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Mitchem v. Illinois Collection Service

July 29, 2010


The opinion of the court was delivered by: Judge Ronald A. Guzmán


Plaintiff James Mitchem, individually and on behalf of those similarly situated, has sued defendant Illinois Collection Service, Inc. ("ICS") for its alleged violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 ("TCPA").*fn1 Defendant has filed a Federal Rule of Civil Procedure ("Rule") 12(b)(1) motion to dismiss the suit for lack of subject matter jurisdiction. Plaintiff has filed a Rule 23 motion for class certification. For the reasons set forth below, the Court denies the motions.


Plaintiff put his cellular telephone number on a patient information form he filled out in connection with medical treatment he received from Dr. Lee. (Def.'s Mem. Law Supp. Mot. Dismiss, Ex. 2, Mitchem Dep. 13.) Plaintiff believed that the information he provided would be used to collect the bill through the mail, not by telephone. (Id. 15.) He did not understand that, if he failed to pay the medical bill, Dr. Lee's office would give his number to a debt collector, which is exactly what happened. (Id.; Compl. ¶¶ 14-15.)

ICS is debt collector that uses an automatic dialing system in its collection efforts, which enables it to call debtors without having a person manually dial telephone numbers. (Id. ¶¶ 12, 16-17.) ICS typically obtains the debtors' telephone numbers from their doctors. (Mot. Class Cert., Ex. A, Gelb Dep. at 26-27.) If the doctor does not give ICS a number, or the number given is incorrect, ICS uses a skip tracing service to obtain the debtor's telephone number. (Id. at 21-22.)

On November 11, 2007, ICS used an automatic dialer to call plaintiff's cell phone and left a prerecorded voice message on his voice mail in an attempt to collect his debt to Dr. Lee. (Compl. ¶¶ 14, 18-19, 22-24, 27.) In total, ICS made approximately forty phone calls to plaintiff's cell phone. (Def.'s Mem. Law Supp. Mot. Dismiss, Ex. 2, Mitchem Dep. at 20.)


Motion to Dismiss

There are two kinds of Rule 12(b)(1) motions: those that attack the sufficiency of the jurisdictional allegations and those that attack the factual basis for jurisdiction. Facial attacks are subject to the same standard as motions pursuant to Rule 12(b)(6) motions; that is, the Court accepts as true all well-pleaded factual allegations of the complaint, drawing all reasonable inferences in plaintiff's favor. United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2002). However, in factual attacks, like this one, the Court may consider affidavits and other evidence in deciding the motion. Id. In either case, the burden of proving that jurisdiction exists rests with the plaintiff. Id.

Plaintiff alleges that ICS violated the TCPA by using an automatic dialer to call his and the putative class members' cellular telephones without their prior express consent. See 47 U.S.C. § 227(b)(1)(A)(iii) ("It shall be unlawful for any person... to make any call (other than a call made... with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice... to any telephone number assigned to a... cellular telephone...."). ICS contends that plaintiff does not have standing to assert this claim because he did not allege that he incurred individual charges for each call ICS made to his cell phone. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (identifying injury as a component of standing); (Def.'s Mem. Law Supp. Mot. Dismiss, Ex. 2, Mitchem Dep. at 23.) But it is reasonable to infer that plaintiff paid for service to the cell phone number ICS called, which is enough to confer standing. (See Pl.'s Resp. Mot. Dismiss, Ex. A, Rivas v. Receivables Performance Mgmt., LLC, No. 08-61312-CIV-LENARD/GARBER, slip op. at 8 (S.D. Fla. Sept. 1, 2009) (order granting in part defendant's motion for summary judgment) ("[T]he Court finds that Plaintiff was the one being charged for calls to his cellular phone and thus he has standing to assert a claim against Defendant for violations of the TCPA."); In re Rules Implementing the Tel. Consumer Prot. Act of 1991, 23 FCC Rcd 559, 562 (F.C.C. 2007) (noting that "wireless customers are charged for incoming calls whether they pay in advance or after the minutes are used").

Even if plaintiff had not suffered damages, he would still have the requisite injury because he has alleged a violation of his rights under the TCPA. A plaintiff who sues to enforce statutory rights has constitutional standing if "[the] statutory provision on which the claim rests properly can be understood as granting persons in the plaintiff's position a right to judicial relief." Discovery House, Inc. v. Consol. City of Indianapolis, 319 F.3d 277, 279 (7th Cir. 2003) (quotation omitted). The TCPA does not require plaintiff to allege that he was charged for individual collection calls to state a claim. See, e.g., Lozano v. Twentieth Century Fox Film Corp., No. 09 C 6344, __ F. Supp. 2d __, 2010 WL 1197884, at *9 (N.D. Ill. Mar. 23, 2010) ("[T]he plain language of the TCPA does not require plaintiff to allege that he was charged for the relevant call at issue in order to state a claim pursuant to [section 227 of the TCPA]."); Abbas v. Selling Source, LLC, No. 09 C 3413, 2009 WL 4884471, at *3 (N.D. Ill. Dec. 14, 2009) (same).

Nonetheless, defendant argues that plaintiff has no TCPA claim because he consented to receiving its calls by giving his cellular telephone number to Dr. Lee. See In re Rules, 23 FCC Rcd at 564 ("[T]he provision of a cell phone number to a creditor... reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt."). Plaintiff says TCPA consent cannot be inferred from his provision of a cell phone number to his doctor because the number is protected health information that his doctor gratuitously disclosed to ICS in violation of under the Health Insurance Portability and Accountability Act ("HIPAA"). See 45 C.F.R. § 160.101 ("Protected health information means individually identifying health information...."); id. § 164.514(b)(2)(D) (classifying telephone numbers as individually identifiable health information); id. § 164.514(d)(3)(i) (stating that health care providers should "limit the protected health information disclosed [for purposes of obtaining payment] to the amount reasonably necessary to achieve the purpose of the disclosure"). Whether that is true is a merits inquiry, not a question of jurisdiction. See McCarter v. Ret. Plan for the Dist. Managers of the Am. Family Ins. Group, 540 F.3d 649, 650 (7th Cir. 2008) ("[T]he shortcomings of a legal theory differ from a lack of subject-matter jurisdiction.").

Defendant argues that the issues of standing and claim viability should be addressed together, citing the district court decision in McCarter as support. The plaintiffs in that case alleged that their pension plan violated ERISA because it was structured to encourage them to choose lump sum distribution. McCarter v. Retirement Plan for Dist. Managers of Am. Family Ins. Group, No. 3:07-cv-00206-bbc, 2007 WL 4333979, at *6-8 (W.D. Wis. Nov. 16, 2007). Though plaintiffs had not been financially harmed by the lump-sum method, they argued that it violated their rights under the revenue regulations governing ERISA plans. Id. at *6-7. The court, believing that "the issue of standing rises or falls on the merits of [plaintiffs'] claim," addressed them together and concluded that plaintiffs did not have standing or a viable claim. Id. at *6-8. On appeal, however, the Seventh Circuit rejected that approach:

"[T]he district court... dismiss[ed] the suit for want of standing.... But if the Employee Retirement Income Security Act (ERISA) entitles [plaintiffs] to revoke their elections yet keep the cash, it is not appropriate to dismiss the suit for lack of a case or controversy.... The injury [plaintiffs] assert -- that monthly income at retirement age is diminished if participants are stampeded into taking cash, which then burns holes in their pockets -- can be traced to the plans' terms and can be redressed by a judgment in plaintiffs' favor. No more is required for ...

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