FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TIMOTHY MCCOLLOUGH,
Plaintiff-Appellee, No. 09-35767
v.
D.C. No.
1:07-cv-00166-CSO
JOHNSON, RODENBURG & LAUINGER,
LLC, OPINION
Defendant-Appellant.
Appeal from the United States District Court
for the District of Montana
Carolyn S. Ostby, Magistrate Judge, Presiding
Argued and Submitted
July 29, 2010—Billings, Montana
Filed March 4, 2011
Before: Sandra Day O’Connor, Associate Justice,*
Sidney R. Thomas and William A. Fletcher, Circuit Judges.
Opinion by Judge Thomas
*The Honorable Sandra Day O’Connor, Associate Justice of the United
States Supreme Court (Ret.), sitting by designation pursuant to 28 U.S.C.
§ 294(a).
3117
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3121
COUNSEL
John H. Boyer, Fred Simpson, and Jessie Lundbert, Missoula,
Montana, for the appellant.
John Heenan, Billings, Montana, and Richard Rubin, Santa
Fe, New Mexico, for the appellee.
3122 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
OPINION
THOMAS, Circuit Judge:
Debt collection law firm Johnson, Rodenburg & Lauinger
(“JRL” or “the law firm”) appeals from the entry of summary
judgment against it under the federal Fair Debt Collection
Practices Act (“FDCPA”), and from a subsequent jury verdict
awarding damages under the FDCPA, the Montana Unfair
Trade Practices and Consumer Protection Act (“MCPA”), and
state torts of malicious prosecution and abuse of process. We
have jurisdiction pursuant to 28 U.S.C. § 1291 and we affirm.
I
Tim McCollough, a former school custodian, opened a
credit card account with Chemical Bank sometime around
1990. Chemical Bank merged with the Chase Manhattan
Bank (“Chase Manhattan”) in 1996 and continued business
under the Chase Manhattan name. McCollough continued to
make purchases on the account.
McCollough and his wife fell behind on their credit card
bills after he allegedly suffered a brain injury at work and she
underwent surgery. When McCollough made his last payment
on the Chase Manhattan account in 1999, an unpaid balance
of approximately $3,000 remained. In 2000, Chase Manhattan
“charged off” the account on its books.
Collect America, Ltd. (“Collect America”),1 through its
subsidiary, CACV of Colorado, Ltd. (“CACV”), is a pur-
chaser of bad debt portfolios—typically, debts that have been
charged off by the primary lender. CACV purchases the
debts; Collect America attempts collection.
1
Collect America is now known as “SquareTwo Financial.”
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3123
In 2001, CACV purchased McCollough’s delinquent
account from Chase Manhattan. CACV sued McCollough in
2005 for $3,816.80 in state court to collect the debt. Acting
pro se, McCollough replied that the “statute of limitations is
up.” Two weeks later, CACV dismissed the case. CACV doc-
umented service of the complaint and McCollough’s response
in its electronic files.
In 2006, Collect America retained JRL, a law firm special-
izing in debt collection, to pursue collection of McCollough’s
outstanding debt. Although JRL is a North Dakota law firm,
some of its lawyers are admitted to practice in Montana.
Charles Denby was the JRL attorney who handled the law
firm’s collection cases for Montana. During the period from
January 2007 through July 2008, JRL filed 2,700 collection
lawsuits in Montana. On an average day, JRL filed five law-
suits in the state; on one day, JRL filed 40 lawsuits. JRL attor-
ney Lisa Lauinger testified that approximately 90% of the
collection lawsuits resulted in a default judgment.
The contract between JRL and Collect America contained
the following disclaimer: “Collect America makes no war-
ranty as to the accuracy or validity of data provided.” In addi-
tion, the contract expressly made JRL “responsible to
determine [its] legal and ethical ability to collect these
accounts.” CACV transmitted information about McCol-
lough’s account to JRL using debt collection software. CACV
also sent the law firm the electronic file.
The law firm’s screening procedures flagged a statute of
limitations problem with McCollough’s debt. On January 4,
2007, JRL account manager Grace Lauinger wrote to CACV:
“It appears that the Statute of Limitations has expired on this
file as of August 21, 2005. If you can provide us with an
instrument in writing to extend the Statute of Limitations.”
The next day, JRL recorded in the electronic file that “***
NO DEMAND HAS GONE OUT ON THIS FILE *** THIS
3124 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
IS THE COLLECT AMERICA BATCH THAT WE ARE
HAVING PROBLEMS W[ITH].”
On January 23, 2007, CACV responded to JRL attorney
Lisa Lauinger in an email entitled “sol extended” that McCol-
lough had made a $75 partial payment on June 30, 2004, and
inquired: “Do you need any info from me on this one?” Based
on that payment date, the five-year statute of limitations on
the claim against McCollough would not have expired until
2009. See Colo. Nat’l Bank of Denver v. Story, 862 P.2d
1120, 1122 (Mont. 1993) (holding that Montana’s five-year
statute of limitation on an account stated commences running
from the date of the last payment).
However, the information was incorrect: McCollough had
not made a partial payment on June 30, 2004. Rather, as
reflected in the electronic file, the event that took place on
June 30, 2004, was the return of court costs to CACV for a
collection complaint and summons that CACV had prepared
in 2003. Lisa Lauinger did not respond to CACV’s offer to
provide additional documentation of the event.
On April 17, 2007, JRL filed a collection complaint signed
by JRL attorney Charles Dendy against McCollough in Mon-
tana state court. The complaint sought judgment for an
account balance of $3,816.80, interest of $5,536.81, attor-
ney’s fees of $481.68, and court costs of $120.00.
Dendy later testified that he reviewed the information in the
electronic file before filing suit. At that point, the electronic
file indicated the 2000 charge-off date; a June 30, 2004, entry
indicating the return of court costs; an entry showing that
CACV had previously sued McCollough; and an entry indi-
cating that McCollough had pled a statute of limitations
defense in response. Dendy admitted that he made no inquiry
into whether a partial payment occurred on June 30, 2004.
Instead, he explained: “In this case I relied upon the informa-
tion that was provided by the client.”
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3125
On June 13, 2007, McCollough filed a pro se answer to the
complaint, asserting a statute of limitations defense:
FORGIVE MY SPELLING I HAVE A HEAD
INJURY AND WRITING DOSE NOT COME
EASY
(1) THE STACUT OF LIMITACION’S IS UP, I
HAVE NOT HAD ANY DEALINGS WITH ANY
CREDITED CARD IN WELL OVER 8½ YEARS
(2) I AM DISABLED I GET 736.00 A MONTH
S.S.I. . . .
(3) WHEN WORKERS COMP STOPED PAYING
I RAN OUT OF MONEY, CHASE WOULD NOT
WORK WITH ME, THEY PASSED IT ON TO
COLLECTOR’S – THEY LIED TO ME, THEY
INSULTED ME, THEY USED BAD LANGUAGE,
THEY CALLED AROUND THE CLOCK, SO I
COULD NOT REST, THEY GOT ME SO WOUND
UP AND CONFUSED THE HEALING OF MY
HEAD INJURY STOPED! THEY WERE HURT-
ING ME, SO I HAD TO STOP DEALING WITH
THEM SO I COULD RECOVER, IM STILL
RECOVERING. THE PAIN THEY COSSED AND
NEW MED BILLS ARE WORTH MORE THEN
THE MONEY THEY WANT.
(4) THIS IS THE THIRED TIME THEY HAVE
BROUGHT ME TO COURT ON THIS ACCOUNT,
. . . WHEN WILL IT STOP DO I HAVE TO SUE
THEM SO I CAN LIVE QUIETLY IN PAIN
One month later, McCollough also telephoned Dendy and
left a message indicating that he would be seeking summary
judgment on the basis of the statute of limitations.
3126 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
Dendy noted on July 11, 2007, “[w]e need to get what the
client has for docs on hand.” The following day, Grace Lau-
inger sent an email to Collect America asking for documenta-
tion. Collect America responded: “[b]ecause of the age of the
account, we can’t get any more statements (other than what
has been sent to you).” Dendy continued to prosecute the suit.
On August 6, 2007, CACV informed Grace Lauinger that
McCollough had not made a partial payment on June 30,
2004, as previously stated; rather, the entry on that date “was
actually unused costs by another office, not payment.” Grace
Lauinger testified that she scanned the email into the elec-
tronic file to which Dendy had access and that she did not
recall whether she directly conveyed the new information to
Dendy. Dendy testified that he did not learn of this informa-
tion until later. He continued to prosecute the suit.
In October 2007, Dendy served on McCollough a list of
twenty-two requests for admission that included the follow-
ing:
11. Prior to initiation of this suit, Defendant Tim M.
McCollough has never notified plaintiff or any other
party in interest in this action of any disputes regard-
ing said Chase Manhattan Bank credit card.
....
14. There are no facts upon which Defendant Tim
M. McCollough relies as a basis for defense in this
action.
....
17. Every statement or allegation contained in plain-
tiff’s Complaint is true and correct.
....
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3127
21. Defendant Tim M. McCollough made a payment
on said Chase Manhattan Bank credit card on or
about June 30, 2004 in the amount of $75.00.
The requests for admission did not include an explanation
that, under Montana Rule of Civil Procedure 36(a), the
requests would be deemed admitted if McCollough did not
respond within thirty days.
McCollough retained counsel and timely denied all of the
requests. Continuing to prosecute the collection case, Dendy
issued a subpoena to Chase in November 2007 seeking pro-
duction of the operative records from McCollough’s account.
Chase responded a month later that it had no records of the
account.
On December 7, 2007, Dendy sent to CACV an email
marked “URGENT.” The email read:
An attorney has appeared in this action and has
served discovery requests. . . .
The attorney is one who is anti purchased debt and
who attempts to run up costs in an attempt to secure
a large cost award against plaintiff. . . .
Please provide me with copies of everything you can
get for documentation as soon as possible. We need
to request everything available from the original
creditor, not just the things that you normally
request, etc. Application, statements, cardmember
agreement, copies of payments, copies of correspon-
dence. Please have the requests expedited if possible.
CACV emailed in response:
For this file we are not able to get any more media.
The retention rate is seven years from [charge-off],
3128 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
which was 10/2000. I have sent you all the docs we
have.
CACV also called JRL to explain that the last payment
McCollough had made on the account preceded the 2000
charge-off.
That afternoon, CACV instructed Dendy to dismiss the suit
“asap” because of the “SOL problem.” JRL then moved for
dismissal with prejudice and the state court dismissed the
action.
McCollough sued JRL in federal district court alleging vio-
lations of the FDCPA and the MCPA, along with state law
claims for malicious prosecution and abuse of process.
On cross-motions for summary judgment, the district court
found that the following facts were established:
(1) On April 17, 2007, JRL filed a time-barred law-
suit against McCollough.
(2) By August 6, 2007, JRL had information from its
client demonstrating that the lawsuit was time-
barred.
(3) JRL prosecuted the time-barred lawsuit against
McCollough until December 7, 2007.
The district court granted McCollough partial summary
judgment on his FDCPA claims.
The case was then tried to a jury over the course of three
days. At trial, lay witnesses Keri Henan and Ken Lucero testi-
fied about their experiences being sued by JRL. Michael
Eakin, a consumer law attorney with Montana Legal Services,
testified about the rapid growth of debt-collection lawsuits in
Montana and about JRL’s role in that trend; he also testified
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3129
that “a vast majority” of JRL’s lawsuits against debtors result
in default judgments because JRL tries its cases without con-
sideration for the pro se status of most of its defendant-
debtors. James Patten, a Montana collection lawyer, described
the importance of reasonable pre-suit investigation and testi-
fied that it was JRL’s “factory” approach of “mass producing
default judgments,” rather than any mistake, that caused JRL
to prosecute the time-barred debt and pursue unlawful attor-
ney’s fees against McCollough.
The jury found in favor of McCollough on all remaining
claims and awarded him the $1,000 statutory maximum for
violations of the FDCPA; $250,000 for emotional distress;
and $60,000 in punitive damages.
JRL filed motions for a new trial and amendment of the
judgment to reduce the emotional distress damage award.
When the district court denied these motions, JRL timely
appealed.
II
The district court properly granted summary judgment
against JRL on the FDCPA claims. The FDCPA prohibits
debt collectors from engaging in various abusive and unfair
practices. See Heintz v. Jenkins, 514 U.S. 291, 292-93 (1995).
The statute was enacted to eliminate abusive debt collection
practices; to ensure that debt collectors who abstain from such
practices are not competitively disadvantaged; and to promote
consistent state action to protect consumers. 15 U.S.C.
§ 1692(e); Jerman v. Carlisle, McNellie, Rini, Kramer &
Ulrich LPA, ___ U.S. ___, ___, 130 S. Ct. 1605, 1608-09
(2010). The statute defines a “debt collector” as one who
“regularly collects . . . debts owed or due or asserted to be
owed or due another,” 15 U.S.C. § 1692a(6), and covers law-
yers who regularly collect debts through litigation, Heintz,
514 U.S. at 293-94.
3130 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
A
[1] Although the FDCPA is a strict liability statute, it
excepts from liability those debt collectors who satisfy the
“narrow” bona fide error defense. Reichert v. Nat’l Credit
Sys., Inc., 531 F.3d 1002, 1005 (9th Cir. 2008) (quotation
omitted). That defense provides that:
A debt collector may not be held liable in any action
brought under [the FDCPA] if the debt collector
shows by a preponderance of evidence that the viola-
tion was not intentional and resulted from a bona
fide error notwithstanding the maintenance of proce-
dures reasonably adapted to avoid any such error.
15 U.S.C. § 1692k(c). “The bona fide error defense is an affir-
mative defense, for which the debt collector has the burden of
proof.” Reichert, 531 F.3d at 1006 (citing Fox v. Citicorp.
Credit Servs, Inc., 15 F.3d 1507, 1514 (9th Cir. 1994)). Thus,
to qualify for the bona fide error defense, the defendant must
prove that (1) it violated the FDCPA unintentionally; (2) the
violation resulted from a bona fide error; and (3) it maintained
procedures reasonably adapted to avoid the violation.
[2] The district court correctly concluded that JRL’s bona
fide error defense failed as a matter of law. JRL argues that
it maintained adequate preventive procedures by utilizing a
system to flag potential statute of limitations problems. How-
ever, the procedures that support a valid bona fide error
defense must be “ “reasonably adapted’ to avoid the specific
error at issue.’ ” Reichert, 531 F.3d at 1006 (quoting Johnson
v. Riddle, 443 F.3d 723, 729 (10th Cir. 2006)). JRL’s error in
this case was not its failure to catch time-barred cases; indeed,
JRL initially spotted the limitations period problem and sent
a letter to CACV requesting “an instrument in writing to
extend” the limitations period. Instead, JRL erred by relying
without verification on CACV’s representation and by over-
looking contrary information in its electronic file. JRL thus
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3131
presented no evidence of procedures designed to avoid the
specific errors that led to its filing and maintenance of a time-
barred collection suit against McCollough. Cf. Jenkins v.
Heintz, 124 F.3d 824, 834 (7th Cir. 1997) (debt collectors
maintained “extensive systems” and “elaborate procedures . . .
to avoid collecting unauthorized charges,” and “insist[ed] that
their client[s] verify under oath that each of the charges was
true and correct”).
[3] JRL contends that its reliance on CACV’s representa-
tion about a June 30, 2004, partial payment created a question
of fact for the jury on its bona fide error defense. However,
the bona fide error defense “does not protect a debt collector
whose reliance on a creditor’s representation is unreason-
able.” Reichert, 531 F. 3d at 1006 (citing Clark v. Capital
Credit & Collection Serv., Inc., 460 F.3d 1162, 1177 (9th Cir.
2006)). Unwarranted reliance on a client is not a procedure to
avoid error. Indeed, in Reichert, we held that “[t]he fact that
the creditor provided accurate information in the past cannot,
in and of itself, establish that reliance in the present case was
reasonable and act as a substitute for the maintenance of ade-
quate procedures to avoid future mistakes.” 531 F.3d at 1007;
see also Turner v. J.V.D.B. & Assocs., Inc., 330 F.3d 991, 996
(7th Cir. 2003) (suggesting that one “reasonable preventive
measure[ ]” to avoid mistakes is “an agreement with . . .
creditor-clients that debts are current”); Turner v. J.V.D.B. &
Assocs., Inc., 318 F. Supp. 2d 681, 686 (N.D. Ill. 2004) (on
remand from the Seventh Circuit in the above cited case,
determining that an “understanding and/or agreement” that
the client would only furnish reliable information would have
been necessary to showing reasonable reliance).
[4] The undisputed evidence established that JRL’s reli-
ance on CACV’s email was unreasonable as a matter of law.
First, Collect America’s contract with JRL expressly dis-
claimed “the accuracy or validity of data provided” and
instructed that JRL was “responsible to determine [its] legal
and ethical ability to collect” the account. Second, the elec-
3132 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
tronic file confirmed that the event that took place on June 30,
2004, was the return of “unused costs” rather than a partial
payment. Third, the electronic file also indicated that McCol-
lough had asserted a statute of limitations defense to a collec-
tion action filed against him in 2005 over the same debt.
Finally, McCollough informed JRL that the debt fell outside
the limitations period both in his answer to JRL’s complaint
and in a phone call.
[5] For these reasons, the district court properly concluded
that JRL’s reliance on its client was unreasonable as a matter
of law. Cf. Hyman v. Tate, 362 F.3d 965, 967-68 (7th Cir.
2004) (reliance was reasonable where debt collector and
creditor-client had “understanding” that client would not for-
ward accounts in bankruptcy; error was made in 0.01% of
cases; and debt collector immediately ceased collection
efforts upon notice from debtor of the mistake); Smith v.
Transworld Sys., Inc., 953 F.2d 1025, 1032 (6th Cir. 1992)
(the FDCPA “does not require an independent investigation of
the debt referred for collection” where, for example, the debt
collector’s “referral form, completed and signed by [the
creditor-client], include[d] specific instructions to claim only
amounts legally due and owing”). The district court properly
granted summary judgment on JRL’s bona fide error defense.
B
The district court did not err in granting McCollough’s
motion for summary judgment on his claim that JRL violated
the FDCPA by requesting attorney’s fees in its underlying
state collection complaint.
[6] JRL does not dispute the district court’s determination
that the pursuit of unauthorized attorney’s fees in a collection
suit violates both § 1692f(1) and § 1692e(2) of the FDCPA.
Section 1692f(1) prohibits the use of “unfair or unconsciona-
ble means to collect or attempt to collect any debt,” including
“[t]he collection of any amount (including any interest, fee,
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3133
charge, or expense . . .) unless such amount is expressly
authorized by the agreement creating the debt or permitted by
law.” See Reichert, 531 F.3d at 1005-07 (violation of
§ 1692f(1) arising from a debt collector’s imposition of an
unlawful charge for attorney’s fees).
Section 1692e(2) prohibits the use of “any false, deceptive,
or misleading representation or means in connection with the
collection of any debt,” including “[t]he false representation
of . . . (A) the character, amount, or legal status of any debt;
or (B) any . . . compensation which may be lawfully received
by any debt collector for the collection of a debt.” See Clark,
460 F.3d at 1174-77 (possible violation of § 1692e(2) arising
from misstatement of an account balance); Foster v. DBS Col-
lection Agency, 463 F. Supp. 2d 783, 802 (S.D. Ohio 2006)
(holding debt collectors violated § 1692e(2) by seeking attor-
ney’s fees not permitted by state law); Strange v. Wexler, 796
F. Supp. 1117, 1118 (N.D. Ill. 1992) (same).
JRL argues that the district court erred in two respects.
First, JRL characterizes the district court’s decision as holding
that it violated the FDCPA by requesting attorney’s fees with-
out having proof of its entitlement to those fees at the time it
filed the complaint. In support, JRL cites the Sixth Circuit’s
opinion in Harvey v. Great Seneca Fin. Corp., 453 F.3d 324,
333 (6th Cir. 2006), which held that no FDCPA violation
occurs when a creditor files a valid debt collection action in
court without having in its possession adequate proof of its
claim. However, in contrast to Harvey, JRL’s collection
action in this case was invalid because JRL presented no
admissible evidence establishing its entitlement to collect the
fees at the time of the summary judgment motion — not at the
time it filed suit.
Second, JRL argues that summary judgment was inappro-
priate because a genuine issue of material fact existed over
whether JRL had a contractual entitlement2 to seek attorney’s
2
JRL does not challenge the district court’s determination that Montana
law did not itself authorize the request for attorney’s fees.
3134 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
fees from McCollough. Before the district court, JRL pre-
sented a credit card agreement purportedly belonging to
McCollough. JRL now admits that the agreement was not
McCollough’s and does not contest the district court’s exclu-
sion of the evidence.
JRL contends that it presented evidence that attorney’s fees
are permitted under all cardmember agreements, even if it
was not able to obtain McCollough’s specific agreement. JRL
argues that its failure to produce a cardmember agreement
applicable to McCollough was not fatal, and that the issue
should have gone to the jury for its determination as to
whether McCollough’s agreement contained such a provision.
[7] The district court correctly concluded that JRL failed to
meet its burden to show a genuine issue for trial because it
presented no admissible evidence of a contract authorizing a
fee award. The FDCPA prohibits “[t]he collection of any
amount . . . unless such amount is expressly authorized by the
agreement creating the debt or permitted by law.” 15 U.S.C.
§ 1692f(1) (emphasis added). JRL produced no evidence of
express authorization of its fee request from McCollough; the
presentation of generic evidence that all credit cards contain
attorney’s fees provisions was insufficient to create a genuine
issue of material fact for the jury. The district court correctly
granted summary judgment on the claim.
C
The district court properly held that JRL’s requests for
admission violated the FDCPA as a matter of law.
1
[8] As a threshold matter, JRL contends that the FDCPA
should not be read to cover discovery procedures such as
requests for admission,3 although JRL concedes that the
3
JRL’s own actions in this case belie its theory. In the very requests for
admission at issue, it stated at the bottom: “This is an attempt to collect
a debt.”
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3135
FDCPA covers both the filing of complaints, Donohue v.
Quick Collect, Inc., 592 F.3d 1027, 1031-32 (9th Cir. 2010),
and the service of settlement letters during the course of liti-
gation, Heintz, 514 U.S. at 293. Our precedents do not support
such a distinction. Rather, the FDCPA “applies to the litigat-
ing activities of lawyers.” Heintz, 514 U.S. at 294. The
Supreme Court’s reasoning in Heintz was twofold. First, the
Court reasoned that lawyers who collect debts through litiga-
tion plainly fall within the statutory language defining “ ‘debt
collector[s]’ ” to include those who “ ‘regularly collec[t] or
attemp[t] to collect, directly or indirectly, [consumer] debts
owed or due or asserted to be owed or due another.’ ” Id.
(quoting 15 U.S.C. § 1692a(6) (alterations in original)). Sec-
ond, the Court observed that an earlier version of the FDCPA
provided an exemption for lawyers, but that Congress had
since repealed that exemption. See id. at 294-95; Pub. L. No.
95-109, § 803(6)(F), 91 Stat. 874, 875 (1977) (exempting
from the definition of the term “debt collector” ”any attorney-
at-law collecting a debt as an attorney on behalf of and in the
name of a client”); Pub. L. No. 99-361, 100 Stat. 768 (1986)
(repealing the exemption); see also 15 U.S.C.
§ 1692a(6)(A)-(F) (listing current exceptions to the definition
of “debt collector,” none of which cover attorneys).
[9] We have reached similar conclusions in two cases.
First, in the pre-Heintz case of Fox, we held that the FDCPA
applies to attorneys engaged in “purely legal activities” and
thus covers the filing of an application for a writ of garnish-
ment. See 15 F.3d at 1511-12; see also id. at 1512 (“There is
simply no mention of attorneys in the current definition of
‘debt collector’ or its exceptions; nor is there any distinction
drawn between legal and non-legal activities.”). More
recently, in Donohue, we applied Heintz and held that the
FDCPA covers the service upon a debtor of a complaint to
facilitate debt-collection efforts. 592 F.3d at 1031-32. We rea-
soned in Donohue that “[t]o limit the litigation activities that
may form the basis of FDCPA liability to exclude complaints
. . . would require a nonsensical narrowing of the common
3136 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
understanding of the word ‘litigation.’ ” Id. at 1032 (rejecting
a distinction between “lawyers acting in the capacity of debt
collectors and those litigating”). There is no principled dis-
tinction to be drawn between these types of litigation activi-
ties and written discovery.
Our sister circuits agree. The Fourth Circuit has held that
the FDCPA applies specifically to statements in written dis-
covery documents. See Sayyed v. Wolpoff & Abramson, 485
F.3d 226, 228, 230-32 (4th Cir. 2007) (holding that the
FDCPA applies to allegedly erroneous statements made by
the defendant law firm in interrogatories and a summary judg-
ment motion during the course of a state court collection suit)
(collecting cases).
JRL asserts that failure to exclude discovery procedures
from FDCPA coverage would hinder attorneys’ ability to liti-
gate cases. Instead, JRL contends that remedies for improper
discovery tactics lie in court rules for civil procedure, and
asserts that if its requests for admission complied with the
applicable state rules, they ought not subject it to liability
under the FDCPA. However, Congress enacted the FDCPA
expressly because prior laws for redressing “abusive, decep-
tive, and unfair debt collection practices” were “inadequate to
protect consumers.” 15 U.S.C. § 1692(a), (b). The statute pre-
empts state laws “to the extent that those laws are inconsistent
with any provision of [the FDCPA].” 15 U.S.C. § 1692n.
[10] Moreover, policy reasoning provides no authority to
override the clear statutory language of Congress. “[O]ur obli-
gation is to apply the statute as Congress wrote it.” Hubbard
v. United States, 514 U.S. 695, 703 (1995) (quotation omit-
ted); see Jerman, 130 S. Ct. at 1622 (finding it unremarkable
that “the FDCPA imposes some constraints on a lawyer’s
advocacy on behalf of a client”); Sayyed, 485 F.3d at 234
(concluding that, by a simple reading of its text, the FDCPA
covers litigation activities, including discovery); Fox, 15 F.3d
at 1512 (“The plain language of the statute unambiguously
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3137
precludes any continued doctrine of special treatment for
attorneys under the FDCPA.”); see also Heintz, 514 U.S. at
296-97 (allowing for the possibility that the FDCPA may con-
tain some “additional, implicit, exception[s]” to account for
the potential conflicts that may arise in the application of the
FDCPA to litigation activities). In short, the FDCPA does not
exclude from its coverage the service of requests for admis-
sion.
2
[11] The district court correctly held that JRL’s service of
false requests for admission violated the FDCPA as a matter
of law. The FDCPA prohibits a debt collector from using
either “unfair or unconscionable means to collect . . . any
debt,” 15 U.S.C. § 1692f, or “any false, deceptive, or mislead-
ing . . . means in connection with the collection of any debt,”
id. § 1692e. The FDCPA measures a debt collector’s behavior
according to an objective “least sophisticated debtor” stan-
dard. Clark, 460 F.3d at 1171. This standard “ ‘ensure[s] that
the FDCPA protects all consumers, the gullible as well as the
shrewd . . . the ignorant, the unthinking, and the credulous.’ ”
Id. (quoting Clomon v. Jackson, 988 F.2d 1314, 1318-19 (2d
Cir. 1993) (alteration and ellipsis in original)). The FDCPA
imposes strict liability on creditors, including liability “for
violations that are not knowing or intentional.” Reichert, 531
F.3d at 1005.
[12] JRL’s requests for admission asked McCollough to
admit facts that were not true: that he had never disputed the
debt, that he had no defense, that every statement in JRL’s
complaint was true, and that he had actually made a payment
on or about June 30, 2004. JRL had information in its posses-
sion that demonstrated the untruthfulness of the requested
admissions.
[13] The requests for admission did not include an expla-
nation that, under Montana Rule of Civil Procedure 36(a), the
3138 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
requests would be deemed admitted if McCollough did not
respond within thirty days. Because we consider the debt col-
lector’s conduct from the standpoint of the least sophisticated
debtor, we must conclude that the service of requests for
admission containing false information upon a pro se defen-
dant without an explanation that the requests would be
deemed admitted after thirty days constitutes “unfair or
unconscionable” or “false, deceptive, or misleading” means to
collect a debt. Here, JRL effectively requested that McCol-
lough admit JRL’s entire case against him and concede all
defenses. The least sophisticated debtor cannot be expected to
anticipate that a response within thirty days was required to
prevent the court from deeming the requests admitted. The
district court properly granted summary judgment on this
claim.
D
JRL also challenges the district court’s denial of its motions
for partial summary judgment and judgment as a matter of
law on McCollough’s claims under the MCPA. However,
given our resolution of the FDCPA claims, we need not reach
this issue. The damages McCollough would receive on his
MCPA claims are already available to him through his
FDCPA claims. Like the FDCPA, the MCPA authorizes
actual damages, attorney’s fees, and costs. Compare 15
U.S.C. § 1692k(a)(1), (3) with Mont. Code Ann. § 30-14-
133(1), (3). While the MCPA also permits the court in its dis-
cretion to award treble damages and any other equitable relief
that it considers proper, id. § 30-14-133(1), the district court
declined to grant McCollough such relief.
McCollough and amicus curia the State of Montana have
conceded that if the FDCPA claims are upheld, it is not neces-
sary to reach the MCPA issues. If we were to consider the
issues, ours would not be a definitive construction of the stat-
ute: that prerogative belongs to the Montana Supreme Court.
See Ticknor v. Choice Hotels Int’l, Inc., 265 F.3d 931, 939
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3139
(9th Cir. 2001) (“federal courts are bound by the pronounce-
ments of the state’s highest court on applicable state law” and
“[w]here the state’s highest court has not decided an issue, the
task of the federal courts is to predict how the state high court
would resolve it” (quotation omitted)).
Thus, we need not, and do not, reach the MCPA issues. See
Webb v. Sloan, 330 F.3d 1158, 1166-67 (9th Cir. 2003)
(declining to reach state law issues where verdict could be
sustained on federal grounds).
III
We review for abuse of discretion a district court’s decision
to admit evidence. Boyd v. City and County of San Francisco,
576 F.3d 938, 943 (9th Cir. 2009). We reverse only if we are
“ ‘convinced firmly that the reviewed decision lies beyond the
pale of reasonable justification under the circumstances.’ ” Id.
(quoting Harman v. Apfel, 211 F.3d 1172, 1175 (9th Cir.
2000)). “A party seeking reversal for evidentiary error must
show that the error was prejudicial, and that the verdict was
more probably than not affected as a result.” Id. (quotation
omitted).
A
The district court did not abuse its discretion in admitting
the very brief testimony of individual debtors Keri Henan and
Ken Lucero concerning their experiences of being sued by
JRL. JRL argues that the testimony was irrelevant under Fed-
eral Rule of Evidence 401 and that it should have been
excluded on that basis. Alternatively, JRL contends that the
probative value of the evidence was substantially outweighed
by the danger of unfair prejudice and thus that the evidence
should have been excluded under Rule 403.
[14] Rule 401 defines relevant evidence as “evidence hav-
ing any tendency to make the existence of any fact that is of
3140 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
consequence to the determination of the action more probable
or less probable than it would be without the evidence.” See
United States v. Curtin, 489 F.3d 935, 943 (9th Cir. 2007) (en
banc). If evidence is relevant, it is generally admissible under
Federal Rule of Evidence 402. See id. However, relevant evi-
dence must be excluded if its probative value is substantially
outweighed by the danger of unfair prejudice, confusion of
the issues, or misleading the jury. Fed. R. Evid. 403.
[15] The district court did not abuse its discretion in con-
cluding that the testimony of JRL’s conduct in similar cases
was relevant to show intent, absence of mistake, malice, will-
fulness, and reprehensibility. Pursuant to the FDCPA, McCol-
lough had to prove that JRL’s violations were “intentional” to
obtain the maximum amount of FDCPA statutory damages
and to counter JRL’s bona fide error defense. 15 U.S.C.
§ 1692k(b)(1) (requiring consideration, among other relevant
factors, of “the extent to which such noncompliance was
intentional”); id. at § 1692k(c) (bona fide error defense).
McCollough’s malicious prosecution and abuse of process
claims required proof of malice and willfulness. See Plouffe
v. Mont. Dep’t of Pub. Health & Human Servs., 45 P.3d 10,
14 (Mont. 2002) (malicious prosecution); Hughes v. Lynch,
164 P.3d 913, 919 (Mont. 2007) (abuse of process). Finally,
McCollough’s entitlement to punitive damages depended on
a showing of reprehensibility. See State Farm Mut. Auto. Ins.
Co. v. Campbell, 538 U.S. 408, 419 (2003) (requiring consid-
eration of whether the defendant’s “conduct involved repeated
actions or was an isolated incident”). In addition, JRL
defended its conduct on the basis that it simply made a series
of mistakes in prosecuting the time-barred lawsuit. Thus, the
district court did not abuse its discretion in admitting the testi-
mony.
B
JRL contends that the district court abused its discretion in
admitting expert testimony from attorneys Michael Eakin and
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3141
James Patten regarding JRL’s collection practices in other
cases. However, it failed to preserve this claim for appeal by
failing to object at trial. United States v. Archdale, 229 F.3d
861, 864 (9th Cir. 2000) (holding that filing a motion in
limine is insufficient to preserve an issue for appeal absent a
further objection at trial). Here, JRL filed a motion in limine
challenging admission of the evidence, but the district court
denied JRL’s motion to exclude the experts’ testimony “with
leave to renew any objections at trial” and thus did not issue
an ultimate ruling on the evidence. JRL did not reassert the
objections at trial. JRL thus failed to preserve its objection
under Archdale.
JRL also claims error in the district court’s admission of
Exhibit #106, a list of all the lawsuits JRL had filed in the
State of Montana from January 2007 through July 2008. How-
ever, defense counsel opened the door to consideration of this
evidence when he questioned Patten about the number of law-
suits filed during that period. Byrd v. Maricopa County Sher-
iff’s Dept., ___ F.3d. ___, No. 07-16640, 2011 WL 13920 at
*11 n.10 (9th Cir. Jan. 5, 2011) (en banc). A party’s preemp-
tive use of evidence at trial before its introduction by the
opposing party constitutes a waiver of the right to challenge
the admissibility of the evidence on appeal. See Ohler v.
United States, 529 U.S. 753, 757-59 (2000); United States v.
Decoud, 456 F.3d 996, 1011 (9th Cir. 2006).
JRL also failed to preserve its claim on appeal that the dis-
trict court erred in allowing the attorney expert testimony and
the list of cases to be presented at the liability and general
damage portions of the trial, rather than at the punitive dam-
ages stage.
IV
The district court did not abuse its “broad discretion” in
formulating the jury instructions. Miller v. Rykoff-Sexton, Inc.,
845 F.2d 209, 213 (9th Cir. 1988).
3142 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
JRL first argues that the district court abused its discretion
by admitting Exhibit #106 and the testimony of Henan,
Lucero, Eakin, and Patten without instructing the jury to limit
its use of the evidence to the issue of reprehensibility, and to
award punitive damages only for JRL’s conduct toward
McCollough. JRL argues that the admission of the evidence
without proper limiting instructions violated JRL’s due pro-
cess rights. However, JRL failed to preserve this issue on
appeal because it did not request an instruction limiting the
jury’s use of the evidence at trial. Accordingly, the issue is
waived. See id. (“[I]f an appellant does not request an instruc-
tion at trial, the issue is not preserved on appeal.”).
JRL likewise argues that it is entitled to a new trial on the
ground that the district court instructed the jury that it had
previously found JRL’s requests for admission to be “abusive,
unfair, or unconscionable,” rather than by simply stating its
legal conclusion that JRL violated the FDCPA. However, JRL
did not raise this objection at trial. Indeed, JRL conceded that
the instruction correctly summarized the district court’s prior
order and objected only because it disagreed with the court’s
prior order. Thus, this challenge is also waived. See id.
V
The district court did not err in denying JRL’s motion for
judgment as a matter of law on McCollough’s state law mali-
cious prosecution and abuse of process claims.4 “A jury’s ver-
dict must be upheld if it is supported by substantial evidence,
which is evidence adequate to support the jury’s conclusion,
even if it is also possible to draw a contrary conclusion.” Har-
per v. City of Los Angeles, 533 F.3d 1010, 1021 (9th Cir.
2008) (quotation omitted). Substantial evidence supports the
jury’s findings of liability on both state law claims.
4
JRL also argues that the district court erred in denying its motion for
summary judgment on these issues. However, that decision is not review-
able on appeal. Ortiz v. Jordan, ___ U.S. ___, No. 07-737, 2011 WL
197801 at *2 (2011).
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3143
A
To sustain an action for malicious prosecution under Mon-
tana law, a plaintiff must establish six separate elements:
(1) a judicial proceeding was commenced and prose-
cuted against the plaintiff; (2) the defendant was
responsible for instigating, prosecuting or continuing
such proceeding; (3) there was a lack of probable
cause for the defendant’s acts; (4) the defendant was
actuated by malice; (5) the judicial proceeding termi-
nated favorably for the plaintiff; and (6) the plaintiff
suffered damage.
Plouffe, 45 P.3d at 14. JRL contends that McCollough did not
present substantial evidence of elements (3) and (4): lack of
probable cause and malice.
Probable cause exists when a party “reasonably believes in
the existence of the facts upon which the claim is based, and
. . . correctly or reasonably believes that under those facts the
claim may be valid under the applicable law.” Hughes, 164
P.3d at 918 (quotation omitted). Probable cause is “deter-
mined . . . on the basis of the facts known to the party initiat-
ing the legal action.” Plouffe, 45 P.3d at 15.
[16] McCollough presented substantial evidence that JRL
did not reasonably believe in the existence of a June 30, 2004,
partial payment that would have rendered its suit timely.
JRL’s electronic file indicated that the suit was time-barred.
CACV expressly disclaimed the accuracy of the account
information it gave JRL. Lisa Lauinger ignored the offer of
additional “info from me on this one” when she accepted
CACV’s unsupported statement. Grace Lauinger initially
requested supporting documentation from CACV “to extend
the Statute of Limitations,” but did not follow up when none
was submitted. JRL continued to prosecute the collection case
for four months after having been explicitly told by CACV
3144 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
that the June 30, 2004, partial payment never occurred. These
facts provide substantial evidence to support the jury’s con-
clusion that JRL sued McCollough without reasonably believ-
ing in the suit’s timeliness and thus without probable cause.
Substantial evidence also supports the jury’s finding of
malice. The Montana Supreme Court has not yet defined
“malice” in the context of a malicious prosecution action. In
Plouffe, the Montana Supreme Court cited two possible defi-
nitions from Montana law. See 45 P.3d at 17. Montana’s puni-
tive damages statute provides:
A defendant is guilty of actual malice if the defen-
dant has knowledge of facts or intentionally disre-
gards facts that create a high probability of injury to
the plaintiff and:
(a) deliberately proceeds to act in conscious or inten-
tional disregard of the high probability of injury to
the plaintiff; or
(b) deliberately proceeds to act with indifference to
the high probability of injury to the plaintiff.
Mont. Code Ann. § 27-1-221(2). Alternatively, Mont. Code
Ann. § 1-1-204(3) defines “malice” as “a wish to vex, annoy,
or injure another person or an intent to do a wrongful act.”
Under either definition, “the plaintiff is not required to prove
the subjective intent of the defendant to establish a prima
facie case for malicious prosecution.” Plouffe, 45 P.3d at 18.
Moreover, a rebuttable presumption of malice arises if the
jury finds an absence of probable cause. Id. at 17-18.
[17] Here, substantial evidence supported the jury’s find-
ing under either definition. McCollough presented evidence
that JRL knew of or intentionally disregarded facts concern-
ing the timeliness of its collection action. JRL’s conduct cre-
ated a high probability of injury to McCollough, yet JRL
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3145
deliberately acted in disregard of such injury. See Mont. Code
Ann. § 27-1-221(2). Likewise, the evidence of JRL’s conduct
toward McCollough — as well as the testimony of Henan,
Lucero, Eakin, and Patten — supports an inference that JRL
acted with a “wish to . . . injure another person or an intent
to do a wrongful act.” Mont. Code Ann. § 1-1-204(3). More-
over, a rebuttable presumption of malice arose when the jury
found an absence of probable cause. Plouffe, 45 P.3d at 17-18.
Substantial evidence supports the jury’s findings of both a
lack of probable cause and malice. Accordingly, the district
court properly denied JRL’s motion for judgment as a matter
of law on McCollough’s malicious prosecution claim.
B
To sustain an action for abuse of process under Montana
law, a plaintiff must establish two elements: “(1) an ulterior
purpose; and (2) a willful act in the use of the process not
proper in the regular conduct of the proceeding.” Hughes, 164
P.3d at 919 (quotation omitted). Those elements are satisfied
where, as here, evidence indicates that the litigant willfully
filed a lawsuit “with an ulterior purpose of extracting money
from [the opposing party] that he did not owe,” and that the
litigant “had no valid legal claim against [the opposing party]
and knew it, but filed an action . . . nonetheless.” Seipel v.
Olympic Coast Invs., 188 P.3d 1027, 1032 (Mont. 2008).
[18] Substantial evidence supports the jury’s finding of lia-
bility on this claim. McCollough presented evidence that JRL
filed suit to extract money from McCollough that it could not
legally obtain in a collection action and that it filed a baseless
action with knowledge that it had no legal claim. McCollough
presented evidence that JRL filed and pursued a time-barred
lawsuit against him, even though JRL’s own electronic file
indicated that the suit was time-barred. McCollough presented
evidence that JRL continued to prosecute the collection case
for four months after having been explicitly told by CACV
that the June 30, 2004, payment was not grounds for extend-
3146 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
ing the statute of limitations. McCollough presented evidence
that JRL sought attorney’s fees without confirming that
McCollough had a contractual fee obligation. The jury could
have inferred from this evidence that JRL’s purpose in filing
the lawsuit was to coerce McCollough to pay awards and fees
to which it and CACV were not entitled. The jury’s abuse of
process verdict was supported by substantial evidence, and
the district court properly denied JRL’s motion for judgment
as a matter of law.
VI
The district court properly denied JRL’s motion for a new
trial or amendment of the judgment based on the jury’s
$250,000 award for actual damages due to emotional distress.
In reviewing the district court’s denial of a motion for a new
trial for abuse of discretion, we defer to a jury’s finding of the
appropriate amount of damages unless the award is “grossly
excessive or monstrous, clearly not supported by the evi-
dence, or based only on speculation or guesswork.” Del
Monte Dunes at Monterey, Ltd. v. City of Monterey, 95 F.3d
1422, 1435 (9th Cir. 1996) (citation omitted). We “may not
assess the credibility of witnesses in determining whether sub-
stantial evidence exists to support the jury’s verdict.” Gil-
brook v. City of Westminster, 177 F.3d 839, 856 (9th Cir.
1999) (citation omitted).
The FDCPA provides for the award of actual damages. See
15 U.S.C. § 1692k(a)(1). At trial, McCollough presented evi-
dence of emotional distress through his own testimony and
testimony from a clinical psychologist, Dr. Donna Veraldi,
who examined McCollough in July 2008. At the close of the
evidence, the trial judge issued the following jury instructions
with respect to damages available under the FDCPA:
Actual damages include damages for personal humil-
iation, embarrassment, mental anguish and emo-
tional distress. There is no fixed standard or measure
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3147
in the case of intangible items such as humiliation,
embarrassment, mental anguish or emotional dis-
tress. Mental and emotional suffering and distress
pass under various names such as mental anguish,
nervous shock and the like. It includes all highly
unpleasant mental reactions such as fright or grief,
shame, humiliation, embarrassment, anger, chagrin,
disappointment, worry and nausea. The law does not
set a definite standard by which to calculate compen-
sation for mental and emotional suffering and dis-
tress. Neither is there any requirement that any
witness express an opinion about the amount of com-
pensation that is appropriate for the kind of law.
The law does require, however, that when making an
award for mental and emotional suffering and dis-
tress you should exercise calm and reasonable judg-
ment. The compensation must be just and
reasonable.
JRL did not object to either instruction.
JRL argues that the $250,000 award was “clearly not sup-
ported by the evidence” and “based on speculation and guess-
work.” In support, JRL contends that the evidence “boils
down to [McCollough’s] testimony that he was mad . . . and
had to lie down”; his testimony concerning pre-existing symp-
toms that had not worsened due to JRL’s conduct; and Dr.
Veraldi’s testimony about the effects she would hypotheti-
cally expect of stress on someone with McCollough’s condi-
tions.
[19] However, ample evidence exists in the record to sup-
port the jury’s award. See Zhang v. Am. Gem Seafoods, Inc.,
339 F.3d 1020, 1039-41 (9th Cir. 2003) (upholding emotional
damages of a similar amount based solely on the plaintiff’s
testimony). Dr. Veraldi described McCollough’s condition
after he suffered a head injury in 1990 and explained that he
3148 MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER
suffered from mixed personality disorder and multiple other
afflictions, including post-traumatic stress disorder. Dr. Ver-
aldi further testified that the lawsuit was a significant stress
factor in McCollough’s life, and noted that McCollough is
“somebody who is a more vulnerable individual in negotiating
the world,” and thus “more vulnerable to any types of prob-
lems.” She explained that the adverse impacts of JRL’s law-
suit may have worsened McCollough’s existing symptoms of
headaches, anxiety, paranoia, and difficulty relating to others.
McCollough testified as to the adverse impact of being
sued by JRL, including the anxiety, stress, and anger that he
felt and the “down time” and severe headaches that he suf-
fered as a result. McCollough testified that the lawsuit JRL
prosecuted against him “definitely” caused him anxiety,
increasing his temper, pain, adrenaline, and conflict with his
wife. McCollough acknowledged his disabling pre-existing
condition but characterized the impact of JRL’s lawsuit on
him as “the straw that broke the camel’s back.” He thought
that the lawsuit was “frivolous” and “an insult,” and that he
was “being shoved around.” We thus must conclude that the
award was not based on speculation and guesswork, but rather
on the jury’s valuation of McCollough’s emotional distress.
Contrary to JRL’s assertions, In re First Alliance Mortgage
Co., 471 F.3d 977 (9th Cir. 2006), does not compel a different
result. There, the jury improperly arrived at its damage award
by averaging the estimates of the parties’ damage experts. 471
F. 3d at 1002-03. No analogous calculation error is evident on
this record.
JRL also argues that the $250,000 award was based on an
improper desire to punish JRL for its conduct. However, the
jury returned both an emotional distress damages award and
a punitive damages award; no evidence indicates that the jury
improperly blurred the distinction between the two awards.
MCCOLLOUGH v. JOHNSON, RODENBURG & LAUINGER 3149
[20] Substantial evidence supports the jury’s emotional
distress damage award. The district court properly denied
JRL’s motion for a new trial or amendment of the judgment.
VII
The district court properly granted summary judgment on
the FDCPA claims. The district court did not abuse its discre-
tion in its evidentiary rulings or in formulating jury instruc-
tions. Substantial evidence supports the jury’s verdict.
We affirm the judgment of the district court.
AFFIRMED.