Jennings v. Continental Service Group, Inc.

Citations: 239 F. Supp. 3d 662; 2017 WL 900069; 2017 U.S. Dist. LEXIS 32334Docket: 1:15-CV-00575 EAW

Court: District Court, W.D. New York; March 6, 2017; Federal District Court

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Plaintiff Thomas Jennings, individually and on behalf of similarly situated individuals, has filed a lawsuit against Continental Service Group, Inc. and Does 1-10, alleging violations of the Telephone Consumer Protection Act (TCPA) and the Fair Debt Collection Practices Act (FDCPA). Currently, the court is reviewing the defendant's motion for judgment on the pleadings. The motion is denied, except that Jennings' FDCPA claim is dismissed without prejudice, allowing him the opportunity to re-plead.

The defendant operates as a debt collection agency focusing on student loan debts and is accused of making an excessive number of harassing calls to Jennings—up to four times daily—using an automatic dialing system. These calls were aimed at collecting a debt allegedly owed by Jennings and employed an artificially reproduced voice to leave messages. The defendant did not have express consent to make these calls and confirmed that they were not for emergency purposes.

Regarding the standard of review, judgment on the pleadings may be granted when material facts are undisputed, applying the same criteria as a Rule 12(b)(6) motion. The court must accept the allegations in the complaint as true and draw reasonable inferences in favor of the nonmoving party. A plaintiff must provide sufficient factual allegations to state a plausible claim for relief, moving beyond mere labels or conclusions. The standard requires enough detail to raise the right to relief above a speculative level.

Plaintiff's claims under the Telephone Consumer Protection Act (TCPA) are sufficiently stated. The TCPA prohibits calls made using an automatic telephone dialing system or an artificial or prerecorded voice to cell phone numbers without prior express consent, except for emergencies. A private right of action is granted under the TCPA, allowing for statutory damages of $500 per violation and injunctive relief. To establish a claim, a plaintiff must demonstrate that (1) a call was made to a cell phone, (2) using an automatic dialing system or artificial message, and (3) without the recipient’s prior consent. In this case, the Plaintiff alleges that Defendant made calls using a blended pre-recorded and artificial message without emergency justification or consent, sufficiently raising the claim above the speculative level.

Defendant argues that prior consent is necessary for automated calls related to debt collection, asserting that written consent is not required and oral consent suffices. However, the Plaintiff's assertion of lacking “prior written express consent” does not negate the broader claim of lacking any consent, which is also included in the amended complaint. Consequently, the court finds that Plaintiff has met the requisite pleading standard.

Regarding the Fair Debt Collection Practices Act (FDCPA) claim, Defendant asserts it must be dismissed on two grounds: (1) Plaintiff did not allege that Defendant qualifies as a “debt collector” under the FDCPA, and (2) the calls do not pertain to “consumer” debt. The FDCPA prohibits debt collectors from engaging in conduct that harasses or abuses individuals while collecting debts and forbids the use of unfair means for debt collection. The court will evaluate whether the Plaintiff has adequately alleged these elements in the context of the FDCPA.

A "debt collector" under the Fair Debt Collection Practices Act (FDCPA) is defined as any individual or entity whose primary business is to collect debts or who regularly collects debts owed to another party (15 U.S.C. 1692a(6)). The FDCPA defines "debt" as any obligation of a consumer to pay money arising from transactions primarily for personal, family, or household purposes (15 U.S.C. 1692a(5)), specifically relating to consumer rather than commercial debts. 

In the case at hand, the Plaintiff asserts that the Defendant is a debt collection agency attempting to collect an outstanding debt allegedly owed by the Plaintiff. The Defendant admits to being a collection agency but contends the Plaintiff did not adequately allege that the Defendant's principal purpose was debt collection, thus failing to state a claim. The Plaintiff, however, claims that the Defendant specializes in collecting student loan debts, which is sufficient to meet the FDCPA's requirements for establishing the Defendant as a debt collector.

The Defendant further argues that the Plaintiff has not specified whether the debt related to personal, family, or household expenses, which is necessary for the FDCPA to apply. The court notes that the Plaintiff's complaint lacks specific allegations regarding the nature of the debt and to whom it was owed, rendering the claims mere conclusory statements without factual support to suggest that the collection efforts stemmed from a consumer transaction. Consequently, the Plaintiff's allegations are deemed insufficient under the FDCPA.

Plaintiff alleges that Defendant is primarily engaged in collecting student loan debt, suggesting that this infers the nature of the calls made to Plaintiff were related to debts covered by the Fair Debt Collection Practices Act (FDCPA). However, the court finds this inference unsupported, noting that Plaintiff did not provide facts indicating the debts pertained to consumer transactions involving personal, family, or household expenses. As a result, the FDCPA claim is dismissed without prejudice due to insufficient allegations. The court grants Plaintiff 20 days to file an amended complaint to rectify these deficiencies. While Defendant’s motion for judgment on the pleadings is denied, it retains the right to challenge the sufficiency of any amended complaint. Additionally, the court recognizes its jurisdiction over TCPA claims and clarifies that a plaintiff is not required to negate an affirmative defense, such as consent, in their initial pleadings. Consequently, since Defendant did not demonstrate any consent, judgment on the pleadings is deemed inappropriate at this stage. Prior case law supports that a general claim regarding the debt's purpose could suffice to avoid dismissal, but Plaintiff has not made even this basic allegation.