Williams v. Stellar Recovery Inc

Filing 100

MEMORANDUM OPINION AND ORDER - For the reasons above, the Court decertifies the plaintiff class and grants Mr. Williams's motion for summary judgment. (Doc. 92 ). On or before July 2, 2021, Mr. Williams may file a submission addressing the dama ges he seeks for the 11 TCPA violations that he has established. Mr. Williams should break out his damages evidence into ATDS damages evidence and prerecorded voice message damages evidence. Signed by Judge Madeline Hughes Haikala on 6/22/2021. (KEK)

FILED
2021 Jun-22 PM 12:49
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
ERIC K. WILLIAMS,

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PLAINTIFF,

v.

Case No.: 5:15-cv-01434-MHH

JOHN G. SCHANCK

DEFENDANT.

MEMORANDUM OPINION AND ORDER
This opinion is the most recent chapter in this long-running Telephone
Consumer Protection Act case. Mr. Williams has moved for summary judgment on
his individual TCPA claims. (Doc. 92). For the reasons explained below, the Court
decertifies the plaintiff class and grants Mr. Williams’s summary judgment motion.
I.
In June 2018, the Court granted Eric Williams’s motion to certify a plaintiff
class under Federal Rule of Civil Procedure 23(b)(2). (Doc. 47, p. 17). The Court
defined the certified class as:
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All individuals or entities within the United States who received
autodialed or prerecorded collection calls from Stellar relating to a Dish
Network account on a cellular phone number between April 10, 2011
and April 10, 2014, and who did not provide consent – either to Stellar
expressly or to Dish Network by providing a cellular number – to
receive autodialed or prerecorded calls on a cellular telephone number.
(Doc. 47, p. 17).
The class claims against Stellar included a claim for autodialed calls to a
cellular phone number without prior consent under 47 U.S.C. § 227(b)(1)(A)(iii), a
claim for artificial or prerecorded voice calls to a cellular phone number without
consent under 47 U.S.C. § 227(b)(1)(A)(iii), and a claim to enjoin both types of
TCPA violations under 47 U.S.C. § 227(b)(3)(A). (Doc. 47, p. 17).
The request for injunctive relief is moot now because Stellar has dissolved
and no longer operates. (See 06/14/2018 minute entry; Doc. 49-2, p. 2). During the
March 1, 2021 telephone conference in this matter, Mr. Williams acknowledged that
injunctive relief no longer is necessary.
Though the Court certified a plaintiff class several years ago, class counsel
has not sent notice to the class members. Mr. Williams has not taken steps to
advance his class claims since the Court certified the plaintiff class in 2018. During
the March 1, 2021 telephone conference in this matter, class counsel did not object
to an order dissolving the plaintiff class.

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Accordingly, the Court dissolves the plaintiff class and turns its attention to
Mr. Williams’s individual TCPA claims against Mr. Schanck.
II.
Mr. Williams has moved for judgment in his favor on his TCPA claims against
Mr. Schanck. (Doc. 92). Under Federal Rule of Civil Procedure 56, a district court
“shall grant summary judgment if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a). To demonstrate a genuine dispute as to a material fact
precluding summary judgment, the party opposing summary judgment must cite “to
particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations (including
those made for the purposes of the motion only), admissions, interrogatory answers,
or other materials.” FED. R. CIV. P. 56(c)(1)(A). When considering a motion for
summary judgment, a district court must view the evidence in the record in the light
most favorable to the non-moving party and draw reasonable inferences in the nonmoving party’s favor. White v. Beltram Edge Tool Supply, Inc., 789 F.3d 1188, 1191
(11th Cir. 2015). Accordingly, the Court will view the TCPA evidence in the light
most favorable to Mr. Schanck and will draw reasonable inferences in his favor.

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The TCPA “makes it illegal to ‘make any call … using any automatic
telephone dialing system or an artificial or prerecorded voice’ to ‘emergency
telephone line[s],’ to ‘guest room[s] or patient room[s] of a hospital,’ or ‘to any
telephone number assigned to a paging service[] or cellular telephone device’
without the ‘prior express consent of the called party.’” Glasser v. Hilton Grand
Vacations Co., LLC, 948 F.3d 1301, 1305 (11th Cir. 2020) (quoting 47 U.S.C. §
227(b)(1)(A)) (alterations in Glasser); see Facebook, Inc. v. Duguid, 141 S. Ct.
1163, 1167, 1173 (2021) (“The Telephone Consumer Protection Act of 1991
(TCPA) proscribes abusive telemarketing practices by, among other things,
imposing restrictions on making calls with an “automatic telephone dialing system.”
. . . The statute separately prohibits calls using “an artificial or prerecorded voice”
to various types of phone lines, including home phones and cell phones, unless an
exception applies.”) (quoting 47 U.S.C. § 227(a)(1) and 47 U.S.C. § 227(b)(1)(A)
and (B)). Accordingly, “to state a claim for a violation of the TCPA, a plaintiff must
set forth sufficient facts supporting that: (1) a call was made to a cell or wireless
phone, (2) by the use of an automatic dialing system or an artificial or prerecorded
voice, and (3) without prior consent of the called party.” Getz v. DIRECTV, LLC,
359 F. Supp. 3d 1222, 1230 (S.D. Fla. 2019) (emphasis in original); Meyer v.
Portfolio Recovery Assocs., 707 F.3d 1036, 1043 (9th Cir. 2012). Mr. Williams

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alleges that Stellar used an automatic telephone dialing system (ATDS) and left him
prerecorded voice messages on his cell phone without his consent.
In support of his motion for summary judgment, Mr. Williams relies on the
deposition testimony of Stellar’s 30(b)(6) corporate representative, Kendra
Vallarelli, and on Mr. Schanck’s admissions. 1 That evidence establishes that Stellar
placed calls to Mr. Williams’s cell phone. (Doc. 43-2, p. 4, tp. 119) (“Q: Now,
having reviewed the documents, will you agree with me that [redacted] is Mr.
Williams’ cellphone? A: That’s my understanding, yes.”); see also (Doc. 82-1, p. 9)
(Mr. Schanck’s admission that Stellar called Mr. Williams’s cell phone). The
evidence also establishes that Mr. Williams did not consent to Stellar’s calls. (Doc.
43-2, p. 9, tp. 140) (“Q: When you said there’s not consent, so Stellar admits that
Mr. Williams never gave them consent to call him on any of his numbers, did he?

1

In its January 29, 2021 memorandum opinion, the Court granted Mr. Williams’s motion to deem
Mr. Schanck’s admissions admitted. (Doc. 97, p. 10 n.5; see Doc. 85). The Court explained that
Mr. Schanck could ask to withdraw his admissions, but to do so, he would have to file a motion
consistent with Federal Rule of Civil Procedure 36. (Doc. 97, pp. 11–12). Mr. Schanck has not
filed a Rule 36 motion. Instead, he filed a motion to stay. (Doc. 98). The Court notes that since
2019, Mr. Schanck has filed numerous motions and documents, including his answer (Doc. 66),
his answer and affirmative defenses (Doc. 67), a motion for extension of time to find counsel (Doc.
73), a motion for judgment on the pleadings and motion for summary judgment (Doc. 86), a “notice
of responding requests for admissions” (Doc. 87), a notice of supplemental authority (Doc. 90),
and a response in opposition to Mr. Williams’s motion for summary judgment (Doc. 96). Mr.
Schanck has proven able to participate effectively in the litigation process. Yet, he has not availed
himself of the opportunity to file a Rule 36 motion to withdraw his admissions.

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A: That’s my understanding, yes.”); see also (Doc. 82-1, p. 9) (Mr. Schanck’s
admission that Mr. Williams did not give Stellar permission to call his cell phone).
The evidence shows that Stellar used an ATDS and left pre-recorded messages
when the company called Mr. Williams’s cell phone. Ms. Vallarelli testified that
Stellar used LiveVox as its “dialing technology” system, and LiveVox offered two
styles of dialing: RPC and QC. (Doc. 43-1, p. 7, tpp. 22, 24). 2 She explained that
“RPC, upon the outbound telephone call, will ask the person we’re calling to follow
some steps of verification before connecting it to an agent. QC makes the telephone
call connect and transfer to an agent.” (Doc. 43-1, p. 18, tpp. 67–68). She testified
that RPC and QC are ATDS devices. (Doc. 43-1, p. 18, tp. 67); see also (Doc. 821, p. 9) (Mr. Schanck’s admission that Stellar’s telephone system was capable of
automatically dialing telephone numbers).
Stellar’s records show that it placed six calls to Mr. Williams using the RPC
LiveVox system. (Doc. 9-1, pp. 2–4). These calls were placed at: 11:41 a.m. on
April 2, 2014; 8:30 a.m. on April 5, 2014; 7:54 a.m. on April 8, 2014; 12:53 p.m. on
April 8, 2014; 10:14 a.m. on April 10, 2014; and 5:44 p.m. on April 10, 2014.
(Doc.91-1, pp. 2–4). With respect to prerecorded messages, Ms. Vallerelli admitted
that Stellar left Mr. Williams prerecorded messages on April 2, 2014 at 7:05 p.m.;

2

RPC stands for “Right Party Connect,” and QC stands for “Quick Connect.” (Doc. 43-1, p. 18,
tp. 67).

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April 3, 2014 at 11:21 a.m.; April 4, 2014 at 8:34 a.m.; April 7, 2014 at 12:28 p.m.;
and April 9, 2014 at 11:19 a.m. (Doc. 43-3, pp. 15–16, tpp. 241–42).3 Stellar
intended to make those calls and intended to call Mr. Williams when it left the prerecorded messages on his voicemail. (Doc. 43-3, p. 16, tp. 243).
In response to Mr. Williams’s motion for summary judgment, Mr. Schanck
makes three arguments:
Plaintiff has not overcome my affirmative defenses filed Oct 2,
2019.
Plaintiff has no proof that I can be personally liable for alleged
TCPA violations and I recently filed cases on this topic.
Plaintiff has no proof the dialer is an automatic telephone dialing
system as defined in the 11th circuit. There is no proof or even
allegation the number dialed was randomly generated. IN [sic] fact,
it is the opposite. The evidence is the number was obtained from a
scrub vendor.
(Doc. 96, p. 1).

3

The Court notes that the times identified in the deposition do not align perfectly with the times
on Stellar’s call sheet, but this does not create a genuine dispute of material fact. The timing of
the calls is not material. Whether the calls were made at 3:00 a.m. or 3:00 p.m., a prerecorded call
violates the statute. Ms. Vallarelli admitted that each call was a prerecorded call, so Stellar is
liable for those calls.
Additionally, the timing of the calls reflected on Stellar’s call sheet are a close approximation of
the times in the deposition. For example, Ms. Vallarelli testified that there was a prerecorded call
on April 4, 2014 at 8:34 a.m. local time (7:34 a.m. CST). (Doc. 43-3, p. 16, tp. 242). The call
sheet reflects a call at 7:33 a.m. on April 4, 2014, off by one minute. (Doc. 91-1, p. 2). Each of
the five prerecorded calls listed on Stellar’s sheet is off by one minute from the deposition
testimony. These discrepancies do not preclude summary judgment.

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As to Mr. Schanck’s final point, as noted, Stellar’s 30(b)(6) corporate
representative stated that Stellar used an ATDS, and Mr. Schanck admitted as much.
The Eleventh Circuit Court of Appeals recently noted that “[t]he statute . . . applies
to devices that have the ‘capacity’ to identify randomly generated numbers; it does
not require that capacity to be used in every covered call.” Glasser, 948 F.3d at
1312. So, Mr. Williams does not have to prove that Stellar’s ATDS identified his
cell phone number randomly; he needs to show that only that Stellar’s ATDS had
the capacity to identify randomly generated numbers.

Because the evidence

establishes that Stellar’s LiveVox system, using RPC and QC, was an ATDS, Mr.
Williams has demonstrated that Stellar placed calls to his cell phone, using an ATDS
for some calls and leaving prerecorded messages during others, and that Stellar did
so without his consent.
As to Mr. Schanck’s personal liability for Stellar’s misconduct, Mr. Williams
has not cited, and the Court has not found, binding authority that indicates whether
a company officer or director may be held liable personally for his company’s TCPA
violations. In Salcedo v. Hanna, 936 F.3d 1162 (11th Cir. 2019), a TCPA case, the
Eleventh Circuit mentioned in a footnote that “[f]or simplicity, and without implying
any view as to Mr. Hanna’s possible personal liability, throughout this opinion we
will refer to both defendants—Mr. Hanna and his law firm—collectively as
‘Hanna.’” 936 F.3d at 1165 n.1. Though it did not explicitly endorse personal
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liability of company officers in TCPA cases, the Eleventh Circuit did not reject
personal liability either.
“[C]ourts that have addressed the issue have concluded that individuals acting
on behalf of a corporation may be held personally liable for violations of [the TCPA]
if they ‘had direct, personal participation in or personally authorized the conduct
found to have violated the statute.’” Maryland v. Universal Elections, 787 F. Supp.
2d 408, 416 (D. Md. 2011) (quoting Texas v. Am. Blastfax, 164 F. Supp. 2d 892, 898
(W.D. Tex. 2001)); see also Covington & Burling v. Int’l Mktg. & Research, Inc.,
No. Civ.A. 01-0004360, 2013 WL 2138425, at *6 (D.C. Super. Ct. Apr. 17, 2003)
(Corporate officers may be liable for the corporation’s acts, and “[a]s the only
corporate officers of Fax.Com, [the individual defendants] set company policies and
oversee day-to-day operations. Therefore, they are clearly involved in the business
practices that led to Covington receiving 1,634 unsolicited faxes in a five day
period.”).
In Mais v. Gulf Coast Collection Bureau, Inc., No. 11-61936-Civ., 2013 WL
1283885 (S.D. Fla. Mar. 27, 2013), the district court reasoned that for an individual
defendant to be held liable for a company’s TCPA violation, the plaintiff “would
have to show that [he] failed to take efforts to implement appropriate policies or
procedures designed to comply with the TCPA, or that he authorized or personally
engaged in conduct that clearly violated the TCPA.” Mais, 2013 WL 1283885, at
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*4. Because the plaintiff offered no facts showing the individual defendant’s
involvement in implementing TCPA-compliant policies or procedures, the district
court was “unwilling to find a corporate officer individually liable where he
attempted to implement policies that complied with the statute and did not have any
direct participation in the allegedly violative conduct, even if the corporation is itself
liable. To hold otherwise, would countenance personal liability for corporate
officials too easily.” Mais, 2013 WL 1283885, at *4. But the district court opined
that “officers may be held personally liable when they ‘directly participate in or
authorize the commission of a wrongful act, even if the act is done on behalf of the
corporation[.]’” Mais, 2013 WL 1283885, at *4 n.1 (quoting Am. Blastfax, 164 F.
Supp. 2d at 898).
Our facts align more closely with the facts in Covington & Burling than the
facts in Mais. Mr. Schanck knew of, approved of, and signed off on Stellar’s TCPA
practices. (Doc. 82-1, p. 10, ¶¶ 11–13). He was the Chairman and Chief Executive
Officer of Stellar. (Doc. 82-1, p. 10, ¶¶ 6–9; see also Doc. 43-1, p. 8, tp. 26; Doc.
49-2, p. 2). He was involved in the operations of Stellar, including liquidating its
accounts receivable in March 2018 to satisfy a creditor. (Doc. 62, p. 1; Doc. 62-1,
p. 1). The evidence does not support Mr. Schanck’s claim that he was simply an
investor during the life of Stellar. (See Doc. 87, pp. 3–4). Rather, the evidence
shows that Mr. Schanck oversaw Stellar, including its TCPA practices. Like the
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defendants in Covington & Burling, Mr. Schanck was “clearly involved in the
business practices” that led to the TCPA violations.
Because the evidence shows that Mr. Schanck personally oversaw and
approved of conduct that violated the TCPA, Mr. Schanck is personally liable for
Stellar’s TCPA violations. Accordingly, the Court will enter judgment in favor of
Mr. Williams and against Mr. Schanck personally as to the 11 calls that violated the
TCPA.
Conclusion
For the reasons above, the Court decertifies the plaintiff class and grants Mr.
Williams’s motion for summary judgment. (Doc. 92). On or before July 2, 2021,
Mr. Williams may file a submission addressing the damages he seeks for the 11
TCPA violations that he has established. Mr. Williams should break out his damages
evidence into ATDS damages evidence and prerecorded voice message damages
evidence.4

4

On April 1, 2021, the Supreme Court issued its opinion in Facebook, Inc. v. Duguid, 141 S. Ct.
1163 (2021). In that case, the Supreme Court “granted certiorari to resolve a conflict among the
Courts of Appeals regarding whether an autodialer must have the capacity to generate random or
sequential phone numbers.” Duguid, 141 S. Ct. at 1168–69. The Supreme Court held that
“Congress’ definition of an autodialer requires that in all cases, whether storing or producing
numbers to be called, the equipment in question must use a random or sequential number
generator.” Duguid, 141 S. Ct. at 1170. “[A] necessary feature of an autodialer under [47 U.S.C.]
§ 227(a)(1)(A) is the capacity to use a random or sequential number generator to either store or
produce phone numbers to be called.” Duguid, 141 S. Ct. at 1173. Because Stellar has admitted
that its devices are ATDS devices for purposes of the TCPA, and because Mr. Schanck has not

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DONE and ORDERED this June 22, 2021.

_________________________________
_____________________________
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE

tried to withdraw his admissions since the Court offered the opportunity more than four months
ago, the Court will not reopen the autodialer issue in this case. Should an appellate court find error
in the autodialer analysis in this case, that error will not impact Stellar’s prerecorded voice TCPA
violations.

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