Lemieux v. Lender Processing Center et al

Filing 24

ORDER denying Defendant's 10 Motion to Dismiss for Failure to State a Claim; denying Plaintiff's 18 Ex Parte Motion for Leave to File Notice of Supplemental Authority and 21 Second Ex Parte Motion for Leave to File Notice of Supplemental Authority. Signed by Judge Cynthia Bashant on 3/24/2017. (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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KEVIN LEMIEUX, individually and
on behalf of all others similarly
situated,

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ORDER DENYING
DEFENDANT’S MOTION TO
DISMISS

Plaintiff,

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Case No. 16-cv-1850-BAS(DHB)

[ECF No. 10]

v.
LENDER PROCESSING CENTER,
et al.,

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Defendants.

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Defendant Hightechlending brings this motion to dismiss pursuant to Federal

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Rules of Civil Procedure 12(b)(1) and 12(b)(6), arguing that Plaintiff Kevin

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Lemieux lacks standing and fails to state a claim upon which relief can be granted.

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(ECF No. 10.) The Court finds this motion suitable for determination on the papers

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submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1).

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For the following reasons, the Court DENIES Defendant’s motion to dismiss.

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I.

BACKGROUND

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Plaintiff Kevin Lemieux brings this class-action complaint against

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Defendants Lender Processing Center and Hightechlending, Inc. for violations of

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the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, et seq.1

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According to the complaint, Defendants placed a telemarketing call to Plaintiff’s

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cell phone one time using an automatic telephone dialing system (“ATDS”).

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(Compl. ¶¶ 14-15, 22.) “During the call, there was a heard pause and/or clicking

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noise before a representative of Defendants came on the line.” (Id. ¶ 18.)

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“Defendants’ representative informed Plaintiff that the call was from Lender

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Processing Center.” (Id. ¶ 23.) The call was then transferred “to a different female

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representative, an application manager, who informed Plaintiff that the call was

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from High Tech Lending.” (Id. ¶ 24.)

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The call invaded Plaintiff’s privacy and caused Plaintiff “frustrat[ion] and

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distress[].” (Compl. ¶¶ 1, 28-29.) It also caused Plaintiff and other class members to

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“live without the utility of their cellular phones by occupying their cellular

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telephone with one or more unwanted calls, causing nuisance and lost time.” (Id. ¶

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30.) The call “was placed to a telephone number assigned to a cellular telephone

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service for which Plaintiff incurs a charge for incoming calls.” (Id. ¶ 21.)

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II.

LEGAL STANDARDS

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Federal courts are limited to hearing “actual cases or controversies.” Spokeo,

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Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (citing Raines v. Byrd, 521 U.S. 811,

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818 (1997)). Failure to allege an actual case or controversy subjects a plaintiff to

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dismissal for lack of standing under Federal Rule of Civil Procedure 12(b)(1). “The

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plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing

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[standing].” Spokeo, 136 S. Ct. at 1548. The plaintiff must clearly allege facts

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On July 29, 2016 Plaintiff voluntarily dismissed Lender Processing Center from this
action pursuant to Federal Rule of Civil Procedure 41(a)(1)(A). (ECF No. 4.)
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demonstrating that an actual case or controversy exists. See id.

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A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil

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Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R.

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Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court

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must accept all factual allegations pleaded in the complaint as true and must

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construe them and draw all reasonable inferences from them in favor of the

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nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir.

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1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed

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factual allegations, rather, it must plead “enough facts to state a claim to relief that

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is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A

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

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

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misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly,

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550 U.S. at 556). “Where a complaint pleads facts that are ‘merely consistent with’

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a defendant’s liability, it stops short of the line between possibility and plausibility

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of ‘entitlement to relief.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at

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557).

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“[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to

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relief’ requires more than labels and conclusions, and a formulaic recitation of the

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elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (quoting

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Papasan v. Allain, 478 U.S. 265, 286 (1986)) (alteration in original). A court need

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not accept “legal conclusions” as true. Iqbal, 556 U.S. at 678. Despite the deference

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the court must pay to the plaintiff’s allegations, it is not proper for the court to

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assume that “the [plaintiff] can prove facts that [he or she] has not alleged or that

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defendants have violated the . . . laws in ways that have not been alleged.”

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Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459

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U.S. 519, 526 (1983).

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III.

DISCUSSION

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A.

Objections / Requests for Judicial Notice

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Hightechlending requests that the Court take judicial notice of an oral

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argument and ruling from the District of New Jersey in Sussino v. Work Out World,

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Inc. as well as various other class-action complaints filed by the same plaintiff in

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other cases. (ECF No. 10-2.) Plaintiff objects. (ECF No. 12-1.) Plaintiff requests

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that the Court take judicial notice of a minute order and hearing transcript from the

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Northern District of Illinois in Johnson v. Yahoo! Inc. (ECF No. 12-2.)

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Although non-precedential, the Court agrees to take judicial notice of the

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transcripts and rulings in the two cases from other districts. See M/V American

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Queen v. San Diego Marine Constr. Corp., 708 F.2d 1483, 1491 (9th Cir. 1983).

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However, the Court agrees that Kevin Lemieux’s many other class-action

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complaints alleging violations of the TCPA are irrelevant to this case. Therefore,

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the Court declines to take judicial notice of these other cases.

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Plaintiff further objects to the reply brief filed in this case arguing: (1) it

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inappropriately includes extrinsic evidence; (2) it improperly raises new arguments

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for the first time; and (3) it violated Civil Local Rule 7.1(h) because it exceeds ten

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pages. (ECF No. 14.) Hightechlending responds by filing an amended reply brief

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that does not exceed ten pages. (ECF No. 15.) Plaintiff objects that the amended

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reply brief is untimely and filed without leave of the court to file an amended reply.

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(ECF No. 17.)

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The Court overrules the first two objections but agrees that the reply brief

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violates Civil Local Rule 7.1(h), and the amended reply brief is untimely and filed

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without leave of the Court. Therefore, the Court agrees with Plaintiff and ORDERS

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STRICKEN the last two pages of Hightechlending’s reply brief (ECF No. 13) and

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the entire amended reply brief (ECF No. 15).

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B.

Standing

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Hightechlending moves to dismiss Plaintiff’s Complaint for lack of standing.

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In particular, it argues that under the Supreme Court’s recent decision in Spokeo v.

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Robins, 136 S. Ct. 1540 (2016), Plaintiff has not suffered a concrete injury as a

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result of the alleged statutory violation.

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Spokeo reiterated that “[t]o establish an injury in fact, a plaintiff must show

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that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete

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and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’”

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Spokeo, 136 S. Ct. at 1548 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555,

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560 (1992)). A concrete injury, although it may be intangible, must actually exist.

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Id. at 1549. When determining whether an intangible injury actually exists, both

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history and the judgment of Congress play important roles, but “Congress’ role in

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identifying and elevating intangible harms does not mean that a plaintiff

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automatically suffers the injury-in-fact requirement whenever a statute grants a

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person a statutory right and purports to authorize that person to sue to vindicate that

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right.” Id. In other words, a plaintiff may not rely solely on the statute to claim

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harm, he must show that he suffered actual harm beyond the violation of the statute.

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The vast majority of district courts considering the issue post-Spokeo have

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found that the violation of privacy caused by a violation of the TCPA is sufficient

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actual, albeit intangible, injury to constitute standing. See Juarez v. Citibank, NA,

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No. 16-cv-1984-WHO, 2016 U.S. Dist. Lexis 118483, at *8 (N.D. Cal. Sept. 1,

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2016) (“Even a single phone call can cause lost time, annoyance, and frustration.”);

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Aranda v. Caribbean Cruise Line, Inc., No. 12 C 4069, 2016 WL 4439935, at *6

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(N.D. Ill. Aug. 23, 2016) (“[U]nsolicited telephone contact [in violation of the

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TCPA] constitutes an intangible concrete harm.”); Mey v. Got Warranty, Inc., No.

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5:15-cv-101, 2016 WL 3645195, at *3 (N.D. W. Va. June 30, 2016) (“This Court

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finds that unwanted phone calls cause concrete harm.”); Wilkes v. Care Source

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Mgmt. Grp., Co., No. 4:16-cv-038-JD, 2016 WL 7179298, at *5 (N.D. Ind. Dec. 9,
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2016) (concurring with the reasoning in Aranda and Mey); Cour v. Life360, Inc.,

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No. 16-cv-805-TEH, 2016 WL 4039279, at *6 (N.D. Cal. July 28, 2016) (plaintiff’s

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allegation that he was harmed because defendant invaded his privacy when it called

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in violation of the TCPA is sufficient concrete injury.); Caudill v. Wells Fargo

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Home Mortg., Inc., No. 5:16-066-DCR, 2016 U.S. Dist. Lexis 89136, at *4-5 (E.D.

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Ky. July 11, 2016) (Invasion of privacy caused by a violation of the TCPA is

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sufficient injury for standing.); Booth v. Appstack, Inc., No. C13-1533JLR, 2016

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WL 3030256, at *5 (W.D. Wash. May 25, 2016) (In contrast to the facts of Spokeo,

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TCPA violations alleged here, if proven, required plaintiffs to waste time answering

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or otherwise addressing widespread robocalls.); Krakauer v. Dish Network, LLC,

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168 F. Supp. 3d Inc., 843, 845 (M.D.N.C. 2016) (“Telemarketing calls made in

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violation of the . . . TCPA are more than bare procedural violations; . . . These calls

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form concrete injuries because unwanted telemarketing calls are a disruptive and

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annoying invasion of privacy.”); A.D. v. Credit One Bank, N.A., No. 14 C 10106,

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2016 U.S. Dist. Lexis 110393, at *17-18 (N.D. Ill. Aug. 19, 2016) (The TCPA

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“directly forbids activities that by their nature infringe the privacy-related interests

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that Congress sought to protect by enacting the TCPA.” “Both history and the

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judgment of Congress suggest that violation of this substantive right is sufficient to

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constitute a concrete, de facto injury.”); LaVigne v. First Cmty. BancShares, Inc.,

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No. 1:15-cv-934-WJ-LF, 2016 WL 6305992, at *4 (D.N.M. Oct. 19, 2016) (The

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Supreme Court in Mims v. Arrow Financial Services, LLC, 132 S. Ct. 740, 745

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(2012) “recognized that, in enacting the TCPA, Congress determined that

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‘unrestricted telemarketing . . . can be an intrusive invasion of privacy’ and that

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automated or prerecorded telephone calls made to private residences ‘were rightly

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regarded by recipients as an invasion of privacy.’”); Cabiness v. Educ. Fin.

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Solutions, LLC, No. 16-cv-1109-JST, 2016 WL 5791411 at *5 (N.D. Cal., Sept. 1,

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2016) (“unlike a statutory violation of the FCRA [as alleged in Spokeo] which may

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result in no harm, a statutory violation of [the TCPA] inherently presents a risk of
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real harm, even if that harm is difficult to prove or measure such that the statutory

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violation is sufficient on its own to constitute injury in fact.”).

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Hightechlending points to several district court cases that rule to the contrary.

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In Sussino v. Work Out World, No. 15-5881 (PGS) (D.N.J. Aug. 1, 2016) (ECF No.

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10-2, Ex. 1), for example, the district court found the plaintiff could not claim an

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intrusion on her privacy because she did not answer the call placed in violation of

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the TCPA. Clearly, that case is factually distinguishable from this one where

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Plaintiff alleges he answered the call and spoke to both representatives from

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Lending Processing Center and High Tech Lending. (Compl. ¶¶ 18, 23-24.) In both

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Hernandez v. Path, Inc., No. 12-cv-1515-YGR, 2012 WL 5194120 (N.D. Cal. Oct.

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19, 2012), decided before Spokeo, and Smith v. Aitima Medical Equipment, Inc.,

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No. ED CV 16-339-AB (DTBx), 2016 WL 4618780 (C.D. Cal. July 29, 2016), the

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district courts found that allegations of diminished storage, battery life, or band

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width on a cell phone from a call made in violation of the TCPA were insufficient

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harm to warrant standing. However, neither court addressed the argument that a

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violation of privacy alone, and the nuisance from a telemarketing call made from an

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ATDS, was a sufficient injury.

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Finally, in Romero v. Department Stores National Bank, No. 15-cv-193-

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CAB-MDD, 2016 WL 4184099 (S.D. Cal. Aug. 5, 2016), the court began from the

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premise that “[a] plaintiff cannot have suffered an injury in fact as a result of a

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phone call she did not know was made.” Romero, 2016 WL 4184099, at *3. In that

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case, the plaintiff alleged the defendant debt collector had called her cellular

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telephone over 290 times in a six-month period, but she only answered the

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telephone call on two occasions, and frequently was unaware the defendant was

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calling her phone. The court continued, “[m]oreover, even for the calls Plaintiff

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heard ring or actually answered, Plaintiff does not offer any evidence of a concrete

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injury caused by the use of an ATDS, as opposed to a manually dialed call.” Id.

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Because the defendant was a debt collector attempting to collect a debt from the
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plaintiff by calling a cell phone number she gave as a contact number, any “lost

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time, aggravation or distress” she suffered was not because the defendant used an

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ATDS in violation of the TCPA, but because she was being contacted by a debt

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collector:
Defendants here were creditors of Plaintiff and were
attempting to collect a debt. They were calling Plaintiff’s
cell phone because that was the only telephone number
she provided them. Although these calls seeking to
collect debts may have been stressful, aggravating and
occupied Plaintiff’s time, that injury is completely
unrelated to Defendants’ use of an ATDS to dial her
number. Plaintiff would have been no better off had
Defendants dialed her telephone number manually.

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Id. at *6.

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Several courts have rejected the decision in Romero outright. See LaVigne v.

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First Cmty. BancShares, Inc., No. 1:15-cv-934-WJ-LF, 2016 WL 6305992, at *6

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(D.N.M. Oct. 19, 2016) (“Romero is an outlier[.]); Mbazomo v. Etourandtravel,

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Inc., No. 2:16-cv-2229 SB, 2016 WL 7165693 (E.D. Cal Dec. 8, 2016) (rejecting

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the reasoning of Romero); Wilkes v. CareSource Mgmt. Grp., Co., No. 4:16-cv-038-

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JD, 2016 WL 7179298, at *5 (N.D. Ind. Dec. 9, 2016) (“The injuries at issue are

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caused by the placing of unwanted phone calls . . . . That the TCPA only proscribes

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such calls when made with auto-dialers . . . does not mean that the existence of an

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injury for Article III purposes depends on whether those means are used, but only

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that plaintiffs do not have a cause of action when they are not.”).

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Although this Court agrees that a bare allegation of a violation of the TCPA

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could be an insufficient allegation of injury to establish standing, such as when a

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telephone call is unheard or unanswered, this is not such a case. Plaintiff alleges he

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heard the call, answered the call, spoke with both Defendants who were attempting

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to solicit his business without his consent, incurred a charge for the incoming call,

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and suffered frustration, distress, and lost time because of the invasion of his

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privacy. (Compl. ¶¶ 21, 23-24, 28-30.) These facts are distinguishable from
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Romero, and the allegations are sufficient to show a concrete injury. Therefore, the

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motion to dismiss for lack of standing is DENIED.

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C.

Insufficient Allegations of Use of an ATDS

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Hightechlending moves to dismiss for insufficient allegations arguing that

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the Complaint fails to allege sufficient facts to support the theory that an ATDS was

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used. (ECF No. 10.) The TCPA prohibits the use of an ATDS to place calls to a

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cellular telephone without the recipient’s prior express consent. 47 U.S.C. §

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227(b)(1)(A)(iii). An ATDS is defined as “equipment which has the capacity—(A)

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to store or produce telephone numbers to be called, using random or sequential

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number generator, and (b) to dial such numbers.” 47 U.S.C. § 227(a)(1).

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Courts have recognized the difficulty a plaintiff has in alleging sufficient

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facts regarding the calling system used by a defendant without the benefit of

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discovery. Knutson v. Reply! Inc., No. 10-cv-1267 BEN (WMc), 2011 WL

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1447756, at *1 (S.D. Cal. Apr. 13, 2011). Therefore, some courts have allowed

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minimal allegations that the defendant used an ATDS recognizing that the type of

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equipment used by the defendant to place the call is within the sole possession of

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the defendant. See Maier v. J.C. Penney Corp., Inc., No. 13cv0163-IEG (DHG),

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2013 WL 3006415, at *3 (S.D. Cal. June 13, 2013) (citing In re Jiffy Lube Int’l,

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Inc. Text Spam Litig., 847 F. Supp. 2d 1253, 1260 (S.D. Cal. 2012)) (“While

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additional factual details about the machines might be helpful, further facts are not

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required to move beyond the pleading stage.”).

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Most courts, however, have required a plaintiff to plead at least some facts,

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easily available to him or her, on the basis of personal knowledge and experience,

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which would support the allegation that an ATDS was used. Maier, 2013 WL

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3006415, at *3 (citing Johansen v. Vivant, Inc., No. 12 C 7159, 2012 WL 6590551,

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at *3 (N.D. Ill. Dec. 18, 2012)) (“It is not unreasonable . . . to require a plaintiff to

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describe the phone messages he received in laymen’s terms or provide the
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circumstances surrounding them to establish his belief that the messages were . . .

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delivered via an ATDS.”).

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In this case, Plaintiff alleges Defendants placed a telemarketing call to

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Plaintiff’s cell phone one time using an ATDS. (Compl. ¶¶ 14-15, 22.) Plaintiff

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heard a “pause and/or clicking noise before a representative of Defendants came on

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the line.” (Id. ¶ 18.) “Defendants’ representative informed Plaintiff that the call was

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from Lender Processing Center.” (Id. ¶ 23.) The call was then transferred “to a

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different female representative, an application manager, who informed Plaintiff that

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the call was from High Tech Lending.” (Id. ¶ 24.) Plaintiff had no business

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relationship with Defendants, and the call was made by Defendants to solicit

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Plaintiff’s business. (Id. ¶¶ 13, 22.) Although the call was made from two

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California companies, the area code calling Plaintiff’s cell phone was not from

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California. (Id. ¶¶ 11, 16, 24.)

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These allegations are sufficient factual allegations to support Plaintiff’s

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allegation that an ATDS was used. Although some courts have found that the

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allegation of a pause is insufficient, see Smith, 2016 WL 4618780, this Court agrees

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with those that have found “[t]he precise length of the pause and how long it takes

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to transfer or route a call is inappropriate at the pleading stage.” Oliver v. DirecTV,

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LLC, No. 14-cv-7794, 2015 U.S. Dist. Lexis 47964, at *11 (N.D. Ill. Apr. 13,

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2015). The allegation that Plaintiff heard a “pause and/or clicking noise before a

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representative of Defendants came on the line” is a sufficient description in

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laymen’s terms to establish Plaintiff’s belief that the call was delivered via an

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ATDS. See also Lofton v. Verizon Wireless (VAW) LLC, No. 13-cv-05665-YGR,

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2015 WL 1254681, at *5 (N.D. Cal. Mar. 18, 2015) (allegation of a “telltale” pause

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after plaintiff picked up the telephone is sufficient at the pleadings stage to allege

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use of an ATDS); Thomas v. Dun & Bradstreet Credibility Corp., 100 F. Supp. 3d

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937 (C.D. Cal. 2015) (plaintiffs’ allegations that defendant used an ATDS and that

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he heard a “pause” after answering the telephone was sufficient at the pleading
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stage).

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Plaintiff’s allegations that an ATDS was used are sufficient to withstand a

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motion to dismiss. Further inquiry into Defendant’s use of an ATDS is better left to

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discovery and a motion for summary judgment.

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D.

Insufficient Allegations Against Hightechlending

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Hightechlending finally requests dismissal arguing that the allegations

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against Hightechlending, as opposed to the Lender Processing Center, are

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insufficient. Plaintiff alleges both Defendants initiated and placed a telemarketing

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call to his cell phone using an ATDS. (Compl. ¶¶ 4, 14-15, 22.) Plaintiff further

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alleges that both Defendants’ representatives said she was from Lender Processing

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Center but then transferred him to a different representative who said “the call was

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from Hightechlending.” (Id. ¶ 24.) The Court must accept all factual allegations

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pleaded in the complaint as true and must construe them and draw all reasonable

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inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins.

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Co., 80 F.3d 336, 337-38 (9th Cir. 1996).

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Accepting these allegations as true and construing them in Plaintiff’s favor,

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he has alleged sufficient facts that Hightechlending is responsible for the telephone

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call that allegedly violated the TCPA.

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IV.

CONCLUSION & ORDER

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In light of the foregoing, Defendant’s motion to dismiss is DENIED. (ECF

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No. 10.) Furthermore, exercising its discretion, Plaintiff’s ex parte applications for

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leave to file notices of supplemental authority is also DENIED. (ECF Nos. 18, 21.)

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IT IS SO ORDERED.

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DATED: March 24, 2017

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