McPeters v. Lexisnexis
| Decision Date | 03 October 2012 |
| Docket Number | Case No. 4:11–cv–02056. |
| Parties | Karen McPETERS, Plaintiff, v. LEXISNEXIS, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
OPINION TEXT STARTS HERE
Robert L. Mays, Jr., Attorney at Law, Robert L. Mays, San Antonio, TX, for Plaintiff.
Robert T. Mowrey, Locke Lord LLP, Dallas, TX, Amanda M. Schaeffer, Amanda Marie Schaeffer, Locke Lord Bissell and Liddell, LLP, Benjamin David Lee Foster, Locke Lord et al., Austin, TX, David Alan McNamara, Port of Houston Authority, Houston, TX, J. Allen Maines, S. Tameka Phillips, Paul, Hastings, Janofsky & Walker, LLP, John G. Parker, Paul Hastings et al., William K. Whitner, Paul Hastings LLP, Atlanta, GA, for Defendant.
Before the Court is Defendant's Motion to Dismiss (“Motion”). (Doc. No. 68.) After considering the Motion, all responses and replies thereto, and the applicable law, the Court concludes that the Motion should be GRANTED in part and DENIED in part.
Plaintiff Karen McPeters is a Montgomery County civil litigant who challenges the electronic filing (“e-filing”) charges imposed by Defendant on litigants in Texas state courts in Montgomery and Jefferson counties. Plaintiff brings this suit as a putative class action, and alleges that Defendant has violated several provisions of the Texas Constitution, the Texas Deceptive Trade Practices (“DTPA”), the Texas Theft Liability Act (“TTLA”), and the Texas Business and Commerce Codes.
Plaintiff previously sued Defendant in a related action in this Court, asserting both federal law and Texas state law claims. McPeters v. Edwards, 806 F.Supp.2d 978 (S.D.Tex.2011)aff'd,464 Fed.Appx. 351 (5th Cir.2012). Defendant filed a motion to dismiss in that case. This Court granted Defendant's motion, dismissing Plaintiff's federal claims, and declined to exercise supplemental jurisdiction over her state law claims. Plaintiff appealed, and the decision regarding the federal claims was affirmed by the Fifth Circuit. McPeters v. Edwards, 464 Fed.Appx. 351, 352 (5th Cir.2012).
Plaintiff initiated the instant action in Bexar County, and Defendant removed it to this Court on the basis of diversity. The disputed issues resolved in this Order concern Plaintiff's state claims.
Rule 12(b)(6) provides for dismissal of a complaint for “failure to state a claim for which relief can be granted.” Fed.R.Civ.P. 12(b)(6). When considering a Rule 12(b)(6) motion to dismiss, a court must “accept the complaint's well-pleaded facts as true and view them in the light most favorable to the plaintiff.” Johnson v. Johnson, 385 F.3d 503, 529 (5th Cir.2004). A claim “does not need detailed factual allegations” but must provide party'sgrounds for entitlement to relief, “including factual allegations that when assumed to be true raise a right to relief above the speculative level.” Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir.2007), citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
A district court will dismiss a claim under Fed. R. of Civ. P. 12(b)(6) only if “it appears certain that the plaintiff cannot prove any set of facts in support of his claim that would entitle him to relief.” Leffall v. Dallas Indep. Sch. Dist., 28 F.3d 521, 524 (5th Cir.1994). However, “conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.” Fernandez–Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir.1993). A complaint will only survive a motion for dismissal if the plaintiff pleads sufficient facts to state a claim for relief that is facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 677, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
III. ANALYSISA. The Texas Deceptive Trade Practices Act (“DTPA”)
Plaintiff alleges that Defendant engaged in false, misleading, or deceptive practices (§ 17.46(b) of the DTPA) and that Defendant engaged in unconscionable conduct (§ 17.50(a)(3)). The Court grants Defendant's Motion with regard to § 17.46(b) and denies Defendant's Motion with regard to 17.50(a)(3).
Section 17.46(b) of the DTPA makes unlawful false, misleading, or deceptive acts or practices in the conduct of any trade or commerce. Plaintiff alleges that Defendant made implied representations that it was a government actor, and misled Plaintiff about the amount and nature of the e-filing fee. Defendant asserts that Plaintiff has not demonstrated causation or injury based on Defendant's conduct. Detrimental reliance is an essential element for proving false, misleading or deceptive acts under the DTPA. Tex. Bus. & Com.Code § 17.50(a)(1)(B). The Court finds that the Plaintiff has not demonstrated causation because she has failed to allege any specific concealments by Defendant that she relied upon to e-file. Plaintiff had knowledge of the alternatives to e-filing before she chose to e-file. (Compl. ¶ 10, 82). She did not choose to e-file because she thought that Defendant was charging her a “filing fee,” rather than an e-filing fee.
Plaintiff also alleges that Defendant concealed information such as the amount of the e-filing fee, the ability to pay for filing without paying for service of a document, and the cost of an invoice for services provided from the consumer. The Court finds that 1) these concealments did not induce Plaintiff to pay the e-filing fee, and 2) failure to disclose the e-filing fee is not a violation of the DTPA. To be actionable, Defendant's failure to disclose must have been “intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed.” See DTPA § 17.46(b)(24) (Vernon Supp. 2001), cited in Texas v. Am. Blastfax, Inc., 164 F.Supp.2d 892, 901 (W.D.Tex.2001). Plaintiff has not alleged that she would have used an alternative method if she had known the cost of e-filing, indeed she states that the “local terminal option” for filing court documents is “even more costly and inconvenient,” which is why she chose not to use it (Compl. ¶ 82(i)).
Plaintiff alleges that parties in Montgomery County have misrepresented Defendant'srole in e-filing to her. However, Plaintiff cannot show that Defendant is responsible for misstatements by other parties. For example, Plaintiff points to the statements of the Montgomery County District Clerk, who incorrectly informed her that e-filing was mandatory. While “there may be more than one proximate cause of an event,” Plaintiff has not sufficiently asserted that the Defendant is one cause of the false, misleading, or deceptive conduct. Del Lago Partners, Inc. v. Smith, 307 S.W.3d 762, 774 (Tex.2010), citing Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 784 (Tex.2001).
Plaintiff alleges that e-filing fees charged by Defendant are unconscionable. An ‘unconscionable action or course of action’ means “an act or practice which, to a person's detriment: (A) takes advantage of the lack of knowledge, ability, experience, or capacity of a person to a grossly unfair degree; or (B) results in a gross disparity between the value received and consideration paid, in a transaction involving transfer of consideration.” Tex. Bus. & Com.Code § 17.45(5); Latham v. Castillo, 972 S.W.2d 66, 72 (Tex.1998)citing Chastain v. Koonce, 700 S.W.2d 579, 582 (Tex.1985). Plaintiff asserts a plausible claim that Defendant's charges are grossly higher than those of similar providers of e-filing. For example, Defendant charges almost twice as much as TexasOnline. (Compl. ¶ 31). Plaintiff contends that an individual filing in Montgomery County or Jefferson County has little alternative to paying this higher fee.
Defendant points to the fact that Plaintiff had alternatives to e-filing. Plaintiff could have brought her filings in the form of 3–1/2? IBM or compatible formatted disc to the public terminal located in the District Clerk's Office and uploaded the pleadings at no charge. Additionally, Plaintiff could file a motion for leave to file in a traditional manner. However, the existence of alternatives does not mean that Defendant's fees are not unconscionable. As the sole provider in Montgomery and Jefferson County of e-filing—the most convenient and widely used method of filing—Defendant can take advantage of individuals by setting whatever fee it likes. Parties who are out-of-state cannot meaningfully take advantage of the public terminal option, and could not request leave of court to file in a traditional manner without using e-filing or the public terminal to file the motion for leave. The availability of alternatives is not sufficient to defeat a claim of unconscionability if those choices are not meaningful ones. Ski River Dev., Inc. v. McCalla, 167 S.W.3d 121 (Tex.App.2005).
Additionally, as this Court noted in a prior related case ( McPeters v. Edwards, 806 F.Supp.2d 978, 991 (S.D.Tex.2011)aff'd,464 Fed.Appx. 351 (5th Cir.2012)), it is not clear that there is any limit to the rates Defendant could charge for its service, although the law suggests that fees must be minimal and reasonable. The 2003 Order expressly represents that “a minimal fee is assessed for each filing and service delivery made through the system.” (Doc. No. 68–2, at 2). Additionally, the Texas Government Code sets forth filing fees and other fees to be charged by district clerks. Tex. Govt.Code §§ 51.317–19, 101.061–101.0617, 103.021–103–033 (Vernon's 2005). The statute provides that “for performing any other service prescribed or authorized by law for which no fee is set by law” the district clerk shall collect “a reasonable fee.” Id. at § 51.319. Both “minimal fee” and “reasonable fee” indicate there should be an upward limit to the fee Defendant can charge for its services. It is not clear that there is currently any oversight or any limit to...
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Texas. Practice Text
...producing higher prices in a relevant market constitutes, by itself, a per se illegal activity”). But see McPeters v. LexisNexis, 910 F. Supp. 2d 981, 988 (S.D. Tex. 2012) (holding that plaintiff stated plausible claim for per se violation by alleging that defendant’s anticompetitive acts w......