Miles v. Medicredit, Inc.

Filing 53

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendant Medicredit, Inc.'s Motion for Partial Judgment on the Pleadings 35 is DENIED. Signed by District Judge John A. Ross on 7/14/2021. (LNJ)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
TIMOTHY MILES, on behalf of himself
and others similarly situated,
Plaintiff,
v.
MEDICREDIT, INC.,
Defendant.

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No. 4:20-CV-01186 JAR

MEMORANDUM AND ORDER
This matter is before the Court on Defendant Medicredit, Inc.’s Motion for Partial
Judgment on the Pleadings. (Doc. No. 35). The motion is fully briefed and ready for disposition. 1
Background
Plaintiff brings this putative class action against Defendant Medicredit, a medical debt
collector, for violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227.
Specifically, Plaintiff alleges Medicredit violated § 227(b)(1)(A)(iii) of the TCPA by placing
non-emergency telephone calls to consumers’ cellular telephone numbers by using an automatic
telephone dialing system (“ATDS”) (Count I) and an artificial or prerecorded voice (Count II),
without their prior express consent. (Amended Class Action Complaint (“AC”), Doc. No. 18 at ¶
3).
According to the amended complaint, Medicredit placed numerous calls to Plaintiff’s
cellular telephone number in an effort to contact and collect a debt allegedly owed by a third
party, unknown to Plaintiff, named “Amy.” (AC at ¶¶ 17, 31). Plaintiff alleges upon information
1

Both sides have submitted supplemental authority in support of their briefing (Doc. Nos. 47-1, 48-1, 491, 50-1, 51-1, 51-2, 52-1, 52-2) which the Court has considered.

and belief, and “in light of the frequency, character, number, and nature of the calls,” that
Medicredit used an ATDS, as defined by § 227(a)(1), to place its calls to his cellular telephone
number. (Id. at ¶ 36). More specifically, Plaintiff alleges Medicredit uses a predictive dialer, a
type of ATDS with the capacity to store numbers to be called, and to dial such numbers
automatically (even if the system must be turned on or triggered by a person). (Id. at ¶¶ 37-38,
52). Plaintiff further alleges, upon information and belief, that Medicredit uploads telephone
numbers to be called to its dialer, which then stores the numbers to be called and automatically
dials those numbers based on the availability of Medicredit’s customer service representatives to
field connected calls. (Id. at ¶ 39).
Medicredit moves for partial judgment on the pleadings, arguing that Count I of
Plaintiff’s amended complaint fails to plausibly allege that Medicredit’s dialer is an ATDS under
the definition set forth in the Supreme Court’s recent decision in Facebook, Inc. v. Duguid, 141
S. Ct. 1163 (2021). More specifically, Medicredit argues that Plaintiff fails to allege its dialer
stores or produces telephone numbers to be called using a random or sequential number
generator. Plaintiff urges the Court to deny Medicredit’s motion and allow discovery on the
capabilities of Medicredit’s dialer. Alternatively, Plaintiff asks for leave to amend his complaint
in light of Duguid.
Legal standard
A motion for judgment on the pleadings under Fed. R. Civ. P. 12(c) is governed by the
same standard used to address a motion to dismiss for failure to state a claim under Rule
12(b)(6). Ginsburg v. InBev NV/SA, 623 F.3d 1229, 1233 n.3 (8th Cir. 2010). To survive a
motion to dismiss pursuant to Rule 12(b)(6), “a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556

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U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A
plaintiff need not provide specific facts in support of his allegations, Erickson v. Pardus, 551
U.S. 89, 93 (2007) (per curiam), but “must include sufficient factual information to provide the
‘grounds’ on which the claim rests, and to raise a right to relief above a speculative level.”
Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir. 2008) (citing Twombly, 550
U.S. at 555 & n.3). This obligation requires a plaintiff to plead “more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Twombly, 550 U.S. at 555. A complaint “must contain either direct or inferential allegations
respecting all the material elements necessary to sustain recovery under some viable legal
theory.” Id. at 562 (quoted case omitted). This standard “simply calls for enough fact to raise a
reasonable expectation that discovery will reveal evidence of [the claim or element].” Id. at 556.
On a motion to dismiss, the court accepts as true all of the factual allegations contained in
the complaint, even if it appears that “actual proof of those facts is improbable,” id. at 556, and
reviews the complaint to determine whether its allegations show that the pleader is entitled to
relief. Id. at 550 U.S. at 555-56; Fed. R. Civ. P. 8(a)(2). The principle that a court must accept as
true all of the allegations contained in a complaint does not apply to legal conclusions, however.
Iqbal, 556 U.S. at 678 (stating “[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice”). Although legal conclusions can
provide the framework for a complaint, the pleader must support them with factual allegations.
Id. at 679. The court reviews 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).

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The scope of a court’s inquiry on a Rule 12(b)(6) motion is limited to the pleadings, but it
may consider some materials that are part of the public record or do not contradict the complaint
as well as materials that are necessarily embraced by the pleadings. Porous Media Corp. v. Pall
Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (internal citations omitted).
Discussion
The issue for purposes of deciding Medicredit’s motion is whether Plaintiff has
sufficiently alleged that Medicredit’s dialer is an ATDS. The TCPA defines an ATDS as
“equipment which has the capacity —
(A) to store or produce telephone numbers to be called, using a random or
sequential number generator; and
(B) to dial such numbers.”
47 U.S.C.A. § 227(a)(1). Various parts of this definition have been extensively litigated,
including the term “capacity” and whether a device that requires human intervention qualifies. In
Duguid, the Supreme Court held that “to qualify as an ‘automatic telephone dialing system,’ a
device must have the capacity either to store a telephone number using a random or sequential
generator or to produce a telephone number using a random or sequential number generator.”
141 S. Ct. at 1167.
The plaintiff in Duguid challenged a Facebook security feature that allows a user to
provide a telephone number to be contacted via text message when an attempt is made to access
their Facebook account from an unknown device or browser. This is an “opt-in” feature, meaning
the user must affirmatively provide and verify a phone number to which Facebook can send
messages. Id. at 1168. Plaintiff received several of these security notification messages despite
not having a Facebook account and thus not having provided Facebook with his phone number
for this purpose. Id. He sued, alleging Facebook violated the TCPA by maintaining a database

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that stored phone numbers and programming its equipment to send automated text messages to
those numbers in response to a potential unauthorized access attempt. Id.
The question before the Supreme Court, which focused only on part (a) of the statutory
definition of an ATDS, was whether the phrase “using a random or sequential number generator”
applied to both “store” and “produce” or only to “produce.” Facebook stored the telephone
numbers it contacted but did not use a random or sequential number generator to store or contact
those numbers; rather, Facebook’s program contacted specific numbers, i.e., numbers belonging
to those whom it was attempting to inform of a potentially unauthorized login. Based on this
reasoning, Facebook moved to dismiss the case at the district court level, arguing that the
plaintiff had failed to allege it sent text messages to “randomly or sequentially generated”
numbers. The district court agreed and dismissed the plaintiff’s complaint with prejudice.
Duguid v. Facebook, Inc., No. 15-CV-00985-JST, 2017 WL 635117 (N.D. Cal. Feb. 16, 2017).
On appeal, the Ninth Circuit reversed, holding that an ATDS only had to have the
capacity to “store numbers to be called” and to “dial such numbers automatically”; the device did
not have to use a random or sequential generator to actually store the numbers. Duguid v.
Facebook, Inc., 926 F.3d 1146 (9th Cir. 2019). The Supreme Court, noting a conflict among the
various courts of appeal on this issue, granted certiorari. Facebook, Inc. v. Duguid, 141 S. Ct.
193 (2020).
Following “conventional rules of grammar,” 141 S. Ct. at 1169, and statutory context, id.
at 1171, the Court found the modifying clause “using a random or sequential number generator”
applies to all of the verbs that precede it – specifically, both “store” and “produce,” id. at 1170.
Therefore, to qualify as an ATDS, the equipment in question must use a random or sequential

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generator to either store or produce phone numbers to be called, id. Because Facebook’s system
did neither, it was not an ATDS.
Medicredit argues that Plaintiff’s allegation that it uploads telephone numbers to be
called to its dialer is fundamentally incompatible with the definition of an ATDS set out in
Duguid. In support of its argument, Medicredit cites Timms v. USAA Fed. Sav. Bank, No. 3:18CV-01495-SAL, 2021 WL 2354931 (D.S.C. June 9, 2021). In Timms, the court granted
summary judgment in favor of defendant on plaintiff’s TCPA claim because there was no
evidence in the record that the dialing systems at issue stored numbers using a random or
sequential number generator or produced numbers using a random or sequential number
generator. Both systems were “capable of making telephone calls only to specific telephone
numbers from dialing lists created and loaded by’ the defendant. They “cannot store or produce
telephone numbers using a random or sequential number generator.” Id. at *7. Therefore, neither
dialing system was an ATDS. Because Timms was decided following discovery and on a motion
for summary judgment, and not at the pleading stage, the Court finds the case is not dispositive
of the issue before it.
Medicredit further argues it would be illogical to dial telephone numbers created by a
random or sequential number generator to reach “Amy” or any other specific consumer it was
trying to reach. Medicredit cites Watts v. Emergency Twenty Four, No. 20-CV-1820, 2021 WL
2529613, at *3 (N.D. Ill. June 21, 2021) and Hufnus v. DoNotPay, Inc., No. 20-CV-08701-VC,
2021 WL 2585488, at *1 (N.D. Cal. June 24, 2021), both dismissing TCPA claims because the
dialing equipment at issue placed calls to specific individuals from an existing list of phone
numbers, suggesting the numbers were not randomly or sequentially generated. But see Callier v.

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GreenSky, Inc., No. EP-20-CV-00304-KC, 2021 WL 2688622 (W.D. Tex. May 10, 2021),
denying a motion to dismiss a TCPA claim in light of Duguid:
To be sure, that each agent asked to speak with ‘Armando’ suggests that
Defendant did not use a random number generator to produce its call list …
However, it is not unreasonable to infer from the pleadings that Defendant relied
on a sequential number generator to place its calls. Indeed, such an inference is
appropriately drawn at the pleadings stage, where the Court is required to credit
Plaintiff’s account, view the facts in the light most favorable to Plaintiff, and draw
inferences therefrom[.]
Id. at *5.
In response, Plaintiff argues that a dialer does not have to generate the telephone numbers
it autodials randomly or sequentially to qualify as an ATDS. Relying on a footnote in the
Druguid opinion, Plaintiff contends that a dialer can qualify as an ATDS by “us[ing] a random
number generator to determine the order in which to pick phone numbers from a preproduced
list. It would then store those numbers to be dialed at a later time.” 141 S. Ct. at 1172 n.7. Some
courts have considered and rejected this argument, finding it relies on an “acontextual” reading
of footnote 7 of Duguid, see Timms, 2021 WL 2354931, at *5-7 and Hufnus, 2021 WL 2585488,
at *1-2. But see Carl v. First National Bank of Omaha, No. 2:19-cv-00504-GZS, 2021 WL
244162 (D. Me. June 15, 2021), acknowledging that “this description may encompass
defendant’s [dialing system],” but finding the issue not amenable to summary judgment on the
current record. Id. at *9 n.10.
Upon consideration, the Court agrees with Plaintiff that the “newly clarified definition of
an ATDS is more relevant to a summary judgment motion than at the pleading stage.” Gross v.
GG Homes, Inc., No. 3:32-cv-00271-DMS-BGS, 2021WL 2863623, at *7 (S.D. Cal. July 8,
2021) (citing Montanez v. Future Vision Brain Bank, LLC, 20-CV-02959-CMA-MEH, 2021 WL
1697928, at *7 (D. Colo. Apr. 29, 2021)). At this stage of the case, the Court cannot determine

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whether Medicredit’s dialer stores and/or produces telephone numbers using a random or
sequential number generator. Additional factual details about Medicredit’s dialer, including the
process by which it stores and produces phone numbers, might be helpful but are not required at
the pleading stage, particularly under notice pleading standards of Rule 8(a)(2), which requires
only a “short and plain statement of the claim.” Gross, 2021 WL 2863623, at *7.
In any event, the Court finds Plaintiff has pled enough facts to proceed with discovery, at
which time he will have the opportunity to discover the precise technology that was used at the
time of the alleged TCPA violations. 2 “If the technology does not meet the definition set forth in
the statute, as construed by the Supreme Court in [Duguid],” then Medicredit may move for
summary judgment on that basis. Atkinson v. Pro Custom Solar, LLC, No. 5:21-CV-178, ECF
No. 11 at 2-3 (W.D. Tex. June 16, 2021). Again, the issue presented by Medicredit’s motion is
whether Plaintiff has plausibly alleged that Medicredit’s dialer is an ATDS; whether he can
prove his allegations at trial is a separate matter.
Therefore, accepting the factual allegations as true and granting all reasonable inferences
from the amended complaint in Plaintiff’s favor, the Court finds Plaintiff has alleged sufficient
facts to withstand a motion for judgment on the pleadings.
Accordingly,
IT IS HEREBY ORDERED that Defendant Medicredit, Inc.’s Motion for Partial
Judgment on the Pleadings [35] is DENIED.
Dated this 14th day of July, 2021.
JOHN A. ROSS
UNITED STATES DISTRICT JUDGE
2

As noted by Plaintiff, this Court adopted Medicredit’s proposal for bifurcated discovery on the merits of
Plaintiff’s individual claims before proceeding with class discovery. (Doc. Nos. 37, 38).

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