector knows that the consumer is represented by counsel. See 15 U.S.C. § 1692c(a)(2) (“[A] debt collector may not communicate with a consumer in connection with the collection of any debt [ ] if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address.”); see also Cal. Civ.Code § 1788.14(c) (“No debt collector shall … initiat[e] communications, other than statements of account, with the debtor with regard to the consumer debt, when the debt collector has been previously notified in writing by the debtor’s attorney that the debtor is represented by such attorney with respect to the consumer debt and such notice includes the attorney’s name and address….”). Defendant argues that Plaintiff cannot meet his burden of persuasion at trial as to his claim that Defendant contacted him despite being aware that he was represented by counsel, because “Mr. Schwinn did not advise Mr. Desai that his representation was for anything other than the [state court] Collection Action. Reading Mr. Schwinn’s email at face value and giving his words their ordinary meaning, once the Collection Action was dismissed there was not attorney representation.” Mot. at 3, 4. The Court finds Defendant’s argument unpersuasive because Mr. Schwinn clearly indicated to Mr. Desai that he was representing Plaintiff with regard to the debt. The “above referenced case” Mr. Schwinn references in the email is a debt collection action brought by Defendant in order to collect on Plaintiff’s debt. See FAC Exh. 2. Neither the FDCPA nor Rosenthal Act demands that an attorney use “magic words” when informing a debt collector about his or her representation of a debtor. The plain language of the FDCPA, in fact, compels the opposite conclusion: Section 1692c(a)(2) prevents a Defendant from contacting a consumer “if the debt collector knows the consumer is represented by an attorney,” without demanding that that knowledge come directly from the debtor’s attorney. See also Goins v. JBC & Assocs., P.C., 352 F.Supp.2d 262, 272–73 (D.Conn.2005) (“As the Federal Trade Commission commentary on [Section 1692c(a)(2) ] explains, “[i]f a debt collector learns that a consumer is represented by an attorney in connection with the debt, even if not formally notified of this fact, the debt collector must contact only the attorney and must not contact the debtor.”) (citing FTC Commentary at 53 Fed.Reg. 50097, 50104 (1988)) (emphasis added). Though the Rosenthal Act requires the communication to come from the debtor’s attorney, see Civil Code § 1788.14, it also only requires that the notification be “with respect to the consumer debt.” See id.; Alkan v. Citimortgage, Inc., 336 F.Supp.2d 1061, 1064–65 (N.D.Cal.2004). Here, Mr. Desai was informed directly by Mr. Schwinn’s email that Mr. Schwinn and the Consumer Law Center were representing Plaintiff with respect to the debt because the email stated that Mr. Schwinn was “represent[ing] Carlos Camacho in the above referenced case.” FAC Exh. 2. Representation in a debt collection action is representation with respect to the debt. Cf. Goins at 273. Defendant is therefore not entitled to summary adjudication as to either the FDCPA or Rosenthal Act claims that arise from Plaintiff’s allegation that he was contacted directly despite being represented by counsel, because Mr. Schwinn’s email to Mr. Desai informed Defendant that Plaintiff was represented by counsel with respect to his consumer debt.
But, Judge Freeman found that the debt collector’s bona fide error defense was viable.
In support of its bona fide error defense, Defendant points to a policy handbook, the Vendor Network Operations Manual (“Vendor Manual”), which it claims requires “its vendors to transmit information to the extent that a consumer is represented by counsel so Jefferson Capital will not communicate with that individual.” Becker Decl. ¶ 7 Exh. G. The Vendor Manual instructs vendors that “[i]f an account is represented by an attorney an address maintenance file must be sent to overwrite the current account address.” Id. Exh. G at 15. The Vendor Manual also gives specific instructions to its vendors on how this overwrite must occur when a vendor learns that a debtor is represented by counsel. See id. at 16 (stating that a vendor must “send [the] consumer maintenance file update with [the] attorney’s information,” including the name and address of counsel, as well as send an “Account Ledger Activity update” which denotes that such a change was made to the file). Defendant argues that this written vendor policy is “reasonably adapted” to avoid the error that gives rise to this suit. Plaintiff makes two main arguments in opposition. First, he argues that Defendant has “submitted no evidence that [the Vendor Manual] was ever provided to Mr. Desai, or that Mr. Desai … was ever trained how to proceed when the consumer retains counsel.” Pl.’s Supp. Mem., ECF 53 at 2. Second, he argues that a bona fide error defense requires “not only initial compliance procedures, but additionally, a separate preventative mechanism for catching errors” that Defendant has not shown. Neither the FDCPA nor Rosenthal Act “require debt collectors to take every conceivable precaution to avoid errors,” and instead require only that debt collectors take “reasonable precaution[s].” See, e.g., Kort v. Diversified Coll. Servs., Inc., 394 F.3d 530, 539 (7th Cir.2005). Here, Defendant has met its burden to show that, as a matter of law, it is entitled to a bona fide error defense. . . .Plaintiff’s first contention, that there is no testimony from Mr. Desai that he received and was trained on the Vendor Manual, in unavailing. Plaintiff points to several cases in which courts have looked to affidavits from the employee who has committed the error, but cites no case that demands the employee who failed to comply with the policy testify regarding his receipt and knowledge of the policy. . . Plaintiff’s second argument fares no better. Plaintiff argues that a Defendant asserting a bona fide error defense must show both an initial compliance procedure and a second level of preventative measures that would catch errors. The cases cited by Plaintiff in its opposition or supplemental memorandum do not support this assertion. Instead, these cases state that a defendant must point to a policy, rather than just training procedures, and that the policy must be reasonably adapted to prevent the specific error at issue. See, e.g., Adams v. Law Offices of Stuckert & Yates, 926 F.Supp. 521, 529 (E.D.Pa.1996); Johnson v. Eaton, 873 F.Supp. 1019, 1028 (M.D.La.1995). Unlike in those cases cited by Plaintiff, Defendant has pointed to a written policy – provided by Defendant to its vendors – which is designed to prevent this particular error: vendors, when they learn a debtor is represented by counsel, must take specific steps to inform Defendant of this fact and overwrite the account address to reflect the attorney’s address. The Court finds based upon the undisputed facts, including the Vendor Manual, that as a matter of law Defendant’s policy is reasonably adapted to prevent the error that occurred in this case – Defendant contacting Plaintiff despite Plaintiff’s counsel having told Defendant’s vendor that Plaintiff was represented by counsel. As such, Defendant is entitled to summary adjudication as to its bona fide error defense, and is not liable under the FDCPA or Rosenthal Act for contacting Plaintiff despite Plaintiff being represented by counsel.