Castro v. Collecto, Inc.
| Citation | 668 F.Supp.2d 950 |
| Decision Date | 27 October 2009 |
| Docket Number | No. EP-08-CA-215-FM.,EP-08-CA-215-FM. |
| Parties | Nemesio CASTRO, on behalf of himself and all others similarly situated, Plaintiff, v. COLLECTO, INC. dba Collection Company of America, and U.S. Asset Management Inc., Defendants. |
| Court | U.S. District Court — Western District of Texas |
Chicago, IL, Scott Alan Vogelmeier, Law Office of Scott A. Vogelmeier, El Paso, TX, for Plaintiff.
Keith Wier, Bush & Ramirez, LLC, Houston, TX, for Defendants.
On this date, the Court considered Collecto, Inc. dba Collection Company of America ("Collecto"), and U.S. Asset Management Inc.'s ("U.S. Asset") (collectively, "Defendants") "Defendants' Motion to Dismiss the Complaint or, Alternatively, for Judgment on the Pleadings" ("Motion to Dismiss") [Rec. No. 61], filed June 18, 2009; Defendants' "Memorandum in Support of Defendants' Motion to Dismiss the Complaint or, Alternatively, for Judgment on the Pleadings" ("Memorandum in Support of Motion to Dismiss") [Rec. No. 61-4], filed June 18, 2009; Nemesio Castro's ("Plaintiff") "Plaintiff's Response in Opposition to Defendants' Motion to Dismiss the Complaint or, Alternatively for Judgment on the Pleadings" ("Response Opposing Motion to Dismiss") [Rec. No. 65], filed June 29, 2009; Defendants' "Reply Memorandum in Support of Defendants' Motion to Dismiss the Complaint, or Alternatively for Judgment on the Pleadings" ("Reply in Support of Motion to Dismiss") [Rec. No. 73], filed July 10, 2009; "Plaintiff's Motion for Partial Summary Judgment as to Liability" ("Motion for Partial Summary Judgment") [Rec. No. 57], filed June 16, 2009; Plaintiff's "Memorandum in Support of Plaintiff's Motion for Partial Summary Judgment as to Liability" [Rec. No. 57-2], filed June 16, 2009; "Defendants' Response in Opposition to Plaintiff's Motion for Partial Summary Judgment" ("Response Opposing Partial Summary Judgment") [Rec. No. 66], filed June 29, 2009; and "Plaintiff's Reply in Support of Partial Summary Judgment as to Liability" ("Reply in Support of Partial Summary Judgment") [Rec. No. 69], filed July 10, 2009. Based upon the parties' briefs, arguments, and the law, the Court will grant Defendants' Motion to Dismiss and deny Plaintiff's Motion for Partial Summary Judgment.
On June 18, 2008, Plaintiff filed a class action lawsuit against Defendants, alleging violations of the Fair Debt Collection Practices Act ("FDPCA"), 15 U.S.C. § 1692 et seq., and the Texas Finance Code § 392.304. In answer, Defendants denied any liability and asserted numerous defenses, including good faith. On March 4, 2009, the Court certified the class, defining it as
(a) all individuals with Texas addresses (b) who were sent a letter in the form represented by Exhibit A to Plaintiff's Complaint, (c) seeking to collect a cellular telephone debt (d) which became delinquent more than 2 years prior to the sending of the letter in the form represented by Exhibit A to Plaintiff's Complaint, (e) which letter was sent between June 16, 2007, and July 6, 2008.
On June 19, 2009, the Court approved the form of Notice to be sent to putative class members [Rec. No. 63]. The Court continued the trial setting and stayed ruling on any dispositive motions until after July 27, 2009, the date on which putative class members were required to give notice as to whether they wished to be excluded from the certified class. The Court now addresses Defendants' Motion to Dismiss and Plaintiff's Motion for Summary Judgment.
Defendants argue the delinquent accounts, which they attempted to collect and are now the subject of this lawsuit, are subject to Texas's four-year statute of limitations, not the two-year limitations period of the Federal Communications Act of 1934 ("FCA"), section 415, Title 47 of the United States Code. Defendants assert section 415 only applies to tariffed charges. Defendants explain section 332 of the FCA, as amended by Congress in the 1990s, only preempts state rate and market entry regulation as to cell phone carriers, not common law contract actions between carriers and their customers. Defendants assert there is nothing in section 415, which would generally override state statutes of limitations. Defendants point to cases in which plaintiffs litigated state actions for deceptive trade and advertising; failure to disclose charging practices; and rounding up cellular call charges.
Defendants, explain that as a result of the Federal Communications Commission's ("FCC") 1990s detariffing, the filed-rate doctrine and section 415 do not apply to Commercial Mobile Radio Services providers ("CMRS providers"), which include cell phone and wireless carriers. Defendants contend section 415 only applies to actions at law by "carriers" to collect "lawful charges." Defendants assert the reference to "lawful charges" applies to the schedule of charges, or tariffs, which must be filed by common carriers and subjected to the review and approval of the FCC. Defendants point out state laws affecting rates are preempted because they interfere with tariffs, which cannot be varied by either contract or tort. On the other hand, Defendants explain that because cellular providers no longer have to file tariffs, the section 415 statute of limitations period no longer applies to them because rates are set by contract and are not subject to FCC regulatory approval. Defendants contend the FCC has substituted state contract and consumer protection laws for federal remedies under the FCA.
In sum, Defendants argue the assignor of Defendants' debt, Sprint PCS ("Sprint"), is a CMRS provider, who is not subject to the tariff requirement. Defendants explain Sprint's agreements with its customers embrace a choice-of-law provision, which encompasses the state for which a device's area code is set, in this case Texas. Defendants argue Plaintiff's debt is subject to Texas's four-year limitations period, and thus, the collection action is not time-barred. Accordingly, Defendants request the Court to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)") or to enter judgment on the pleadings in favor of Defendants pursuant to Federal Rule of Civil Procedure 12(c) ("Rule 12(c)").
Alternatively, Defendants contend state actions, which do not reach the question of the reasonableness of a carrier's rates, are not preempted. Defendants argue their collection of a debt does not touch the nature or validity of the underlying service charges themselves, and therefore their debt collection action is not a federal issue. Defendants assert only state law claims, which alter the terms of a tariff, are preempted. According to Defendants, there are no such claims as Plaintiff has not called into question the reasonableness of the rates charged and has conceded there is no factual issue concerning the amounts charged or their reasonableness. Thus, Defendants claim any action to collect the debt is governed by state law and the applicable state statute of limitations.
In response, Plaintiff contends section 415's language is plain and unambiguous. Relying on the Court's previous discussion of section 415 in its "Order Granting Plaintiff's Motion for Class Certification" ("Order") [Rec. No. 44], filed March 4, 2009, Plaintiff argues the interstate nature of telecommunications makes apparent the obvious need for a uniform federal statute of limitations. Plaintiff asserts the uniform limitation period avoids a "hodge-podge" of different limitations periods and prevents forum shopping and needless litigation over which law applies.
Plaintiff argues other courts have upheld the express language of section 415, and he notes Defendants point to no case in which a court permitted a carrier to ignore section 415's two-year limitations period. Plaintiff contends there is no dispute Sprint is a carrier pursuant to the FCA and Defendants, as assignees, are bound by the same statute of limitations as Sprint.
Plaintiff argues the issue of the filed-tariff doctrine is a red herring because there is no basis to assert Congress intended to limit section 415 to filed tariffs and carrier-to-carrier interconnection contracts. Plaintiff contends section 415's plain language refers to "lawful charges." Plaintiff argues "lawful charges" is a phrase commonly used in the telecommunications field and simply means the amounts a carrier is entitled to collect, whether set by tariff or agreement. Plaintiff contends it is inappropriate to ascribe "tariff" to "lawful charges" because Congress used the term "tariff" in the FCA when that is what it meant.
Plaintiff further claims Congress's choice to deregulate CMRS providers does not mean Congress intended to abandon the goals of uniformity and nondiscrimination, with respect to the FCA's statute of limitations. Plaintiff argues detariffing simply changed the method by which prices were determined. Plaintiff contends state law may govern contract formation and construction, which are not expressly regulated by the FCA nor implicate federal policy, but the statute of limitations is governed by the FCA to ensure uniformity. Plaintiff explains Congress deliberately chose to use the phrase "all actions at law" in section 415, and so the Court should not change the statute to read "some actions at law." Plaintiff contends the extension permitted in section 415(d) makes clear Congress's intent to provide a shorter limitations period than what states generally permit. Finally, Plaintiff asserts section 414's savings clause does not...
To continue reading
Request your trial
-
Unifund CCR Partners v. Lindsey
...contended that the federal district court's decision upon which the trial court relied had been overturned. See Castro v. Collecto, Inc., 668 F.Supp.2d 950, 977–78 (W.D.Tex.2009) (dismissing the class action because, inter alia, the longer Texas statute of limitations was not preempted and ......
-
Rose v. Asset Acceptance, LLC
...thereof, shall be begun within two years from the time thecause of action accrues, and not after."3 Relying on Castro v. Collecto, Inc. (W.D. Tex. 2009) 668 F.Supp.2d 950, for its holding that Section 415(a) applies only to federally regulated telephone charges, the trial court ruled that b......