ROSENZWEIG v. TRANSWORLD SYSTEMS INC.
Filing
51
OPINION. Signed by Judge John Michael Vazquez on 04/26/2018. (sms, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
ARON ROSENZWEIG, individually and on
behalf of all others similarly situated,
Plaintiff,
Civil Action No. 16-227 (JMV)(MF)
OPINION
V.
TRANSWORLD SYSTEMS INC.,
Defendant.
John Michael Vazguez, U.S.D.J.
This matter comes before the Court on Defendant Transworld Systems inc.’s (“Defendant”
or “TSI”) motion to dismiss the Second Amended Complaint for failure to state a claim upon which
relief can be granted. D.E. 42. The Court previously dismissed the First Amended Complaint but
permitted Plaintiff to file another amended complaint. D.E. 38, 39. Plaintiff brings a class action
against TSI alleging violations of the F air Debt Collection Practices Act, 15 U.S.C. 1692 et seq.
(“FDCPA”). The Court reviewed all submissions made in support and in opposition to the motion,
and considered the motion without oral argument pursuant to L. Civ. R. 78.1(b).’ For the reasons
that follow, Defendant’s motion is GRANTED.
Memorandum in Support of Transworld Systems Inc.’s Motion to Dismiss Plaintiffs Second
Amended Complaint, D.E. 42, hereinafter “Defendant’s Brief’ or “Def. Br.”; Plaintiffs
Opposition to Defendant’s Motion to Dismiss, D.E. 48, hereinafter “Opposition” or “Opp.”;
Reply in Support of Transworld Systems Inc.’s Motion to Dismiss Plaintiffs Second Amended
Complaint, D.E. 49, hereinafter “Defendant’s Reply” or “Reply.”
I.
Factual Background & Procedural History
The following facts are taken from Plaintiffs Second Amended Complaint (“SAC”), D.E.
44, and certain attachments thereto, which are assumed as true for purposes of the current motion.
Plaintiff uses an E-ZPass transponder that allows him to pay tolls without having to stop at toll
plazas. SAC at ¶j7-$. E-ZPass allows customers to continue using the transponder even when
their accounts have a negative balance.2 Id. at ¶12. Plaintiff alleges that the transponder was not
properly scanned a number of times while he passed through a toll plaza, which resulted in “orphan
transactions.”
Id. at ¶13.
The E-ZPass Individual Agreement Terms and Conditions (the
“Agreement”) defines “orphan transaction” as an instance in which a transponder is not read “due
to equipment failure or user rnisuse[.]” Ex. A to SAC. However, the Agreement only refers to
orphan transactions as occurring on the “New Jersey Turnpike[.]” Id. The SAC does not allege
that Plaintiffs incident occurred on the Turnpike. The amount the user is charged for an orphan
transaction is calculated according to the vehicle’s class and certain prescribed “rules[.j” Id.
Plaintiff alleges that “[o]n a date better known to Defendant,” he drove through a toll plaza
but the toll was not paid. SAC at ¶16. Afterward, Defendant sent Plaintiff a collection letter,
requesting a total of $55.00: $5.00 for the unpaid toll and $50.00 for an administrative fee. Id. at
¶17, Ex. C to SAC. The collection letter did not specify the date of the violation. SAC at ¶21, Ex.
C to SAC. Defendant’s collection letter indicated Plaintiffs “Current Balance Due” as $55.00,
and further stated that “ty]our account balance may be periodically increased due to the addition
of accrued interest or other changes as provided in the agreement with the original creditor or as
The E-ZPass agreement does not permit a customer to carry a negative balance, instead it
requires a customer to “pay with cash in a cash lane” when the customer has an “insufficient
balance[.]” Ex. A to SAC. Plaintiffs attorney, however, indicates that he contacted E-ZPass,
and they indicated that they do permit customers to use their transponders even when they have
an inadequate balance. Ex. B to SAC.
2
2
otherwise provided for state law.” SAC at
¶ 27,
28, Ex. C to SAC. Plaintiff claims these two
statements are “false, deceptive, and misleading.” SAC at ¶29.
Plaintiff filed his initial Complaint on January 13, 2016. D.E. 1. TSI filed its Answer on
March 14, 2016. D.E. 7. Plaintiff then filed a motion to amend/correct the Complaint, which
Defendant opposed. D.E. 18, 20. Judge Falk granted the motion on September 20, 2016. D.E.
27, 28. Plaintiff filed his First Amended Complaint on September 20, 2016. D.E. 29. Defendant
filed a motion to dismiss, which was granted on July 14, 2017. D.E. 30, 38, 39. Plaintiff filed a
44•3 Defendant has now filed a motion
Second Amended Complaint on August 11, 2017. D.E. 40,
to dismiss the Second Amended Complaint, D.E. 42, which Plaintiff opposed. D.E. 48. Defendant
replied on September 25, 2017. DE. 49. The First Amended Complaint alleged violations of three
different statutes. The SAC contains only one count, which alleges a violation of the FDCPA.
II.
Standard of Review
According to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court should dismiss
a complaint when it fails “to state a claim upon which relief can be granted.” In analyzing a motion
to dismiss under Rule 12(b)(6) the court will “accept all factual allegations as true, construe the
complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable
reading of the complaint, the plaintiff maybe entitled to relief.” Phillips v. Cty. ofAlleghenv, 515
F.3d 224, 231 (3d Cir. 2008) (quoting Pinker
Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d
Cir.2002). In addition to the complaint, the court may also consider any exhibits attached thereto.
See Pension Ben. Gitar. corp. v. White Consot. Inthts., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)
Plaintiff initially filed the Second Amended Complaint on August 11, 2017, D.E. 40. The
Court ordered Plaintiff to re-file it in accordance with Local Rule 15.1, D.E. 43, which Plaintiff
did on August 25, 2017. D.E. 44. D.E. 44 is the operative pleading.
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(noting that when deciding a motion to dismiss, courts generally consider “the allegations
contained in the complaint, exhibits attached to the complaint and matters of public record”).
To survive dismissal, “a complaint must contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.” Ashcroft v. Jqbal, 556 U.S. 662, 678 (2009)
(quoting Bell All. Corp. v. Twomblv, 550 U.S. 544, 570 (2007)). Determining whether a complaint
is plausible is a “context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id. at 679. While not a “probability requirement,” plausibility
means “more than a sheer possibility that a defendant has acted unlawfully.” Id. at 678. “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. Even if plausibly
pled, however, a complaint will not withstand a motion to dismiss if the facts alleged do not state
“a legally cognizable cause of action.” Turner v. IF. Morgan Chase & Co., No. 14-7148, 2015
WL 12826480, at *2 (D.N.J. Jan. 23, 2015). Additionally, a court is “not compelled to accept
unwarranted inferences, unsupported conclusions or legal conclusions disguised as factual
allegations.” Baraka v. McGreevey, 481 F.3d 187, 211 (3d Cir. 2007).
III.
Analysis
The FDCPA was enacted by Congress in 1977 with the purpose of eliminating “abusive,
deceptive, and unfair debt collection practices” by debt collectors. 15 U.S.C.
§ 1692(a). “As
remedial legislation, the FDCPA must be broadly construed in order to give full effect to these
purposes.” aprio
V.
Heatthcare Revenue Recovety Grp., LLC, 709 F.3d 142, 148 (3d Cir. 2013).
To that end, “[l]ender-debtor communications potentially giving rise to claims under the FDCPA
should be analyzed from the perspective of the least sophisticated debtor.” Rosenau v. Unzfund
Corp., 539 F.3d 218, 221 (3d Cir. 200$) (quotingBrown v. Card Serv. Ctr., 464 f.3d 450, 454 (3d
4
Cir. 2006)). “[A]lthough this standard protects naive consumers, it also ‘prevents liability for
bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of
reasonableness and presuming a basic level of understanding and willingness to read with care.”
Wilson v. Qttadramed Coip., 225 F.3d 350, 354-55 (3d Cir. 2000) (quoting United States v. Nat’l
fin. Servs., Inc., 98 F.3d 131, 136 (4th Cir. 1996)).
To succeed on an FDCPA claim, a plaintiff must demonstrate that “(1) she is a consumer,
(2) the defendant is a debt collector, (3) the defendant’s challenged practice involves an attempt to
collect a ‘debt’ as the Act defines it, and (4) the defendant has violated a provision of the FDCPA
in attempting to collect the debt.” Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d
Cir. 2014). On this motion, only the third element is at issue. Specifically, Defendant moves to
dismiss the SAC on the basis that the delinquent toll and the subsequent violation fee are not
“debts” under the FDCPA. Def. Br. at 4.
The FDCPA defines a “debt” as:
any obligation or alleged obligation of a consumer to pay money
arising out of a transaction in which the money, property, insurance,
or services which are the subject of the transaction are primarily for
personal, family, or household purposes, whether or not such
obligation has been reduced to judgment.
15 U.S.C. 1692a(5). A “debt” arises out of a “consensual consumer transaction[ j
.
.
.
whose
subject is primarily for personal, family, or household purposes.” Pollice v. National Tax funding,
L.P., 225 F.3d 379, 401 (3d Cir. 2000) (holding that obligations to pay water and sewer utilities
are “debts” under the FDCPA). By contrast, property taxes are not debts under the FDCPA
because they “are not obligations arising out of a transaction in which the money, property,
insurance, or services which are the subject of the transaction are primarily for personal, family,
or household purposes.” Id. at 401-02 (internal quotation marks omitted).
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The Court discussed Plaintiffs allegations with regard to the FDCPA in great detail in its
July 14, 2017 Opinion, and ultimately dismissed the FDCPA claim because it determined the
delinquent toll and fee are not “debts.” D.E. 38. The analysis in that Opinion relied heavily on a
case out of this District, St. Pierre
Retrieval-Masters Creditors Bureau, Inc., which held that an
obligation arising from non-payment of a toll does not constitute a debt under the FDCPA. 2017
WL 1102635 (D.N.J. Mar. 24, 2017). The Court also found that Plaintiff failed to plausibly plead
a cause of action because he failed to “plead the essential tenns” of his contract with E-ZPass, or
attach the contract itself to the First Amended Complaint. D.E. 38 at 10. Instead, for example,
Plaintiff attached a document he believed to be his contract with E-ZPass to his opposition to
Defendant’s first motion to dismiss. Id., Ex. ito D.E. 33.
Defendant argues that Plaintiff has failed to address the deficiencies noted in the July 14,
2017 Opinion. Def Br. at 4. Specifically, Defendant argues that given the decision in St. Pierre,
and this Court’s decision to dismiss the First Amended Complaint. Defendant cannot continue to
argue that the amount due to E-ZPass is a “debt.” Id. at 4-10. Defendant further argues that while
Plaintiff has now attached the purported contract with E-ZPass to the SAC, the allegations in the
SAC directly contradict the clear terms of the contract language. Id. at 9-10. Defendants also
point out that Plaintiffs attorney’s declaration about a conversation the attorney had with an E
ZPass representative cannot vary the terms of the contract Plaintiff attached to the SAC. Id. at 9
& n.2.
Plaintiff responds that this Court should follow the precedent set by other District Courts
which have held that similar toll charges are “debts” under the FDCPA. Opp. at 9. He further
The appeal of St. Pierre is still pending with the Third Circuit, which held oral argument on
January 23, 201$. USCA Case No. 17-1941. The parties do not cite to, nor did the Court find any
subsequent cases in this District dealing with the same or similar fact pattern.
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argues that because the court in St. Pierre did not apply the pro tanto test as required by the Third
Circuit to determine whether a debt is covered by the FDCPA, this Court should not follow its
holding. Id. at 10. Plaintiff lastly argues that St. Pierre’s holding conflicts with other Third Circuit
precedent. Id. at 13.
In sum, the Court finds that Plaintiff has failed to remedy the deficiencies the Court
addressed in its July 14, 2017 Opinion. D.E. 38. Plaintiff, in essence, repeats the same legal
arguments with which this Court has already disagreed. The Court fully addressed the two cases
out of other District Courts that Plaintiff cites: Brown v. Transttrban USA, Inc., 144 F. Supp. 3d
809 (E.D. Va. 2015); and Yitnker v. AllianceOne Receivables Management., 2011 U.S. Dist.
LEXIS 159445 (S.D. Fla. Jul. 19, 2011). Id. at 6-7. Afier considering each, the Court discussed
St. Pierre—a case from this District—in detail, and noted that Judge Wolfson did address the pro
tanto analysis Plaintiff argues applies. As this Court explained:
Judge Wolfson [in St. Pierre] emphasized that “[u]nlike a traditional
consumer relationship, but like revenue generated by taxes, revenue
generated from tolls is used for the benefit of the public at large,
including the construction, maintenance and improvement of the
roads.” Therefore, the court held that the requirement “to pay tolls
does not arise from a transaction that is ‘primarily for personal,
family, or household purposes” and is not a debt.
D.E. 38 at 8-9, (discussing St. Pierre, 2017 WL 1102635, at *8) (internal citations omitted). Judge
Wolfson also addressed both Brown and Yank-er in her analysis in St. Pierre. St. Pierre, 2017 WL
1102635, at *9• This Court ultimately agreed with Judge Wolfson’s analysis in St. Pierre, and
dismissed the FDCPA claim.
Plaintiff also now attaches the E-ZPass Individual Agreement Tenris and Conditions as
Exhibit A to the SAC. As the Court noted in its original Opinion, and as reflected in note 2 supra,
the Terms and Conditions directly contradict Plaintiffs allegation that the E-ZPass contract
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extended him a line of credit. Plaintiffs attorney nevertheless states in his declaration, Ex. B to
SAC, that he “called MTA Bridges and Tunnels E-ZPass
[] regarding the policies and procedures,”
and during that call a representative from E-ZPass told him that “although it is not written in the
contract, it is E-ZPass’s policy to extend credit to consumers.” Ex. B. to SAC at ¶2. The written
document, however, controls. ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 n.$ (3d Cir. 1994)
(“Where there is a disparity between a written instrument annexed to a pleading and an allegation
in the pleading based thereon, the written instrument will control.”) Moreover, even if the Court
were to credit the declaration (which would essentially mean that Plaintiffs attorney is acting as a
fact witness in a case that he is litigating), it does not indicate that E-ZPass extended credit to users
during the time alleged in the SAC. The collection letter was sent on June 29, 2015, meaning that
Plaintiffs alleged violation had to occur before that date.5
Regardless of the contract between Plaintiff and E-ZPass, Plaintiff has failed to show that
the delinquent toll and the administrative fee are “debts” under the fDCPA—instead he has re
hashed arguments he made in opposition to the first motion to dismiss. For the reasons stated in
the Court’s July 14, 2017 Opinion, D.E. 3$, the Court disagrees with Plaintiffs arguments. Thus,
the Court has no legal basis to deny this second motion to dismiss.
IV.
Conclusion
For the reasons set forth above, Defendant’s motion is granted. The Court noted in its
initial Opinion that “in light of the legal conclusions made herein, a credible argument can be
Of note, the document Plaintiff now claims is his agreement with E-ZPass, Ex. A to the SAC, is
the same document that he previously supplied in the prior motion to dismiss, D.E. 33-1.
However, Plaintiff earlier claimed that he merely “believed” that it was the agreement and that
discovery was needed to determine whether a contract actually existed between Plaintiff and E
ZPass. D.E. 33 at 5, 6. Plaintiff has not provided the Court with any information as to how he is
now certain of the agreement.
$
made that any amendment would be futile.” D.E. 38 at 15. Because Plaintiff has not cured any
of the earlier deficiencies, the Court is now reasonably certain that any future amendment would
be futile. Thus, the Second Amended Complaint is dismissed with prejudice. An appropriate
Order accompanies this Opinion.
Dated: April 26, 2012
\&
John Michael VazquQ kJ. .D.J.
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