Utah district court finds that state law debt collection claims are not barred when they are also governed by the more specific FDCPA

In Naranjo v. The Cherrington Firm, LLC, 2-17-cv-00645 (Jan. 22, 2018) the United State District Court for the District of Utah found in favor of the consumer that his Utah Consumer Sales Protection Act (“UCSPA”) claim was not barred by the Fair Debt Collection Practices Act (“FDCPA”).

In Naranjo, the debtor sued a debt collection firm and its attorney alleging they violated both the UCSPA and the FDCPA by attempting to collect and collecting from the debtor amounts in excess of what he actually owed. The collection firm and attorney (“defendants”) moved to dismiss the UCSPA claim on the grounds that a more specific statute, the FDCPA, governed debt collection. The District Court denied the motion.

Defendants contended that Utah law bars UCSPA claims when other, more specific law governs the conduct at issue. In reaching its finding, the Utah District Court examined three Utah cases where the state court had dismissed USPCA claims: Carlie v. Morgan, 922 P.2d 1 (Utah 1996); Berneike v. CitiMortgage Inc., 708 F.3d 1141 (10th Cir. 2013); and Thomas v. Wells Fargo Bank, N.A., No. 2:13-cv-686 (D. Utah Feb. 20, 2014). It found them all distinguishable.

In Carlie, tenants claimed their apartment building owner and manager violated UCSPA when the building was closed due to health code violations. The Utah Supreme Court held the Utah Fit Premises Act spoke directly to the alleged violations and provided specific remedies to tenants whose apartments become uninhabitable due to health and safety standard violations. The UCSPA, by contrast, did not. The Carlie case holds that where a more specific state statute applies, UCSPA will not apply.

In Berneike, the plaintiff brought RESPA and UCSPA claims against her mortgage loan servicer for incorrectly billing her for overcharges and improper fees. The Tenth Circuit applied Carlie to hold there was no remedy under UCSPA because the other state law, Utah’s Mortgage Lending and Servicing Act, specifically regulated mortgage loan servicing. The Naranjo court distinguished Berneike on the grounds that UCSPA claims were barred in that case only because a more specific state law, not federal law, controlled.

Thomas, by contrast, held that there was no remedy under UCSPA because the alleged conduct was covered by a more specific federal statute. In that case, the consumer alleged that the creditor reported incorrect credit information to credit reporting agencies by failing to remove her mother’s bankruptcy filing that had erroneously appeared on her credit report and sued under UCSPA, as well as the Fair Credit Reporting Act. Relying on Utah Code § 13-11-22(1)(a), which provides that UCSPA does not apply to an act or practice required or specifically permitted under federal law or by state law, the court determined that her UCSPA claims were precluded by the Fair Credit Reporting Act and dismissed them.

The Naranjo court rejected the Thomas court holding for two reasons. First, neither Carlie nor Berneike held that UCSPA claims are precluded where the alleged acts were governed by more specific federal law. Second, Utah Code § 13-11-22(1)(a) does not apply to situations where both federal and state laws prohibit the same conduct.

The Naranjo court held that where defendants were alleged to have violated both federal and state law, Utah Code § 13-22(1)(a) does not apply. And, because there was not a more specific state law regulating the subject matter of the law suit (debt collection), Carlie and Berneike were not apposite. Accordingly, the district court denied defendants’ motion to dismiss concluding that the debtors UCSPA claim was not barred by the FDCPA.


  • James Noonan

    Jim is a founding partner of Noonan & Lieberman. Jim has more than 25 years of experience in civil litigation on behalf of creditors, servicers, business and real estate owners.

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