United States District Court, D. Oregon, Eugene Division
OPINION AND ORDER
MICHAEL McSHANE UNITED STATES DISTRICT JUDGE
Nicholas Russell brings this putative class action against
Ray Klein, Inc. and Christopher Bevans for alleged violations
of the Oregon Uniform Trade Practices Act
(“UTPA”), Oregon Unlawful Debt Collection
Practices Act (“UDCA”), and Federal Fair Debt
Collection Practices Act (“FDCPA”). With respect
to the UTPA, Mr. Russell alleges that Defendants are
misrepresenting to debtors that they are authorized by state
law to charge a $45 attorney's fee upon garnishment.
Defendants move to dismiss the UTPA claim pursuant to
Fed.R.Civ.P. 12(b)(6). Because Mr. Russell has alleged a
plausible claim that Defendants' have violated the UTPA,
Defendants' Motion to Dismiss (ECF No. 14) is DENIED.
than eighteen years ago, Nicholas Russell obtained a loan or
extension of credit from non-party Washington Mutual Bank.
First Am. Compl. (“FAC”) ¶ 27, ECF No. 1.
The loan was obtained for “personal, family, or
household purposes.” FAC ¶ 27. When Mr. Russell
defaulted on that obligation, Washington Mutual initiated a
lawsuit in Jackson County Circuit Court and obtained a
judgment against Mr. Russell. FAC ¶ 27. Several years
later, on February 21, 2003, Washington Mutual assigned that
judgment to Ray Klein, Inc. FAC ¶ 27.
effort to enforce its judgment, Ray Klein, Inc., acting
through its in-house attorney Christopher Bevans, issued a
writ of garnishment to Mr. Russell's employer in October
2018. FAC ¶¶ 9, 6, 29. A copy of the writ and a
debt calculation form were also sent to Mr. Russell. FAC
¶¶ 11, 37. On both documents, Ray Klein, Inc.
represented that it was authorized to charge an
attorney's fee of $45 for issuing the writ of
garnishment. FAC ¶ 51. It further represented that Mr.
Russell was responsible for the fee and that the fee had been
added to Mr. Russell's outstanding debt. FAC ¶¶
7-8, 11, 37. To that end, when Ray Klein, Inc. received the
garnished wages from Mr. Russell's employer, it deducted
the $45 attorney's fee and then credited the remainder of
the funds toward satisfaction of Mr. Russell's debt. FAC
Russell filed this putative class action on January 1, 2019.
Compl. at 23, ECF No. 1. Defendants moved to dismiss the
Complaint in April, but their motion was denied as moot when
Mr. Russell submitted his FAC on May 1. See Minute
Order, ECF No. 13 (citing Ramirez v. Cty. of San
Bernardino, 806 F.3d 1002, 1008 (9th Cir. 2015)). In the
FAC, Mr. Russell asserts claims for violations of the UTPA,
UDCA, and FDCPA. FAC ¶¶ 50-54. With respect to the
UTPA claim, Mr. Russell alleges that Defendants “caused
a likelihood of confusion and . . . misunderstanding as to
source, approval, and/or certification” of the $45
attorney's fee by wrongly suggesting that the fee was
authorized under Oregon law. FAC ¶ 50. Defendants now
move to dismiss Mr. Russell's UTPA claim pursuant to
survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a
complaint must contain factual allegations sufficient to
“state a claim to relief that is plausible on its
face.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007). A claim is plausible
on its face when the factual allegations allow a court to
infer the defendant's liability based on the alleged
conduct. Ashcroft v. Iqbal, 556 U.S. 662, 663
(2009). The factual allegations must present more than
“the mere possibility of misconduct.”
Id. at 678. When considering a motion to dismiss, a
court must accept all allegations of material fact as true
and construe those facts in the light most favorable to the
non-moving party, Burget v. Lokelani Bernice Pauahi
Bishop Trust, 200 F.3d 661, 663 (9th Cir. 2000), but it
is “not bound to accept as true a legal conclusion
couched as a factual allegation.” Twombly, 550
U.S. at 555. If a complaint is dismissed, the court must
grant the plaintiff leave to amend unless it
“determines that the pleading could not possibly be
cured by the allegation of other facts.” Doe v.
United States, 58 F.3d 494, 497 (9th Cir. 1995).
his UTPA claim, Mr. Russell must establish three elements:
“(1) a ‘person' (2) ‘in the course of
the person's business, vocation or occupation' (3)
‘[c]auses likelihood of confusion or of
misunderstanding as to the source, sponsorship, approval, or
certification' of, among other things, a ‘loan or
extension of credit.'” Gordon v.
Rosenblum, 361 Or. 352, 367 (2017). In response,
Defendants raise three arguments as to why Mr. Russell's
UTPA claim fails. First, Defendants argue that the UTPA's
substantive protections are not broad enough to govern the
business practices of a debt collector whose conduct is
unrelated to the original service rendered to the targeted
debtor. Second, Defendants argue that, even if their business
practices are subject to the UTPA, they never engaged in any
conduct which would violate a consumer's rights under the
UTPA. Finally, Defendants argue that, even if their
businesses practices are subject to and violated the UTPA,
those alleged violations are not actionable because the
debtor here never suffered an ascertainable loss of money or
property as a result of the alleged violations. The Court
addresses each argument in turn.
Or Rev. Stat. § 646.608(1)(b)
Russell alleges that Defendants violated Or. Rev. Stat.
§ 646.608(1)(b) by causing a “likelihood of
confusion or misunderstanding” as to the source,
approval, or certification of fees which they added to his
outstanding debt when garnishing his wages. FAC ¶ 50.
Specifically, he argues that Defendants misrepresented that
Or. Rev. Stat. § 18.999(4)(a)(H) authorized Defendants
to recover an additional $45 attorney's fee, when, in
fact, Defendants never “actually paid” an
attorney to issue the garnishment. FAC ¶¶ 33-36,
argue that, regardless of whether they were authorized to
recover an issuance fee under Or. Rev. Stat. §
18.999(4)(a)(H), the UTPA does not govern representations
made by a debt collector about such fees. Defendants'
argument is an attempt to reframe the issuance fee as the
service, notwithstanding the underlying loan Mr. Russell
obtained from Washington Mutual Bank.
UTPA . . . was enacted as a comprehensive statute for the
protection of consumers from unlawful trade practices.”
Pearson v. Phillip Morris, Inc., 358 Or. 88, 115
(2015). Although the UTPA does not define “services,
” it limits the application of its protections to those
services “obtained primarily for personal, family, or
household purposes, ” including “loans and
extensions of credit.” Id. (quoting Or. Rev.
Stat. § 646.605(6)(a)). Defendants argue that the