Hanley v. Green Tree Servicing, LLC

Citations: 934 F. Supp. 2d 977; 2013 U.S. Dist. LEXIS 42533; 2013 WL 1189697Docket: No. 12 C 4158

Court: District Court, N.D. Illinois; March 21, 2013; Federal District Court

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Gary Hanley initiated a proposed class action against Green Tree Servicing, LLC, alleging violations of the Telephone Consumer Protection Act (TCPA) due to multiple calls made to his cellular phone using an automatic telephone dialing system (ATDS) and/or an artificial or prerecorded voice, despite his requests for the calls to stop. Hanley, a homeowner, claims that these actions by Green Tree occurred over a four-year period and constitute a breach of the TCPA provisions that prohibit such calls after a demand to cease. 

In his complaint, Hanley seeks statutory damages of $500 per violation, with potential treble damages of $1,500 for willful violations, a permanent injunction against further calls using an ATDS, a declaration confirming the violations, and any additional relief deemed appropriate by the court. Following the filing of the complaint on May 29, 2012, the parties agreed to withdraw the motion for class certification to allow for further discovery.

Green Tree responded by filing a motion to dismiss Hanley's complaint, arguing that he failed to demonstrate a plausible claim for relief, particularly regarding the lack of consent for the calls and the basis for seeking treble damages. In his response, Hanley contended that the burden of proving prior express consent lies with the defendant and that he only needed to provide general facts about Green Tree's state of mind to recover treble damages. The court ultimately granted Green Tree's motion to dismiss.

On October 29, 2012, Hanley sought permission from the Court to submit additional legal authority, particularly referencing the Ninth Circuit’s decision in *Chesbro v. Best Buy Stores, L.P.*, which the Court approved on November 8, 2012. Green Tree contested the relevance of *Chesbro* to the current case in its response. Subsequently, on December 5, 2012, Hanley requested to submit further authority, specifically concerning the FCC’s ruling regarding the Telephone Consumer Protection Act, which the Court allowed on December 11, 2012. Green Tree again argued that this ruling was inapplicable. The Court acknowledged Green Tree's response but granted Hanley's request to submit the additional authority. 

The current issue before the Court is Green Tree's motion to dismiss Hanley’s complaint under Rule 12(b)(6) for failure to state a claim. The purpose of this motion is to assess the legal sufficiency of the complaint rather than the merits of the case. When evaluating such a motion, the Court must view the complaint in the light most favorable to the plaintiff, accepting well-pleaded factual allegations as true while not being obliged to accept legal conclusions disguised as factual assertions. The Court will reference Rule 8 of the Federal Rules of Civil Procedure, which requires a clear statement of the claim showing entitlement to relief.

Interpreting Rule 8, the Supreme Court established that while detailed factual allegations are not mandatory, a plaintiff must present facts that, if accepted as true, demonstrate a plausible claim for relief. This was articulated in Iqbal and Twombly, where the Court assumes the truth of well-pleaded allegations and assesses whether they plausibly indicate entitlement to relief. A claim achieves facial plausibility when its factual content permits a reasonable inference of the defendant's liability. The "plausibility" standard is context-specific, requiring courts to utilize judicial experience and common sense, and it demands more than mere possibilities of unlawful conduct. Complaints that only suggest potential liability without sufficient factual support fall short of this standard. A motion to dismiss is appropriate if the complaint fails to provide plausible claims, offering only speculative or conclusory statements lacking the necessary factual basis.

The Court finds that the complaint in this case is inadequate, providing little substantive pleading. The TCPA, enacted by Congress in 1991, aims to curb telemarketing practices that infringe on consumer privacy rights, granting the FCC authority to create regulations for its implementation. Congress intended for the FCC to clarify the Act through rulemaking, as highlighted in relevant Supreme Court cases.

The legal framework outlined in the excerpt pertains to the Telephone Consumer Protection Act (TCPA), specifically addressing unlawful calls made using an automatic telephone dialing system (ATDS) or artificial voice to cellular phone numbers without prior express consent. To establish a valid claim under the TCPA, a plaintiff must demonstrate that a call was made, an ATDS or artificial voice was used, the number called was a cellular service number, and there was no prior consent from the recipient.

In the case at hand, Hanley alleges multiple calls to his cellphone over four years using an ATDS or artificial voice, despite requesting that the calls cease. However, the court emphasizes that mere assertions without specific factual details do not meet the pleading standards established in *Twombly* and *Iqbal*. The Seventh Circuit has clarified that a plaintiff must provide more than generalized allegations; the complaint must demonstrate a plausible claim grounded in specific facts. Hanley’s complaint is criticized for lacking sufficient factual enhancement, consisting mainly of legal conclusions, thus failing to meet the required pleading standards of Rule 8. As a result, it does not establish a plausible entitlement to relief and is deemed inadequate.

Threadbare recitals of the elements of a cause of action, supported only by conclusory statements, are inadequate under legal standards set by Iqbal and Twombly. The Seventh Circuit has clarified that courts must reject abstract recitations and conclusory legal assertions. Hanley's complaint fails to meet the pleading standards of Rule 8, as interpreted by these cases, because it lacks specific factual details, such as the number and timing of calls made by Green Tree, and does not describe how or when Hanley requested that the calls cease. The complaint consists mainly of formulaic statements that do not provide the necessary factual basis to support a claim under the Telephone Consumer Protection Act (TCPA). It only asserts a "sheer possibility" of violation without sufficient detail to establish a plausible entitlement to relief. To survive a motion to dismiss, a complaint must state a claim that is plausible on its face, providing enough factual matter to support a reasonable inference of misconduct. Hanley’s allegations do not meet this threshold, as they fail to establish a nonnegligible probability that the claim is valid, leaving no basis for inferring more than the mere possibility of misconduct.

Hanley’s complaint was found inadequate under the liberal pleading standards of Rule 8 of the Federal Rules of Civil Procedure, leading to its dismissal. Despite submitting multiple pleadings during the case, Hanley did not seek to amend his complaint, even after being alerted to potential issues by Green Tree’s motion to dismiss. The court noted that while it typically grants leave to amend complaints dismissed for inadequate pleading, in this case, any amendment would be futile due to the lack of a valid basis for relief. Consequently, the dismissal was made with prejudice. The court also considered Hanley’s motion to reconsider the dismissal, which was granted, allowing for a review of the prior order. However, it reaffirmed that the decision to deny leave for amendment was based on the futility of such efforts, emphasizing the broad discretion the court holds in these matters. The ruling concluded with the court granting Green Tree’s motion to dismiss and instructed the Clerk to enter judgment in favor of Green Tree Servicing, LLC.

An amended complaint does not need to be accepted by the Court if it clearly does not rectify the issues identified in the original complaint, as established in Arazie v. Mullane. Typically, Rule 15 requires that leave to amend be granted at least once for potentially curable complaints, and denials of such requests are generally disfavored. Amendments should only be denied if they would be clearly futile, as noted in Bogie v. Rosenberg. It is especially advisable to allow amendments after a dismissal of the initial complaint unless it is certain that any amendment would be futile.

In this instance, the plaintiff, Hanley, has made substantial efforts to address the shortcomings of his initial complaint. The Court determines that it is no longer clear that an amended complaint would be futile. Futile amendments typically involve mere restatements of facts, reasserted claims, or failure to establish a valid theory of liability. A review of Hanley's amended complaint indicates that it does not suffer from the identified defects of futile repleading, although it remains uncertain whether it will survive a motion to dismiss.

Consequently, Hanley is granted leave to amend his complaint under Rule 15(a)(2), and his first amended complaint is filed with the Court. Green Tree has 30 days to file a new motion to dismiss. If Green Tree does not file by this deadline, the Court will proceed based on the original motion to dismiss.

Hanley has engaged in extensive procedural delays, filing several motions for extensions and additional authority, yet he never sought leave to amend his complaint, despite being alerted to its deficiencies by Green Tree's motion to dismiss. This inaction has resulted in unnecessary expenses and complications for both the Court and the parties involved. Hanley's original complaint was criticized for being overly simplistic and failing to meet the pleading standards outlined in Rule 8 of the Federal Rules of Civil Procedure. The Court questions Hanley’s decision to withhold pertinent facts that he later included in an amended complaint, suggesting potential violations of Rule 11, which mandates that attorneys ensure their filings are factually and legally sound. The Court notes that sanctions may be imposed for filings lacking a legitimate basis. Hanley is instructed to cease wasting the Court's time, to take more proactive measures in his legal advocacy, and to withdraw his appeal, filing a motion for voluntary dismissal with the Seventh Circuit. The Court retains jurisdiction over the case.