Thomas v. Williams & Fudge, Inc.

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IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION
MARIA THOMAS, 	)
)
Plaintiff, 	)
)
v. 	) 	Case No. 2:25-cv-04292-MDH
)
WILLIAMS & FUDGE, INC., 	)
)
Defendant. 	)
ORDER
Before the Court is Defendant Williams & Fudge, Inc.’s Motion to Dismiss (Doc. 8).
Defendant filed Suggestions in Support (Doc. 9), Plaintiff filed Suggestions in Opposition (Doc.
10) and Defendant has filed a reply (Doc. 13). Additionally, before the Court is Plaintiff’s Motion
to Strike New Evidence and Arguments in Defendant’s Reply, or in the Alternative, for Leave to
File Sur-Reply. (Doc. 14). Defendant filed Suggestions in Opposition (Doc. 16) and Plaintiff has
filed a reply. (Doc. 17). Lastly, before the Court is Plaintiff’s Motion to Compel Scheduling
Conference. (Doc. 20). Defendant has not filed Suggestions in Opposition and the time to do so
has elapsed. The motions are now ripe for adjudication on the merits. For reasons herein,
Defendant’s Motion to Dismiss is GRANTED; Plaintiff’s Motion to Strike New Evidence and
Arguments in Defendant’s Reply is DENIED; Plaintiff’s Motion to File Sur-Reply is GRANTED;
and Plaintiff’s Motion to Compel Scheduling Conference is FOUND AS MOOT.
BACKGROUND
This case arises from an alleged violation of the Fair Debt Collection Practices Act
(“FDCPA”). Plaintiff Maria Thomas is a resident of Grandview, Missouri and Defendant Williams
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& Fudge, Inc is a South Carolina corporation with its principal place of business located in South
Carolina.
Plaintiff attended Benedictine College in the Fall of 2023 and paid for that semester using
personal funds and federal financial aid. Plaintiff enrolled in the Witner Semester at Benedictine
College in 2024 but dropped out after several weeks. Plaintiff alleges that the debt owed is for
attendance during the first few weeks of the Winter Semester in 2024. Plaintiff states that
Defendant attempted to collect a debt owed or due, due, or asserted to be owed or due to
Benedictine College. Plaintiff alleges that on September 18 and 19 of 2024, Defendant attempted
to collect a debt on behalf of Benedictine College, threatened Plaintiff that if she did not pay her
debt, her college transcripts will be withheld by Benedictine College. Plaintiff further alleges these
attempts at debt collection were illegal as the United States Department of Education enacted a
rule as of July 2024 that prohibits institutions from withholding transcripts for credits paid for with
federal financial aid. Plaintiff states that Defendant claims her transcript would be withheld if she
did not pay the debt from the Winter 2024 semester. Plaintiff argues that her tuition was paid for
with federal financial aid and that Defendant’s collection attempt sets forth a false representation
of the amount of debt allegedly owed in violation of the FDCPA.
Plaintiff brings her Complaint alleging one count of violations of the FDCPA. Defendant
subsequently brought its Motion to Dismiss arguing that Plaintiff’s Complaint fails to state a claim
upon which relief can be granted. Plaintiff additionally brings her Motion to Strike New Evidence
and Arguments in Defendant’s Reply, or, in the Alternative, for Leave to File Sur-Reply. The
Court will evaluate each motion.
STANDARD OF REVIEW
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A complaint must contain factual allegations that, when accepted as true, are sufficient to
state a claim of relief that is plausible on its face. Zutz v. Nelson, 601 F.3d 842, 848 (8th Cir. 2010)
(citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). The Court “must accept the allegations
contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving
party.” Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005) (internal citations omitted). The
complaint’s factual allegations must be sufficient to “raise a right to relief above the speculative
level,” and the motion to dismiss must be granted if the complaint does not contain “enough facts
to state a claim to relief that is plausible on its face.” Bell Atl. Corp v. Twombly, 550 U.S. 544, 545
(2007). Further, “the tenet that a court must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice.” Ashcroft, 556 U.S. at 678 (citing
Twombly, 550 U.S. at 555).
ANALYSIS
As the Motion to Strike and Motion to File Sur-Reply deal directly with Defendant’s
Motion to Dismiss, the Court will evaluate Plaintiff’s Motion to Strike first.
I. 	Motion to Strike
A. 	New Legal Theory
Plaintiff argues that the Defendant has engaged in procedural sandbagging. Specifically,
Plaintiff argues that the Defendant added a new legal theory in its reply; that federal regulations
are merely contractual and do not bind participants until a new form is signed. Plaintiff states that
it is well settled in the Eighth Circuit that a party may not raise new arguments or evidence for the
first time in the reply brief and thus the Court should strike these portions of Defendant’s reply.
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Defendant argues that its reply was proper supplementation and expanded its argument from its
Suggestions in Support. Defendant argues that in its Motion to Dismiss, it addresses the Program
Participation Agreement (“PPA”) and its application to Plaintiff’s allegations. Defendant argues
that 34 C.F.R. § 668.14(b)(34) is a contractual requirement rather than a regulatory requirement,
which expands its argument that the regulation is misplaced.
“As a general rule, [courts] will not consider arguments raised for the first time in a reply
brief. [Courts] are not precluded from doing so, however, particularly where the argument raised
in the reply brief supplements an argument raised in a party’s initial brief.” Gatewood v. City of
O’Fallon, Missouri, 70 F.4th 1076, 1080 (8th Cir. 2023) (quoting Carpenter’s Pension Fund of
Ill. v. Neidorff, 30 F.4th 777, 787 (8th Cir. 2022)). Further, “[w]hen courts have exercised their
authority to decline consideration of issues raised in reply briefs, they have typically done so out
of concern that the opposing party would be prejudiced by an advocate arguing an issue without
an opportunity for the opponent to respond.” Gatewood v. City of O’Fallon, Missouri, 70 F.4th
1076, 1080 (8th Cir. 2023) (quoting United States v. Head, 340 F.3d 628, 630 n.4 (8th Cir. 2003)).
The Court finds that Defendant’s argument relates back to its Motion to Dismiss and
Suggestions in Support. Defendant’s Suggestions in Support state:
Plaintiff contends [Williams & Fudge, Inc.]’s statements violate the FDCPA based
on federal regulations governing standards for participation in Title IV, HEA
programs. See 34 CFR § 668, et seq. These regulations provide that an institution
may participate in any Title IV, HEA program if the institution enters into a written
Program Participation Agreement with the Secretary of Education. 34 CFR §
668.14. By entering into a PPA, an institution agrees to a number of provision
including the two herein at issue[.]
(Doc. 9, page 4) (emphasis added). While Defendant did not explicitly make their argument
regarding whether the federal regulations do not bind participants until a new form is signed, the
plain language in Defendant’s Suggestions in Opposition is enough to supplement the implicit
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argument found within its Suggestions in Support. The Court finds that Defendant’s Reply brief
does not contain a new legal theory and thus Plaintiff’s Motion to Strike on that basis is DENIED.
B. 	Footnote
Plaintiff next argues that Defendant raised for the first time in its reply new extrinsic
evidence. Specifically, the Defendant introduces a website link and a specific date to argue a fact
not found in the Complaint. Defendant argues that the inclusion of the website link and specific
date are permissible and precludes Plaintiff from stating that 34 C.F.R. § 668(b)(34) applied when
Defendant made its statements to Plaintiff in mid-September. Further, Defendant argues that the
Court is permitted to take judicial notice of the contents of the record pursuant to Federal Rule of
Evidence 201.
Even if not filed with the pleadings “documents necessarily embraced by the complaint”
can be considered on a motion to dismiss. See Ashanti v. City of Golden Valley, 666 F.3d 1148,
1151 (8th Cir. 2012) (quoting Enervations, Inc. v. Minn. Mining & Mfg. Co., 380 F.3d 1066, 1069
(8th Cir. 2004)). “[M]aterials embraced by the complaint include documents whose contents are
alleged in a complaint and whose authenticity no party questions, but which are not physically
attached to the pleadings. Zean v. Fairview Health Servs., 858 F.3d 520, 526 (8th Cir. 2017)
(citation omitted). Separately, “[t]he district court may take judicial notice of public records and
may thus consider them on a motion to dismiss. Stahl v. U.S. Dep’t of Agric., 327 F.3d 697, 700
(8th Cir. 2003).
The website link and specific date are found in footnote 1 of Defendant’s Reply in Support
of its Motion to Dismiss and states in relevant part:
Plaintiff says the actionable statements occurred done September 18, 2024, and
September 19, 2024. See DE 1-1, ¶ 25. However, public records show Benedictine
College did not enter into a program participation agreement which included the
language in § 668(b)(34) until November 4, 2024. See https://studentaid.gov/data-
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center/school/ppa, hyperlink titled “PPA Statuses of Title IV Eligible Institutions
(last visited January 26, 2026). As a public record, the Court can take judicial notice
of the contents of this record pursuant to Fed. R. Evid. 201. The Court need not do
so, however, because of Plaintiff’s lack of allegations on this issue.
(Doc. 13, page 2, Fn. 1). Defendant’s footnote has a hyperlink that details the PPA statuses of Title
IV Eligible Institutions which helps supplement Defendant’s argument as raised in its Motion to
Dismiss and Suggestions in Support. 34 C.F.R. § 668.14 governs the PPA and states:
An institution may participate in any Title IV, HEA program, other than the LEAP
and NEISP programs, only if the institution enters into a written program
participation agreement with the Secretary, on a form approved by the Secretary. A
program participation agreement conditions the initial and continued participation
of an eligible institution in any Title IV, HEA program upon compliance with the
provisions of this part, the individual program regulations, and any additional
condition specified in the program participation agreement that the Secretary
requires the institution to meet.
The PPA is a public record that is necessarily embraced by the Complaint and may be judicial
noticed within a motion to dismiss without converting it into a summary judgment motion. The
Court finds that Defendant’s footnote in its reply does not raise new evidence and thus Plaintiff’s
Motion to Strike on that basis is DENIED. However, to ensure that Plaintiff does not suffer
inadvertent prejudice, the Court will GRANT Plaintiff’s Motion for Leave to File Sur-Reply and
will constructively consider Plaintiff’s Sur-Reply in Opposition to Defendant’s Motion to Dismiss
as filed. (Doc. 14-1).
II. 	Motion to Dismiss
Defendant argues that Plaintiff’s Complaint fails to state a claim upon which relief can be
granted. Specifically, Defendant argues that its alleged statements do not constitute false or
misleading representations under the FDCPA and the cited regulations do not prohibit transcript
withholding under the facts alleged. Defendant further argues that even if the cited regulations do
prohibit transcript withholding, the cited regulations do not apply to Defendant as it is not an
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institution. Lastly, Defendant argues that there is no private right of action available under the
regulation on which Plaintiff relies. The Court will take each of these arguments in turn.
A. 	False or Misleading Representations Under the FDCPA
Defendant argues that Plaintiff’s FDCPA claim fails as a matter of law as Defendant’s
alleged statements were not false, deceptive, or misleading. Defendant argues that Benedictine
College was within its rights to withhold Plaintiff’s transcript for the unpaid session. Defendant
further argues that its language is expressly conditional and merely relays what Benedictine
College would do, without embellishment or a threat of unlawful action. Plaintiff argues that the
FDCPA is virtually a strict-liability statute in that a consumer need not show that the debt collector
intended to deceive the Plaintiff, but rather an objective “unsophisticated-consumer” standard is
applied to determine if a statement is false or misleading under § 1692(c). Plaintiff argues that if a
policy conflicts with federal law, a collector who threatens to enforce it violates the Act, such as
in this case.
While the Eighth Circuit has not recognized specific elements to a violation of the FDCPA,
other courts within this district find that an FDCPA claims must meet three elements: “(1) the
plaintiff has been the object of collection activity arising from a consumer debt; (2) the defendant
is a debt collector as defined by the FDCPA; (3) the defendant has engaged in an act or omission
prohibited by the FDCPA.” Moon v. Portfolio Recovery Assocs., LLC, No. 4:23CV1195 JMB,
2024 WL 473770, at *3 (E.D. Mo. Feb. 7, 2024) (quoting Klein v. Stewart Zlimen & Jungers, Ltd.,
No. CV 18-658, 2019 WL 79317, at *3 (D. Minn. Jan. 2, 2019)). The FDCPA states that a debt
collector may not use false, deceptive, or misleading representations in the attempt to collect a
debt, including the threat to take any action that cannot legally be taken or that is not intended to
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be take. 15 U.S.C. § 1692e(5). 34 C.F.R. § 668.14 governs the PPA which sets for the standards
for participation in Title IV, HEA programs. This regulation was updated and effective starting
July 1, 2024, and states in relevant part:
It will not withhold official transcripts or take any other negative action against a
student related to a balance owed by the student that resulted from an error in the
institution’s administration of the title IV, HEA programs, or any fraud or
misconduct by the institution or its personnel;
Upon request by a student, the institution will provide an official transcript that
includes all the credit or clock hours for payment periods–[i]n which the student
received title IV, HEA funds; and [f]or which all institutional charges were paid
or included in an agreement to pay at the time the request is made[.]
34 C.F.R. § 668.14(b)(33)–(34) (emphasis added_.
Taking the allegations as true for the purposes of a motion to dismiss, Plaintiff has failed
to raise a right to relief above a speculative level. Here, Plaintiff’s Complaint alleges that:
Plaintiff attended and completed the Fall Semester of 2023 of college education at
Benedictine College and paid for that semester using personal funds as well as
fund[s] provided for by federal financial aid. Plaintiff enrolled in the Winter
Semester at Benedictine College in 2024 but dropped out after several weeks. The
debt that Plaintiff allegedly owes is for attendance of Benedictine College during
the first few weeks of the Winter Semester in 2024.
(Doc. 1-1, ¶¶ 20–22). Plaintiff concedes in her Complaint that the debt owed is for the Winter
Semester in 2024. By the plain language of 34 C.F.R. § 668.14(b)(34) it states that “the institution
will provide an official transcript that include all the credit or clock hours for payment periods …
for which all institutional charges were paid or included in an agreement to pay at the time the
request is made.” (emphasis added). Even taking Plaintiff’s Complaint in the light most favorable
to her, she has failed to show she complied with 34 C.F.R. § 668.14(b)(34). Plaintiff’s Complaint
further stated that:
On two occasions, September 18, 2024 and September 19, 2024, [Williams &
Fudge, Inc.] in an attempt to collect a debt on behalf of Benedictine College,
threatened Plaintiff that if she did not pay her debt, her college transcripts will be
withheld by Benedictine College.
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(Doc. 1-1, ¶ 25). The Court cannot say this statement by Defendant, as alleged in Plaintiff’s
Complaint, was false, deceptive, or misleading as Benedictine College had a right to withhold
Plaintiff’s transcript pursuant to payment or an agreement to pay. Further, as discussed above,
Plaintiff has not satisfied the conditions in 34 C.F.R. § 668.14(b)(34) and thus that regulation does
not provide Plaintiff protection from the collection efforts of Defendant. For the reasons stated,
Defendant’s Motion to Dismiss is GRANTED.
B. 	Other Arguments
The Court having granted Defendant’s Motion to Dismiss based on the rationale articulated
above, the Court will decline to analyze Defendant’s other arguments.
III. 	Motion to Compel Scheduling Conference
The Court having granted Defendant’s Motion to Dismiss will find as moot Plaintiff’s
Motion to Compel Scheduling Conference.
CONCLUSION
For the reasons set forth herein, Plaintiff’s Motion to Strike New Evidence and Arguments
in Defendant’s Reply is DENIED; Plaintiff’s Motion for Leave to File Sur-Reply is GRANTED;
Defendant’s Motion to Dismiss is GRANTED; and Plaintiff’s Motion to Compel Scheduling
Conference is FOUND AS MOOT.
IT IS SO ORDERED.
DATED: April 21, 2026
/s/ Douglas Harpool
DOUGLAS HARPOOL
UNITED STATES DISTRICT JUDGE
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