Abante Rooter & Plumbing v. Farmers Group, Inc.

Filing 39

ORDER by Judge Phyllis J. Hamilton granting 28 Motion to Dismiss. (pjhlc2, COURT STAFF) (Filed on 1/4/2018)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

ABANTE ROOTER & PLUMBING,

8

Plaintiff,

9
10

United States District Court
Northern District of California

11

v.

Case No. 17-cv-03315-PJH
ORDER GRANTING MOTION TO
DISMISS

FARMERS GROUP, INC.,

Re: Dkt. No. 28

Defendant.

12
13
14

Defendant Farmers Group, Inc.’s (“Farmers Group”) motion to dismiss came on for

15

hearing before this court on December 20, 2017. Plaintiff Abante Rooter & Plumbing

16

(“Abante”) appeared through its counsel, Yana Hart. Defendant appeared through its

17

counsel, Randall Hack. Having read the papers filed by the parties and carefully

18

considered their arguments and the relevant legal authority, and good cause appearing,

19

the court hereby GRANTS defendant’s motion to dismiss without prejudice, for the

20

following reasons.
BACKGROUND

21
22

This putative class action asserts two causes of action against Farmers Group for

23

negligently and willfully violating the Telephone Consumer Protection Act, 47 U.S.C.

24

§ 227 (“TCPA”). Abante, a California corporation, alleges that on four occasions over an

25

approximately one-year period its employees received calls from defendant on plaintiff’s

26

cellular phones and that those calls were made using an automatic telephone dialing

27

system (“ATDS”).

28

The parties do not dispute that Farmers Group itself does not sell insurance in

1
2

California. See also Dkt. 29-2 (California Department of Insurance website showing no

3

results for “farmers group”).1 The parties also do not appear to dispute that other

4

insurance companies sell insurance policies under the “Farmers” service mark.

5

Based on the factual allegations described next, plaintiff claims it suffered

6

economic injury because its employees were distracted from work, compelled to answer

7

calls, and because plaintiff pays the cellular phone bill covering the phones that received

8

the calls. FAC ¶ 61. Plaintiff further alleges that the calls violated its privacy and were a

9

nuisance. FAC ¶ 61.
On September 20, 2016, one of plaintiff’s employees answered a call and, “after a

10

United States District Court
Northern District of California

11

prolonged delay,” a “representative” identified herself as “Rosie, an assistant for Kip

12

Fuller, calling on behalf of Farmers Insurance.” FAC ¶¶ 14-16. Rosie asked if “plaintiff

13

would be interested in procuring Farmers Insurance services.” FAC ¶ 16.
On September 27, 2016, plaintiff received two calls purportedly from defendant’s

14
15

representatives. FAC ¶¶ 18, 19. After the first caller identified herself as calling on

16

behalf of defendant, plaintiff disconnected the call. FAC ¶ 18. During the second call

17

that day, plaintiff asked defendant’s representative, Nina, whether she was calling from

18

her home office. FAC ¶ 20. Nina replied that she was. FAC ¶ 20. Plaintiff alleges that

19

this shows defendant was making calls via a computer system since the Caller ID

20

reflected a Farmers office number. FAC ¶ 20.
Plaintiff next alleges that on October 12, 2016, plaintiff sent emails to two accounts

21
22

that Nina provided, one to Fuller and one to “[e-mail].” FAC ¶¶ 21-22.

23

Those emails stated that plaintiff had provided no consent to the calls and the calls were

24

unwelcome. Id. Plaintiff does not allege whether anyone responded to those emails.

25
26
1

27
28

Under Federal Rule of Evidence 201(b)(2), the court takes judicial notice of Exhibit B, a
printout from the California Department of Insurance. See Allen v. Hyland’s Inc., 300
F.R.D. 643, 656 (C.D. Cal. 2014). Because the court finds it unnecessary to rely on or
consider the other exhibits, defendant’s request as to those exhibits is denied.
2

1

On October 26, 2016, one of plaintiff’s employees again received a call from Nina,

2

who asked if plaintiff would be interested in procuring Farmers insurance. FAC ¶ 24.

3

Plaintiff’s employee answered that call and again “spoke with Nina who asked if plaintiff

4

would be in procuring Farmers Insurance services for a discounted price.” FAC ¶ 25.

5

Though plaintiff alleges that defendant “continued placing calls sometime in
August 2017” via an ATDS, plaintiff only includes allegations about a call made in early

7

August 2017. FAC ¶¶ 26, 28. With regards to that call, after answering and “hearing a

8

pause and a delay,” defendant’s representative identified herself as Grace and asked if

9

plaintiff would be interested in Farmers insurance. FAC ¶ 28. For the sole purpose of

10

stopping the solicitation calls, plaintiff said he was interested and arranged a time to be

11
United States District Court
Northern District of California

6

called by Windell Williams, a Farmers Insurance agent. FAC ¶ 29.

12

Plaintiff spoke with Williams on August 10, 2017. FAC ¶¶ 30-37. Williams stated

13

that he was a Farmers Insurance representative. FAC ¶ 33. Williams’ telephone

14

recording states that Williams is “from Farmers Insurance” and Williams is listed on

15

defendant’s website as a Farmers Insurance Agent. FAC ¶¶ 34, 40. During the call,

16

Williams allegedly stated that the “other agents were Farmers agents calling from a call

17

center using an auto dialed system.” FAC ¶ 37.

18

Plaintiff alleges he did not have a previous relationship with defendant and never

19

provided written consent to receive any of the above solicitation calls. FAC ¶ 54. Plaintiff

20

also alleges that the number defendant called was assigned to a cellular telephone

21

service for which plaintiff incurs a charge for incoming calls. FAC ¶ 53. Plaintiff,

22

however, does not allege it pays per call received.

23

Plaintiff also makes a number of other conclusory allegations. Plaintiff alleges that

24

defendant encouraged, directed, and authorized the above representative and others to

25

place marketing calls to acquire business for Farmers Insurance. FAC ¶ 41. Plaintiff

26

also alleges that to avoid liability, defendant outsources marketing calls to third parties

27

but allows the third parties, including the above representatives, to identify themselves

28

and associate with Farmers Insurance. FAC ¶¶ 42, 49. Upon information and belief,
3

1

plaintiff alleges that the marketing agreements between defendant and its representatives

2

contemplate telemarketing. FAC ¶ 50.

3

Lastly, plaintiff makes a number of allegations aimed at satisfying the elements of

4

its TCPA claim. Plaintiff alleges that the ATDS utilized by defendant has the capacity to,

5

and does, call telephone numbers automatically and without human intervention. FAC

6

¶ 52. In an apparent attempt to show agency, plaintiff asserts that persons receiving

7

calls from defendant’s representatives believed that defendant had authorized the calls

8

and that defendant knew or should have known that its agents were using an ATDS but

9

failed to take any effective steps to stop that conduct. FAC ¶¶ 43-45.
According to plaintiff, the above conduct makes defendant directly and vicariously

10

United States District Court
Northern District of California

11

liable under the TCPA.
DISCUSSION

12
13

A.

Legal Standard

14

1.

Telephone Consumer Protection Act

15

“The TCPA makes it unlawful, in part, ‘to make any call (other than a call made for

16

emergency purposes or made with the prior express consent of the called party) using

17

any automatic telephone dialing system or an artificial or prerecorded voice . . . to any

18

telephone number assigned to a . . . cellular telephone service, . . . unless such call is

19

made solely to collect a debt owed to or guaranteed by the United States.’ 47 U.S.C. §

20

227(b)(1)(A). An aggrieved person may bring an action to enjoin a violation of this

21

provision or to seek actual or statutory damages. See id. § 227(b)(3). Statutory

22

damages are $500 per violation. See id. § 227(b)(3)(B). If a violation is willful or

23

knowing, a court may treble the award. See id. § 227(b)(3).” Chen v. Allstate Ins. Co.,

24

819 F.3d 1136, 1139 (9th Cir. 2016).

25

“The three elements of a TCPA claim are: (1) the defendant called a cellular

26

telephone number; (2) using an automatic telephone dialing system; (3) without the

27

recipient's prior express consent. 47 U.S.C. § 227(b)(1).” Meyer v. Portfolio Recovery

28

Assocs., LLC, 707 F.3d 1036, 1043 (9th Cir. 2012).
4

1

2.

Motion To Dismiss For Failure To State A Claim

2

A motion to dismiss under Rule 12(b)(6) tests for the legal sufficiency of the claims

3

alleged in the complaint. Ileto v. Glock, 349 F.3d 1191, 1199-1200 (9th Cir. 2003).

4

Under Federal Rule of Civil Procedure 8, which requires that a complaint include a “short

5

and plain statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ.

6

P. 8(a)(2), a complaint may be dismissed under Rule 12(b)(6) if the plaintiff fails to state a

7

cognizable legal theory, or has not alleged sufficient facts to support a cognizable legal

8

theory. Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013).

9

While the court is to accept as true all the factual allegations in the complaint,
legally conclusory statements, not supported by actual factual allegations, need not be

11
United States District Court
Northern District of California

10

accepted. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The complaint must proffer

12

sufficient facts to state a claim for relief that is plausible on its face. Bell Atlantic Corp. v.

13

Twombly, 550 U.S. 544, 555, 558-59 (2007) (citations and quotations omitted).

14

A claim has facial plausibility when the plaintiff pleads factual content that allows

15

the court to draw the reasonable inference that the defendant is liable for the misconduct

16

alleged.” Iqbal, 556 U.S. at 678 (citation omitted). “[W]here the well-pleaded facts do not

17

permit the court to infer more than the mere possibility of misconduct, the complaint has

18

alleged—but it has not ‘show[n]’—that the pleader is entitled to relief.’ ” Id. at 679.

19

Where dismissal is warranted, it is generally without prejudice, unless it is clear the

20

complaint cannot be saved by any amendment. Sparling v. Daou, 411 F.3d 1006, 1013

21

(9th Cir. 2005).

22

Review is generally limited to the contents of the complaint, although the court can

23

also consider a document on which the complaint relies if the document is central to the

24

claims asserted in the complaint, and no party questions the authenticity of the

25

document. See Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). The court may

26

consider matters that are properly the subject of judicial notice, Knievel v. ESPN, 393

27

F.3d 1068, 1076 (9th Cir. 2005); Lee v. City of L.A., 250 F.3d 668, 688-89 (9th Cir. 2001),

28

and may also consider exhibits attached to the complaint, see Hal Roach Studios, Inc. v.
5

1

Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1989), and documents

2

referenced extensively in the complaint and documents that form the basis of a the

3

plaintiff's claims. See No. 84 Emp'r-Teamster Jt. Counsel Pension Tr. Fund v. Am. W.

4

Holding Corp., 320 F.3d 920, 925 n.2 (9th Cir. 2003).

5

B.

Standing
Defendant first argues that plaintiff does not have standing to sue under the TCPA

6
7

because plaintiff has not adequately alleged a concrete harm. Specifically, defendant

8

argues that under California law, corporations do not have a right to privacy and therefore

9

plaintiff has not alleged a cognizable injury.
The court need not reach defendant’s argument because plaintiff has also alleged,

10

United States District Court
Northern District of California

11

and defendant all but ignores, a cognizable economic injury. Plaintiff alleges that it lost

12

employee time as a result of plaintiff’s employees receiving and answering the calls.

13

FAC ¶ 61. The diversion of employee time is a concrete injury that confers standing.

14

See Booth v. Appstack, Inc., No. 13-1533C, 2016 WL 3030256, at *5 (W.D. Wash. May

15

25, 2016) (finding injury under Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016),

16

when plaintiff alleged “waste[d] time answering or otherwise addressing robocalls”).

17

C.

Plaintiff Has Not Stated A Claim Under the TCPA

18

“The three elements of a TCPA claim are: (1) the defendant called a cellular

19

telephone number; (2) using an automatic telephone dialing system; (3) without the

20

recipient’s prior express consent. 47 U.S.C. § 227(b)(1).” Meyer, 707 F.3d at 1043.
Defendant Did Not “Make” the Alleged Calls

21

1.

22

For a person to “make” a call under the TCPA, the person must either (1) directly

23

make the call, or (2) have an agency relationship with the person who made the call.

24

Gomez v. Campbell-Ewald Co., 768 F.3d 871, 877-79 (9th Cir. 2014). Defendant

25

contends that plaintiff has failed to establish this element under either theory. The court

26

agrees. Plaintiff’s complaint is devoid of factual allegations from which the court could

27

infer defendant controlled or could control the representatives.

28

a.

Direct Liability
6

1

Plaintiff has not alleged facts showing that Farmers Group made the calls or that

2

the callers were calling on behalf of or were employed by Farmers Group, as opposed to

3

some other entity. A number of representatives stated they were calling on behalf of

4

“Farmers Insurance,” i.e., not the defendant, or inquired whether plaintiff was interested

5

in Farmers insurance. See, e.g., FAC ¶ 16, 28. These allegations do not support an

6

inference that the representatives were employed by defendant. The same goes for

7

plaintiff’s conclusory allegations that the representatives were calling “on behalf of

8

Defendant,” see, e.g., ¶ 18, and allegations that baldly assert the caller was a

9

representative of defendant, see, e.g., ¶ 19 (“Defendant’s representative Nina called”).
b.

10

United States District Court
Northern District of California

11

Vicarious Liability

“[A] defendant may be held vicariously liable for TCPA violations where the plaintiff

12

establishes an agency relationship, as defined by federal common law, between the

13

defendant and a third-party caller.” Gomez, 768 F.3d at 879. “The existence of an

14

agency relationship generally presents a question of fact.” Ward v. Mgmt. Analysis Co.,

15

135 F.3d 1276, 1283 (9th Cir. 1988) aff’d in part, rev’d in part on other grounds UNUM

16

Life Ins. Co. of Am. v. Ward, 526 U.S. 358 (1999). That, however, does not imply that

17

mere assertions of an agency relationship will survive a motion to dismiss under Rule

18

12(b)(6). Though “the precise details of the agency relationship need not be pleaded to

19

survive a motion to dismiss, sufficient facts must be offered to support a reasonable

20

inference that an agency relationship existed.” Kristensen v. Credit Payment Servs., 12

21

F. Supp. 3d 1292, 1301 (D. Nev. 2014).

22

Three theories of agency could support vicarious liability: (1) actual authority; (2)

23

apparent authority; and (3) ratification. Thomas v. Taco Bell Corp., 582 Fed. App’x. 678,

24

679 (9th Cir. 2014) (citing In re DISH Network, LLC, 28 F.C.C.R. at 6590 n. 124)). The

25

complaint fails to allege factual allegations supporting an agency relationship under any

26

theory.

27
28

i.

Actual authority

“An agent is one who ‘act[s] on the principal's behalf and subject to the principal's
7

1

control.’ ” United States v. Bonds, 608 F.3d 495, 506 (9th Cir. 2010) (quoting

2

Restatement (Third) Agency § 1.01.); see also Thomas v. Taco Bell Corp., 879 F. Supp.

3

2d 1079, 1085 (C.D. Cal. 2012), aff'd, 582 F. App'x 678 (9th Cir. 2014). “Agency means

4

more than mere passive permission; it involves request, instruction, or command.”

5

Thomas, 879 F. Supp. 2d at 1085 (quoting Klee v. United States, 53 F. 2d 58, 61 (9th Cir.

6

1931)).

7

The complaint contains no factual allegations about defendant’s relationship with
the purported callers, much less factual allegations about what control defendant

9

exercised over the callers. To state a plausible claim based on actual authority, plaintiff

10

must allege facts showing that defendant had the right to control the representatives and

11
United States District Court
Northern District of California

8

the manner and the means of the calls they made. See Thomas, 583 F.3d App’x at 679-

12

80. It is not enough that each representative identified him or herself as acting on behalf

13

of Farmers Insurance. Such allegations say nothing about whether defendant consented

14

to those representations. And, more importantly, such allegations indicate nothing about

15

the amount of control, if any, defendant purportedly exercised over the representatives.

16

The only allegation that comes close to connecting the purported agents and

17

defendant is Williams’ profile on defendant’s website and the use of defendant’s mark

18

and trade name. While the profile does show that there is some connection between

19

defendant and Williams, it does not show what that connection is or how that relationship

20

relates to the alleged calls. In fact, the allegations in the complaint leave open the

21

possibility that Williams paid defendant to host his profile to increase Williams’

22

profitability—rather than the opposite scenario that plaintiff envisions.

23

The allegations regarding defendant’s mark fare little better. Viewing that

24

allegation in the light most favorable to Abante, the court can infer that there is some

25

relationship between the purported representatives and defendant. But that inference is

26

not enough because it still does not allow the court to infer that defendant exercises

27

control over the representatives. See Jackson v. Caribbean Cruise Line, Inc., 88 F.

28

Supp. 3d 129, 138 (E.D.N.Y. 2015) (dismissing TCPA claim and concluding that the
8

1

existence of a contract between two companies does not “necessarily mean that [the

2

principal] had the power to give ‘interim instructions’ to [the agent].”). While plaintiff is

3

entitled to all reasonable inferences, the court is neither required to nor allowed to layer

4

inference upon inference to make plaintiff’s claim for it.

5
6

ii.

Apparent Authority

“Apparent authority arises from the principal's manifestations to a third party that

7

supplies a reasonable basis for that party to believe that the principal has authorized the

8

alleged agent to do the act in question.” N.L.R.B. v. Dist. Council of Iron Workers of the

9

State of Cal. & Vicinity, 124 F.3d 1094, 1098 (9th Cir. 1997). It is not sufficient to allege

10

United States District Court
Northern District of California

11

that the purported agent “claimed authority or purported to exercise it.” Id.
Plaintiff points to three allegations that supposedly establish apparent authority.

12

First, plaintiff argues that defendant’s agents called on defendant’s behalf. Second,

13

plaintiff argues that the agents promoted defendant’s brand and products. Third, plaintiff

14

argues that one of the defendant’s agents is listed on defendant’s website as a Farmers

15

Insurance Agent. The court finds each of these insufficient.

16

The first two beg the question by assuming the veracity of plaintiff’s own argument.

17

As is evidenced by the sentences themselves, they assume an agency relationship exists

18

in order to show defendant made a manifestation to a third party. That will not do.

19

Viewed in the most favorable light, plaintiff’s third response does show a

20

manifestation by defendant to a third party. The website, which defendant never

21

specifically disclaims as its own, shows Williams is a Farmers Insurance representative.

22

It is reasonable to infer that defendant has control over the website, and its willingness to

23

display Williams as a Farmers Insurance agent implies that there is some relationship

24

between Williams and defendant. But again the bare existence of a relationship does not

25

indicate that Williams was authorized to act on defendant’s behalf or speak to the scope

26

of that purported authorization. Nor does it give rise to a reasonable belief that Williams

27

is authorized to act on defendant’s behalf for all purposes.

28

More fundamentally, plaintiff has not even alleged that it reasonably relied on the
9

1

website.
iii.

2

Ratification

Plaintiff cannot show defendant is liable under a ratification theory because “the

3
4

principal-agent relationship is still a requisite, and ratification can have no meaning

5

without it.” Batzel v. Smith, 333 F.3d 1018, 1036 (9th Cir. 2003).

6

2.

Use of An ATDS

7

Title 47 U.S.C. § 227(a)(1) defines an ATDS as “equipment which has the

8

capacity—(A) to store or produce telephone numbers to be called, using a random or

9

sequential number generator; and (B) to dial such numbers.” An ATDS “need not
actually store, produce, or call randomly or sequentially generated telephone numbers, it

11
United States District Court
Northern District of California

10

need only have the capacity to do it.” Satterfield v. Simon & Schuster, Inc., 569 F.3d 946,

12

951 (9th Cir. 2009).
The court finds the complaint’s allegations sufficient to satisfy this element of

13
14

plaintiff’s TCPA claim. Plaintiff alleges, and defendant’s briefing ignores, that Williams

15

stated “the other agents were Farmers agents calling from a call center using an auto

16

dialed system.” FAC ¶ 37. Further, the complaint alleges that on two of the calls a pause

17

and delay was heard before the representative began talking. FAC ¶¶ 16, 28, 37; see

18

Oliver v. DirecTV, LLC, 2015 WL 1727251, at *3 (N.D. Ill. Apr. 13, 2015) (“momentary

19

pause, along with [ ] other allegations” were sufficient at pleading stage); Lofton v.

20

Verizon Wireless (VAW) LLC, No. 13-05665 C, 2015 WL 1254681, at *5 (N.D. Cal. Mar.

21

18, 2015) (finding the “telltale pause after plaintiff picked up each call . . . suggests the

22

use of a predictive dialing system, and thus renders plausible the conclusory allegation

23

that an ATDS was used”). These specific factual allegations do not, as defendant

24

asserts, merely parrot the ATDS definition.

25

3.

26

Neither party disputes that this element has been adequately alleged. See FAC

27
28

No Prior Consent

¶ 54.
CONCLUSION
10

1

In accordance with the foregoing, defendant’s motion to dismiss is GRANTED as

2

plaintiff has failed to adequately allege the first element of a TCPA claim, that the

3

defendant named in the complaint made the offending calls. As this is the first time the

4

court has dismissed plaintiff’s complaint, the dismissal is WITH LEAVE TO AMEND. Any

5

amended complaint shall be filed no later than February 5, 2017. No additional parties or

6

claims may be added without leave of court or stipulation by defendant.

7
8
9
10

United States District Court
Northern District of California

11

IT IS SO ORDERED.
Dated: January 4, 2018
__________________________________
PHYLLIS J. HAMILTON
United States District Judge

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
11