McLain v. Head Mercantile Co.

• Decision Date: 28 August 2017
• Docket Number: CIVIL ACTION NO. 16-780-JWD-RLB
• Parties: BARBARA McLAIN, on behalf of herself and all others similarly situated v. HEAD MERCANTILE CO., INC. d/b/a THE HMC GROUP a/k/a THE SOS GROUP
• Court: U.S. District Court — Middle District of Louisiana

BARBARA McLAIN, on behalf of herself and all others similarly situated
v.
HEAD MERCANTILE CO., INC. d/b/a THE HMC GROUP a/k/a THE SOS GROUP

CIVIL ACTION NO. 16-780-JWD-RLB

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

August 28, 2017

RULING AND ORDER

I. Introduction

This matter comes before the Court on Defendant The Head Mercantile Co., Inc. d/b/a The HMC Group a/k/a The SOS Group's ("Defendant") Motion to Dismiss or for Summary Judgment. (Doc. 16.) Plaintiff Barbara McLain, on behalf of herself and others similarly situated ("Plaintiff"), filed an opposition in which she addressed the motion to dismiss on the merits, and argued that Defendant's motion for summary judgment was premature. (Doc. 27.) Defendant filed a reply brief arguing that its Rule 56 motion is ripe for consideration and addressing the merits of Plaintiff's opposition. (Doc. 30.) After conducting limited discovery responsive to the issues raised on summary judgment, and with leave of Court (see Doc. 36), Plaintiff filed a supplemental opposition responding on the merits to the summary judgment motion. (Doc. 37.) Defendant subsequently filed a supplemental reply brief. (Doc. 38.) After careful consideration of the law, facts, and arguments of the parties, for the reasons set forth below, Defendant's motion to dismiss is DENIED AS MOOT and its motion for summary judgment is GRANTED IN PART and DENIED IN PART.

II. Background

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Defendant is an Ohio corporation doing business as a debt collection agency. (Docs. 16 at 1; 16-1 at 1.) On or around June 9, 2014, Defendant registered with the Louisiana Secretary of State's office to do business in Louisiana under the name "The HMC Group" and provided its correct domicile and Ohio mailing address. (Docs. 16 at 1—2; 16-1 at 1.) On or about December 8, 2016, Defendant updated its registration with the Louisiana Secretary of State's office to reflect its new "doing business as" name: "The SOS Group," and once again provided the same Ohio domicile mailing address. (Docs. 16 at 2; 16-1 at 1—2, 5—7.)

Plaintiff is a Louisiana resident who claims that she is "allegedly obligated to pay a debt owed or due, or asserted to be owed or due a creditor other than Defendant." (Doc. 1 at 3.) Specifically, Plaintiff's debt arose out of medical services she received from Ochsner Health System ("Ochsner") between August 12, 2015 and February 4, 2016. (Docs. 16 at 2; 16-1 at 2.) Each time Plaintiff sought medical services at Ochsner, she signed documentation that contained the following provision:

Acceptance of Financial Responsibility: I agree that in consideration of the services and supplies that have been or will be furnished to the patient, I am hereby obligated to pay all charges made for or the account of the patient according to the standard rates (in effect at the time the services and supplies are delivered) established by Ochsner, including its Patient Financial Assistance Policy to the extent it is applicable. I understand that I am responsible for all charges, or portions thereof, not covered by insurance or other sources...

(Docs. 16 at 2; 16-1 at 9; 37-1 at 3.)

Ochsner employed Defendant's services to collect outstanding debts from its patients, including Plaintiff. In connection with her debt, Defendant sent Plaintiff a letter dated March 30, 2016, in which Defendant identified itself as "The SOS Group fka The HMC Group." (Docs. 1 at 4; 1-1 at 2.) Plaintiff received a second letter from Defendant dated July 20, 2016; this letter also reflected that it was from "The SOS Group fka The HMC Group". (Docs. 1 at 4; 1-2 at 2.)

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Specifically, as evidenced by the letters attached as exhibits to Plaintiff's complaint, these letters identify the sender as "The SOS Group" in the body of the letter, but include the "The SOS Group fka The HMC Group" language in the top left corner of the letter. (Docs. 1-1 at 2; 1-2 at 2.) The address under both headings is the same, and reflects Defendant's proper Ohio domicile address. (Docs. 1-1 at 2; 1-2 at 2.) In her complaint, filed November 22, 2016, Plaintiff avers that a "query of the Louisiana Secretary of State's website does not produce any business filings under 'The SOS Group.'... [or] under 'The SOS Group fka The HMC Group.'"¹ (Doc. 1 at 4.)

In both the March 30, 2016 and July 20, 2016 letters, Defendant offers various options through which the recipient debtor may pay his or her debt, including an option to pay online or via a toll-free number to pay either by credit/debit card or via check by phone. (Docs. 1 at 5; 1-1 at 2; 1-2 at 2.) The letters further state that "[a] $2.00 convenience fee applies to checks by phone." (Docs. 1-1 at 2; 1-2 at 2.) They direct the debtor to make checks payable to "The SOS Group." (Docs. 1 at 5; 1-1 at 2; 1-2 at 2.)

Plaintiff argues that the letter, which improperly identifies Defendant as "The SOS Group" and which imposes $2.00 convenience fee associated with payment of checks by phone, violates various provisions of the Federal Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., which "Congress enacted [] to 'eliminate abusive debt collection practices, to ensure that debt collectors who abstain from such practices are not competitively disadvantaged, and to promote consistent state action to protect consumers'". (Doc. 1 at 2 (quoting Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 577 (2010) (citing 15 U.S.C. § 1692(e)).) Plaintiff maintains that these letters are based upon a form or template that Defendant sends as its initial communication to a consumer in connection with its collection of a debt. (Id.

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at 5.) She avers that Defendant has used this form letter to send collection notices to at least forty (40) individuals in Louisiana within the one year preceding the filing of the complaint. (Id. at 6.) Plaintiff seeks to represent the following class of individuals: "All persons in the State of Louisiana to whom Defendant sent, within one year before the date of this complaint and in connection with the collection of a debt, a collection letter based upon the Template." (Id.)

In her complaint, Plaintiff alleges that Defendant violated six provisions of the FDPCA: first, that Defendant violated Section 1692e(2)(B) "by falsely representing that it could legally charge a $2.00 fee for payments made by check over the telephone and for falsely representing that it was entitled to collect the Debt from Plaintiff when they are not licensed in the state as required under Louisiana state law." (Id. at 9.)

Second, she argues that Defendant violated Section 1692e(5) when it "threaten[ed] to take an action against Plaintiff that cannot be legally taken or that was not actually intended to be taken, including by taking a $2.00 fee for payments made by check over the telephone and for attempting to collect the Debt from Plaintiff when they are not licensed" in Louisiana, as required by law. (Id. at 10.)

Third, Plaintiff claims that Defendant violated Section 1692e(10) "by using false, deceptive, or misleading representations or means to collect or attempt to collect a debt," including by the use of a name not registered with the Secretary of State and by "attempting to collect a $2.00 fee for payments made by check over the telephone which they are not entitled to charge". (Id. at 11.)

Fourth, Plaintiff avers that Defendant violated Section 1962e(14), which "forbids the 'use of any business, company, or organization name other than the true name of the debt collector's business, company or organization'" because it "attempt[ed] to collect under the business name

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'The SOS Group' when this name is not registered with the Louisiana Secretary of State as required by state law and is a name other than the true name of the debt collector's business, company, or organization." (Id. at 13.)

Fifth, Plaintiff argues that Defendant violated Section 1692f, which prohibits a debt collector from employing "unfair or unconscionable means to collect or attempt to collect any debt" because Defendant "engag[ed] in unfair or unconscionable means to collect or attempt to collect any debt from Plaintiff by attempting to collect a debt without complying with Louisiana's registration requirements." (Doc. 1 at 14—15 (citing 15 U.S.C. § 1692f) (internal quotation marks omitted)).)

Lastly, in her sixth cause of action, Plaintiff avers that Defendant violated Section 1692f(1) "by attempting to collect an amount from Plaintiff that is not expressly authorized by the agreement creating the debt nor permitted by law, including by attempting to collect a $2.00" convenience fee for checks by phone "when, upon information and belief, Defendant is not expressly authorized or permitted by law to charge that amount." (Id. at 16.)

III. Discussion

a. Standard

i. Rule 12(b)(6)

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), the Court "must accept as true all of the factual allegations contained in the complaint." Erickson v. Pardus, 551 U.S. 89, 94 (2007). "Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The Supreme Court expounded upon the Twombly standard, explaining that "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is

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plausible on its face.' "Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. It follows that "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show [n]'—'that the pleader is entitled to relief.' Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). Assessing the...