Frankfort v. Metropolis Technologies Inc

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

TODD FRANKFORT, et al., §

Plaintiffs, §

§

v. § No. 3: 24-CV-02283-L

§

METROPOLIS §

TECHNOLOGIES, INC., §

Defendant. §

FINDINGS, CONCLUSIONS, AND RECOMMENDATION

OF THE UNITED STATES MAGISTRATE JUDGE

Before the Court is Defendant Metropolis Technologies, Inc.’s (“Metropolis”)

Motion to Dismiss all claims asserted by Plaintiffs Todd Frankfort, Curtis Goodban,

and Sarina Gutierrez1 (collectively, “Plaintiffs”), pursuant to Rule 12(b)(6) of the

Federal Rules of Civil Procedure, (Dkt. No. 11), accompanied by a brief in support

(Dkt. No. 12 (“D. Br.”)), and an appendix (Dkt. No. 13) (“D. App.”).) Also before

the Court is Plaintiffs’ Motion for Class Certification, filed on December 5, 2024.

(Dkt. No. 14.) United States District Judge Sam A. Lindsay referred the motions to

the undersigned United States magistrate judge for hearing, if necessary, and

proposed findings and recommendation for disposition of the motions. (Dkt. Nos.

16, 21.)

1 In their response, Plaintiffs advise that Sarina Gutierrez is no longer proceeding as a

class representative (see D. Br. at 1 n.1), but the record reflects no corrective pleadings have

yet been filed to reflect this change.

On February 3, 2025, the Court issued an order staying both discovery and

Defendant’s deadline to file a response to Plaintiffs’ motion for class certification

until the Court rules on the present motion to dismiss. (Dkt. No. 25.) Based on the

relevant findings and applicable law, the undersigned recommends that Metropolis’s

motion to dismiss (Dkt. No. 11) be GRANTED, and Plaintiffs’ motion for class

certification (Dkt. No. 14) be DENIED as moot.

I. BACKGROUND

On September 6, 2024, Plaintiffs filed a putative class action complaint against

Metropolis asserting four causes of action: three damages counts under the Fair Debt

Collection Practices Act (“FDCPA”) (Count One), the Texas Debt Collection Act

(“TDCA”)2 (Count Two), and the Texas Deceptive Trade Practices Act (“DTPA”)

(Count Three), and one for injunctive relief under the DTPA and the TDCA (Count

Four). (Dkt. No. 1 (“Compl.”).)

Plaintiffs allege subject matter jurisdiction pursuant to 28 U.S.C. § 1332 of the

Class Action Fairness Act of 2005 (“CAFA”) because: (1) there are 100 or more

Class members, (2) there is an aggregate amount in controversy exceeding

$5,000,000, exclusive of interest and costs, and (3) there is minimal diversity because

at least one member of the class of plaintiffs and one defendant are citizens of

different states. (Compl. ¶ 32.) Plaintiffs additionally allege subject matter

2 Both parties refer to this Act as the Texas Fair Debt Collection Practices Act,

or the “TFDCPA,” but the Texas legislature and state courts refer to it as the Texas

Debt Collection Act (“TDCA”) and the undersigned refers to it is as such.

jurisdiction relative to Plaintiffs’ FDCPA claims under 28 U.S.C. § 1331 and 15

U.S.C. § 1692k(d) and supplemental jurisdiction relative to Plaintiffs’ state-law

claims under the TDCA and DTPA pursuant to 28 U.S.C. § 1367(a). (Id.) The

undersigned notes that Metropolis has not objected to Plaintiffs’ assertion of CAFA

jurisdiction or asserted any basis that would divest the district court of subject matter

jurisdiction over the claims in this lawsuit.

Metropolis filed the present motion to dismiss on December 12, 2024 (Dkt.

No. 11), after which Plaintiffs filed a response on January 22, 2025 (Dkt. No. 22

(“Resp.”)), and Metropolis filed a reply on February 19, 2025 (Dkt. No. 26

(“Reply”)). Accordingly, the motion is ripe for decision.

Plaintiffs allege the following facts in their complaint. Metropolis operates

hundreds of parking facilities across the United States, using a “drive-in, drive-out”

system. (Compl. ¶ 22.) Individuals may park their cars in a particular parking spot,

for a particular amount of time in exchange for a pre-set fee. (Id. ¶ 32.) Metropolis

equips its parking facilities with monitoring technology that identifies and tracks

vehicles entering and leaving its facilities. (Id. ¶ 5.) This technology photographs an

individual’s vehicle at the time of entry and exit to calculate the parking fee, allowing

the garages to operate without entry and exit gates. Instead, consumers pay online

by scanning a posted QR code with a smart device. (Id.)

According to Plaintiffs, these Metropolis parking facilities either have no rates

posted or have only hourly rates posted, but in either case, Metropolis does not

disclose the Violation Fine. (Compl. ¶ 34.) Plaintiffs allege that this payment system

causes consumers “to fail to pay the required parking charge.” (Id. ¶ 6.) When a

consumer leaves a Metropolis garage without paying via the posted QR code,

Metropolis mails a form “Notice of Parking Violation” (“Notice”) to the vehicle

owner, charging the unpaid parking charge and a “Violation Fine.” (Id.) The Notice

contains information about (i) when the consumer’s car was in the lot, (ii) the unpaid

fare owed, and (iii) the non-payment fine. (See Dkt. No. 1-2.) It also includes a

statement that “all vehicles that fail to pay for parking violations may be subject to

additional fees, referred to a dedicated collection agency or incur other legal action,

future ticketing, booting and/or towing, at the sole discretion of Metropolis.” (Id.)

Following this statement, the Notice states “Metropolis is not a debt collection

agency.” (Id.) The Violation Fine and the Notice are the bases for Plaintiffs’ claims.

Plaintiff Goodban parked at a Metropolis garage at 500 N. Akard Street,

Dallas Texas on June 11, 2024, staying for 16 minutes and incurring a parking fee of

$5.00. (Compl. ¶ 32.) After Goodban failed to pay the required parking fee, he

received in the mail a Notice that requested payment of the $5.00 parking fee along

with a violation fine of $70.25. (Id. ¶ 40; see also Dkt. No. 1-2.) Plaintiffs Frankfort

and Gutierrez each parked at a Metropolis garage at the Texas Women’s Hospital at

7600 Fannin Street, Houston, Texas, in which the rates for their respective stays

were $9.00 and $12.00. (Id. ¶ 33.) After failing to pay their respective parking fees,

they each incurred a $30.25 violation fine, which they both paid. (Id. ¶ 40 n. 8.)

Plaintiffs do not state why they failed to pay the parking fares. Nor do they allege

that they were confused by the posted signs or did not pay due to other unarticulated

concerns.

Plaintiffs allege that “the removal of gates and the use of inconspicuous signs

requiring payment through a QR code and the nondisclosure of the Violation Fines

is an intentional business strategy” to encourage non-compliance so Metropolis can

“later coerce the Violation Fine” from it parking patrons to “generate higher returns

for itself.” (Compl. ¶ 34.)

II. LEGAL STANDARDS

In deciding a motion to dismiss for failure to state a claim on which relief may

be granted under Rule 12(b)(6), the Court “accepts all well-pleaded facts as true,

viewing them in the light most favorable to the plaintiff.” In re Katrina Canal Breaches

Litig., 485 F.3d 191, 205-06 (5th Cir. 2007). Such a motion therefore is “not meant

to resolve disputed facts or test the merits of a lawsuit” and “instead must show that,

even in the plaintiff’s best-case scenario, the complaint does not state a plausible case

for relief.” Sewell v. Monroe City Sch. Bd., 974 F.3d 577, 581 (5th Cir. 2020). A

plaintiff must plead “enough facts to state a claim to relief that is plausible on its

face,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007), and must plead those facts

with enough specificity “to raise a right to relief above the speculative level,” id. at

555.

“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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility

standard is not akin to a ‘probability requirement’ but it asks for more than a sheer

possibility that a defendant has acted unlawfully.” Id. So, “[w]here a complaint

pleads facts that are merely consistent with a defendant’s liability, it stops short of the

line between possibility and plausibility of entitlement to relief.” Id. (quoting

Twombly, 550 U.S. at 557 (cleaned up)); see also Bryant v. Ditech Fin., L.L.C., No. 23-

10416, 2024 WL 890122, at *3 (5th Cir. Mar. 1, 2024) (unpublished) (“[J]ust as

plaintiffs cannot state a claim using speculation, defendants cannot defeat plausible

inferences using speculation.”).

Federal Rule of Civil Procedure 8(a)(2) does not mandate detailed factual

allegations, but it does require that a plaintiff allege more than labels and

conclusions. And, while a court must accept a plaintiff’s factual allegations as true, it

is “not bound to accept as true a legal conclusion couched as a factual allegation.”

Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Consequently, a

threadbare or formulaic recitation of the elements of a cause of action, supported by

mere conclusory statements, will not suffice. See id. And so, “to survive a motion to

dismiss” under Twombly and Iqbal, plaintiffs must “plead facts sufficient to show”

that the claims asserted have “substantive plausibility” by stating “simply, concisely,

and directly events” that they contend entitle them to relief. Johnson v. City of Shelby,

574 U.S. 10, 12 (2014) (citing Fed. R. Civ. P. 8(a)(2)-(3), (d)(1), (e)).

A court cannot look beyond the pleadings in deciding a 12(b)(6) motion.

Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.1996); see also Spivey v. Robertson, 197 F.3d

772, 774 (5th Cir.1999). When a party presents “matters outside the pleadings” with

a Rule 12(b)(6) motion to dismiss, the Court has “complete discretion” to either

accept or exclude the evidence for purposes of determining the motion. Isquith ex rel.

Isquith v. Middle S. Utils., Inc., 847 F.2d 186, 196 n. 3 (5th Cir.1988); accord Gen. Retail

Servs., Inc. v. Wireless Toyz Franchise, LLC, 255 F. App'x 775, 783 (5th Cir.2007). “If

. . . matters outside the pleading[s] are presented to and not excluded by the court,”

however, “the motion must be treated as one for summary judgment under Rule 56,”

and “[a]ll parties must be given a reasonable opportunity to present all the material

that is pertinent to the motion.” Fed. R. Civ. P. 12(d).

“Pleadings” for purposes of a Rule 12(b)(6) motion include attachments to the

complaint. In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir.2007);

Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). Similarly,

documents “attache[d] to a motion to dismiss are considered part of the pleadings, if

they are referred to in the plaintiff's complaint and are central to her claim[s].”

Collins, 224 F.3d at 498-99 (quotations omitted); accord Benchmark Electronics, Inc. v.

J.M. Huber Corp., 343 F.3d 719, 725 (5th Cir.2003). Attachments falling under these

categories may be properly considered without converting the motion to dismiss into

a motion for summary judgment. See Benchmark Electronics, 343 F.3d at 725.

Here, Plaintiffs attached to their complaint a copy of a Notice of Parking

Violation received by Plaintiff Goodban. (See Dkt. No. 1-2.) This document is

therefore considered part of the pleadings. See Katrina Canal Breaches Litig., 495 F.3d

at 205; see also Gipson v. Deutsche Bank Nat. Tr. Co., No. 3:13-CV-4820-L, 2015 WL

2069583, at *4 (N.D. Tex. May 4, 2015). Metropolis attached to its motion to

dismiss images of notices posted at the Fannin Garage and the N. Ackard Garage,

the two parking lots referenced in Plaintiffs’ complaint (see Compl. ¶ 32), which

expressly warn that failure to pay the parking fee via the QR code will result in

“penalties or fines.” (See D. App. 4 at ¶¶ 5-7 (Declaration of Christina Murray)3; D.

App. 6-12.) Metropolis contends that these posted notices represent the terms of the

debt alleged in the complaint. (See D. Br. at 3, 10.) These notices are referenced in

Plaintiffs’ complaint (see Compl. ¶ 34 (alleging that signs posted at Metropolis

garages fail to disclose the Violation Fines)) and are central to their theory of the

case; they are therefore considered part of the pleadings. See Collins, 224 F.3d at 498-

99. Therefore, the undersigned concludes that conversion of Metropolis’s motion to

dismiss into a motion for summary judgment is not necessary. See id.; Katrina Canal

Breaches Litig., 495 F.3d at 205; see also Gipson, 2015 WL 2069583, at *4; Burgess v.

RAB, Inc., No. 3:23-CV-2845-L-BN, 2024 WL 3237183, at *2 (N.D. Tex. June 6,

2024), adopted, 2024 WL 3240665 (N.D. Tex. June 28, 2024).

III. ANALYSIS

As noted above, Plaintiffs assert causes of action under the FDCPA, the

TDCA, and the DTPA, as well as a cause of action for injunctive relief. Plaintiffs

claim that Metropolis’s practice of “collecting undisclosed, arbitrary, and

3 Ms. Murray is Director of Central Operations at Metropolis; she has been in her

current role since August 2022; and her job responsibilities involve, among other things,

developing Metropolis’s parking enforcement strategies. (See D. App. 3 at ¶ 1.)

unconscionable violation fines, using illegal threats” violates the FDCPA, the

TDCA, and the DTPA. (See Resp. at 2.)

Metropolis argues that Plaintiffs have not alleged sufficient facts to render

their FDCPA and DCPA claims plausible and their conclusory allegations that

Metropolis’s payment system is an unlawful “scheme” that “tricks and intimidates

individuals into paying the inflated Violation Fine” (see, e.g., Compl. ¶ 42) is not

enough to entitle them to any relief. (See D. Br. at 1.) More specifically, Metropolis

argues that (1) Plaintiffs do not plead sufficient facts to support their claim that

Metropolis is a “debt collector” regulated by the FDCPA, which warrants dismissal

of Count One; (2) the Notice about which Plaintiffs complain does not violate the

FDCPA, the TDCA, or the DTPA, which warrants dismissal of the complaint in its

entirety; (3) Plaintiffs failed to plead reliance on Metropolis’s alleged scheme, that

they were harmed by the alleged scheme, or that the alleged scheme was

unconscionable as defined by the DTPA, which mandates dismissal of Count Three;

and (4) Plaintiffs lack standing to bring any claim for injunctive relief, which

warrants dismissal of Count Four. (See D. Br. at 1-2.)

In response, Plaintiffs maintain that they have plausibly alleged their claims,

including that Metropolis’s Notices violate the DTPA, TDCA, and FDCPA, and

Metropolis’s collection of a Violation Fine “in some arbitrary amount” violates the

FDCPA’s and the TDCA’s prohibition against collecting any amount that is not

expressly authorized by an agreement or by law and that Metropolis uses illegal and

unconscionable threats to intimidate parkers into paying the Violation Fine,

including threatening actions that only a state or government actor could take such

as issuing ticket or seizing a vehicle by booting it or towing it.. (See Resp. at 4-15.)

Plaintiffs further maintain that their complaint sufficiently alleges that Metropolis is

a debt collector under the TDCA and the FDCPA (id. at 15-21), and they have

standing to seek injunctive relieve (id. at 21-24). Finally, should the Court find

Plaintiffs’ allegations insufficient to sustain claims or the relief requested, Plaintiffs

request leave to amend their complaint. (Id. at 24-25.)

A. Applicable Law.

1. Fair Debt Collection Practices Act (FDCPA).

Congress enacted the FDCPA “to eliminate abusive debt collection practices

by debt collectors, to ensure that those debt collectors who refrain from using abusive

debt collection practices are not competitively disadvantaged, and to promote

consistent State action to protect consumers against debt collection abuses.” Gonzalez

v. Kay, 577 F.3d 600, 603 (5th Cir. 2009) (quoting 15 U.S.C. § 1692(e)). To state a

claim under the FDCPA, a plaintiff must demonstrate that: “(1) [he] has been the

object of a collection activity arising from consumer debt, (2) the defendant is a debt

collector under the FDCPA, and (3) the defendant engaged in an act or omission

prohibited by the FDCPA.” Vazzano v. Receivable Mgmt. Servs., LLC, 621 F. Supp. 3d

700, 711 n.18 (N.D. Tex. 2022).

Whether a defendant is a debt collector is often a threshold question for

determining FDCPA liability. See e.g., Gipson, 2013 WL 3746003, at *2 (dismissing

FDCPA claim because plaintiffs failed to plead sufficient facts that defendant

qualified as a debt collector under the statute). The FDCPA only regulates “debt

collector[s].” 15 U.S.C. § 1692a(6); see, e.g., Obduskey v. McCarthy & Holthus LLP, 586

U.S. 466, 468 (2019). Under either of the statute’s two definitions:

The term ‘debt collector’ means [1] any person who uses any

instrumentality of interstate commerce or the mails in any business the

principal purpose of which is the collection of any debts, or [2] who

regularly collects or attempts to collect, directly or indirectly, debts

owed or due or asserted to be owed or due another.

15 U.S.C. § 1692a(6) (emphasis added). The statute explicitly excludes any person

collecting or attempting to collect any debt owed that “concerns a debt which was

originated by such person[.]” 15 U.S.C. § 1692a(6)(F)(ii).

With respect to letters to consumers (such as the Notice), the Fifth Circuit

instructs the Court to “evaluate any potential deception in [a] letter under an

unsophisticated or least sophisticated consumer standard.” Goswami v. Am.

Collections Enter., Inc., 377 F.3d 488, 495 (5th Cir. 2004). “That is, in determining

whether the defendant's actions are deceptive under the FDCPA [the Court] must

assume that the plaintiff-debtor is neither shrewd nor experienced in dealing with

creditors.” Id. Yet at the same time, the Court does not consider the debtor as “tied

to the ‘very last rung on the [intelligence or] sophistication ladder.’” Id. (quoting

Taylor v. Perrin, Landry deLaunay & Durand, 103 F.3d 1232, 1236 (5th Cir. 1997)).

The Fifth Circuit generally treats the application of the unsophisticated consumer

standard as a question of law. Manuel v. Merchs. and Pro. Bureau, Inc., 956 F.3d 822,

826 (5th Cir. 2020). And while the issue of whether a collection letter is misleading

is usually a question of fact, dismissal is appropriate when it is apparent from the

letter that no significant fraction of the population would be misled by it. See

Daugherty, 836 F.3d at 512 (quoting McMahon v. LVNV Funding, LLC, 744 F.3d 1010,

1020 (7th Cir. 2014)).

“FDCPA claims may be dismissed at the Rule 12(b)(6) stage for failure to

state a claim if, as a matter of law, the letters are not deceptive based on the language

and placement of a disclaimer. Stated another way, dismissal is appropriate when it

is apparent from a reading of the letter that not even a significant fraction of the

population would be misled by it.” Bracken v. Portfolio Recovery Assoc., LLC, No. 3:20-

CV-1991-L-BK, 2021 WL 8441769, at *2 (N.D. Tex. Aug. 25, 2021), adopted, 2021

WL 8441747 (N.D. Tex. Sept. 9, 2021) (cleaned up) (citing Gonzalez v. Kay, 577 F.3d

600, 606 (5th Cir. 2009); Daugherty v. Convergent Outsourcing, Inc., 836 F.3d 507, 512

(5th Cir. 2016)); see also Christie v. Cont. Callers, Inc., No. 4:20-CV-00518-P, 2021 WL

689548, at *4 (N.D. Tex. Feb. 23, 2021).

2. Texas Debt Collection Act (TDCA).

The elements of a TDCA claim are: (1) the debt is consumer debt; (2) the

defendant is a debt collector, as defined by the TDCA; (3) the defendant committed a

wrongful act in violation of the TDCA; (4) the wrongful act was committed against

the plaintiff; and (5) the plaintiff was injured as a result of the defendant’s wrongful

act. Putty v. Fed. Nat’l Mortg. Ass’n, No. 3:16-CV-2562-D, 2017 WL 5070423, at *3

(N.D. Tex. Nov. 3, 2017), aff’d, 736 F. App'x 484 (5th Cir. 2018).

The TDCA differs from its federal counterpart in that “[t]he [TDCA] defines a

‘debt collector’ as ‘a person who directly or indirectly engages in debt collection’”

and “encompasses a creditor collecting its own debts as well as a third-party debt-

collector.” Welch v. Wells Fargo Bank, Civ. A. No. H-12-1468, 2012 WL 13047695, at

*4 (N.D. Tex. Dec. 17, 2012) (quoting Tex. Fin. Code § 392.001(6), then citing Tex.

Fin. Code §§ 392.001(3), (5)-(7)); see also Genender v. Kirkwood, 506 S.W.3d 508, 514

(Tex. App.—Houston [1st Dist.] 2016, no pet.) (“The TDCA has a two-tiered

structure that includes both ‘third-party debt collectors’ . . . and ‘debt collectors.’”

(quoting Tex. Fin. Code § 392.001(6))).

The definition of a third-party debt collector under the TDCA incorporates the

definition of a debt collector under the FDCPA, 15 U.S.C. § 1692a(6). See Welch,

2012 WL 13047695, at *4; see also Wesner as Tr. of Charles Wesner, Jr. Living Tr. v.

Southall, No. 3:22-CV-0927-B, 2023 WL 3000623, at *8 (N.D. Tex. Apr. 18, 2023)

(explaining that the TDCA’s definition of “third-party debt collector” borrows the

definition of “debt collector” from the FDCPA); Tex. Fin. Code § 392.001(7))

(“‘Third-party debt collector’ [under the TDCA] means a debt collector, as defined

by [the FDCPA.]”). And as previously explained, a “debt collector” under the

FDCPA must be collecting a debt for another. Henson v. Santander Consumer USA

Inc., 582 U.S. 79, 83 (2017). Therefore, a “third-party debt collector” under the

TDCA must likewise be collecting a debt for another.

By contrast, a “debt collector” is “a person who directly or indirectly engages

in debt collection[.]” Tex. Fin. Code § 392.001(6). Under the TDCA, “debt

collection” is “an action, conduct, or practice in collecting, or in soliciting for

collection, consumer debts that are due or alleged to be due a creditor.” Id.

§ 392.001(5). “Although the TDCA does not explicitly state that a ‘debt collector’ is

a person who engages in debt collection of a debt they originated, courts have given

the TDCA this construction to reconcile the statute’s somewhat circular

terminology.” Wesner, 2023 WL 3000623, at *8 (citing Scarbrough v. JPMorgan Chase

Bank, N.A., 2022 WL 2373725, at *10 (S.D. Tex. June 2, 2022), adopted, 2022 WL

2359645 (S.D. Tex. June 30, 2022) (collecting cases)).)

3. Texas Deceptive Trade Practices Act (DTPA).

The DTPA provides consumers with a cause of action for false, misleading, or

deceptive acts or practices. See Tex. Bus. & Com. Code § 17.50(a); Amstadt v. U.S.

Brass Corp., 919 S.W.2d 644, 649 (Tex. 1996). The elements of a DTPA claim are:

(1) the plaintiff was a consumer; (2) the defendant either engaged in false, misleading

or deceptive acts (i.e., violated a specific laundry-list provision of the DTPA) or

engaged in an unconscionable action or course of action; and (3) the DTPA laundry-

list violation or unconscionable action was a producing cause of the plaintiff's injury.

Windle v. Synthes USA Prods., LLC, No. 3:11-CV-2591-D, 2012 WL 1252550, at *4

(N.D. Tex. Apr. 13, 2012) (citing Amstadt, 919 S.W.2d at 649).

“The question of whether a party is a consumer [under the DTPA] is a

question of law.” Gomez v. Wells Fargo Bank, No. 3:10-CV-381-B, 2010 WL 2900351,

at *3 (N.D. Tex. July 21, 2010) (citation omitted); see Holland Mortgage & Inv. Corp. v.

Bone, 751 S.W.2d 515, 517 (Tex. App.-Houston [1st Dist.] 1987, writ ref’d n.r.e.)).

The DTPA defines a consumer as:

an individual, partnership, corporation, this state, or a subdivision or

agency of this state who seeks or acquires by purchase or lease, any

goods or services, except that the term does not include a business

consumer that has assets of $25 million or more, or that is owned or

controlled by a corporation or entity with assets of $25 million or more.

Tex. Bus. & Com. Code § 17.45(4). The DTPA defines “goods” as “tangible chattels

or real property purchased or leased for use.” Id. § 17.45(1). It defines “services” as

“work, labor, or service purchased or leased for use, including services furnished in

connection with the sale or repair of goods.” Id. § 17.45(2).

Plaintiffs’ claim under the DTPA must also meet Rule 9(b)’s heightened

pleading standards. Univ. Baptist Church of Fort Worth v. Lexington Ins. Co., 346 F.

Supp. 3d 880, 889 (N.D. Tex. 2018), aff’d, 787 F. App’x 194 (5th Cir. 2019); Berry v.

Indianapolis Life Ins. Co., 608 F. Supp. 2d 785, 800 (N.D. Tex. 2009). Under Rule

9(b), “a party must state with particularity the circumstances constituting fraud or

mistake.” Fed. R. Civ. P. 9(b). Rule 9(b) requires specifying “the ‘who, what, when,

where, and how’ of the alleged fraud.” U.S. ex rel. Williams v. Bell Helicopter Textron

Inc., 417 F.3d 450, 453 (5th Cir. 2005); see also Melder v. Morris, 27 F.3d 1097, 1100

n.5 (5th Cir. 1994).

B. Plaintiffs fail to plausibly allege that Metropolis is a debt collector as

defined by the FDCPA.

Plaintiffs allege that, as a debt collector, Metropolis violated multiple

provisions of the FDCPA, including that Metropolis falsely represents that it is

legally authorized to impose a fine (violation of Section 1692e(2)(A); falsely

represents that it has the authority to boot or tow an individual’s vehicle for

nonpayment of the fine (violation of Section 1692e(4)); Metropolis is not legally

authorized take any legal action for nonpayment of the fine (violation of Section

1692e(5)); the Notice is deceptive because it falsely implies that, in assessing the

Violation Fine, Metropolis is acting under police powers of the state (violation of

Section 1692e(10)); and the Violation Fine constitutes a “fee” by which Metropolis

uses unfair or unconscionable means to collect or attempt to collect (violation of

Section 692f(1)). (See Compl. ¶ 46.)

Plaintiffs fail to plausibly allege the second required element for all FDCPA

claims: that Metropolis is a “debt collector” as defined by 15 U.S.C. § 1692a(6). As

previously explained, the FDCPA only regulates “debt collector[s],” 15 U.S.C.

§ 1692a(6); Obduskey, 586 U.S. at 468, and the statute explicitly excludes any person

collecting or attempting to collect any debt owed that “concerns a debt which was

originated by such person,” 15 U.S.C. § 1692a(6)(F)(ii). The allegations of the

complaint and the attachments to it suggest that the principal purpose of

Metropolis’s business is operating parking facilities, not debt collecting.

According to Plaintiffs’ factual allegations, Metropolis is “a new player in the

parking industry” whose “leading-edge computer vision technology” uses “AI and

machine learning to provide seamless parking solutions and maximize revenue for

facility owners.” (Compl. ¶¶ 2, 4 (citing Dkt. No. 1–1 at 2).) “Metropolis operates in

over 40 U.S. metropolitan centers creating a “drive in and drive out” payment

experience at parking facilities and enabling it to “capture revenue from more than

five million consumers who do not have to stop and pay.” (Compl. ¶¶ 2, 4, 6 (citing

Dkt. No. 1–1 at 2).) Based on these allegations, it appears that collecting unpaid

parking debts is incidental to Metropolis’s parking technology business.

Plaintiffs maintain, however, that the allegations in their complaint

demonstrate that Metropolis’s principal purpose is debt collection because “the

central feature of Metropolis’s business model is its creation and collection of debts

(parking fares and the associated violation fines) purportedly owed by consumers.”

(Resp. at 17 (citing Compl. ¶¶ 36-38, 42).) Specifically, Plaintiffs allege that

Metropolis’s system:

• is designed to extract higher payments” (Compl. ¶ 36);

• is intentional and was created for a specific goal: extracting unlawful

Violation Fines” (id. ¶ 37);

• intentionally encourages minor technical nonpayment or underpayments

of garage parking fees such that a large arbitrary and unauthorized

Violation Fine can be threatened and collected from a significant portion of

its customers” (id. ¶ 38); and

• allows Metropolis to inflate any potential debt (unpaid parking) by orders

of magnitude without any authority to do so, and tricks and intimidates

individuals into paying the inflated Violation Fine (id. ¶ 42).

(Id.) But these statements amount to little more than “legal conclusions; mere labels;

[t]hreadbare recitals of the elements of a cause of action; conclusory statements; and

naked assertions devoid of further factual enhancement,” and the Court cannot

presume labels or legal conclusions as true. Morgan v. Swanson, 659 F.3d 359, 370

(5th Cir. 2011) (internal quotations and citations omitted).

Plaintiffs’ conclusory allegations do not convert Metropolis’s principal

purpose from parking facility operations to the “creation and collection of debts.”

(See Resp. at 14, 16–17 (citing Compl. 1, ¶¶ 34, 36, 42).) The court is not required to

“accept as true conclusory allegations, unwarranted factual inferences, or legal

conclusions.” Gentilello v. Rege, 627 F.3d 540, 544 (5th Cir.2010) (citation omitted).

Accordingly, Plaintiffs’ conclusory characterization of Metropolis’s ticketless entry

system as a “scheme” “designed to extract higher payment from customers” (Compl.

¶ 36) fails to allege that Metropolis’s principal business is debt collection, rather than

a parking garage operation. Bent v. Mackie Wolf Zientz & Mann, P.C., No. 3:13-CV-

2038-D, 2013 WL 4551614, at *3 (N.D. Tex. Aug. 28, 2013) (“Plaintiffs’ assertion

that Defendant undertook the role of ‘debt collector’ is a legal conclusion that courts

are not bound to accept as true.”)

As noted above, the statute explicitly excludes any person collecting debts

originated by itself. See 15 U.S.C. § 1692a(6)(F)(ii). Plaintiffs argue that this

exclusion does not apply to Metropolis because Metropolis “partners with entities

and persons that own, manage or otherwise control parking facilities,” it regularly

collects debts “owed or due another.” (Resp. at 19 (citing Compl. ¶¶ 5, 36).) But

Plaintiffs do not allege any facts regarding the particulars of these alleged

partnerships, including the nature and extent of the relationship, or any entities with

whom Metropolis allegedly partners. Plaintiffs also do not allege that Metropolis is a

third-party agent, collecting debts for an unnamed “partner” or that Metropolis tried

to collect debts that parkers owed to unnamed “facility owners” that Plaintiffs

“belie[ve]” are Metropolis “partner[s].” (See id.)

Plaintiffs argue that unresolved fact questions regarding this issue preclude

dismissal of their FDCPA claim (Resp. at 19-20), but this argument is unavailing as

Plaintiffs’ allegations are insufficient to support a reasonable inference that

Metropolis is collecting debts Plaintiffs owed to “entities and persons” other than

Metropolis itself. (See Compl. ¶ 5.) Therefore, Plaintiffs’ allegations do not pass the

threshold from possibility to plausibility. See Iqbal, 556 U.S. at 678 (“Where a

complaint pleads facts that are merely consistent with a defendant’s liability, it stops

short of the line between possibility and plausibility of entitlement to relief.”)

(internal citations and quotation marks omitted).

Because Plaintiffs fail to plausibly allege that Metropolis is a “debt collector”

as defined by 15 U.S.C. § 1692a(6), their FDCPA claim is not plausibly alleged and

should be dismissed. See, e.g., Mason v. Ocwen Loan Servicing, LLC, 740 F. App’x 451,

452 (5th Cir. 2018) (“The district court did not err in dismissing [Plaintiff]’s FDCPA

claim because [Defendant] was not a debt collector under the Act.”).

C. Plaintiffs’ TDCA claim should be dismissed because they fail to plausibly

allege that Metropolis committed any wrongful acts against them.

As explained above, the TDCA differs from its federal counterpart to the

extent that “[t]he TDCPA defines a ‘debt collector’ as ‘a person who directly or

indirectly engages in debt collection’” and “encompasses a creditor collecting its own

debts as well as a third-party debt-collector.” Welch, 2012 WL 13047695, at *4

(internal citations and quotations omitted). Here, Plaintiffs allege that Metropolis is

a “debt collector” involved in “debt collection” under the TDCA, because the

Notices constitute “an action, conduct, or practice in collecting, or in soliciting for

collection, consumer debts that are due or alleged to be due a creditor.” (Compl.

¶ 51 (citing Tex. Fin. Code §§ 392.001(5)–(6)).) Accordingly, dismissal of Plaintiffs’

TDCA claim is not warranted on the basis that Metropolis is not a debt collector.

Despite the difference in the TDCA’s and FDCPA’s definition of debt

collector, Plaintiffs’ TDCA and FDCPA claims share in common the essential

element that Metropolis must have committed a wrongful act against them. See

Putty, 2017 WL 5070423, at *3. Courts have noted the relative paucity of precedent

under the Texas statute, but “conduct prohibited under the TDCA is coextensive

with that prohibited under the FDCPA, at least insofar as ‘[t]he same actions that are

unlawful under the FDCPA are also unlawful under the TDCA.’” Palmer v.

ProCollect, Inc., No. 6:19-CV-82-JDK, 2020 WL 4677570, at *6 (E.D. Tex. May 5,

2020) (granting summary judgment on TFDCPA and FDCPA claims “for the same

reasons”) (citations omitted).

The FDCPA “prohibits the use of ‘any false, deceptive, or misleading

representation or means in connection with the collection of any debt.’” Daugherty v.

Convergent Outsourcing, Inc., 836 F.3d 507, 510–11 (5th Cir. 2016) (quoting 15 U.S.C.

§ 1692e). Among other things, “the FDCPA prohibits ‘[t]he false representation of

. . . the character, amount, or legal status of any debt[.]’” Salinas v. R.A. Rogers, Inc.,

952 F.3d 680, 683 (5th Cir. 2020) (quoting 15 U.S.C. § 1692e(2)(A)). “It is also a

violation of the FDCPA to use ‘any false representation or deceptive means to collect

or attempt to collect any debt or to obtain information concerning a consumer.’” Id.

(quoting 15 U.S.C. § 1692e(10)).

The FDCPA also prohibits the use of “unfair or unconscionable means” by a

debt collector “to collect or attempt to collect any debt.” In particular, the relevant

provision states that the following conduct constitutes a violation: “The collection of

any amount (including any interest, fee, charge, or expense incidental to the

principal obligation) unless such amount is expressly authorized by the agreement

creating the debt or permitted by law.” 15 U.S.C. § 1692f(1). “Whether the

collection of a debt violates Section 1692f(1) depends solely on two factors:

(1) whether the debt agreement explicitly authorizes the charge; or (2) whether the

charge is permitted by law. Turner v. J.V.D.B. & Assocs., Inc., 330 F.3d 991, 996 (7th

Cir.2003). Plaintiffs’ FDCPA claim focuses on the former—that the Violation Fine

imposed by Metropolis is not expressly authorized by the agreement creating the

obligation. (See Compl. ¶¶ 46, 52; see also Resp. at 5.)

The TDCA similarly “prohibits debt collectors from using threats, coercion, or

other wrongful practices to collect consumer debts.” Rentfrow v. JP Morgan Chase

Bank, Nat'l Ass’n, No. 4:19-CV-3507, 2020 WL 1893558, at *5 (S.D. Tex. 2020),

adopted, 2020 WL 1891848, *5 (S.D. Tex. 2020) (citing Brown v. Oaklawn Bank, 718

S.W.2d 678, 680 (Tex. 1986)).

Plaintiffs’ allegations of Metropolis’s wrongful conduct include the following:

(1) illegally threatening that a consumer’s car will be towed or booted, or the

consumer may incur additional fees, future ticketing, referred to a dedicated

collection agency, or incur other legal action; (2) using “unfair or unconscionable

means” to collect or attempt to collect a “fee” (the Violation Fine) that is not

expressly authorized by an agreement or by law; and (3) misrepresenting that it is

legally authorized to impose the Violation Fine. (See Compl. ¶¶ 46, 52.)

First, Plaintiffs allege that the Violation Fine is not “expressly authorized by

the agreement creating the debt.” (Compl. ¶ 46(e); 52(c).) Metropolis argues in

response that the notices posted at the two parking lots referenced in Plaintiffs’

complaint (D. App. 6-12) represent the terms of the debt alleged in the complaint and

expressly authorize Metropolis to assess fines for failures to pay the parking fee. (See

D. Br. at 3, 10, 19-22; see also D. App. 4 at ¶¶ 5-7.) Therefore, argues Metropolis, the

Violation Fine was authorized, and the Notice does not violate the FDCPA or the

TDCA. (See D. Br. at 11.)

Although Plaintiffs refute the existence of any agreement between them and

Metropolis (see, e.g., Resp. at 5 n.5), their attempt to state claims for relief under the

FDCPA and the TDCA necessarily presupposes that any actionable debt underlying

those claims arose from a contract. (See Compl. ¶¶ 46(e), 52(b) (alleging wrongful

conduct under the FDCPA and the TDCA based on Metropolis’s failure to comply

with an agreement).) Considering the pleadings, including the complaint, the

motion, and the attachments thereto, the undersigned concludes “that contract law is

the source of the obligation at issue here.” Franklin v. Parking Revenue Recovery Servs.,

Inc., 832 F.3d 741, 744 (7th Cir. 2016) (holding that the unpaid parking fees and

nonpayment penalties were “debts” under the FDCPA because, by parking in the

lot, “a contract was formed obligating [the plaintiffs] to pay the stated price or pay a

higher price if they left the parking lot without paying.”)

As Plaintiffs correctly state, Franklin did not address whether a nonpayment

charge violated the FDCPA (see Resp. at 8), but its analysis with respect to the

creation of a debt arising under a contract formed when a customer parks in a

parking garage is nevertheless persuasive. See id. As the Seventh Circuit explained,

“[t]he crucial question is the legal source of the obligation,” and when contract law

forms the basis of the obligation to pay, the obligation to pay is an FDCPA “debt.”

Id. at 744-45; see also Skeberdis v. Kinnally, No. 17-CV-6261, 2018 WL 3068379, at *4

(N.D. Ill. June 21, 2018); but see Gulley v. Markoff & Krasny, 664 F.3d 1073, 1075 (7th

Cir. 2011) (“[T]he municipal fines levied against [plaintiff] cannot reasonably be

understood as ‘debts’ arising from consensual consumer transactions for goods and

services.”); Reid v. Am. Traffic Sols., Inc., No. 10-CV-204-JPG-DGW, 2010 WL

5289108, at *5 (S.D. Ill. Dec. 20, 2010) (fines for running red lights are not “debts”

because “[t]hey are not the product of a negotiation or contract, explicit or implied,

where the plaintiffs purchased the right to run red lights in order to accomplish

personal or family purposes”).

Just as in Franklin, the terms of the contracts at issue here, were located on the

signs at the two parking lots at which Plaintiffs parked. Plaintiffs incorporate these

signs into their complaint by premising their claims on debts and purchases and by

alleging that "in neither case is the Violation Fine disclosed on either the posted signs

or through the QR code." (See Compl. ¶ 34.) But this statement is controverted by

the photographs of the signs submitted as attachments to the Motion. (See D. App.

3-4, 5-12.) As previously explained these attachments are considered part of the

pleadings because they are referred to in Plaintiffs’ complaint and central to their

claims and, therefore, may be properly considered without converting the motion to

dismiss into a motion for summary judgment. Collins, 224 F.3d at 498-99; Benchmark

Electronics, 343 F.3d at 725. Just as in Franklin, Plaintiffs here entered into contracts

obligating them to pay the stated price or pay a higher price if they left without

paying. See Franklin, 832 F.3d at 744. And contrary to Plaintiffs’ claims, these signs

clearly warn parkers that they will be subject to a fine or other penalties if they fail to

pay for parking. The signs state: parking is “enforced 24/7,” “pay before exiting,”

and “[f]ailure to complete payment will result in fine and/or towing at vehicle

owner's expense.” (See D. App. at 5–12.)

Plaintiffs contend that Metropolis nevertheless violated the TDCA because the

amount of the Violation Fine is undisclosed prior to being levied, and because the

amount is “arbitrary and unconscionable.” (See Resp. at 2, 5-8.) Plaintiffs further

contend that the Violation Fines are unenforceable either as an improper penalty for

failing to pay the underlying parking fare or as an improper late fee under Texas law

and therefore not part of any contract that may exist between Plaintiffs and

Metropolis. (See id. at 6-9) (citing BMG Direct Mktg., Inc. v. Peake, 178 S.W.3d 763,

766 (Tex. 2005); Atrium Med. Ctr., LP v. Houston Red C LLC, 595 S.W.3d 188, 192

(Tex. 2020).) Contrary to Plaintiffs’ assertion, the possibility of incurring fines for

refusing to pay for parking was disclosed in the signs at the garages which comprise

the agreements between Plaintiffs and Metropolis.

Plaintiffs also complain that the Violation Fines are “arbitrary and

outrageous,” but beyond labels, unsupported hypotheticals, and broad assertions, the

factual allegations in their complaint do not support that contention. (See, e.g.,

Compl. ¶¶ 6, 38.) For example, Plaintiffs allege that Metropolis’s gateless system

“intentionally encourages minor technical nonpayment,” which “generates 164% of

the revenue [that it would generate] from a traditional gate system, driven by

Violation Fines.” (Compl. ¶¶ 36, 38.) But Plaintiffs’ calculations are based on mere

conjecture such as unsupported assumptions regarding nonpayment rates and

Violation Fine collection rates. Plaintiffs speculate that Metropolis can “impose a

$1,000 violation fine on someone who failed to pay a $15 parking fare” (see Resp. at

7-8), but this is not what the complaint alleges. Rather, Plaintiffs allege that Plaintiff

Goodban incurred a violation fine of $70.25 after failing to pay a $5.00 parking fee

and Plaintiffs Frankfort and Gutierrez each incurred a $30.25 violation fine after

failing to pay their respective parking fees of 9.00 and $12.00. (Compl. ¶ 40.)

Therefore, Plaintiffs’ reliance on hypothetical or abstract facts is “insufficient to

satisfy the plausibility requirements at the motion-to-dismiss stage.” Duggan v. Dep’t

of the Air Force, 617 F. App’x 321, 325 (5th Cir. 2015); see also Iqbal, 556 U.S. at 678.

Furthermore, Metropolis argues that the Violation Fines are not arbitrary

because they “align with standard industry practice and are not disconnected from

the losses that parking garage operators [ ] incur when customers do not pay for

parking. (Reply at 6-7 (citing Franklin, 832 F.3d at 743 ($45 nonpayment penalty);

Wilkinson v. Passport Labs, Inc., No. 22-10714, 2022 WL 4870793, at *1 (E.D. Mich.

Oct. 3, 2022) ($50 nonpayment penalty increasing to $100 if unpaid after 14 days);

Ahmed v. Richland Holdings, Inc., No. 2:19-CV-1925 JCM (DJA), 2021 WL 769642, at

*4 (D. Nev. Feb. 26, 2021) (on motion to dismiss, holding that collection fee does

not violate FDCPA, when it is a standard practice in applicable industry).) Thus,

even taking Plaintiffs’ allegations as true, they fail to plead any credible facts

supporting their claim that the Violation Fines are arbitrary and outrageous.

Similarly baseless are Plaintiffs’ allegations that the Notices contain illegal

threats and false representations, as well as the use of “unfair and unconscionable”

means for collection of the Violation Fine. (See Compl. ¶ 46 (claims under the

FDCPA), ¶ 52 (claims under the TDCA), ¶ 61 (claims under the (DTPA).) As

explained above, conduct prohibited under the TDCA is equivalent to conduct

prohibited under the FDCPA, because “[t]he same actions that are unlawful under

the FDCPA are also unlawful under the TDCA.” Palmer, 2020 WL 4677570, at *6.

Likewise, courts evaluate the alleged deceptiveness of letters to consumers (the

Notices in this case) under the “least sophisticated consumer” standard for both

FDCPA and the TDCA claims. See Goswami, 377 F.3d at 495; Meroney v. Pharia,

LLC, 688 F. Supp. 2d 550, 552 (N.D. Tex. 2009); Rodriguez v. Fulton Friedman &

Gullace, LLP, No. H-11-4592, 2012 WL 3756589, at *13 (S.D. Tex. Aug. 28, 2012)

(granting motion to dismiss “very similar” TFDCPA claims “[f]or the same reasons”

as for FDCPA claims using least sophisticated consumer standard); Tarazon v. LTD

Fin. Servs., L.P., No. 7:18-CV-60, 2019 WL 13258507, at *4 (S.D. Tex. Jan. 31,

2019).

Under this standard, the Court must assume that the debtor is neither shrewd

nor experienced in dealing with creditors. Thus, the standard “serves the dual

purpose of protecting all consumers, including the inexperienced, the untrained and

the credulous, from deceptive debt collection practices and protecting debt collectors

against liability for bizarre or idiosyncratic consumer interpretations of collection

materials.” McMurray v. ProCollect, Inc., 687 F.3d 665, 669 (5th Cir. 2012) (quoting

Taylor v. Perrin, Landry deLaunay & Durand, 103 F.3d 1232, 1236 (5th Cir. 1997)); see

also Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 645–46 (7th Cir. 2009) (noting

that even the least sophisticated debtor is not a “dimwit,” presumably has

“rudimentary knowledge” about finances, and can make “basic logical deductions

and inferences”) (internal quotation marks omitted).

In this case, the undersigned concludes that the phrasing in the Notice is not

false or deceptive as a matter of law, even from the standpoint of the least

sophisticated or an unsophisticated consumer. Taylor, 103 F.3d at 1236. Taking first

Plaintiffs’ allegation that that the Notice implies that Metropolis was acting on behalf

of the government or acting with a government’s authority, Plaintiffs ignore the bold,

all-capitalized disclaimer in the Notice:

THIS INVOICE IS PRIVATELY ISSUED, IS NOT

ISSUED BY A GOVERNMENTAL AUTHORITY,

AND IS NOT SUBJECT TO CRIMINAL PENALTIES.

(Dkt. No. 1–2, at 2.) This language expressly and unambiguously states that the

“invoice” is not issued by a governmental authority but rather is issued by a private

party. Even unsophisticated consumers would not believe that Metropolis was

acting under government authority given what the conspicuous disclaimer stated.

Goswami, 377 F.3d at 495. Furthermore, under the least sophisticated consumer

standard, the use of common words such as “fine” and “violation” to describe

contractual penalties do not convey any affiliation with a governmental entity. See,

e.g., Agrelo v. Affinity Mgmt. Servs., LLC, 841 F.3d 944, 951 (11th Cir. 2016) (HOA

“fine” was a debt under FDCPA); Franklin, 832 F.3d at 744 (parking “fine” for

failure to pay at parking lot was private debt).

Plaintiffs argue that, despite this bold disclaimer, the least sophisticated

consumer would be deceived into believing that Metropolis had government

authority. (See Resp. at 10.) The undersigned disagrees. The language of the

disclaimer is sufficiently clear that even “the inexperienced, the untrained and the

credulous” would understand that the Notice was not issued by a government

authority. McMurray, 687 F.3d at 669. Furthermore, the Notice is clearly issued by

Metropolis, as Metropolis’s name and return address are printed at the top of the

Notice, the Notice states “Metropolis is providing this courtesy notice[.];” the

payment processing portal is www.payment.metropolis.io, and the Notice states

“Metropolis is not a debt collection agency.” (Dkt. 1-2 at 2.) Contrary to Plaintiffs'

contention, this simple and clearly-worded language would not lead the least

sophisticated consumer to believe that the Notice was issued or authorized by a

government authority. See Osborn v. Ekpsz, LLC, 821 F. Supp. 2d 859, 877 (S.D. Tex.

2011).

Plaintiffs also claim that the “Violation Fine falsely implies that Metropolis is

acting under the police powers of the state” and that “Metropolis cannot lawfully

assess a Violation Fine on behalf of a private party.” (Compl. ¶¶ 40, 46.) Both the

FDCPA and the TDCA prohibit:

1) The false representation or implication that the debt collector is

vouched for, bonded by, or affiliated with the United States or any

State, . . . .

* * *

(9) The use or distribution of any written communication which

simulates or is falsely represented to be a document authorized, issued,

or approved by any court, official, or agency of the United States or any

State, or which creates a false impression as to its source, authorization,

or approval.

15 U.S.C. 1692e; see also Tex. Fin. Code Ann. § 392.304(9)-(10). The conduct about

which Plaintiffs complain does not constitute prohibited government impersonation

under these express prohibitions. “Courts have generally limited the application of

§ 1692e(9) to egregious situations where the debt collector overtly impersonates a

government agency or where it attempts to hide its identity by using a false alias.”

Osborn, 821 F. Supp. 2d at 876 (quoting Sullivan v. Credit Control Servs., Inc., 745

F.Supp.2d 2, 10 (D.Mass.2010)).

As explained above, the Notice neither overtly impersonates a government

authority nor attempts to conceal Metropolis’s identity. Because the Notice does not

expressly invoke a government or use words that necessarily suggest affiliation or

endorsement by a government, it does not violate the FDCPA or the TFDCPA in

that manner.

Plaintiffs next allege that the Notice “falsely states that an individual’s car may

be booted or towed for failure to pay the fine, when Metropolis has no authority to

do so” and argue that these statements violate the FDCPA (§ 1692e(4)), the

TFDCPA (§§ 392.301(7)–(8)), and the DTPA (§ 17.46(b)(12)). (Compl. ¶¶ 46(b),

52(a), 61(b).) Plaintiffs also argue that “Metropolis’s threats of booting and/or

towing are “plainly illegal” because “[b]y the time consumers receive a Notice, their

vehicle has already left the Metropolis facility.” (Compl. ¶ 7.)

First, Plaintiffs are wrong about Texas law. Metropolis can boot or tow

vehicles if their operators refuse to pay for parking at Metropolis’s garages. See Tex.

Occ. Code § 2308.257(a) (“A parking facility owner may, without the consent of the

owner or operator of an unauthorized vehicle, cause a boot to be installed on the

vehicle in the parking facility[.]”); Tex. Occ. Code § 2308.252(a) (“A parking facility

owner may, without the consent of the owner or operator of an unauthorized

vehicle, cause the vehicle and any property on or in the vehicle to be removed and

stored at a vehicle storage facility at the vehicle owner’s or operator’s expense[.]”).

Plaintiffs do not allege that Metropolis did not or would not follow these conditions

if they sought to tow or boot a vehicle in one of its parking facilities, and therefore,

they plead no facts to support a plausible inference that Metropolis has no legal

authority whatsoever to tow or boot a vehicle for failure to pay the fine.

Second, the Notice specifically states that failure to pay may be subject to

“future ticketing, booting and/or towing.” (See Dkt. 1-1 at 2 (emphasis added).) This

statement appears after the disclaimer stating that the “invoice is privately issued, []

not issued by a governmental authority, and not subject to criminal penalties.” (See

id.) Because a consumer must read the disclaimer before reading about Metropolis’s

authority to boot or tow their vehicles, the least sophisticated consumer understands

that Metropolis, a private company, only has legal authority to boot or tow their

vehicles in one of Metropolis’s parking facilities. “Although established to ease the

lot of the naive, the [least sophisticated consumer] standard does not go so far as to

provide solace to the willfully blind or non-observant. Even the least sophisticated

debtor is bound to read collection notices in their entirety.” Osborn, 821 F. Supp. at

877 (citing Campuzano–Burgos v. Midland Credit Mgmt., 550 F.3d 294, 299 (3d Cir.

2008)).

For all these reasons, the undersigned finds that Plaintiffs’ have failed to

plausibly allege that Metropolis’s efforts to enforce the terms of the posted parking

agreements were unconscionable, that Metropolis falsely impersonated or implied an

affiliation with a government authority, or that it illegally threatened to tow or boot

Plaintiffs’ vehicles. Accordingly, Plaintiffs’ TDCA claim should be dismissed.

D. Plaintiffs failed to plead reliance or unconscionability as required by the

DTPA.

Plaintiffs here plead three different causes of actions under the DTPA. First,

Plaintiffs allege that Metropolis committed unconscionable action through its

“scheme” to take advantage of consumers’ lack of knowledge by “threaten[ing] fines,

booting, and/or towing, further legal action, or referral to a collection agency.” (See

Compl. ¶ 58; see also id. ¶ 59 (alleging that these unconscionable actions occurred

numerous times).) Second, Plaintiffs allege Metropolis’s violation of the TDCA

constitutes a violation of the DTPA. (Id. ¶ 60.) Third, Plaintiffs allege that

Metropolis violated the DTPA through false, misleading, and deceptive acts,

including that “[t]he Notice . . . falsely implies that Metropolis is acting under or has

sponsorship of police powers of the state” and has represented that it has an

agreement that confers the right to levy the Violation Fine, boot or tow vehicles for

failure to pay the fine, and pursue legal action to collect the Violation fine. (Id. ¶ 61.)

The relevant provisions of the DTPA are Sections 17.46(b) and 17.50. First,

as explained above, under § 17.50(a) only a “consumer” has standing to maintain a

private cause of action under these provisions of the DTPA. Second, proving a

violation of the DTPA requires a consumer to proceed down one of two different

avenues. Avenue number one requires showing that a defendant committed one or

more of a laundry list of 33 “false, misleading, or deceptive acts or practices”

enumerated under § 17.46(b) that were relied upon by the consumer to his detriment.

See, collectively, id. at §§ 17.46(b) and 17.50(a)(1). An alternative avenue to prove a

violation of the DTPA involves showing that a defendant committed one of three

violations enumerated under § 17.50(a)(2) (“breach of an express or implied

warranty”), § 17.50(3) (“any unconscionable action”), or § 17.50(4) (“violation of

Chapter 541, Insurance Code”). Id.

Although Plaintiffs allege that Metropolis’s actions violate the enumerated

divisions of § 17.46, they do not plead that their reliance on those alleged violations

caused their injuries as required by § 17.50(a)(1)(B). (See Compl. ¶¶ 60–61.) Their

bare references to § 17.46 violations are not enough; they must plead that they

actually relied on a deceptive business practice and that caused their injury. (See

Compl. ¶¶ 58–59.) Plaintiffs allege that a violation of the TDCA is also a violation of

the DTPA (see Compl. ¶ 60 (citing Tex. Fin. Code § 392.404)), but this allegation

must be disregarded. Not only have Plaintiffs failed to plausibly allege a TDCA

violation, see supra Section III.C., but § 392.404 merely states that a violation of the

TDCA is a “deceptive trade practice” under the DTPA (just as those enumerated in

§ 17.46). Plaintiffs must still plead reliance and causation. See Tex. Fin. Code

§ 392.404).

The complaint also lacks sufficient factual allegations enabling a reasonable

inference that Metropolis’s actions are unconscionable under the DTPA. The DTPA

defines an unconscionable action as “an act or practice which, to a consumer’s

detriment, takes advantage of the lack of knowledge, ability, experience, or capacity

of the consumer to a grossly unfair degree.” Tex. Bus. & Com. Code § 17.45(5).

‘“The term ‘gross’ should be given its ordinary meaning, and therefore, the resulting

unfairness must be glaringly noticeable, flagrant, complete and unmitigated.” Lon

Smith & Assocs., Inc. v. Key, 527 S.W.3d 604, 623 (Tex. App.—Fort Worth 2017, pet.

denied) (quotation omitted). “Case law uniformly holds . . . [that] the

unconscionable-act-or-course-of-action element of a DTPA section 17.50

unconscionability claim requires proof of each consumer’s knowledge, ability,

experience, or capacity.” Id. at 624. Plaintiffs must plead sufficient facts to meet

these substantive requirements and the heightened procedural requirements under

9(b). See, e.g., Lopez v. United Prop. & Cas. Ins. Co., 197 F. Supp. 3d 944, 951 (S.D.

Tex. 2016) (applying Rule 9(b) to DTPA claim); Kumar v. Panera Bread Co., No. 4:21-

CV-03779, 2024 WL 4281018, at *4 (S.D. Tex. Sept. 24, 2024) (dismissing DTPA

claim for unconscionable actions).

The complaint contains no facts leading to a plausible inference of

unconscionability and does not satisfy Rule 9(b)’s requirements. First, as discussed

above, Plaintiffs’ general allegations of an unconscionable “Violation Fine Scheme”

(see generally Compl.) rely on unsupported hypotheticals and broad assertions that are

not supported by any factual allegations in Plaintiffs’ complaint, and therefore, fail to

plausibly allege an “unconscionable” practice. See supra Section III.C.

Second, Plaintiffs fail to plead their own individual lack of knowledge; nor do

they allege that they did not know or understand the terms under which they parked

in Metropolis’s garages, and it is unclear why Plaintiffs failed to pay for parking.

The scheme is only unconscionable if it took advantage of Plaintiffs in some way.

The lack of allegations regarding why Plaintiffs individually lacked knowledge or the

ability to follow the Metropolis signs and pay the parking fee is fatal to their DTPA

claim.

Finally, even if Plaintiffs pled individual facts regarding their own knowledge,

the alleged facts in the complaint do not rise to the level of unconscionability.

Plaintiffs do not allege facts showing that Metropolis, or the Notice, took advantage

of them “to a grossly unfair degree.” Bradford v. Vento, 48 S.W.3d 749, 760 (Tex.

2001); Strauss v. Ford Motor Co., 439 F. Supp. 2d 680, 687 (N.D. Tex. 2006)

(“[Plaintiff] certainly has not alleged that the defendants took unfair advantage of

him in a way that was flagrant or glaringly noticeable.”). Plaintiffs chose to park at a

parking garage and did not pay for the parking despite signs warning of fines.

Based on the lack of any factual allegations—other than Plaintiffs’ broad

characterizations of Metropolis’s gateless parking technology as an intentional

scheme to encourage nonpayment of parking fees and intimidate parkers into paying

the Violation Fine—Plaintiffs fail to plausibly allege that Metropolis took advantage

of their lack of knowledge to a grossly unfair degree. Therefore, Plaintiffs have failed

to plausibly allege a violation of the DTPA.

E. Plaintiffs fail to state a claim for injunctive relief.

An equitable remedy, such as a declaratory judgment or injunctive relief, is

not an independent cause of action. See Johnson v. Wells Fargo Bank, NA, 999 F.

Supp. 2d 919, 924 (N.D. Tex., Feb. 24, 2014). Instead, such relief depends upon the

existence of an underlying judicially remediable right. Schilling v. Rogers, 363 U.S.

666, 677 (1960). Accordingly, because Plaintiffs does not adequately plead any

plausible underlying legal claims under the FDCPA, the TDCA, or the DTPA, they

are not entitled to any declaratory or other equitable relief.

F. Plaintiffs should be granted leave to amend.

Plaintiffs assert that any pleading deficiencies can be cured by amendment and

request leave to amend should the Court find that Plaintiffs fail to state any of their

claims. (See Resp. at 24-25.)

Leave to amend should be freely granted when justice requires. Fed. R. Civ.

P. 15(a)(2). Actions are not normally dismissed with prejudice without giving

plaintiff an opportunity to amend unless the plaintiff has previously refused to do so,

or the plaintiff has made its best case. Jackson v. Select Portfolio Servicing, No. 3:16-CV-

3027-M (BF), 2017 WL 4011266, at *1 (N.D. Tex. Sept. 11, 2017). Courts generally

afford plaintiffs one opportunity to amend, typically forgone only where amendment

would be futile. Branham v. Bank of Am., N.A., No. 4:23-CV-00959-O-BP, 2024 WL

3277741, at *2 (N.D. Tex. May 30, 2024), adopted, 2024 WL 3278970 (N.D. Tex.

July 2, 2024)).

Metropolis’s brief in reply (Dkt. No. 26) does not argue that amendment of

any of the issues they identify for dismissal would be futile; nor have they asked to

dismiss the claims with prejudice as a result. Accordingly, the undersigned

concludes that Plaintiffs’ request for leave to amend embedded in their response to

the motion to dismiss (see Resp. at 24-25), should be granted. See Davis v. City of

Dawson, Texas, No. 3:19-CV-1751-L, 2020 WL 708026, at *1 (N.D. Tex. Feb. 11,

2020) (denying a motion to dismiss without prejudice and granting plaintiff leave to

amend to cure deficiencies); Parsons v. Deutsche Bank Nat’l Tr. Co. as Tr. For Holders of

New Century Home Equity Loan Tr. Series 2005-A, No. 3:18-CV-1287-L, 2019 WL

460145, at *1 (N.D. Tex. Feb. 6, 2019) (dismissing claims without prejudice and

granting leave to amend).

IV. RECOMMENDATION

For the for foregoing reasons, the undersigned RECOMMENDS that

Metropolis’s motion to dismiss (Dkt. No. 11) be GRANTED; that Plaintiffs be given

an opportunity to file an amended complaint within 21 days of the District Judge’s

acceptance of these findings, conclusions, and recommendation or another date

established by the District Judge; and, if Plaintiffs fails to file an amended complaint

within the time allowed, their claims be dismissed with prejudice for failure to state a

claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

In light of the foregoing, the undersigned further RECOMMENDS that

Plaintiffs’ motion for class certification (Dkt. No. 14) be DENIED as moot.

SO RECOMMENDED on August 29, 2025.

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UNITED STATES MAGISTRATE JUDGE

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INSTRUCTIONS FOR SERVICE AND

NOTICE OF RIGHT TO APPEAL/OBJECT

A copy of this report and recommendation will be served on all parties in the

manner provided by law. Any party who objects to any part of this report and

recommendation must file specific written objections within 14 days after being

served with a copy. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). To be specific,

an objection must identify the finding or recommendation to which objection is

made, state the basis for the objection, and indicate the place in the magistrate

judge’s report and recommendation where the disputed determination is found. An

objection that merely incorporates by reference or refers to the briefing before the

magistrate judge is not specific. Failure to file specific written objections will bar the

aggrieved party from appealing the factual findings and legal conclusions of the

magistrate judge that are accepted or adopted by the district court, except upon

grounds of plain error. See Douglass v. United Services Automobile Ass’n, 79 F.3d 1415,

1417 (5th Cir. 1996), modified by statute on other grounds, 28 U.S.C. § 636(b)(1)

(extending the time to file objections to 14 days).