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Midland and H&H Compel Arbitration of CCP98 FDCPA Claim


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Lomeli v. Midland Funding, LLC., No. 5:19-CV-01141-LHK (N.D. Cal. Sept. 26, 2019)

In the aftermath of Meza, there have been an increased number of fdcpa cases filed immediately upon any perceived deficiency in the "declaration in lieu of testimony" document filed in the cal. state court action.

Usually, the defendant in the cal. state court action is represented, and the same counsel files the fdcpa case in fed. court. About half have sought class certification.

Lomeli is representative of the types of fdcpa cases that have been filed.  Lomeli filed an fdcpa suit arising out of an affidavit filed by h&h in midland's collection lawsuit in cal. state court because the affiant's address was listed as minnesota.


In his Complaint, Plaintiff alleges that the Declaration in Lieu of Testimony is invalid because Walker's address "is located more than 150 miles from the place of trial" and that Defendant's attempt to use the Declaration in Lieu of Testimony "is false, misleading, and unconscionable." Plaintiff therefore asserts a claim under the federal Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA") on behalf of himself and all others similarly situated.

Probably because Lomeli sought class certification, and to avoid any possible waiver of arbitration, the fdcpa defendants did not move to dismiss the claims or seek summary judgment on the merits under some theory that the availability of a state law remedy forecloses a claim under the fdcpa. Rather, both midland and h&h successfully moved to compel arbitration of Lomeli's claims on an individual basis.

During discovery, the court ordered midland to produce a full and unredacted copy of the forward flow agreement.  Midland produced the agreement but moved to seal, which was denied w/o pred.  A renewed motion to seal filed last week is still pending.

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