Jones v. Medical Data Systems, Inc.

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM and Memorandum of Law in Support Thereof

E.D. Tenn.September 9, 2016

28122073 v1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE AT GREENVILLE WILMA JONES, on behalf of plaintiff and the class defined herein, Plaintiff, v. MEDICAL DATA SYSTEMS, INC., d/b/a MEDICAL REVENUE SERVICE, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) CIVIL ACTION NO. 2:16-cv-00250-TRM-MCLC MEDICAL DATA SYSTEMS, INC.’S MOTION TO DISMISS CLASS ACTION COMPLAINT AND MEMORANDUM OF LAW IN SUPPORT THEREOF Alan D. Leeth (BPR # 022358) J. Christopher Suedekum (BPR # 034462) BURR & FORMAN LLP 420 North 20th Street, Suite 3400 Birmingham, Alabama 35203 Telephone: (205) 251-3000 Facsimile: (205) 458-5100 aleeth@burr.com BURR & FORMAN LLP 511 Union Street, Suite 2300 Nashville, Tennessee 37219 Telephone: (615) 724-3237 Facsimile: (615) 724-3337 csuedekum@burr.com Attorneys for Defendant MEDICAL DATA SYSTEMS, INC. Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 1 of 18 PageID #: 17 ii 28122073 v1 TABLE OF CONTENTS PAGE I. INTRODUCTION............................................................................................................. 1 II. FACTUAL BACKGROUND........................................................................................... 2 III. ARGUMENT AND CITATION OF AUTHORITY...................................................... 5 A. Legal Standard ........................................................................................................ 5 B. Plaintiff has failed to state a valid claim against MDS under the FDCPA. ............ 6 1. MDS did not violate section 1692g(a)(2) by identifying the creditor by its licensed trade name under which it usually transacts business................... 8 2. MDS did not communicate materially false credit information in violation of sections 1692e and 1692e(8). ............................................................... 12 IV. CONCLUSION ............................................................................................................... 15 Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 2 of 18 PageID #: 18 28122073 v1 MEDICAL DATA SYSTEMS, INC.’S MOTION TO DISMISS CLASS ACTION COMPLAINT AND MEMORANDUM OF LAW IN SUPPORT THEREOF Pursuant to Fed. R. Civ. P. 8 and 12(b), defendant Medical Data Systems, Inc. (“MDS”), by and through its undersigned counsel, hereby submits its Motion to Dismiss the Class Action Complaint filed by plaintiff Wilma Jones (the “Plaintiff”). In support of its Motion to Dismiss, MDS respectfully states as follows: I. INTRODUCTION In her Class Action Complaint (ECF No. 1) (the “Complaint”) against MDS, Plaintiff purports to assert three counts against MDS, all based on alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p (the “FDCPA”). Yet, at the core of these claims is a single false legal premise: that in identifying the creditor to which Plaintiff owed the alleged medical debt, MDS was required to identify the creditor by its officially registered name of incorporation, i.e. “Hospital of Morristown, Inc.,” rather than by its duly licensed trade name and the name under which it transacts business, i.e. “Lakeway Regional Hospital.” Indeed, the federal courts that have considered this issue have emphasized that in identifying the name of the creditor to whom a plaintiff owes a debt, it is not only “sufficient” for a defendant to provide the name under which the creditor “usually transacts business,” to avoid confusion, a defendant “should” provide the name under which the creditor “usually transacts business.” Here, everyone in Morristown, Tennessee knows that the hospital at issue in this case is named “Lakeway Regional Hospital.” In fact, there are only two hospitals licensed by the Tennessee Department of Health that are located in Hamblen County, Tennessee, one of which is licensed as “Lakeway Regional Hospital,” and the other as “Morristown - Hamblen Healthcare System,” which is located at an entirely different address. Moreover, Plaintiff also cannot dispute that “Lakeway Regional Hospital” is the officially licensed trade name for the hospital Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 3 of 18 PageID #: 19 2 28122073 v1 owned by “Hospital of Morristown, Inc.” To the contrary, she specifically alleges that “Lakeway Regional Hospital” is registered as an assumed name of “Hospital of Morristown, Inc.,” and that “Lakeway Regional Hospital” is the name “under which Hospital of Morristown, Inc. does business.” Simply put, Plaintiff has not and cannot state a valid claim against MDS under the FDCPA. Thus, as shown below, her Complaint should be dismissed, with prejudice. II. FACTUAL BACKGROUND The salient facts at issue are straightforward and, for purposes of this Motion to Dismiss, undisputed.1 All of Plaintiff’s claims against MDS relate to a “medical debt” that Plaintiff alleges “was assigned to [MDS] by Hospital of Morristown, Inc. to attempt collection of the debt from Plaintiff.” (See Complaint ¶¶ 10-12). More specifically, Plaintiff’s claims arise out of a “collection letter dated July 29, 2015” (the “Collection Letter”) that MDS allegedly sent to Plaintiff to collect the medical debt,2 and information regarding the medical debt that MDS allegedly reported to certain consumer reporting agencies (“CRAs”), as shown on Plaintiff’s November 25, 2015 credit reports. (See id. ¶¶ 13-29). According to the Complaint, both the July 29, 2015 Collection Letter and MDS’s reports to the CRAs falsely represented that “Lakeway 1 MDS does not dispute Plaintiff’s factual allegations at this stage solely for the purpose of this Rule 12(b)(6) Motion to Dismiss. However, MDS reserves its right to dispute Plaintiff’s factual allegations should any claim survive dismissal. 2 A copy of the July 29, 2015 Collection Letter is attached to Plaintiff’s Complaint as Exhibit 1, and is also attached hereto as Exhibit “A” for the Court’s convenience. Because the Collection Letter is attached to Plaintiff’s Complaint, the Court may consider it for purposes of this Motion to Dismiss without converting the Motion to one for summary judgment. See Kreipke v. Wayne State Univ., 807 F.3d 768, 774 (6th Cir. 2015) (“In reviewing a motion to dismiss, the Court ‘may consider the [c]omplaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant’s motion to dismiss so long as they are referred to in the [c]omplaint and are central to the claims contained therein.’” (quoting Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir. 2008))); see also Solo v. United Parcel Serv. Co., 819 F.3d 788, 794 (6th Cir. 2016) (recognizing that in ruling on a motion to dismiss, “[t]he court ‘consider[s] the complaint in its entirety, as well as . . . documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.’” (quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007))). Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 4 of 18 PageID #: 20 3 28122073 v1 Regional Hospital was the name of the creditor for the debt, when it was not.” (Id. ¶¶ 15-22, 26- 29). Instead, Plaintiff contends that “Hospital of Morristown, Inc.” is the “officially registered” and incorporated name of the creditor, and thus the name that MDS should have provided in the Collection Letter and when reporting to the CRAs. (See id. ¶¶ 11, 20-22, 29). By failing to do so, Plaintiff submits that MDS violated the FDCPA, and seeks to assert FDCPA claims against it both individually and on behalf of an allegedly “similarly situated” class. (Id. ¶¶ 30-32, 46-48). Notably, Plaintiff readily admits that “[t]here are several assumed names registered with the Tennessee Secretary of State for an entity named Hospital of Morristown, Inc., one of which is ‘Lakeway Regional Hospital.’” (See id. ¶ 21); see also Tenn. Secretary of State, Division of Business Services, Business Entity Detail for “Hospital of Morristown, Inc.,” https://tnbear.tn.gov/Ecommerce/FilingDetail.aspx?CN=03410617402813507103614125007203 7255023003253204 (last visited Aug. 29, 2016).3 Plaintiff likewise acknowledges that “Lakeway Regional Hospital” is “a name under which Hospital of Morristown, Inc. does business.” (See Complaint ¶ 22). In truth, “Lakeway Regional Hospital” located at 426 McFarland Street, Morristown, TN 37814, is the one and only officially licensed trade name for the hospital owned by “Hospital of Morristown, Inc.,” and the primary name under which the hospital transacts business. See Tenn. Dep’t of Health, Health Care Facilities, Licensed Facilities at p. 11, https://apps.health.tn.gov/Facilities_Listings/facilities.htm (select “Hospital” 3 A true and correct printout of the Tennessee Secretary of State business entity detail website page for “Hospital of Morristown, Inc.” is attached as Exhibit “A” to MDS’s contemporaneously filed Request for Judicial Notice (the “RJN”). As shown therein, the Court may judicially notice and consider this and the other exhibits attached to the RJN in ruling on MDS’s Motion to Dismiss without converting the Motion to one for summary judgment. See, e.g., Beider v. Retrieval Masters Creditors Bureau, Inc., 146 F. Supp. 3d 465, 470 (E.D.N.Y. 2015) (taking judicial notice of public documents from state government agencies and holding that “the Court may take judicial notice of these documents in order to establish that defendant’s use of a licensed trade name does not violate § 1692e”). Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 5 of 18 PageID #: 21 4 28122073 v1 under “Facility Type” drop-down box; then select “Search Current Licensed Facilities”; then follow “Search” hyperlink) (last visited Aug. 29, 2016); see also Tenn. Dep’t of Health, Joint Annual Report of Hospitals for Lakeway Regional Hospital at p. 2 (2014), available at https://apps.health.tn.gov/PublicJARS/Reports/hospital/Current/32252.pdf.4 Indeed, at the time that Plaintiff incurred the “medical debt” identified by the July 29, 2015 Collection Letter, (see Complaint at Exhibit 1), “Lakeway Regional Hospital” was even provided as the name of the hospital on the side of the building’s McFarland Street entrance: See Google Maps Street View printout for McFarland Street, Morristown, Tennessee (Aug. 2013).5 Moreover, according to the Tennessee Department of Health, there are only two licensed hospitals located in Hamblen County, Tennessee: (1) “Lakeway Regional Hospital,” again located at 426 McFarland Street, Morristown, TN 37814; and (2) “Morristown - Hamblen Healthcare System,” which is located at 908 West 4th North Street, Morristown, TN 37814. See 4 A true and correct printout of the Tennessee Department of Health’s listing of currently licensed health care facilities is attached to the RJN as Exhibit “B.” In addition, a true and correct copy of the 2014 Joint Annual Report of Hospitals for Lakeway Regional Hospital is attached to the RJN as Exhibit “C.” 5 A true and correct printout of the Google Maps Street View for McFarland Street, Morristown, Tennessee, is attached to the RJN as Exhibit “D.” Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 6 of 18 PageID #: 22 5 28122073 v1 Tenn. Dep’t of Health, Hospital Data for 2014 at pp. 26-27 (Sept. 26, 2015), available at https://apps.health.tn.gov/publicjars/reports/hospital/current/summary.pdf.6 The official website for Medicare likewise identifies these same two hospitals, and no others. See Medicare.gov, Hospital Compare, Hospital Results in Hamblen County, Tennessee, https://www.medicare.gov/hospitalcompare/results.html#dist=200&state=TN&county=HAMBL EN&lat=0&lng=0 (last visited Aug. 29, 2016).7 III. ARGUMENT AND CITATION OF AUTHORITY A. Legal Standard Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court should dismiss Plaintiff’s claims if, accepting the allegations as true, they fail to state facts that support relief. “The purpose of a Rule 12(b)(6) motion is ‘to test [against the legal standard set forth in Fed. R. Civ. P. 8] whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true.’” See Campbell v. Nationstar Mortg., 611 F. App’x 288, 291 (6th Cir. 2015) (quoting Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993)); see also Acosta v. Campbell, 309 F. App’x 315, 317 (11th Cir. 2009). Thus, for a complaint to survive a Rule 12(b)(6) motion, it “must-when the record is construed in the light most favorable to the nonmoving party and when all well-pled factual allegations are accepted as true-contain ‘either direct or inferential allegations respecting all material elements necessary for recovery under a viable legal theory.’” D’Ambrosio v. Marino, 747 F.3d 378, 383 (6th Cir. 2014) (quoting Phila. Indem. Ins. Co. v. Youth Alive, Inc., 732 F.3d 645, 649 (6th Cir. 2013)). Notably, “Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law.” Neitzke v. 6 A true and correct copy of the Tennessee Department of Health summary reports of hospital data for 2014 is attached to the RJN as Exhibit “E.” 7 A true and correct printout of the Medicare website showing the hospitals registered in Hamblen County, Tennessee is attached to the RJN as Exhibit “F.” Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 7 of 18 PageID #: 23 6 28122073 v1 Williams, 490 U.S. 319, 326-27 (1989) (“[The] procedure [outlined at Rule 12(b)(6)], operating on the assumption that the factual allegations in the complaint are true, streamlines litigation by dispensing with needless discovery and factfinding.”) (citations omitted). In reviewing a complaint, however, courts “‘need not accept as true legal conclusions or unwarranted factual inferences, and conclusory allegations or legal conclusions masquerading as factual allegations will not suffice.’” D’Ambrosio, 747 F.3d at 383 (quoting Terry v. Tyson Farms, Inc., 604 F.3d 272, 275-76 (6th Cir. 2010)). Thus, “[a] pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Id. (stating Rule 8 demands more than an unadorned, “the-defendant- unlawfully-harmed-me accusation” (quoting Twombly, 550 U.S. at 555, 557)). Instead, it “must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.” Yeager v. FirstEnergy Generation Corp., 777 F.3d 362, 363 (6th Cir. 2015), cert. denied, 136 S. Ct. 40 (2015) (citing D’Ambrosio, 747 F.3d at 383); Reilly v. Vadlamudi, 680 F.3d 617, 623 (6th Cir. 2012) (“[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.”) (citation and quotation marks omitted); see also Richter v. Fed. Nat’l Mortg. Ass’n, 553 F. App’x 655, 656 (8th Cir. 2014) (reiterating that “a plaintiff must show that success on the merits is ‘more than a sheer possibility’”) (citation omitted). B. Plaintiff has failed to state a valid claim against MDS under the FDCPA. The purpose of the FDCPA is “to eliminate abusive debt collection practices by debt collectors.” 15 U.S.C. § 1692(e). Thus, as the Seventh Circuit made clear in Bailey v. Security National Servicing Corp., the FDCPA is best used to “challeng[e] clear violations rather than Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 8 of 18 PageID #: 24 7 28122073 v1 scanning for technical missteps that bring minimal relief to the individual debtor but a possible windfall for the attorney.” See 154 F.3d 384, 388 (7th Cir. 1998). As a result, “[w]hether a debt collector’s conduct violates sections 1692e and 1692g of the FDCPA requires an objective analysis,” see Campbell v. Am. Recovery Servs. Inc., No. 2:15-cv-9079, 2016 WL 3219866, at *2 (C.D. Cal. June 8, 2016) (citing Gonzales v. Arrow Fin. Servs., Inc., 660 F.3d 1055, 1061 (9th Cir. 2011)), to determine whether the conduct “would mislead the ‘reasonable unsophisticated consumer,’ one with some level of understanding and one willing to read the document with some care,” see Buchanan v. Northland Grp., Inc., 776 F.3d 393, 396 (6th Cir. 2015) (quoting Wallace v. Wash. Mut. Bank, F.A., 683 F.3d 323, 327 (6th Cir. 2012)). For that reason, communications “that appear misleading only by way of ‘bizarre,’ ‘idiosyncratic,’ or ‘nonsensical’ readings do not violate the Act.” See id. (quoting Fed. Home Loan Mortg. Corp. v. Lamar, 503 F.3d 504, 510, 514 (6th Cir. 2007)). Here, Plaintiff asserts that by identifying the creditor to which Plaintiff owed the alleged medical debt as “Lakeway Regional Hospital” rather than “Hospital of Morristown, Inc.” in the July 29, 2015 Collection Letter and in reports to the CRAs, MDS violated multiple sections of the FDCPA. First, Plaintiff alleges that because the creditor’s “officially registered” name of incorporation is “Hospital of Morristown, Inc.,” by identifying it as “Lakeway Regional Hospital” in the July 29, 2015 Collection Letter, MDS violated section 1692g(a)(2) of the FDCPA, which “requires a debt collector to send a consumer ‘written notice containing the name of the creditor to whom the debt is owed.’” (See Complaint ¶¶ 20-24, 30 (quoting 15 U.S.C. § 1692(a)(2))). Second, because MDS also identified the creditor of Plaintiff’s medical debt as “Lakeway Regional Hospital” in its reports to the CRAs, Plaintiff further alleges that MDS “communicated credit information which it knew or should have known was false,” in violation Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 9 of 18 PageID #: 25 8 28122073 v1 of sections 1692e and 1692e(8) of the FDCPA. (See id. ¶¶ 26-29, 31 (citing 15 U.S.C. §§ 1692e and 1692e(8))). These are exactly the kind of “‘bizarre,’ ‘idiosyncratic,’ or ‘nonsensical’ readings’” of the FDCPA that the Sixth Circuit was referring to in Buchanan. See 776 F.3d at 396 (quoting Lamar, 503, F.3d at 510). Accordingly, these contentions have no merit. 1. MDS did not violate section 1692g(a)(2) by identifying the creditor by its licensed trade name under which it usually transacts business. Section 1692g(a) of the FDCPA provides in pertinent part that “[w]ithin five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing . . . (2) the name of the creditor to whom the debt is owed.” 15 U.S.C. § 1692g(a). According to Plaintiff, because the “officially registered” and incorporated name of the creditor to which she allegedly owes the medical debt is “Hospital of Morristown, Inc.,” that is the name (and the only name) that MDS should have listed in the July 29, 2015 Collection Letter. (See Complaint ¶¶ 11, 21-24). Despite Plaintiff’s conclusory allegations to the contrary, federal courts construing section 1692g(a)(2) of the FDCPA have time and again emphasized that to comply with the statute, a debt collector need not always identify a creditor by its official name of incorporation. Rather, “any legitimate name under which the creditor operates could qualify as naming the creditor as required by section 1692g(a)(2).” See Blarek v. Encore Receivable Mgmt., Inc., No. 2:06-cv-420, 2007 WL 984096, at *7 (E.D. Wis. Mar. 27, 2007) (“There is nothing in the statute which indicates that debt collectors must use the creditor’s incorporated name in order to comply with § 1692g(a)(2).”) (emphasis added). Thus, for purposes of section 1692g(a)(2), “it is sufficient . . . if the debt collector uses the full business name of the creditor, the name under which it usually transacts business, or a commonly-used acronym.” See Campbell v. Am. Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 10 of 18 PageID #: 26 9 28122073 v1 Recovery Servs. Inc., No. 2:15-cv-9079, 2016 WL 3219866, at *3 (C.D. Cal. June 8, 2016). Stated differently, to constitute a violation of section 1692g(a)(2), “the stated name of the creditor must be plainly confusing on its face.” See Blarek, 2007 WL 984096, at *7. Consequently, if the name provided for the creditor “is the name under which the [creditor] usually transacts business, is commonly referred to by that name, and is not potentially misleading,” section 1692g(a) has not been violated, and the plaintiff’s claim should be dismissed. See, e.g., Campbell, 2016 WL 3219866, at *3 (“Because ‘American Express’ is the name under which the financial services company usually transacts business, is commonly referred to by that name, and is not potentially misleading, the Court GRANTS ARSI’s Motion [to dismiss] with respect to Plaintiff’s section 1692g claim.”) (citations omitted).8 In concluding that it is sufficient as a matter of law for purposes of section 1692g(a)(2) for a debt collector to provide “any legitimate name under which the creditor operates,” federal courts agree that it is “instructive” to examine other sections of the FDCPA, primarily section 1692a(6), which requires creditors to operate under their “own” “name” to avoid FDCPA coverage, and section 1692e(14), which prohibits using a name “other than the true name of the debt collector’s business, company, or organization.” See Blarek, 2007 WL 984096, at *7 (explaining that “[t]he FDCPA has no provision which indicates that debt collectors, in regards to identifying a creditor, should be held to a higher standard than that of creditors under § 1692a(6)”); see also Bode v. Encore Receivable Mgmt., Inc., No. 2:05-cv-1013, 2007 WL 8 See also, e.g., Spangler v. Conrad, No. 2:08-cv-234, 2010 WL 2389481, at *3 (E.D. Tenn. June 9, 2010) (rejecting plaintiff’s claim that defendant violated section 1692g(a)(2) by identifying creditor as “1st Invst Ser/1st TN Bank” rather than “First Tennessee Investment Services” because plaintiff “had dealt only with First Tennessee Bank” and thus providing only official name of creditor “would have been confusing to any consumer, sophisticated or not”); see also, c.f., Kemmons Wilson, Inc. v. Allied Bank of Texas, No. 02A01-9107CF00131, 1992 WL 1982, at *4 (Tenn. Ct. App. Jan. 3, 1992) (recognizing that “Tennessee law authorize[s] a corporation to operate under an assumed name or trade name”). Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 11 of 18 PageID #: 27 10 28122073 v1 2493898, at *6-8 (E.D. Wis. Aug. 30, 2007). Under either section of the FDCPA, it is again sufficient for a defendant to use a “duly licensed trade name,” a “registered trade name,” or the “‘name under which it usually transacts business.’” See Bode, 2007 WL 2493898, at *7 (citation omitted); see also Mahan v. Retrieval-Masters Credit Bureau, Inc., 777 F. Supp. 2d 1293, 1301 (S.D. Ala. 2011) (“Plaintiff concedes that Retrieval-Masters communicated with her using its duly licensed trade name. There was nothing deceptive or manipulative about Retrieval-Masters contacting Mahan using the name ‘American Medical Collection Agency.’ After all, Retrieval- Masters had been conducting business under that name for more than two decades. There are no facts alleged, and no circumstances to suggest, that defendant’s use of its registered trade name was intended to, or had the effect of, confusing, misleading or deceiving Mahan. Given these undisputed factual parameters, the Court finds as a matter of law that plaintiff has not pleaded a cognizable claim for violation of § 1692e(14). Accordingly, the Motion to Dismiss is granted insofar as it relates to plaintiff’s claim under § 1692e(14) and all other FDCPA claims predicated on defendant’s alleged failure to use its ‘true name.’ All such causes of action are dismissed for failure to state a claim on which relief can be granted.”). In fact, to avoid confusion, courts (and the Federal Trade Commission) recognize that an entity “should use the name under which it usually transacts business.” See, e.g., Fox v. HSBC Mortg. Servs., Inc., No. 3:06-cv-87, 2009 WL 129797, at *5 (E.D. Tenn. Jan. 16, 2009) (recognizing that to comply with section 1692a(6), “‘a creditor should use the name under which it usually transacts business, or a commonly-used acronym, or any name that it has used from the inception of the credit relation’”) (citations and internal quotation marks omitted); see also Orenbuch v. N. Shore Health Sys., Inc., 250 F. Supp. 2d 145, 151-52 (E.D.N.Y. 2003) (“The plaintiff claims that [North Shore Health System, Inc.] violated Section 1692e(14) . . . . The defendants correctly argue that there is nothing misleading Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 12 of 18 PageID #: 28 11 28122073 v1 about a debt collector . . . using the name by which it is known to the public where, as here, that name [Regional Claims Recovery Service] is a registered trade name with the New York Department of State. . . . [B]ecause RCRS letters refer to RCRS’s true name, it does not constitute a ‘false deceptive or misleading representation.’”) (citations omitted).9 In this case, it is plain from the face of the Complaint that “Lakeway Regional Hospital” is the “assumed” trade name “registered with the Tennessee Secretary of State for . . . Hospital of Morristown, Inc.,” and that it is the “name under which Hospital of Morristown, Inc. does business.” (See Complaint ¶¶ 21-22; see also RJN at Ex. “A”). It also cannot be disputed that: (i) “Lakeway Regional Hospital” is the one and only officially licensed trade name for the hospital owned by “Hospital of Morristown, Inc.”; (ii) “Lakeway Regional Hospital” is the primary name under which the hospital transacts business; and (iii) at the time that Plaintiff incurred the alleged medical debt, “Lakeway Regional Hospital” was even provided as the name of the hospital on the side of the building’s McFarland Street entrance. (See RJN at Exs. B through D). Moreover, there are zero allegations in the Complaint that Plaintiff was somehow confused by the reference to “Lakeway Regional Hospital” in the June 29, 2015 Collection Letter. (See generally Complaint ¶¶ 10-48). Nor could she have been, as there are only two 9 See also Mahon v. Anesthesia Bus. Consultants, LLC, No. 1:15-cv-1227, 2016 WL 1452333, at *7-8 (D.D.C. Apr. 13, 2016) (“[T]he complaint alleges that ABC used a name other than its own-‘Surgical and Anes Assoc’-in the process of collecting the balance of Mr. Mahon’s medical debt. . . . To avoid FDCPA coverage under the false name exception, a creditor ‘should use the name under which it usually transacts business, or a commonly-used acronym, or any name that it has used from the inception of the credit relation.’ The creditor ‘need not use its full business name or its name of incorporation.’ . . . In fact, it ‘would have created more confusion’ if ABC ‘started listing itself . . . as [Mr. Mahon’s] creditor instead of the name in which all other business had been transacted.’ . . . Because Mr. Mahon’s FDCPA claims against ABC can only proceed against a ‘debt collector,’ they must be dismissed.”) (internal citations and quotation marks omitted); see also Fed. Trade Comm’n, Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg. 50097-02, 50107 (Dec. 13, 1988) (commenting that a business may provide “the name under which it usually transacts business” for purposes of section 1692e(14)). Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 13 of 18 PageID #: 29 12 28122073 v1 licensed hospitals located in all of Hamblen County, Tennessee: (1) “Lakeway Regional Hospital”; and (2) “Morristown - Hamblen Healthcare System.”10 (See RJN at Exs. E & F). Simply put, no “reasonable” consumer, “unsophisticated” or otherwise, could have been confused by the July 29, 2015 Collection Letter, as MDS properly identified the creditor for Plaintiff’s medical debt by its officially licensed trade name under which it usually transacts business. Federal courts have not only very recently interpreted section 1692g(a)(2) and related provisions of the FDCPA to permit this procedure, they have expressly endorsed it. See, e.g., Campbell, 2016 WL 3219866, at *3 (granting motion to dismiss); see also Mahon, 2016 WL 1452333, at *7-8 (same). As such, Plaintiff’s section 1692g(a)(2) claim should be dismissed, with prejudice.11 2. MDS did not communicate materially false credit information in violation of sections 1692e and 1692e(8). Section 1692e of the FDCPA provides that “[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt,” which under section 1692e(8) includes “[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false.” See 15 U.S.C. §§ 1692e, 1692e(8). Plaintiff alleges that by reporting to the CRAs “that Lakeway Regional Hospital was the name of the creditor for the debt, when it was not,” MDS violated the FDCPA. 10 If anything, “it ‘would have created more confusion’” if MDS had identified the creditor for Plaintiff’s alleged medical debt as “Hospital of Morristown, Inc.,” rather than “Lakeway Regional Hospital,” as Plaintiff may have erroneously believed that the debt was incurred at “Morristown - Hamblen Healthcare System.” See, e.g., Mahon, 2016 WL 1452333, at *7-8 11 In addition, as explained further with respect to Plaintiff’s section 1692e claims, Plaintiff’s section 1692g(a)(2) claim should also be dismissed because, even if “Lakeway Regional Hospital” is not technically the incorporated name of the creditor for Plaintiff’s medical debt (which, again, is irrelevant), it remains that representing the creditor to be “Lakeway Regional Hospital” is not “‘materially false or misleading,’” and thus not a violation of the FDCPA. See, e.g., Scheuer v. Jefferson Capital Sys., LLC, 43 F. Supp. 3d 772, 783 (E.D. Mich. 2014) (quoting Wallace v. Wash. Mut. Bank, F.A., 683 F.3d 323, 326 (6th Cir. 2012)); see also infra Part III.B.2. Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 14 of 18 PageID #: 30 13 28122073 v1 The Sixth Circuit has “repeatedly held” that it is not enough for a statement to be “technically false” or “misleading” to violate the FDCPA; instead, “‘a statement must be materially false or misleading.’” See Scheuer v. Jefferson Capital Sys., LLC, 43 F. Supp. 3d 772, 783 (E.D. Mich. 2014) (quoting Wallace v. Wash. Mut. Bank, F.A., 683 F.3d 323, 326 (6th Cir. 2012)). “‘The materiality standard . . . means that in addition to being technically false, a statement would tend to mislead or confuse the reasonable unsophisticated consumer.’” Clark v. Lender Processing Servs., 562 F. App’x 460, 466 (6th Cir. 2014) (quoting Wallace, 683 F.3d at 326-27); see also Scheuer, 43 F. Supp. 3d at 783 (“A misstatement is material under the FDCPA if it ‘frustrate[s] a consumer’s ability to intelligently choose his or her response.’” (quoting Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1034 (9th Cir. 2010))). As with FDCPA claims based on alleged violations of section 1692g(a)(2), federal courts analyzing section 1692e claims arising out of the representation of a creditor’s name have similarly held that identifying a creditor by “a commonly used name under which the business usually transacts” does not violate the statute. See, e.g., Campbell v. Am. Recovery Servs. Inc., No. 2:15-cv-9079, 2016 WL 3219866, at *3 (C.D. Cal. June 8, 2016); Mahan v. Retrieval- Masters Credit Bureau, Inc., 777 F. Supp. 2d 1293, 1297-1301 (S.D. Ala. 2011); see also Blarek v. Encore Receivable Mgmt., Inc., No. 2:06-cv-420, 2007 WL 984096, at *16 (E.D. Wis. Mar. 27, 2007) (“[W]hat constitutes a failure to properly name a creditor under § 1692g(a)(2) and what constitutes a false representation of the creditor name under § 1692e(10) are necessarily interrelated. A creditor name which is proper under § 1692g(a)(2) cannot be a false representation under § 1692e(10). . . . Such being the case, as with the analysis under § 1692g(a)(2), the use of a name which is not the exact incorporated name of the creditor does not necessarily violate § 1692e(10) . . . . The debt collector might not be making a false Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 15 of 18 PageID #: 31 14 28122073 v1 representation if it used in identifying the creditor ‘a name under which [the creditor] usually transacts business, or a commonly-used acronym, or any name that it has used from the inception of the credit relation.’”) (citation omitted). For the same reasons discussed above with respect to Plaintiff’s section 1692g(a)(2) claim, Plaintiff has also failed to state claims against MDS under sections 1692e and 1692e(8). Again, Plaintiff specifically alleges in the Complaint that “Lakeway Regional Hospital” is the “assumed” trade name “registered with the Tennessee Secretary of State for . . . Hospital of Morristown, Inc.,” and that it is the “name under which Hospital of Morristown, Inc. does business.” (See Complaint ¶¶ 21-22; see also RJN at Ex. A). In addition, the Court may take judicial notice that, among other things, “Lakeway Regional Hospital” is the officially licensed trade name for the hospital owned by “Hospital of Morristown, Inc.,” and that it is the name under which the hospital usually transacts business. (See RJN at Exs. B & C; see also id. at Exs. D through E). Accordingly, MDS’s alleged reports to the CRAs that “Lakeway Regional Hospital” was the name of the creditor for Plaintiff’s medical debt was not technically false or misleading, let alone “materially false or misleading.” See Wallace, 683 F.3d at 326 (citation omitted); see also Campbell, 2016 WL 3219866, at *3 (“ARSI’s letter would not be likely to mislead the least sophisticated consumer because ‘American Express’ is a commonly used name under which the business usually transacts. Therefore, ARSI’s representation of the creditor as ‘American Express’ in its letter is not a material misrepresentation, and thus is not actionable under § 1692e.”) (internal citations omitted).12 Plaintiff’s Complaint again does not include 12 See also, e.g., Scheuer, 43 F. Supp. 3d at 783 (“Even if Jefferson’s statements were in some way false or misleading, Scheuer still cannot prevail on her FDCPA claims because she has not shown that the alleged misstatements were material.”). Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 16 of 18 PageID #: 32 15 28122073 v1 allegations to the contrary, (see generally Complaint ¶¶ 25-29), and thus her section 1692e claims against MDS should also be dismissed, with prejudice. IV. CONCLUSION For all of these reasons and those stated in MDS’s contemporaneously filed Request for Judicial Notice, MDS respectfully requests that this Court grant its Motion to Dismiss and dismiss Plaintiff’s Complaint, with prejudice. Respectfully submitted this 9th day of September, 2016. /s/ Alan D. Leeth Alan D. Leeth (BPR # 022358) J. Christopher Suedekum (BPR # 034462) BURR & FORMAN LLP 420 North 20th Street, Suite 3400 Birmingham, Alabama 35203 Telephone: (205) 251-3000 Facsimile: (205) 458-5100 aleeth@burr.com BURR & FORMAN LLP 511 Union Street, Suite 2300 Nashville, Tennessee 37219 Telephone: (615) 724-3237 Facsimile: (615) 724-3337 csuedekum@burr.com Attorneys for Defendant MEDICAL DATA SYSTEMS, INC. Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 17 of 18 PageID #: 33 28122073 v1 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing document has been served on the following by Notice of Electronic Filing, or, if the party served does not participate in Notice of Electronic Filing, by U.S. First Class Mail, hand delivery, facsimile, or e-mail on this the 9th day of September, 2016: Alan C. Lee P.O. Box 1357 Talbott, Tennessee 37877-1357 Telephone: (423) 581-0924 aleeattorney@gmail.com /s/ Alan D. Leeth Of Counsel Case 2:16-cv-00250-TRM-MCLC Document 4 Filed 09/09/16 Page 18 of 18 PageID #: 34 Exhibit “A” [July 29, 2015 Collection Letter] Case 2:16-cv-00250-TRM-MCLC Document 4-1 Filed 09/09/16 Page 1 of 2 PageID #: 35 645 WALNUT STREET STE 5 GADSDEN, AL 35902 Reference 4225 Toll Free Number (866)451-1216 Total Amount Due $87.00 07/29/2015 39809*TER0R7856005109 iH'"»Mih'" In'lllll'il,'il'll"»iill"ii' WILMA JONES MORRISTOWN, TN 37814-2157 t- □ CHECK HERE IF ADDRESS OR INSURANCE INFORMATION ISINCORRECT AND INDICATE CHANGE ON REVERSE SIDE MEDICAL REVENUE SERVICE 645 WALNUT STREET STE 5 GADSDEN, AL 35902 07/29/2015 CHECK CARD USING FOR PAYMENT w □ | , , , , | □ 3 g u m i u CARD NUMBER SIGNATURE CODE AMOUNT EXP. DATE SIGNATURE MAKE CHECK PAYABLE AND REMIT TO: MEDICAL REVENUE SERVICE 645 WALNUT STREET STE 5 GADSDEN, AL 35902 i«|ii|iii|iii|i|i|iili>ii|n,i,|||l.-,|i,i,|,|i|i||..||..i. Page 1 of 1 yDETACH HERE ^ND RETURN TOP PORTION WITH YOUR PAYMENT miv Toll Free Number (866) 451-1216 Medical Revenue Service is a collection agency. The account(s) indicated below has been placed with our office for collection. Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice this office will provide you with the name and address of the original creditor, if different from the current creditor. Please make your check or money order Payable to Medical Revenue Services. In order to assure proper credit to your account, include the reference number with your payment. We also accept credit card and "check by telephone" payments for your convenience. If you have any questions, you may contact one of our account representatives at the toll-free telephone number listed on this letter. This is an attempt to collect a debt and any information obtained will be used for that purpose. This communication is from a debt collector. TOTAL AMOUNT DUE: $87.00 This collection agency is licensed by the Collection Service Board, State Department of Commerce and Insurance. (Tenn. Code. Ann Subsection (b) (2000).) Permit* 366. Our hours of operation are 8AM to 7PM Monday through Friday Eastern Standard Time. Nuestras horas laborales son de 8AM a 7PM de lunes a viernes. Account # Facility Name Service Date Balance Patient Name 4225 Lakeway Regional Hospital 12/19/2013 $87.00 Jones, Wilma PL1SCase 2:16-cv-00250-TRM-MCLC Document 1-1 Filed 07/26/16 Page 1 of 1 PageID #: 114 9 09 2 2 36