District Court (Cal.) Says State Court Debt Collection Judgment Entered by Default Precluded FDCPA Plaintiff from Arguing that Debt Collector Sued on a Stale Debt

While the Court understands Nguyen’s argument—the California courts only decided that he owed money to LVNV, not whether the actions were filed on time—that distinction doesn’t hold up. Under Murray, when the California courts denied Nguyen’s request to set the default aside, they necessarily found Nguyen owed LVNV $35,000. They also implicitly found that LVNV’s decision to file the state court collection actions was timely and lawful. For this Court to now repudiate the state courts’ findings is exactly the type of second guessing the collateral estoppel doctrine is designed to prevent. “A party cannot by negligence or design withhold issues and litigate them in consecutive actions. Hence the rule is that the prior judgment is res judicata on matters which were raised or could have been raised, on matters litigated or litigable.” Mitchell v. Jones, 172 Cal. App. 2d 580, 585 (1959) (but noting, as in Four Star, an exception for any unnecessary defense).  The California Supreme Court has explained that courts should consider two overarching concerns when invoking collateral estoppel. “Ultimately, the inquiry that must be made is whether the traditional requirements and policy reasons for applying the collateral estoppel doctrine have been satisfied by the particular circumstances of [the] case.” Murray, 50 Cal. 4th at 868. And “it is the opportunity to litigate that is important in these cases, not whether the litigant availed himself or herself of the opportunity.” Murray, 50 Cal. 4th at 869. Finding that Nguyen is collaterally estopped here comports with both concerns. By refusing to allow him to litigate the statute of limitations issue, the Court is “conserving judicial resources and promoting judicial economy by minimizing repetitive litigation, preventing inconsistent judgments which undermine the integrity of the judicial system, and avoiding the harassment of parties through repeated litigation.” Id. at 879. Nguyen had three opportunities to raise his statute of limitations concern with the California courts. He chose not to. The Fair Debt Collection Practices Act doesn’t function to provide litigants with a second chance to try out new arguments in federal court after failing to raise them in state court.  Since there’s no dispute as to any material fact and the Defendants are entitled to judgment as a matter of law, their motion for summary judgment is GRANTED [Dkts. 71, 73]; plaintiff’s motion is DENIED. [Dkt. 76.] Fed. R. Civ. P. 56. Because Nguyen’s Rosenthal Act claim mimics the Fair Debt Collection Practices Act, the Court grants Defendants’ summary judgment on both claims.