District Court (Cal.) Says Selling Debt to a Debt Buyer in and of Itself is Not “Debt Collection” under the Rosenthal Act

In Ramirez v. Midland Credit Mgmt., Inc., No. 22-cv-02772-VC, 2022 U.S. Dist. LEXIS 191894 (N.D. Cal. Oct. 20, 2022), Judge Chhabria dismissed a Rosenthal Act case premised on the sale of the debt.

Ramirez alleges that Capital One violated section 1692e of the FDCPA, which prohibits debt collectors from using “false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. The allegedly violative conduct here—Capital One’s act of selling the debt at issue to Midland Credit Management—does not seem like conduct that is “in connection with” the collection of the debt, at least not as the term “collection” is commonly understood. And Ramirez has provided no authority to support her position. [*2]  In fact, the cases that Ramirez’s counsel cited during the motion hearing suggest that, far from an act done “in connection with” the collection of a debt, the sale of a debt is an alternative to collection. See, e.g., Hinkle v. Midland Credit Management, 827 F.3d 1295, 1297-98 (11th Cir. 2016).