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No TCPA Claims Against Debt Collectors Allowed!: Court holds that ATDS Allegations Against Debt Collection Companies Simply not Plausible in Seventh Circuit

Here’s a big TCPA ruling for debt collectors and servicers– and a bit of a downer for everyone else.

The Court in Mosley v. General Revenue Corp., Civil Action No. 1:20-cv-01012-JES-JEH2020 U.S. Dist. LEXIS 127055 (C.D. Ill. July 20, 2020) granted a debt collection defendant’s motion to dismiss a TCPA claim at the pleadings stage reasoning that it is simply not plausible the Defendant used a random or sequential number generator to make the challenged calls. And while that’s great news– the ruling contains a bit of a curveball for other callers hoping to leverage Gadelhak at the pleadings stage.

As TCPAWorld.com readers know, there is an ongoing split of authority regarding the scope of the TCPA. The Seventh Circuit Court of Appeals—where Mosely as venued—is a particularly favorable jurisdiction for Defendants, however, because the ruling in Gadelhak assures that the TCPA only applies to pre-recorded or random-fired calls. Nonetheless, there is still relatively little caselaw regarding the pleadings standard for TCPA cases post-Gadelhak and, as we all know, positive case law is scarcely beneficial if it can’t be used at the pleadings stage to cut these cases off at the knees—if a Defendant is forced to wait until summary judgment for a dismissal on the ATDS issue hundreds of thousands in fees and expense may already be incurred. (A cost the Defendant very unlikely to recoup).

That’s what makes Mosely so important. The Plaintiff in Mosely admitted—as he had to—that Gadelhak requires the use of a random or sequential number generator to make out a TCPA ATDS claim. But Plaintiff argued at the pleadings stage he could not be expected to know how the Defendant’s system operated and it was enough to allege that he had no relationship with the caller and that he alleged the system had the capacity to dial randomly or sequentially. The Court was unmoved and made a critical finding that everyone should keep in mind out there in TCPAWorld:

The Court rejects the inference that a claim is plausible because a plaintiff merely alleges the dialer system has the capacity to randomly or sequentially generate numbers, without any factual basis for such allegations.

In other words, conclusory allegations of the “capacity” of a system to randomly or sequentially dial–lacking any supporting facts—are to be properly and summarily dismissed. Nice!

But it gets even better, especially for debt collectors. The Court goes on to look at the context and content of the phone calls and determines that random or sequential number generation is simply not plausible—the calls at issue were debt collection calls and debt collectors do not make random-fired calls. In the Court’s words:

Plaintiff offers no plausible explanation why a debt collection company would need or use a machine which had the capacity to dial or store randomly or sequentially generated numbers.

In the absence of such an explanation, the Court simply would not allow the claim to move forward and dismissed it.

There is a dark cloud over this sunny day for TCPA defendants, however. The Court does throw some callers under the bus as potential random-dialers:

It is far more likely that a telemarketing company, bank, or other seller of goods would desire to have machines with the capacity to dial randomly or sequentially generated numbers.

That’s a bit of a sucker punch for non-collectors, but hopefully this dicta will not be used to keep marketing callers trapped in TCPA cases longer than necessary.

We’ll keep an eye on all of this for you.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 204
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About this Author

Eric Troutman Class Action Attorney
Of Counsel

Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems.

Eric has built a national litigation practice based upon deep experience, rigorous...

213-689-6510
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