For the Northern District of California
ORDER (C 10-03602 LB)
2which prohibits unreasonable liquidated damages provisions in contracts; (2) a violation of theConsumers Legal Remedies Act (CLRA), California Civil Code § 1750
, which prohibitsunfair practices resulting in the sale of goods or services to a consumer; (3) a violation of CaliforniaBusiness & Professions Code § 17200
, known as the Unfair Competition Law, whichprohibits unfair or unlawful conduct; (4) a breach of the promissory note’s express terms, whichallow only the collection of reasonable and actually-incurred costs; (5) a cause of action fordeclaratory relief based on the assessment, collection, and attempted collection of the collectionfees; (6) a violation of the Rosenthal Fair Debt Collection Practices Act, California Civil Code §1788
, which prohibits the collection of unlawful fees and unlawful debt collection practices;and (7) a violation of the Consumer Credit Reporting Agencies Act, California Civil Code § 1785.1
., which prohibits the furnishing of incomplete or inaccurate information to a credit reportingbureau. First Amended Complaint, ECF No. 19 at 7-15.Sallie Mae moves to dismiss all claims on the grounds that (A) Plaintiffs lack standing becausethey never alleged injury,
and (B) Plaintiffs did not state claims for relief under Federal Rule of Civil Procedure 12(b)(6). Motion to Dismiss, ECF No. 28 at 8.The court finds standing as to all claims, in part because the complaint sufficiently alleged thatplaintiff Silva paid collection penalties on each of her two loans and that the collection costs wereunreasonable.
First Amended Complaint, ECF 19 at 7, ¶¶ 27-30. The court also finds thatPlaintiffs sufficiently alleged injury-in-fact based on the attempts to collect the fees and the allegedcollection practices.
at 4-7, ¶¶ 14, 19-29. As to the section 17200 claim, the allegations aboutSilva establish standing.
at 7, ¶¶ 27-30.Claim one – alleging that the 25 percent collection costs operate as unlawful liquidated damagesunder California Civil Code § 1671(b) – states a claim for relief. The court dismisses the claimunder section 1671(d) but gives Plaintiffs leave to amend to allege fact showing the student loansalso operate as “services.” The court dismisses claim two, the CLRA claim, also with leave toamend to show facts about how the student loans operate.Claim three – the unfair competition law claim – states a claim because Plaintiffs properlypleaded predicate claims (claims one, four, and seven) to support a section 17200 claim.
Case4:10-cv-03602-LB Document35 Filed02/11/11 Page2 of 26