     Case: 13-10886      Document: 00512645153         Page: 1    Date Filed: 05/29/2014




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                          United States Court of Appeals
                                                                                   Fifth Circuit
                                    No. 13-10886                                 FILED
                                  Summary Calendar                           May 29, 2014
                                                                            Lyle W. Cayce
                                                                                 Clerk
ISRAEL GARCIA, JR.; MELISSA R. GARCIA,

                                                 Plaintiffs - Appellants
v.

JENKINS BABB, L.L.P.; ROBERT EDISON JENKINS; MICHAEL JASON
BABB,

                                                 Defendants - Appellees




                   Appeal from the United States District Court
                        for the Northern District of Texas
                             USDC No. 3:11-CV-3171


Before DAVIS, SOUTHWICK, and HIGGINSON, Circuit Judges.
PER CURIAM:*
       Plaintiff Israel Garcia, Jr., and his wife Melissa R. Garcia appeal from
an interlocutory judgment in favor of the Defendants arising out of their role
in the collection of debt owed to Wells Fargo Bank. We AFFIRM.
       Sometime before November 2010, the Garcias allegedly incurred a debt
to Wells Fargo Bank. On November 17, 2010, the Garcias received a collection



       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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letter from the Dudley Law Firm. The attorneys were acting on behalf of
Primary Financial Services. They instructed the Garcias to make prompt
arrangements to pay off a debt of $17,018.68. The Garcias allegedly responded
by demanding validation of the debt but received no reply. On January 14,
2011, a different collection agency, Jenkins/Babb, LLP, sent the Garcias a
second letter demanding they begin paying on a personal loan account with
Wells Fargo Bank, this time indicating that $15,954.32 would satisfy their
indebtedness. This letter, as did the first, threatened suit if the Garcias failed
to comply.
      Noticing the discrepant debt amounts cited in the two letters, the
Garcias replied to Jenkins/Babb with a copy to the Dudley firm, demanding
that it stop all collection action and provide them with proof of their debt.
Jenkins/Babb provided the Garcias with documents related to their loan. On
March 31, 2011, Jenkins/Babb initiated a collection action against the Garcias
in state court on behalf of Wells Fargo Bank. A judgment against the Garcias
was entered. The Garcias responded with their own suit in federal court
against the companies and individuals involved in the attempted collection of
this debt. This appeal pertains strictly to Defendants Jenkins/Babb, Robert
Jenkins, and Jason Babb (collectively, the “Jenkins Defendants”).
      In their initial complaint, the Garcias alleged that the Jenkins
Defendants’ attempts to collect the debt owed to Wells Fargo Bank violated the
Federal Debt Collection Practices Act (“FDCPA”), Texas Debt Collection
Practices Act (“TDCPA”), and a related provision of the Texas Deceptive Trade
Practices Act (“TDTPA”).     The Jenkins Defendants moved to dismiss the
complaint, arguing that the Garcias failed to state a claim against them. The
magistrate judge agreed and recommended dismissal of all claims. The district
judge, however, allowed the Garcias to amend their complaint out of concern
they had failed to present their best case. The Garcias filed another complaint,
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and the Jenkins Defendants again moved to dismiss.           The district judge
accepted the magistrate judge’s renewed recommendation that the claims be
dismissed with prejudice. Appeal is proper because judgment was entered
pursuant to Federal Rule of Civil Procedure 54.
                                  DISCUSSION
      We review a district court’s grant of a motion to dismiss de novo. In re
Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). To overcome
a motion to dismiss, a plaintiff’s complaint must contain “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). “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).     “Threadbare recitals of elements of a cause of action” and
“conclusory statements” are no substitute for factual content. Id.
      I.      Fair Debt Collection Practices Act claims
      The Garcias first alleged that the Jenkins Defendants violated the
FDCPA.       Only financial obligations incurred for purchases “primarily for
personal, family, or household purposes” qualify as consumer “debt” subject to
the rules and regulations of the FDCPA.          15 U.S.C. § 1692a(5).     When
determining the type of debt at issue for the purposes of the FDCPA, courts
focus on the precise transaction for which the loan proceeds were used, not the
purpose for which an account was opened or the label of the ongoing obligation.
See Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, LLC, 214 F.3d
872, 875 (7th Cir. 2000). Focusing on the nature of the purchase or transaction
comports with the FDCPA’s intent to regulate “debt collection tactics employed
against personal borrowers,” who, unlike commercial borrowers, are more
likely to fall “prey to unscrupulous collection methods.”      Id. (emphasis in
original).
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       The Garcias, who are proceeding pro se on appeal, accuse the district
court of misinterpreting their arguments and citing to inapplicable case law.
These arguments mostly fail to address the district court’s critical finding,
which was that the third amended complaint lacked any facts to suggest that
the Garcias’ debt was incurred through a consumer transaction. 1 See 15 U.S.C.
§ 1692a(5). The Garcias briefly argue that the district court erred by not
relying on their allegation that their financial obligation arose out of “a
transaction in which the money, property, insurance, or services that are the
subject of the transaction were incurred primarily for personal, family, or
household purposes” was enough to establish their claim. The district court
was correct, though, because the third amended complaint’s recitation of
Section 1692a(5)’s key phrase, without any accompanying factual content, is
exactly the sort of “threadbare recital of a cause of action” that cannot survive
the motion to dismiss. Iqbal, 556 U.S. at 678.
       We have reviewed the third amended complaint for facts to support the
Garcias’ conclusory allegation. There are none. The third amended complaint
describes the defendants’ attempt to collect the debt but the original
transaction is not described. Even in their briefing, the Garcias attack the
district court’s opinion but give no indication what item was purchased or what
service was paid for, much less explain how the item or service was intended
for personal or family use. The district court gave the pro se Garcias ample
opportunity to plead their best case, yet the Garcias fail to identify facts
fundamental to their FDCPA claims. Accordingly, the district court did not err
in dismissing these claims with prejudice.




       1 The district court also found that Jason Babb could not be individually or vicariously
liable for the acts of the LLC. We choose not to review this issue in light of our finding that
the Garcias’ FDCPA claim had another flaw.
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      II.    Texas Debt Collection Practices Act and Texas Deceptive Trade
             Practices Act claims
      The Garcias also attempted to assert a stand-alone claim against the
Jenkins Defendants under the catch-all provision of the TDCPA, and other
unspecified violations made actionable through the TDCPA’s tie in with the
TDTPA. See TEX. FIN. CODE. ANN. §§ 392.304(a)(19) & 392.404(a). They also
invoked the TDTPA’s complimentary provision granting a private right of
action to consumers harmed by violations of the TDCPA. TEX. BUS. & COM.
CODE ANN. § 17.50(b).       The TDCPA, like its federal counterpart, defines
consumer debt as “an obligation, or an alleged obligation, primarily for
personal, family, or household purposes and arising from a transaction or
alleged transaction.” TEX. FIN. CODE. ANN. § 392.001(2); see also Guajardo v.
GC Servs., LP, 498 F. App’x 379, 382 (5th Cir. 2012). Similarly, “to qualify as
a consumer [under the TDTPA], ‘a person must have sought or acquired goods
or services by purchase or lease’ and ‘the goods and services purchased or
leased must form the basis of the complaint.’” Hurd v. BAC Home Loans
Servicing, LP, 880 F. Supp. 2d 747, 765 (N.D. Tex. 2012) (quoting Cameron v.
Terrell & Garrett, 618 S.W.2d 535, 539 (Tex. 1981)).
      With respect to these state law claims, the district court determined that
the Garcias’ reliance on Section 392.304(a)(19) of the TDCPA failed because
they did not allege facts to support their allegation that the Jenkins
Defendants used “false representations” or “deceptive means” in their
collection efforts.   See TEX. FIN. CODE. ANN. §§ 392.304(a)(19). The Garcias
take issue with this finding, arguing that their reference to the different
amounts requested in the first and second letter was a fact that qualifies as
false or deceptive. We agree with the district court that this factual allegation
alone does not constitute deception. The Garcias do not, for instance, allege
that the amount requested by the Jenkins Defendants in their collection letter

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was false. After reviewing the third amended complaint, we find a history of
the defendants’ collection efforts but nothing that rises to the level of a false,
fraudulent, or deceptive collection technique.
      The Garcias’ TDCPA stand-alone claims and their claims through its tie-
in provision fail for the same reason as their federal claims. For a collection
practice to be actionable under the TDCPA, the debt at issue must arise out of
a consumer transaction. See TEX. FIN. CODE. ANN. § 392.001(2). The TDTPA
independently contains a similar requirement. See Hurd, 880 F. Supp. 2d at
765. Because the Garcias never alleged facts to support their allegation that
their financial obligation arose out of a transaction primarily for personal or
family use, the district court correctly concluded that they did not allege facts
sufficient to support their state law claims.
      AFFIRMED.




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