Arnold v. AT & T, Inc.

Decision Date14 March 2012
Docket NumberCase No. 4:10CV2429SNLJ.
Citation874 F.Supp.2d 825
PartiesKim ARNOLD, William Pruitt and Rose Young Pruitt, on behalf of themselves and all others similarly situated, Plaintiffs, v. AT & T, INC., AT & T Corp., American Telephone and Telegraph Co., and Southwestern Bell Telephone Co. d/b/a AT & T Missouri, Defendants.
CourtU.S. District Court — Eastern District of Missouri


Limitation Recognized

V.A.M.S. § 506.500(1)

C. Marshall Friedman, C. Marshall Friedman, P.C., St. Louis, MO, for Plaintiffs.

Stephen B. Higgins, Amanda J. Hettinger, Ann A. Beck, At & T Missouri, St. Louis, MO, for Defendants.


STEPHEN N. LIMBAUGH JR., District Judge.

Plaintiffs are landline telephone customers of the defendants. Their claims arise out of and relate to charges on their telephone bills which they allege they were billed for, and paid for, products or services from third parties that they did not order or authorize. Specifically, they allege that they incurred unauthorized prepaid services charges for services that came under the names of Enhanced Services, HBS Billing Services, and/or ILD Teleservices. They have filed a putative nationwide class action complaint for damages against the defendants for violation of the Federal Communications Act (FCA) (Count I); unjust enrichment (Count II); breach of written contract (Count III); breach of the implied covenant of good faith and fair dealing (Count IV); common law fraud (Count V); violation of the Missouri Merchandising Practices Act (MMPA)(Count VI); and conspiracy to commit fraud (Count VII). This matter is before the Court on defendants AT & T, Inc.'s and American Telephone and Telegraph Co.'s (hereinafter referred to as simply American Telephone) Rule 12(b)(2) motion to dismiss [22], filed March 21, 2011. Responsive pleadings have now all been filed and this matter is ripe for disposition.1

The purpose of a motion to dismiss is to test the legal sufficiency of a complaint so as to eliminate those actions “which are fatally flawed in their legal premises and designed to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity.” Young v. City of St. Charles, 244 F.3d 623, 627 (8th Cir.2001)quoting Neitzke v. Williams, 490 U.S. 319, 326–27, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). A complaint must be dismissed for failure to state a claim upon which relief can be granted if it does not plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007)(abrogating the prior “no set of facts” standard set forth in Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Courts “do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face.” Id., 127 S.Ct. at 1974. A complaint must set forth factual allegations which are enough to “raise a right to relief above the speculative level.” Id., 127 S.Ct. at 1974.

In passing on a motion to dismiss, a court must view the allegations of the complaint in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Kottschade v. City of Rochester, 319 F.3d 1038, 1040 (8th Cir.2003). While a complaint challenged by a Rule 12 motion does not need detailed factual allegations, a plaintiff must still provide the grounds for relief, and neither “labels and conclusions” nor “a formulaic recitation of the elements of a cause of action” will suffice. Bell Atlantic Corp. v. Twombly, 127 S.Ct. at 1965 (internal citations omitted). “Although the pleading standard is liberal, the plaintiff must allege facts—not mere legal conclusions—that, if true, would support the existence of the claimed torts.” Securities v. Comprehensive Software Systems, Inc., 406 F.3d 1052, 1062 (8th Cir.2005)citing Schaller Tel. Co. v. Golden Sky Systems, 298 F.3d 736, 740 (8th Cir.2002). In viewing the complaint in the light most favorable to the plaintiff, the court should not dismiss it merely because the court doubts that the plaintiff will be able to prove all of the necessary allegations. Bennett v. Berg, 685 F.2d 1053, 1058 (8th Cir.1982). The primary issue for a court to consider is not whether the plaintiff will ultimately prevail in the lawsuit, but whether the complaint adequately states a claim; and therefore, the plaintiff is entitled to present evidence in support of that claim. A complaint may not be dismissed based upon a district court's assessment that the plaintiff will fail to present evidentiary support for the complaint's allegations or will ultimately fail to prove one or more claims to the satisfaction of the factfinder. Bell Atlantic Corp. v. Twombly, 127 S.Ct. at 1969, n. 8;Neitzke v. Williams, 490 U.S. at 327, 109 S.Ct. 1827 (“What Rule 12(b)(6) does not countenance are dismissals based upon a judge's disbelief of a complaint's factual allegations.”).

In support of jurisdiction, plaintiffs plead that they are Missouri residents, and that the defendants are subject to personal jurisdiction in this judicial district, and a substantial part of the events giving rise to their claims occurred in this judicial district. Plaintiffs' Complaint [1], ¶¶ 3 and 4. Plaintiffs further allege that defendants AT & T, Inc. and American Telephone “at all times relevant w[ere] doing business in the State of Missouri.” Plaintiff's Complaint [1], ¶¶ 5 and 7.

As stated before, plaintiffs are residents of Missouri. All of the named defendants, including AT & T, Inc. and American Telephone, are simply referred to as “foreign corporation[s], and that “at all times relevant, w[ere] doing business in the State of Missouri.” Plaintiffs' complaint does not aver that any of the alleged misconduct actually occurred in Missouri (other than the charges appeared on billings which the Court will assume, for purposes of this motion, were received in Missouri). Plaintiffs' complaint does not aver that any communications involving these two (2) defendants transpired to or from Missouri. Plaintiffs simply allege that upon discovery of the purported unauthorized prepaid services, they “called Defendants' customer service” to inquire about the charges. Plaintiffs do not allege that any contracts were signed or negotiated by either one of these two (2) defendants in Missouri.

In the instant matter, defendants AT & T, Inc. and American Telephone attest that they are both incorporated in Delaware; and that AT & T, Inc's principal and only place of business is in Texas, while American Telephone's principal and only place of business is in New Jersey. Both attest that they are holding companies only.2 They both further attest that they do not provide telecommunications services to the public, nor make or sell any products or services. They both further attest that they do not have employees in Missouri; have no offices or mailing addresses in Missouri; have no owned or leased property in Missouri; do not conduct business in Missouri; pay no income, property, or franchise taxes in Missouri; and do not manufacture any product of any kind or provide any service of any kind that can find its way through the stream of commerce into the State of Missouri. See, Defendants' Exhibits 1 and 2, Declarations of Steven Threlkeld and Maryann McGrath.

When personal jurisdiction is challenged, the plaintiff bears the burden to show that jurisdiction exists. Miller v. Nippon Carbon Co., Ltd., 528 F.3d 1087, 1090 (8th Cir.2008); Dever v. Hentzen Coatings, 380 F.3d 1070, 1072–73 (8th Cir.2004); Epps v. Stewart Information Services Corp., 327 F.3d 642, 647 (8th Cir.2003); Burlington Industries v. Maples Industries, 97 F.3d 1100, 1102 (8th Cir.1996); Gould v. P.T. Krakatau Steel, 957 F.2d 573, 575 (8th Cir.1992); Enterprise Rent–A–Car Co. v. Stowell, 137 F.Supp.2d 1151, 1154 (E.D.Mo.2001). To successfully survive a motion to dismiss challenging personal jurisdiction, a plaintiff must make a prima facie showing of personal jurisdiction over the challenging defendant. Steinbuch v. Cutler, 518 F.3d 580, 585 (8th Cir.2008)(“To survive a motion to dismiss, the plaintiff must state sufficient facts in the complaint to support a reasonable inference that defendants may be subjected to jurisdiction in the forum state.”); Dever, at 1072–73 (plaintiff must produce some evidence; conclusory allegations are insufficient to sustain the prima facie showing); Epps, at 647;Clune, et al. v. Alimak AB, et al., 233 F.3d 538, 541 (8th Cir.2000); Falkirk Mining Co. v. Japan Steel Works, 906 F.2d 369, 373 (8th Cir.1990); Enterprise Rent–A–Car, supra, citing Digi–Tel Holdings, Inc. v. Proteq Telecommunications, Ltd., 89 F.3d 519, 522 (8th Cir.1996); see also, Conway v. Royalite Plastics, 12 S.W.3d 314, 318 (Mo.2000); Products Plus v. Clean Green, 112 S.W.3d 120, 122 (Mo.App.2003); Johnson Heater Corp. v. Deppe, 86 S.W.3d 114, 119 (Mo.App.2002)3. A plaintiff's prima facie showing must be tested “not by pleadings alone, but by affidavits and exhibits presented with the motions and in opposition thereto.” Miller, at 1090citing Dever, at 1072 (citations omitted); see, Stevens v. Redwing, 146 F.3d 538, 543 (8th Cir.1998)(when considering whether personal jurisdiction exists under Missouri long-arm statute, court may inquire by affidavits or otherwise into the facts as they exist). Although a court must view evidence in a light most favorableto the plaintiff and resolve factual conflicts in the plaintiff's favor; the party seeking to establish the court's personal jurisdiction carries the burden of proof, and the burden does not shift to the party challenging jurisdiction. Epps, at 647.

In order for a federal court to exercise personal jurisdiction over a non-resident defendant two prerequisites must be satisfied. Johnson v. Arden, 614 F.3d 785, 794 (8th Cir.2010); see K–V Pharmaceutical Co. v. J. Uriach & CIA, S.A., 648 F.3d...

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