Court Finds that Debt Collection Makes Use Of Random or Sequential Number Generation Implausible

Faegre Drinker Biddle & Reath LLP

Faegre Drinker Biddle & Reath LLP

In a victory for debt collectors, the Central District of Illinois recently found that a plaintiff’s bare-bones allegations regarding use of an ATDS were particularly implausible because “the business of the defendant is such that it would not need a machine with random or sequential number generation capacities.” Mosley v. Gen. Revenue Corp., No. 20-01012, 2020 WL 4060767, at *3 (C.D. Ill. July 20, 2020).

In Mosley v. General Revenue Corp., the plaintiff alleged that a debt collection company used an ATDS and prerecorded messages to call her cellular telephone without her consent. Id. at *1. She claimed the calls concerned debts that were not hers, and some calls started with short pauses and “dead air.” Id.

In moving to dismiss the TCPA claim, the defendant argued that the plaintiff failed to plausibly allege use of an ATDS. Id. at *1-2. Relying on Gadelhak v. AT&T Services, Inc., 950 F.3d 458 (7th Cir. 2020) for its interpretation of the statutory definition of an ATDS, the defendant argued that the plaintiff had not plausibly alleged the dialing equipment could randomly or sequentially generate phone numbers. Id. at *2. The defendant also argued that the allegations were especially implausible in this case, as debt collection companies “call specific individuals, at specific numbers, about specific debts, not random individuals at random numbers.” Id. (citation omitted).

The Court dismissed the claim to the extent it was based on alleged use of an ATDS. Id. at *4. It noted that, although Gadelhak decided what the functionalities of an ATDS are, it did not address what a plaintiff must allege to state a plausible TCPA claim. Id. at *2. Recognizing that pre-Gadelhak district courts within the Seventh Circuit took differing approaches to the pleading standard—with some crediting conclusory statements regarding use of an ATDS, and others requiring factual allegations that made an inference plausible—the Court held that crediting conclusory allegations would contradict the rationale behind the Supreme Court’s decisions in Twombly and Iqbal. Id. at *2, *4. Holding otherwise, the Court concluded, would “make huge swaths of otherwise innocuous phone calls at risk of litigation.” Id. at *3.

Though the Court agreed the plaintiff was not required to plead technical details to which she did not have access, it also found that a pause alone did not make an inference of ATDS use plausible. Id. That was particularly so in this case, the Court reasoned, because the defendant was a debt collector with no reason to use a system that randomly or sequentially generates phone numbers. Id. at *3-4. The plaintiff’s nonexistent relationship with the defendant did not make her claim more plausible, considering companies could “be in the business of purchasing debts from or collecting debts on behalf of others.” Id. at *4. Since the plaintiff offered “no plausible explanation why a debt collection company would need or use” equipment that generates numbers randomly or sequentially, the Court found the use of such equipment in this case was nothing more than “a speculative possibility.” Id.

This decision sides with other cases in the Seventh Circuit that require TCPA plaintiffs to plead sufficient factual allegations concerning use of an ATDS. Critically, it also shows that the nature of a defendant’s business—particularly one that involves calling specific people at specific numbers—can make conclusory statements about ATDS use all the more implausible.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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