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McCullough v. Maximum Title Loans LLC

United States District Court, D. Arizona

August 20, 2019

Sean McCullough, Plaintiff,
v.
Maximum Title Loans LLC, Defendant.

          ORDER

          Honorable John J. Tuchi United States District Judge.

         At issue is Defendant Maximum Title Loans LLC's Motion to Dismiss (Doc. 17, Mot.), to which Plaintiff Sean McCullough filed a Response (Doc. 18, Resp.), and Defendant filed a Reply (Doc. 20, Reply).

         I. BACKGROUND

         On May 1, 2018, Plaintiff obtained a loan from Defendant for $10, 000. (Doc. 1, Compl. ¶ 9.) Pursuant to a financing agreement governing the loan (the “Agreement”), Plaintiff was obligated to make scheduled payments to Defendant with the first payment due on June 30, 2018. (Compl. ¶ 11.)

         Plaintiff alleges that Defendant made calls and sent text messages to his cell phone attempting to collect on the loan immediately after the parties entered the Agreement. (Compl. ¶ 13.) When answering the calls, Plaintiff experienced a pause lasting several seconds and repeatedly said “hello” before being connected to a live representative. (Compl. ¶ 16.) Plaintiff asked that Defendant stop contacting him because payments under the Agreement were not yet due. (Compl. ¶ 17.) Notwithstanding Plaintiff's request, Defendant allegedly made at least thirty more calls to Plaintiff from multiple phone numbers. (Compl. ¶ 18.)

         In February 2019, Plaintiff filed a Complaint alleging that Defendant willfully and knowingly violated the Telephone Consumer Protection Act (“TCPA”). (Compl. ¶ 28.) Plaintiff alleges that Defendant used an automatic telephone dialing system (“ATDS”) to make calls and send text messages to Plaintiff's cell phone without Plaintiff's consent. (Compl. ¶¶ 25-26.) In the Complaint, Plaintiff also raises claims for intentional infliction of emotional distress and breach of contract (collectively the “state law claims”). (Compl. ¶¶ 31, 39.) Defendant now moves to dismiss the TCPA cause of action for failure to state a claim, and to the extent that motion is granted, Defendant contends that the Court should decline to retain jurisdiction over the state law claims and therefore dismiss the balance of the Complaint. (Mot. at 1.)

         II. LEGAL STANDARD

         When analyzing a complaint for failure to state a claim for relief under Federal Rule of Civil Procedure 12(b)(6), the well-pled factual allegations are taken as true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). A plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Legal conclusions couched as factual allegations are not entitled to the assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are insufficient to defeat a motion to dismiss for failure to state a claim. In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010).

         A dismissal under Rule 12(b)(6) for failure to state a claim can be based on either (1) the lack of a cognizable legal theory or (2) insufficient facts to support a cognizable legal claim. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). “While a complaint attacked by a Rule 12(b)(6) motion does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citations omitted). The complaint must thus contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that ‘recovery is very remote and unlikely.'” Twombly, 550 U.S. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

         III. ANALYSIS

         Defendant argues that Plaintiff did not sufficiently allege facts to establish that Defendant used an ATDS and therefore failed to state a TCPA claim that is plausible on its face. (Mot. at 4.) Plaintiff, however, argues that it is plausible that an ATDS was used because Plaintiff experienced a significant pause before being connected with a representative, and Plaintiff received at least thirty more calls from Defendant after repeated requests that Defendant not contact him. (Resp. at 5.)

         Under the TCPA, it is “unlawful for any person within the United States . . . to make any call . . . using any automatic telephone dialing system . . . to any telephone number assigned to a . . . cellular telephone service.”[1] 47 U.S.C. § 227(b)(1)(A)(iii). To state a TCPA claim, a plaintiff must sufficiently allege that: “(1) the defendant called a cellular telephone number; (2) using an automatic telephone dialing system; (3) without recipient's prior express consent.” Meyer v. Portfolio Recovery Assocs., LLC, 707 F.3d 1036, 1043 (9th Cir. 2012). Defendant contends the TCPA claim should be dismissed because Plaintiff has failed to sufficiently allege the second element.

         The TCPA defines an ATDS as “equipment which has the capacity-(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C. § 227(b)(1)(A)(iii). “[A] system need not actually store, produce, or call randomly or sequentially generated telephone numbers, it need only have the capacity to do it.” Satterfield, 569 F.3d at 951. The Ninth Circuit has explained that “dialing equipment does not need to dial numbers or send text messages ‘randomly' in order to qualify as an ATDS under the TCPA.” Flores v. Adir Int'l, LLC, 685 Fed.Appx. 533, 534 (9th Cir. 2017) (mem. decision). Further, courts within the Ninth Circuit have acknowledged “the difficulty a plaintiff faces in knowing the type of calling system used without the benefit of discovery” and have found that courts can infer the use of an ATDS from the details of the call. Hickey v. Voxernet LLC, 887 F.Supp.2d 1125, 1129-30 (W.D. Wash. 2012) (quoting Knutson v. Reply!, Inc., No. 10-CV-1267-BEN, 2011 WL 1447756, at *1 (S.D. Cal. Apr. 13, 2011)).

         Plaintiff argues he “sufficiently described Defendant's system as an ATDS” by alleging that: (1) he received collection calls and text messages to his cellular phone from Defendant beginning soon after May 1, 2018; (2) upon answering the phone calls, Plaintiff experienced a significant pause before being connected with a live representative; (3) on multiple occasions, Plaintiff demanded Defendant stop contacting him because the loan repayment was not yet due; and (4) notwithstanding Plaintiff's demands, Defendant made at least thirty more calls to Plaintiff. (Resp. at 5.) Plaintiff also contends that he ...


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