Garrett v. Ragle Dental Laboratory, Inc. et al
Filing
80
WRITTEN Opinion entered by the Honorable Elaine E. Bucklo on 7/6/2011: Mailed notice(mpj, )
Order Form (01/2005)
United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge
Elaine E. Bucklo
CASE NUMBER
10 C 1315
CASE
TITLE
Sitting Judge if Other
than Assigned Judge
DATE
7/6/2011
Garrett v. Ragle Dental Laboratory, Inc. et al.
DOCKET ENTRY TEXT
Motion by Cross Defendant Cadent, Inc. to dismiss Ragle Dental Laboratory’s
Crossclaim [67] is granted in part and denied in part. Ruling set for 7/7/11
is vacated.
O[ For further details see text below.]
Docketing to mail notices.
STATEMENT
Plaintiff Dr. G. Neil Garrett sued defendants Ragle Dental Laboratory,
Inc. (“Ragle”) and Cadent, Inc. (“Cadent”) for, inter alia, violating the
Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 (2000), after
he allegedly received an unsolicited fax advertisement sent by or on behalf
of Ragle and Cadent. Ragle filed a three-count crossclaim against Cadent,
asserting claims for indemnification, contribution, and breach of contract.
Before me is Cadent’s motion to dismiss Ragle’s crossclaim. For the reasons
explained below, the motion is granted in part and denied in part.
Cadent seeks dismissal of Ragle’s claims for indemnification and
contribution based on the well-settled principle that “[w]here contribution
is sought by one who has had to pay damages for violating a federal statute,
the scope and limitations of the right of contribution are invariably
treated as questions of federal rather than state law.” Donovan v. Robbins,
752 F.2d 1170, 1179 (7th Cir. 1984) (Posner, J.).
Since Ragle seeks
contribution or indemnification for damages that, if awarded, would result
from a violation of the TCPA, federal law governs whether Ragle’s claims are
viable. “Where, as in this case, the action alleges a statutory violation
rather than a tort, the Supreme Court has recognized that a defendant may
seek contribution only if Congress has created an affirmative cause of
action for contribution; federal common law has recognized such a right; or
the parties agreed, prior to the litigation, that any liability would be
shared.” Shurland v. Bacci Cafe & Pizzeria on Ogden Inc., 259 F.R.D. 151,
162 (N.D. Ill. 2009). None of these conditions is present here: the TCPA
does not create an affirmative cause of action for contribution or
indemnification; federal common law does not recognize such a cause of
10C1315 Garett vs. Ragle
Page 1 of 3
STATEMENT
action; and Ragle does not claim that it had any agreement with Cadent
specifically regarding the sharing of liability.
Ragle points out that no court has specifically held that the TCPA does
not permit claims for indemnification and/or contribution.
But this
observation clearly does little to show that Congress has created an
affirmative cause of action for contribution. Nor are the cases on which
Ragle relies to the contrary. In G.M. Sign, Inc. v. Franklin Bank, S.S.B.,
No. 06 C 949, 2006 WL 2666289, at *1 (N.D. Ill. Sept. 14, 2006), for
example, a claim for contribution was asserted in a case involving the TCPA;
however, the court specifically declined to address the contention that the
contribution claim was precluded by Donovan. In G.M. Sign, Inc. v. Finish
Thompson, Inc., No. 07-5953 (N.D. Ill. March 18, 2008), the court merely
granted a motion to file a third-party complaint in a TCPA case. Although
the subsequently-filed complaint included a contribution claim, the question
of whether the contribution claim was barred was never broached. Locklear
Elec., Inc. v. Lay, No. 09-cv-0531-MJR, 2009 WL 4678428, at *1 (S.D. Ill.
Dec. 7, 2009), makes no mention of contribution or indemnification.
To be sure, Donovan involved a claim under ERISA, not the TCPA.
However, its holding has been applied to crossclaims involving numerous
other federal statutes. See, e.g., Daniels v. Bursey, No. 03 C 1550, 2004
WL 1977402, at *2 (N.D. Ill. Aug. 10, 2004) (“There is no basis to believe
that the general rule that federal law governs the right of contribution for
damages assessed for violating federal statutes is restricted to ERISA
violations.”); see also Equity Builders and Contractors, Inc. v. Russell,
406 F. Supp. 2d 882, 885 (N.D. Ill. 2005) (Federal Copyright Act of 1976);
Kay v. First Continental Trading, Inc., 966 F. Supp. 753, 756 (N.D. Ill.
1997) (Fair Credit Reporting Act); Edward Hines Lumber Co. v. Vulcan
Materials Co., No. 85 C 1142, 1987 WL 27368, at *2 (N.D. Ill. Dec. 4, 1987)
(CERCLA). Ragle contends that the TCPA is different from other federal
statutes because it expressly provides for state-court jurisdiction over
claims arising under the Act. But the fact that states are permitted to
hear TCPA claims does not mean that state contribution laws apply to such
claims.
The fact remains that Ragle seeks contribution for damages
resulting from the violation of a federal statute. Consequently, federal
law applies to its claims.
Ragle maintains that Cadent’s argument applies only to claims for
contribution, and that Cadent has therefore failed to show that the claim
for indemnification in Count I should be dismissed. But many cases have
applied Donovan to both contribution and indemnification claims. See, e.g.,
Doherty v. Wireless Broadcasting Systems of Sacramento, Inc., 151 F.3d 1129,
1131 (9th Cir. 1998) (“A defendant held liable under a federal statute has
a right to indemnification or contribution from another only if such right
arises: (1) through the affirmative creation of a right of action by
Congress, either expressly or implicitly, or (2) under the federal common
law.”); Kudlicki v. MDMA, Inc., No. 05 C 2589, 2006 WL 1308617, at *3 (N.D.
Ill. May 10, 2006).
Thus, I grant Cadent’s motion insofar as it seeks
dismissal of Counts I and II of Ragle’s crossclaim.
10C1315 Garett vs. Ragle
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STATEMENT
As to Count III, which asserts a claim for breach of contract, Cadent’s
motion is denied. Ragle alleges that when it accepted Cadent’s offer to fax
advertisements on Ragle’s behalf, it did so with the understanding that the
advertisements would comply with all applicable federal and state laws. If
Cadent’s faxes violated the TCPA, Ragle claims, Cadent breached their
agreement. Cadent argues that the claim must be dismissed because Ragle
fails to allege that Cadent received consideration in connection with their
agreement. Rather, Cadent maintains, Ragle has alleged only that Cadent
offered to distribute a fax advertisement on Ragle’s behalf and that Ragle
accepted the offer.
I disagree. While Ragle does not explicitly plead the element of
consideration, it does state that the fax at issue in the case was an
advertisement for both Ragle and Cadent. One side of the fax advertised
Cadent’s digital impression system and the other side advertised a five
percent rebate for scanning work performed on the system and sent to Ragle
for processing. See Crossclaim ¶ 17. Thus, Cadent received consideration
from Ragle insofar as Ragle’s participation in the promotional offer
advertised in the fax created the prospect of greater sales for Cadent’s
digital impression system. Although this could have been set forth more
explicitly in the crossclaim, the elucidation provided in Ragle’s response
brief has given Cadent sufficient notice of the basis for its claim. See,
e.g., Savarirayan v. Blue Cross Blue Shield of Illinois, No. 10 C 4723, 2011
WL 1362591, at *2 (N.D. Ill. Apr. 7, 2011) (“As long as they are consistent
with the allegations of his Amended Complaint, plaintiff may assert
additional facts in his response to the motion to dismiss.”); see also
Russell v. Unknown Cook County Sheriff’s Officers, No. 03 C 3786, 2004 WL
2997503, 3 n.1 (N.D. Ill. Dec. 27, 2004). Since Ragle has sufficiently
alleged consideration, Cadent’s motion to dismiss Count III is denied.
10C1315 Garett vs. Ragle
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