1

 Plaintiff has misnamed and served this defendant as “7-11, Inc.”

ORDER – PAGE 1

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

APRIL MCCORMICK, et al., §

§

Plaintiff, §

§

v. § Civil Action No. 3:06-CV-0127-N

§

7-11, INC. et al., §

§

Defendants. §

ORDER

This order addresses Defendants 7-Eleven, Inc. (“7-Eleven”),1 Certegy Check

Services, Inc. (“CCS”), and Certegy Payment Recovery Services, Inc.’s (“CPRS”) motion

to dismiss under Federal Rules of Civil Procedure 12(c) [105]. For the reasons explained

below, the Court grants in part and denies in part Defendants’ motion. 

I. FACTUAL BACKGROUND

On or about January 6, 2005, Plaintiff McCormick proffered a check to 7-Eleven in

the amount of $11.91, which was later returned for insufficient funds. In a letter dated

January 18, 2005, CPRS notified McCormick that CCS purchased the unpaid check from 7-

Eleven and had hired CPRS to collect the amount in arrears along with an additional $30.00

service charge. According to McCormick, at the time of her transaction, 7-Eleven

represented that any checks returned unpaid would be subject to a service charge not to

exceed $25.00. On these facts, McCormick claimed Defendants violated the federal Fair

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 1 of 10 PageID 1859
2

 Section 806 prohibits “a debt collector from engaging in any conduct, the natural

consequence of which is to harrass, oppress, or abuse any person in connection with the

collection of a debt”; section 807 prohibits “the use of any false, deceptive or misleading

representation or means in connection with the collection of a debt”; section 808 prohibits

“the use, by a debt collector, of any unfair or unconscionable means to collect or attempt to

collect any debt.” See 15 U.S.C. §§ 1692d, 1692e, and 1692f, respectively.

ORDER – PAGE 2

Debt Collection Practices Act (FDCPA) sections 806, 807, and 808.2

 McCormick asserted

state law claims as well, and requested the Court to exercise supplemental jurisdiction over

those pursuant to 28 U.S.C. § 1367. By Order dated October 30, 2006, (Order) this Court

decided that under the facts alleged, neither 7-Eleven nor CCS are “debt collectors” under

the FDCPA, thereby precluding all FDCPA claims against those parties. The Court also

dismissed the FDCPA claims against CPRS under Sections 806 and 807, but upheld

McCormick’s claim against CPRS under Section 808 and chose to exercise supplemental

jurisdiction over McCormick’s state law claims. The Court subsequently granted

McCormick leave to file an Amended Complaint. Defendants now seek dismissal of claims

sets forth in the Amended Complaint for relief under the Texas Debt Collection Act

(“TDCA”) and the Deceptive Trade Practices Act (“DTPA”). Defendants additionally move

for dismissal of McCormick’s breach of contract claim and request for declaratory relief.

II. MOTION TO DISMISS STANDARD

The standard of review applied to a Rule 12(c) motion to dismiss is the same as the

standard applied to its counterpart in Rule 12(b)(6). Great Plains Trust Co. v. Morgan

Stanley Dean Witter, 313 F.3d 305, 313 (5th Cir. 2002). Thus, Rule 12(b)(6) decisions

appropriately guide the application of Rule 12(c). Id. When faced with a Rule 12(b)(6)

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 2 of 10 PageID 1860
ORDER – PAGE 3

motion to dismiss, the Court must determine whether the plaintiff has asserted a legally

sufficient claim for relief. Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir. 1995).

According to the Supreme Court, a viable complaint must include “enough facts to state a

claim to relief that is plausible on its face,” i.e., “enough fact[s] to raise a reasonable

expectation that discovery will reveal evidence of [the claim or element].” Bell Atl. Corp.

v. Twombly, 127 S. Ct. 1955, 1965 (2007). A plaintiff is required to provide “more than

labels and conclusions, and a formulaic recitation of a cause of action will not do.” Id.

“Factual allegations must be enough to raise a right to relief above the speculative level, on

the assumption that all the allegations in the complaint are true (even if doubtful in fact).”

Id. (citations omitted). In ruling on a Rule 12(b)(6) motion, the court must limit its review

to the face of the pleadings, accepting as true all well-pleaded facts and viewing them in the

light most favorable to the plaintiff. Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999).

III. MCCORMICK ALLEGES FACTS SUPPORTING THAT CCS

AND 7-ELEVEN ARE “DEBT COLLECTORS” UNDER TDCA

This Court previously dismissed McCormick’s FDCPA claims against 7-Eleven and

CCS, because McCormick failed to allege how those defendants qualified as debt collectors

under the federal act. The FDCPA narrowly defines a debt collector to include entities in a

business the principal purpose of which is the collection of debts. See 15 U.S.C. § 1692a(6).

In dismissing McCormick’s FDCPA claims against 7-Eleven and CCS, this Court found that

she failed entirely to allege that 7-Eleven retained any interest in debt collection once it had

sold the defaulted check to CCS. While it was a closer question, this Court also found that

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 3 of 10 PageID 1861
ORDER – PAGE 4

McCormick failed to plead that CCS engaged in the collection of debts as the principal

purpose of its business. 

Similarly, only parties that fit the statutory definition of “debt collector” are subject

to liability under the TDCA. Catherman v. First State Bank of Smithville, 796 S.W.2d 299,

302 (Tex. App.–Austin 1990, no writ). However, the definition of debt collector under the

TDCA is broader than under the FDCPA. The TDCA defines a “debt collector” to include

any person or entity who directly or indirectly engages in any action, conduct or practice in

collecting, or in soliciting for collection, consumer debts due a creditor. TEX. FIN. CODE

ANN. § 392.001(5)-(6) (Vernon 2006). McCormick alleges conduct by CCS that fits within

the Texas statute’s definition of a debt collector. Incorporating the CPRS collection letter

into her Amended Complaint, McCormick alleges that CCS purchased the check in default,

thereby engaging in solicitation of debt under the TDCA. McCormick further alleges that

CCS at least indirectly engages in debt collection by presenting itself as a check collection

service while forwarding the actual work to its subsidiary CPRS. Unlike the FDCPA, the

TDCA does not require that debt collection be the principal business of an entity in order for

it to qualify as a debt collector. Accordingly, McCormick adequately pleads that CCS is a

debt collector under the TDCA.

McCormick states in the Amended Complaint, “The 7-11 at which the check was

written and, upon information and belief, all others, represent through written and posted

signs that 7-11 will attempt to collect a charge not to exceed $25.00 on any returned check.”

Amended Complaint, at ¶ 10.1. The Court finds that the McCormick thereby pleads a fact

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 4 of 10 PageID 1862
ORDER – PAGE 5

that would qualify 7-Eleven itself as a “debt collector” with at least an indirect role in debt

collection for purposes of the TDCA.

IV. MCCORMICK’S CLAIM UNDER TDCA § 392.301(A)(8) IS 

SUBSTANTIALLY THE SAME AS HER CLAIM UNDER FDCPA § 807

McCormick’s claim under TDCA § 392.301(a)(8) mirrors her claim under FDCPA

§ 807, which this Court earlier dismissed. Section 392.301(a)(8) prohibits a debt collector

from threatening to take an action prohibited by law. TEX. FIN.CODE ANN. § 392.301(a)(8)

(Vernon 2006). Section 807 of the FDCPA prohibits “false, deceptive, or misleading

representation or means in connection with the collection of a debt,” including “(5) the threat

to take any action that cannot legally be taken.” 15 U.S.C. § 1692e. The Court found that

McCormick’s Section 807 claim under the FDCPA failed because CPRS made no deceptive

or misleading statements in its collection letter. In so finding, the Court also implicitly

rejected McCormick’s related argument that the mere attempt to collect a $30.00 fee, an

amount which is arguably in violation of Texas law, constitutes a threat to take an action that

cannot legally be taken, under Section 807(5).

 The Court does not find convincing McCormick’s attempt to equate her Section

392.301(a)(8) claim with an earlier FDCPA § 808 claim, which the Court upheld. Section

808(1) prohibits a debt collector from collecting any amount that is not expressly authorized

by the agreement creating the debt or permitted by law. 15 U.S.C. § 1692(f)(1). McCormick

argued that the $30.00 fee violated a reasonableness requirement under Texas law, and

thereby violated Section 808 for collecting an amount not permitted by law. Even if that is

the case, attempting to collect a fee that is ultimately impermissible for being unreasonable,

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 5 of 10 PageID 1863
ORDER – PAGE 6

and thereby in violation of Section 808(1), is not equal to “threatening to take an action

prohibited by law,” under section 807(5) and, through similar language, under TDCA §

392.301(a)(8). There is no reason to believe that the protections of Section 807(5) and

Section 808(1) of the FDCPA are two different ways of saying the same thing. Since TDCA

§ 392.301(a)(8) echoes the language of FDCPA § 807(5) rather than Section 808(1), and the

Court earlier dismissed McCormick’s Section 807 claim, the Court accordingly dismisses the

TDCA § 392.301(a)(8) claim as well.

V. MCCORMICK ADEQUATELY PLEADS THE REST OF HER TDCA CLAIMS

The Court declines to dismiss the remainder of McCormick’s TDCA claims. None

of the Court’s previous findings with regard to the federal claims precludes McCormick from

establishing her state-law based complaints. McCormick claims that Defendants failed to

disclose clearly the name of the party to whom the debt has been assigned or is owed when

making a demand for money (Section 392.304(a)(4)); used a written communication that

fails to indicate clearly the name of the debt collector (Section 392.304(a)(6));

misrepresented the character, extent, or amount of a consumer debt (Section 392.304(a)(8));

used false representations or deceptive means to collect a debt (Section 392.304(a)(19)); or

represented that a consumer debt may be increased by the addition of service fees or other

charges unless authorized to do so by a written contract or statute (Section 392.304(a)(12)).

TEX. FIN. CODE ANN. § 392.304(a)(4), (6), (8), (12) (19) (Vernon 2006).

McCormick pleads sufficient facts through her incorporation of the collection letter

to support her claims under Sections 392.304(a)(4) and 392.304(a)(6). She also states a

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 6 of 10 PageID 1864
ORDER – PAGE 7

claim for misrepresentation and deceptive means in debt collection under TDCA §§

392.304(a)(8) and 392.304(a)(19), notwithstanding that the Court dismissed her similar

FDCPA claims. The Court dismissed the earlier federal claims because it found that CPRS

itself made no deceptive or misleading statements, and it had already dismissed claims

against the other Defendants for not qualifying as debt collectors. Order at 8. The Court

nonetheless agreed with McCormick’s contention that charging a $30.00 processing fee after

advertising only a $25.00 fee could be characterized as deceptive or misleading. Id. In this

instance, because McCormick has alleged facts to support 7-Eleven’s liability under the

TDCA, and alleged that signs in that store represented that no fee would exceed $25.00 on

any returned check, she presents a colorable claim for misrepresentation in debt collection

under TDCA §§ 392.304(a)(8) and 392.304(a)(19). Finally, McCormick’s claim under

Section 392.304(a)(12) corresponds in substance with her claim under Section 808(1) of the

FDCPA, which the Court earlier upheld. 

VI. MCCORMICK DOES NOT QUALIFY AS A DTPA CONSUMER BUT CAN

NONETHELESS SEEK RELIEF FOR DTPA VIOLATIONS INDIRECTLY

 McCormick cannot directly allege claims under the DTPA because she does not plead

facts qualifying her as a consumer under the statute. Only a “consumer” may maintain a

cause of action under the DTPA, as that term is defined in Section 17.45(4). Riverside Nat’l

Bank v. Lewis, 603 S.W.2d 169, 173 (Tex. 1980). To qualify as one, a plaintiff must (1) seek

or acquire goods or services by purchase or lease and (2) the goods or services sought or

acquired must form the basis of her complaint. Melody Homes Mfg. Co. v. Barnes, 741

S.W.2d, 351-52 (Tex. 1987). Presuming that the check McCormick wrote to 7-Eleven was

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 7 of 10 PageID 1865
ORDER – PAGE 8

for the purchase of goods, thereby satisfying the first requirement, she ultimately fails to

allege that these goods form the basis of her complaint. 

The basis of McCormick’s complaint is the fee collection on her defaulted check

which took place after her purchase. While the Court agrees with McCormick that the terms

upon which 7-Eleven purported to accept Plaintiff’s check clearly related to a transaction for

the purchase of goods, Response at 16 (emphasis added), this relationship is not substantial

enough. The Texas Supreme Court has held that when extension of credit is incident to the

sale of goods, and the conduct of the party who extended the credit is so “inextricably

intertwined” with the sale, both the seller and the lender are liable to the plaintiff under the

DTPA. See Knight v Int. Harvester Credit Corp., 627 S.W.2d 382, 388-89 (Tex. 1982). A

creditor may be inextricably intertwined in the transaction so as to confer consumer status

on a party if the extension of credit forms the means of making the sale or purchase from the

buyer's perspective. Brown v. Bank of Galveston, Nat. Ass’n, 930 S.W. 2d 140, 144 (Tex.

App. – Houston [14th Dist.] 1996), aff’d as modified, 963 S.W.2d 511 (Tex.1998), abrogated

on different grounds by Ford Motor Co. v. Ledesma, 242 S.W.3d 32 (Tex. 2007) (citing

Fleniken v. Longshore Bank & Trust Co., 661 S.W.2d 705 (Tex. 1983)). In Fleniken, the

bank’s financing was a precondition to the construction of the house, the “good” that those

Plaintiffs sought. In contrast, nothing in the McCormick’s Amended complaint suggests that

the defaulted check collection procedure in this case was a type of financing that made her

purchase of the 7-Eleven goods possible in the first place. The mere possibility of collection

on a defaulted check was thus not “inextricably intertwined” with any transaction for goods

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 8 of 10 PageID 1866
ORDER – PAGE 9

between McCormick and 7-Eleven, and McCormick fails to plead facts that could establish

her as a consumer vis-a-vis the Defendants for her DTPA claims.

McCormick’s DTPA claims nonetheless survive, because her allegations of deceptive

trade practices are actionable not only under the DTPA directly, but also pursuant to a

remedies provision of the TDCA, which provides “A violation of this chapter [the TDCA]

is a deceptive trade practice under Subchapter E, Chapter 17, Business & Commerce Code,

and is actionable under that subchapter.” TEX.FIN.CODE ANN.§ 392.404(a) (Vernon 2006),

referring to Subchapter E of the DTPA. McCormick brings claims under Section 17.46(b)(2),

(5), (12) and Section 17.50 (a)(3), all of which are within Subchapter E of the DTPA. See

TEX. BUS. & COM. CODE ANN. § 17 (Vernon 2006). There is nothing in the language of

TDCA § 392.404(a) that suggests it would incorporate the DTPA consumer standing

requirement. Such a requirement would render the TDCA meaningless as a separate remedy

for the same violations. Accordingly, though McCormick fails to plead consumer status

under the DTPA, her existing TDCA claims are actionable as DTPA violations through

TDCA § 392.404(a), with all appropriate remedies available under Subchapter E of the

DTPA and without regard to DTPA consumer status. 

VII. MCCORMICK STATES A CLAIM FOR BREACH OF CONTRACT 

McCormick adequately pleads the existence of a contract for purposes of a breach of

contract claim. Federal Rule of Civil Procedure 8(a) requires only a short and plain

statement of the claim showing that the pleader is entitled to relief. FED. R. CIV. P. 8(a)(2).

This requirement is designed to “give the defendant fair notice of what the plaintiff’s claim

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 9 of 10 PageID 1867
ORDER – PAGE 10

is and the grounds upon which it rests.” Gen. Elec. Capital Corp. V. Posey, 415 F.3d 391,

396 (5th Cir. 2005). McCormick’s statement in the Amended Complaint at ¶ 44 is sufficient

to give defendant fair notice of a breach of contract claim. McCormick alleges facts about

the sale transaction and signs at the 7-Eleven representing that collection fees on returned

checks would not exceed $25.00, Amended Complaint at ¶ ¶ 10, 10.1., allegations which

suffice to make the asserted breach of contract claim at least “plausible on its face.” Bell Atl.

Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007). 

CONCLUSION

Accordingly, for the reasons given above, the Court grants Defendants’ motion to

dismiss McCormick’s TDCA § 392.301(a)(8) claim and any claims brought directly under

the DTPA, but denies the motion to dismiss with regard to all other claims. Lastly, the Court

finds that declaratory relief under 28 U.S.C. § 2201 is unnecessary in this case, because

Plaintiff’s other claims will afford her full relief. Federal courts should refuse to grant

declaratory relief where another remedy will be more effective or appropriate under the

circumstances. Dresser Indus., Inc. v. Ins. Co. of N. America, 358 F. Supp. 327, 330 (N.D.

Tex. 1973). The Court accordingly grants the motion to dismiss McCormick’s declaratory

judgment claim. 

 Signed September 29, 2008.

_________________________________

David C. Godbey

United States District Judge

Case 3:06-cv-00127-N Document 140 Filed 09/29/08 Page 10 of 10 PageID 1868