Martin v. Medicredit, Inc. et al

Filing 38

MEMORANDUM AND ORDER (See Full Order) IT IS HEREBY ORDERED that Defendant Portsmouth Regional Hospital's Motion to Dismiss Plaintiff's Complaint for Failure to State a Claim [ECF No. 22 ] is DENIED. IT IS FURTHER ORDERED that Defendants Medicredit Inc. and Portsmouth Regional Hospital's Motion to Stay These Proceedings [ECF No. 24 ] is DENIED. Signed by District Judge E. Richard Webber on 11/15/16. (EAB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
JASON MARTIN, individually and on
behalf of all others similarly situated,
Plaintiffs,
vs.
MEDICREDIT, INC., et al.,
Defendants.

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Case No. 4:16CV01138 ERW

MEMORANDUM AND ORDER
Before the Court is the Motion to Dismiss Plaintiff’s Complaint for Failure to State a
Claim under Fed. R. Civ. P. 12(b)(6) by Defendant HCA Health Services of New Hampshire,
Inc., d/b/a/ Portsmouth Regional Hospital (“Portsmouth”) [ECF No. 22]. Also before the Court
is Defendants Medicredit Inc. and Portsmouth’s Motion to Stay These Proceedings [ECF No.
24].
I.

FACTUAL AND PROCEDURAL BACKGROUND
On July 13, 2016, Plaintiff Jason Martin filed this class action lawsuit against Defendants

Medicredit, Portsmouth and Wentworth-Douglass Hospital1 for alleged violations of the
Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. Plaintiff contends Defendants
violated 47 U.S.C. § 227(b)(1)(A)(iii)2 “by causing an automatic telephone dialing system and/or

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Plaintiff and Defendant Wentworth-Douglass Hospital stipulated to the dismissal of Plaintiff’s claims against
Wentworth-Douglass Hospital [ECF No. 29].
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The TCPA, 47 U.S.C. § 227(b)(1), provides:
It shall be unlawful for any person within the United States, or any person outside the United
States if the recipient is within the United States-(A) to make any call (other than a call made for emergency purposes or made with the prior
express consent of the called party) using any automatic telephone dialing system or an artificial
or prerecorded voice . . .

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[an] artificial or prerecorded voice to be used to make nonemergency telephone calls to Plaintiff
and other members of the Class without their prior express consent.”
Specifically, Plaintiff argues Defendant Portsmouth Regional Hospital (“Portsmouth”)
assigned its delinquent accounts to debt-collector Medicredit. Plaintiff alleges Medicredit placed
robocalls to Plaintiff's cellular telephone number regarding a debt allegedly owed to Portsmouth
by someone other than Plaintiff. Plaintiff claims he did not provide Defendants with his cellular
telephone number. Plaintiff alleges these pre-recorded calls expressly stated they were made “on

behalf of Portsmouth Regional Hospital” and continued despite repeated requests from Plaintiff
to cease calling. Plaintiff alleges Portsmouth is directly and vicariously liable for calls made by
Medicredit.
Plaintiff further seeks to represent a nationwide class of individuals to whose cellular
telephone number Medicredit placed a non-emergency call on and after July 14, 2015, through
the use of any automatic telephone dialing system (“ATDS”) or artificial or prerecorded voice-where the person’s number was obtained from a source other than the person himself. Plaintiff
also set forth a subclass of individuals who owed or allegedly owed a debt to Defendant
Portsmouth. Plaintiff requests the Court issue an order certifying the action as a class action
pursuant to Fed. R. Civ. P. 23, “establishing the appropriate Classes” and “finding Plaintiff is a
proper representative of the Classes.” Plaintiff seeks statutory damages and injunctive relief
under the TCPA from both Medicredit and Portsmouth.
As noted above, this action was commenced on July 13, 2016. Three months earlier, on
April 1, 2016, a putative class action entitled Rajesh Verma, an individual, on behalf of himself

(iii) to any telephone number assigned to a paging service, cellular telephone service, specialized
mobile radio service, or other radio common carrier service, or any service for which the called
party is charged for the call[.]

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and all others similarly situated v. Medicredit, Inc. et al., Case No. 3:16-cv-427-J-25JRK
(“Verma”), was filed in in the United States District Court for the Middle District of Florida. In
Verma, the plaintiff alleged TCPA violations against the defendants Memorial Healthcare Group,
Inc. (“Memorial”), and two debt collectors, NPAS, Inc. and Medicredit, Inc. Plaintiff claims the
Memorial hired NPAS and Medicredit to place debt-collection calls to him regarding a debt
allegedly owed to Memorial. The plaintiff stated he did not owe any money to Memorial, never
provided his cellular number to defendants or granted consent to call it, and repeatedly told
NPAS and Medicredit not to continue to call him.
Plaintiff Verma also seeks to represent a nationwide class of individuals subscribing to a
cellular telephone whose number appears in the Medicredit and NPAS’s records in association
with an ATDS or a pre-recorded message and artificial voice message. The proposed Verma
class includes individuals called between April 11, 2012, and the date of certification. In its
answer, Medicredit opposed certification and argued the suit was not properly brought as a class
action. It is undisputed by the parties that the proposed class in Verma has not yet been certified.
In the instant action, Defendant Portsmouth now moves the Court to dismiss Plaintiff’s
claims against Portsmouth pursuant to Fed. R. Civ. P. 12(b)(6) [ECF No. 22]. Also pending
before the Court is Defendants Portsmouth and Medicredit’s Motion to Stay these proceedings
[ECF No. 24]. Defendants argue that the “first-to-file” rule mandates a stay of this action
pending resolution of the Verma action. For the reasons stated below, this Court will deny
Portsmouth’s Motion to Dismiss and Defendants’ Motion to Stay.
II. DISCUSSION
A. Portsmouth’s Motion to Dismiss

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Defendant Portsmouth argues Plaintiff has failed to state a plausible claim for relief
pursuant to FRCP 12(b)(6). Specifically, Portsmouth contends Plaintiff has failed to allege facts
to establish Portsmouth was directly or vicariously liable for Medicredit’s violations of the
TCPA.
To survive a motion to dismiss for failure to state a claim, a complaint must contain
“enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 545 (2007). Although a complaint need not contain “detailed factual allegations,”
it must contain facts with enough specificity “to raise a right to relief above the speculative
level.” Id. at 555. This standard “calls for enough fact[s] to raise a reasonable expectation that
discovery will reveal evidence of [the claim].” Id. at 556. As the United States Supreme Court
recently reiterated in Iqbal, “[t]hreadbare recitals of the elements of a cause of action, supported
by mere conclusory statements,” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009).
Under this standard, the task of a court is “to review the plausibility of the plaintiff's
claim as a whole, not the plausibility of each individual allegation.” Zoltek Corp. v. Structural
Polymer Group, 592 F.3d 893, 896 n. 4 (8th Cir. 2010) (citing Braden v. Wal–Mart Stores, Inc.,
588 F.3d 585, 594 (8th Cir. 2009) (noting “the complaint should be read as a whole, not parsed
piece by piece to determine whether each allegation, in isolation, is plausible”)). “This is ‘a
context-specific task that requires the reviewing court to draw on its judicial experience and
common sense.’” Id. (quoting Iqbal, 556 U.S. at 679).
In support of its Motion, Portsmouth argues Plaintiff failed to plead Portsmouth was
directly liable for violations of the TCPA because Plaintiff did not allege Portsmouth made the
calls at issue. Portsmouth contends the “express language of the TCPA makes clear that in order

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for there to be liability, a defendant must have physically placed the offending call.” However, as
noted by Plaintiff, the Federal Communications Commission (“FCC”) has ruled that a creditor is
responsible for calls made on its behalf by a third-party debt collector. In In re Rules and
Regulations Implementing the Telephone Consumer Protection Act of 1991, 23 F.C.C. Rcd. 559
¶ 10 & N.38 (Jan. 4, 2008) (“2008 TCPA Order”), the FCC stated:
“[A] creditor on whose behalf an autodialed or prerecorded message call is made to a
wireless number bears the responsibility for any violation of the Commission’s rules.
Calls placed by a third party collector on behalf of that creditor are treated as if the
creditor itself placed the call . . . . A third party collector may also be liable for a violation
of the Commission’s rules.”
The language of the 2008 TCPA Order appears to impose direct liability, not only on the thirdparty debt collector, but also on creditors who farm their debts out to third-party debt collectors.
See Soppet v. Enhanced Recovery Co., LLC, 679 F.3d 637, 642 (7th Cir. Ill. 2012) (“calls placed
by a third-party collector on behalf of a creditor are treated as having been made by the creditor
itself.”); Baisden v. Credit Adjustments, Inc., 813 F.3d 338, 343 (6th Cir. Ohio 2016); O’Connor
v. Diversified Consultants, Inc., No. 4:11CV1722 RWS, 2013 WL 2319342, *4 (E.D. Mo. May
28, 2013); Martin v. Cellco Partnership, No. 12-C-5147, 2012 WL 5048854, *2 (N.D. Ill. Oct.
18, 2012).
In the Complaint, Plaintiff has asserted the following facts: Portsmouth assigned its
delinquent accounts to Medicredit for debt collection. Plaintiff began receiving calls in January
2016 from Medicredit regarding debts owed to Portsmouth by someone other than himself. Many
of the pre-recorded calls expressly stated they were made on behalf of Portsmouth.
Plaintiff has pled sufficient facts against Portsmouth to state a claim for relief. Pursuant
to the 2008 TCPA Order, a creditor could be held liable for violations of the TCPA as if it had
made the calls itself. See O’Connor, 2013 WL 2319342 at *4 (calls placed by a third party

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collector on behalf of a creditor are treated as if the creditor itself placed the call). See also
Aghdasi v. Mercury Ins. Grp., Inc., No. CV 15-4030R, 2015 WL 5638086, at *2 (C.D. Cal. Aug.
18, 2015).

As noted above, Plaintiff has alleged the debt collection calls were made by

Medicredit on Portsmouth’s behalf pursuant to its policy of farming out its delinquent accounts
to Medicredit. Thus, the Court finds Plaintiff’s pleadings are sufficient and the Motion to
Dismiss will be denied.
B. Motion to Stay
Defendants have filed a Motion to Stay in this matter pending the resolution of Verma, a
putative class action alleging TCPA violations filed three months before Plaintiff filed this action
(“Martin”). Defendants rely on the “first-to-file” rule in support of their Motion.
“To conserve judicial resources and avoid conflicting rulings, the first-filed rule gives
priority, for purposes of choosing among possible venues when parallel litigation has been
instituted in separate courts, to the party who first establishes jurisdiction.” Nw. Airlines, Inc. v.
Am. Airlines, Inc., 989 F.2d 1002, 1006 (8th Cir. 1993); Arnold v. DirecTV, Inc., No.
4:10CV00352AGF, 2011 WL 839636, at *4 (E.D. Mo. Mar. 7, 2011). The rule “is not intended
to be rigid, mechanical, or inflexible, but is to be applied in a manner best serving the interests of
justice.” Nw. Airlines, 989 F.2d at 1005 (citation omitted). The prevailing standard is that “in the
absence of compelling circumstances the first-filed rule should apply.” Id. (citation omitted).
However, district courts enjoy wide discretion in applying the first-filed rule. Id. at 1004.
Application of the first-filed rule requires “parallel litigation” to be pending in two
different courts.

Furminator, Inc. v. Munchkin, Inc., No. 4:08CV000367ERW, 2009 WL

2957952, at *1 (E.D. Mo. Sept. 10, 2009). Generally, two cases are considered to be “parallel”
when they involve essentially identical or substantially similar parties and issues. Id. at *1.

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Upon review of the record, the relevant case law and arguments of the parties, this Court
declines to apply the “first-to-file” rule to stay the present case. As noted, the litigation pending
in the two courts must be “parallel.” Here, the two cases do not constitute parallel litigation.
Most significantly, the parties in Verma and Martin are not substantially similar. First, as
Plaintiff correctly suggests, there is a lack of identity among the defendants in the two actions.
Defendant Portsmouth is not a party to the Verma action and two defendants in Verma, creditor
Memorial and debt-collector NPAS, are not parties in Martin. See Miller v. Directv, LLC, No.
3:15CV390JPDB, 2016 WL 816611 at * 3 (M.D. Fla. Mar. 2, 2016) (noting the plaintiff in the
second action had only sued one of the four defendants present in the first action and concluding
one overlapping party and one potential overlapping issue were insufficient to apply the firstfiled rule).
In addition, the named plaintiffs are not the same in Verma and Martin. Defendants argue
this is insignificant as the proper focus of the inquiry is whether the putative classes in both cases
are substantially similar. See e.g., Askin v. Quaker Oats Co., No. 11CV111, 2012 WL 517491, at
*4 (N.D. Ill. Feb. 15, 2012). However, looking at the putative class described in Verma and the
class descriptions set forth here, in Martin, the Court discerns significant differences.
In Verma, the putative class3 is defined as follows:

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

A nationwide class of individuals subscribing to a cellular telephone;
Whose cellular number appears in the defendants’ collection records or auto
dialing records in association with an automated telephone dialing system or a
pre-recorded message or artificial voice message; and
Where those records reflect calls to that cell phone in the period starting four
years prior to the filing of the suit4 through the date of certification.

In Martin, the proposed class is set forth as:

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Specifically, two classes were set forth in the complaint (an “Autodialer Class” and a “Prerecorded Message and
Artificial Voice Class”). The definitions have been combined above to avoid repetition.
4
According to Defendants, the Verma suit was filed on April 11, 2016.

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All persons within the United States (2) to whose cellular telephone number (3)
Medicredit placed a non-emergency telephone call (4) between July 14, 2015 and
the date of certification, (5) through the use of any automatic telephone dialing,
system or artificial or prerecorded voice (6) where such person’s number was
obtained from a source other than the person himself.
[ECF No. 1].

After defining the proposed class, Plaintiff then sets forth a definition of

individuals who revoked their consent to be called. Plaintiff’s “proposed revocation” includes:
“All persons within the United States (2) to whose cellular telephone number (3) Medicredit
placed a non-emergency telephone call (4) between July 14, 2015 and the date of certification,
(5) through the use of any automatic telephone dialing, system or artificial or prerecorded voice
(6) after such person informed Medicredit to stop calling.” [ECF No. 1]. The Complaint also
details the following proposed subclass of individuals (“Portsmouth subclass”):
All persons within the United States (2) to whose cellular telephone number (3)
Medicredit placed a non-emergency telephone call (4) between July 14, 2015 and the date
of certification, (5) through the use of any automatic telephone dialing system or artificial
or prerecorded voice (6) in an attempt to collect a debt owed or allegedly owed to
Portsmouth Regional (7) where such person’s number was obtained from a source other
than the person himself or after such person informed Medicredit to stop calling.
[ECF No. 1].
The class descriptions do overlap in part as both involve a nationwide class of individuals
whole cellular numbers were called through the use of an ATDS or artificial or prerecorded
voice. Nevertheless, there are several distinctions between the two putative classes. Here, in
Martin, the class description states that the person’s cellular number was obtained from a source
other than the person and it includes a definition of revocation. In contrast, the Verma class does
not address 1) from whom the cellular number was obtained, or 2) revocation. Moreover, the
putative class description in Martin includes a subclass of individuals called by Medicredit in an
attempt to collect a debt owed or allegedly owed to Portsmouth. There are no subclasses in

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Verna. Finally, the class in Verma is broader as it includes calls made by more than one
defendant5 and spans a greater time period than Martin.
Based upon the presence of different defendants and significant disparities in the
definitions of the putative classes, this the court concludes the parties in Verma and Martin are
dissimilar. Moreover, the Court finds the issues in the case do not sufficiently overlap. To
constitute parallel actions, a determination in one action should leave little or nothing to be
determined in the other. Grider v. Keystone Health Plan Cent., Inc., 500 F.3d 322, 330 (3d Cir.
2007); Leyse v. Bank of Am., No. CV1107128SDWSCM, 2016 WL 5928683, at *7 (D.N.J. Oct.
11, 2016). Here, Plaintiff’s claims against Defendant Portsmouth will go unresolved by Verma.
See Leyse, 2016 WL 5928683, at *7 (stating that the first-filed rule was inapplicable because a
resolution in the first-filed matter did not necessarily “leave[ ] little or nothing to be determined
in the [second].”)
Moreover, the Court finds there are additional reasons to exercise our discretion to
decline to apply the “first-to-file” rule. Specifically, it is undisputed by the parties that in Verna
the putative class has not yet been certified. At the time Defendants filed their Motion to Stay,
the plaintiff in Verna had not yet even filed its motion for class certification with the court in
Florida. Thus, this case is not advanced much further than the instant action. Moreover,
Defendant Medicredit has taken inconsistent positions regarding the viability of the proposed
class certification in Verna. Specifically, Medicredit assumes for purposes of its motion here that
a class will be certified in Verma, yet in Verma, it opposes class certification in its answer to the
plaintiff’s complaint. Coupled with the early stage of the Verna proceedings, Defendants’
opposing stances on whether a class will be certified in Verna militates against application of the

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In Verna, the class description refers to “defendants,” which includes NPAS and Medicredit. In Martin, only
Medicredit is named in the class description as making calls.

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“first-to-file” rule. See Feggins v. LVNV Funding, LLC, No. 14-1049, 2014 WL 7185376, at *23 (Bankr. M.D. Ala. Dec. 16, 2014).
Having determined this suit is not duplicative of the Verma action and that the first-to-file
doctrine does not apply, the Court declines to stay this action pending resolution of Verma.
Defendants’ Motion to Stay will be denied.
Accordingly,
IT IS HEREBY ORDERED that Defendant Portsmouth Regional Hospital’s Motion to
Dismiss Plaintiff’s Complaint for Failure to State a Claim [ECF No. 22] is DENIED.
IT IS FURTHER ORDERED that Defendants Medicredit Inc. and Portsmouth
Regional Hospital’s Motion to Stay These Proceedings [ECF No. 24] is DENIED.
Dated this 15th day of November, 2016.

________________________________________
E. RICHARD WEBBER
SENIOR UNITED STATES DISTRICT JUDGE

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