Toney v. Quality Resources, Inc. et al

Filing 168

MEMORANDUM Opinion Signed by the Honorable Amy J. St. Eve on 12/1/2014:Mailed notice(kef, )

13-42.141

December 1, 2014

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SARAH TONEY, on behalf of herself
and others similarly situated,
Plaintiff,
v.
QUALITY RESOURCES, INC.,
SEMPRIS, LLC d/b/a Budget Savers,
and PROVELL, INC. f/k/a Budget
Savers,
Defendants.

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No. 13 CV 42

MEMORANDUM OPINION
Before the court are two motions: (1) that of defendant
Quality Resources, Inc. to dismiss the Third Amended Complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6) or in the
alternative for summary judgment pursuant to Federal Rule of Civil
Procedure 56(c); and (2) that of defendants Sempris, LLC and
Provell, Inc. to dismiss the Third Amended Complaint pursuant to
Federal

Rule

of

Civil

Procedure

12(b)(6).

For

the

reasons

explained below, the court denies the motions of defendants Quality
Resources, Inc. and Sempris, LLC and grants the motion of Provell,
Inc.
BACKGROUND
On January 3, 2013, plaintiff, Sarah Toney, filed a class
action complaint asserting claims against three defendants for

violations of the Telephone Consumer Protection Act (“TCPA”), 47
U.S.C. § 227(b) and (c).

Since then, plaintiff has amended the

complaint several times.

The current version, the Third Amended

Complaint, names three entities as defendants: Quality Resources,
Inc. (“Quality”); Sempris, LLC, doing business as Budget Savers
(“Sempris”); and Provell, Inc., formerly known as Budget Savers
(“Provell”).
company

Quality is a telemarketing company.

that

operates

the

Budget

Sempris is a

Savers

website,

www.budgetsaversonline.com, which offers a subscription membership
club that provides retail and restaurant discounts.

Provell is a

defunct corporation that Sempris purchased in February 2011.
Toney alleges that on December 8, 2012, she placed an order
for three pairs of children’s slippers from a website called
Stompeez.com

(“Stompeez”).1

She

entered

her

credit

card

information, shipping address, and e-mail address on the website’s
order form.

She also provided her cellular telephone number

pursuant to the field of the order form that required it “for
questions about [the] order.”

(Third Am. Compl. ¶¶ 30-31.)

Toney

alleges that the representation that customers’ phone numbers would
be

used

“for

questions

about

order[s]”

was

“untrue”

because

Stompeez had a contract with Quality pursuant to which Quality
purchased information about Stompeez’s customers for approximately
$1.50

per

customer

and

then

used

the

information

to

make

1/
Although Toney named Stompeez as a defendant in previous versions of
the complaint, she does not include it in the current complaint.

- 2 -

telemarketing calls to sell the products and services of other
parties, such as Sempris and Provell.

(Id. ¶¶ 32-33.)

On December 10, 2012, Toney received three calls on her
cellular telephone.

The caller-identification information showed

that the caller’s number was [phone] (which is Quality’s
number).

(Id. ¶ 34.)

Toney did not answer the calls.

Opp’n to Quality’s Mot. at 1.)

The next day, she received another

call from the same number and answered it.
35.)

(Pl.’s

(Third Am. Compl. ¶

The call started with a distinctive click and pause prior to

the caller’s coming on the line, indicating that it was coming from
a predictive dialer, an automatic telephone dialing system.
¶¶ 45-47.)

(Id.

The caller told Toney that he was calling about her

Stompeez purchase to verify her address. After the caller verified
Toney’s information, he then tried to sell Toney a membership in
the “Budget Savers” program, which was offered by Sempris and
Provell.

(Id. ¶¶ 36.)

The caller followed a script, which is

attached to the complaint.

(Id. ¶ 41, Ex. A.)

Plaintiff does not

allege that she bought a Budget Savers membership during the call,
but she does allege that Quality entered into contracts with call
recipients on Sempris’s behalf during more than 95 percent of the
completed calls that are the subject of this lawsuit.

(Id. ¶ 39.)

Plaintiff alleges that Quality acted as the agent of Sempris
and Provell during the telemarketing calls and that Quality has had
a business relationship with the two companies since, at the

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latest, February 2005.

(Id. ¶¶ 49-50.)

Throughout the course of

that relationship, the parties had a “Telemarketing Program Sales
Agreement” (the “Agreement”) that was modified at least five times.
(Id. ¶ 51.)

The Agreement with Sempris requires Quality to market

Sempris’s “Budget Savers” programs “via outbound telemarketing.”
(Sempris & Provell’s Mem. in Supp. of Mot., Ex. 2.)2

Sempris

states that it “relies exclusively” on Quality to market the Budget
Savers program.

(Id. at 2.)

Plaintiff alleges that Quality “had

a similar arrangement with Provell during the class period, until
Provell transferred its telemarketing contract to Sempris.” (Third
Am. Compl. ¶ 52.)
According to plaintiff, Quality called her phone “several
times under the guise of ‘confirming’ her address and payment
information for Stompeez,” which plaintiff had already provided,
but “[i]t is clear from the script used to make the call, as well
as the call itself, [that] the real reason for the call was to try
to sell Plaintiff the goods and services of Budget Savers, which is
currently owned and operated by defendant [Sempris] and has no
relationship with Stompeez.”

(Third Am. Compl. ¶ 2.)

In Count I,

plaintiff alleges that defendants violated § 227(c) of the TCPA by

2/

Sempris and Provell attach the Telemarketing Program Sales Agreement
as Exhibit 2 to the memorandum in support of their motion to dismiss and contend
that the court can consider it part of the pleadings because plaintiff refers to
it in the complaint and it is central to plaintiff’s claims. Plaintiff does not
object. Because the Agreement is mentioned in the complaint and is central to
plantiff’s claims, the court will consider the Agreement without converting
Sempris and Provell’s motion into a motion for summary judgment. See Burke v.
401 N. Wabash Venture, LLC, 714 F.3d 501, 505 (7th Cir. 2013).
- 4 -

making unsolicited telemarketing calls to her cellular telephone
number and to other phone numbers that were on the National Do Not
Call Registry.

Count II alleges that defendants violated § 227(b)

of the TCPA by using an automatic telephone dialing system to call
her and others’ cellular telephones.
Quality moves to dismiss the Third Amended Complaint or for
summary judgment. Sempris and Provell have filed a separate motion
to dismiss the Third Amended Complaint.
LEGAL STANDARD
“A motion under Rule 12(b)(6) tests whether the complaint
states a claim on which relief may be granted.”
Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012).

Richards v.

Under Rule 8(a)(2),

a complaint must include “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
8(a)(2).

Fed. R. Civ. P.

The short and plain statement under Rule 8(a)(2) must

“give the defendant fair notice of what the claim is and the
grounds upon which it rests.”

Bell Atl. Corp. v. Twombly, 550 U.S.

544, 555 (2007) (ellipsis omitted).

Under federal notice-pleading

standards, a plaintiff’s “[f]actual allegations must be enough to
raise a right to relief above the speculative level.”

Id.

Put

differently, “a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on
its face.’”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting

Twombly, 550 U.S. at 570).

“In reviewing the sufficiency of a

- 5 -

complaint under the plausibility standard, [courts must] accept the
well-pleaded facts in the complaint as true, but [they] ‘need[ ]
not accept as true legal conclusions, or threadbare recitals of the
elements of

a

statements.’”

cause

of

action,

supported

by

mere

conclusory

Alam v. Miller Brewing Co., 709 F.3d 662, 665–66

(7th Cir. 2013) (quoting Brooks v. Ross, 578 F.3d 574, 581 (7th
Cir. 2009)).
ANALYSIS
I.

Quality’s Motion to Dismiss
A.

Failure to State a Claim

Quality

argues

that

Toney

fails

to

state

a

claim

for

violations of the TCPA because her allegations are “conclusory and
entirely
together.”

inadequate”

“sole

and

“impermissibly

(Quality’s Mot. at 9.)

allegations”

for

Count

I

lump

the

defendants

Quality complains that the
are

that

“defendants

made

unsolicited telemarketing phone calls to plaintiff and the class”
and that “defendants’ policies, practices and procedures for TCPA
compliance are insufficient,” and that Count II “simply concludes,”
while “improperly lumping defendants together,” that “defendants
made improper calls to plaintiff and others’ cellular telephones
using an automatic telephone dialing system.”
Am. Compl. ¶¶ 86-87, 105).)

(Id. (citing Third

Quality, however, simply ignores the

sixteen pages of allegations, incorporated by Counts I and II, that
precede these paragraphs.

Those allegations adequately describe

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plaintiff’s theories of liability and each defendant’s alleged role
in the TCPA violations.

These allegations sufficiently put the

defendants on notice of plaintiff’s claims and the grounds upon
which they rest.
B.

Consent Defense
1.

Provision of Phone Number
“For Questions About Order”

Under the TCPA, it is unlawful “to make any call (other than
a call made for emergency purposes or made with the prior express
consent of the called party) using any automatic telephone dialing
system or an artificial or prerecorded voice . . . to any telephone
number assigned to a paging service, cellular telephone service,
specialized mobile radio service, or other radio common carrier
service, or any service for which the called party is charged for
the call.”

47 U.S.C. § 227(b)(1)(A)(iii).

A defendant may avoid

liability under this section by proving that it made the call with
the prior express consent of the called party.

Quality concedes

that it bears the burden of establishing this affirmative defense.
(Quality’s Mot. at 8-9 n.52, 10.) See, e.g., Thrasher-Lyon v. Ill.
Farmers Ins. Co., 861 F. Supp. 2d 898, 905 (N.D. Ill. 2012).
Complaints need not anticipate affirmative defenses, Levin v.
Miller, 763 F.3d 667, 671 (7th Cir. 2014), but a court may dismiss
a suit on the basis of a valid affirmative defense that is obvious
from the face of the complaint.

Syler v. Will County, Ill., 564 F.

App’x 848, 849 (7th Cir. 2014).
- 7 -

Quality contends that the court should dismiss the complaint
or grant summary judgment on both counts because it is undisputed
that Quality called Toney with Toney’s prior express consent.
Quality relies on two factors.

The first is that Toney admits in

the complaint that she provided her phone number to Stompeez “for
questions about [the] order,” Third Am. Compl. ¶ 31, and, according
to Quality, “[t]his is precisely what Quality did--call Toney to
confirm and verify her order” on Stompeez’s behalf.

(Quality’s

Mot. at 13-15.)
The TCPA does not define what constitutes “prior express
consent.”
rules

and

The FCC, however, which has the authority to promulgate
regulations

that

implement

the

227(b)(2), has shed some light on the issue.

TCPA,

47

U.S.C.

§

Under the Hobbs Act,

the court must apply a final FCC order if it governs the matter at
issue.

CE Design, Ltd. v. Prism Bus. Media, Inc., 606 F.3d 443,

450 (7th Cir. 2010); Griffith v. Consumer Portfolio Servs., Inc.,
838 F. Supp. 2d 723, 726 (N.D. Ill. 2011).

Quality asserts that a

1992 FCC order contains the “operative definition of consent” and
is controlling.

(Quality’s Mot. at 9.)

In that order, the FCC

stated: “[P]ersons who knowingly release their phone numbers have
in effect given their invitation or permission to be called at the
number which they have given, absent instructions to the contrary.
Hence, telemarketers will not violate [TCPA rules] by calling a
number which was provided as one at which the called party wishes

- 8 -

to be reached.”

In re Rules & Regulations Implementing the Tel.

Consumer Prot. Act of 1991, Report and Order, 7 FCC Rcd. 8752, 8769
¶ 31 (Oct. 16, 1992).
In its opening memorandum, Quality cites four cases in which
the court found that the plaintiff’s act of providing his cellular
telephone
consent.

number
In

to

Murphy

the
v.

defendant
DCI

constituted

Biologicals

prior

Orlando,

express

LLC,

No.

6:12–cv–1459–Orl–36KRS, 2013 WL 6865772, at *5-8 (M.D. Fla. Dec.
31, 2013), the court found that plaintiff had expressly consented
to receiving text messages from the defendants where the plaintiff
had voluntarily provided his phone number to the defendants’ plasma
collection center on a “new donor information sheet,” the sheet
stated that the information was being obtained to “process” new
donors, and the plaintiff gave no instructions to the contrary. In
Frausto v. IC System, Inc., No. 10 CV 1363, 2011 WL 3704249, at *2
(N.D. Ill. Aug. 22, 2011), plaintiff had provided his cellular
phone number in applying for an account with an electronic payment
service

whose

terms

stated

that

account

information could be used to collect fees.

holders’

personal

The court found that

the plaintiff had expressly consented to receive debt-collection
calls and that the third-party debt collector who had called the
plaintiff stepped into the shoes of the payment service on whose
behalf it was attempting to recover the debt.

Id.

In Baird v.

Sabre Inc., 995 F. Supp. 2d 1100, 1106-07 (C.D. Cal. 2014), the

- 9 -

plaintiff had given an airline her cellular telephone number when
booking a flight.

The court held that she had therefore expressly

consented to receive a flight-notification text message from the
company that had contracted with the airline to send notifications
on the airline’s behalf.

In Greene v. DirecTV, Inc., No. 10 CV

117, 2010 WL 4628734, at *3 (N.D. Ill. Nov. 8, 2010), the court
concluded that the plaintiff, by providing her cellular telephone
number to a consumer reporting agency as the preferred manner for
potential creditors to contact her for verification purposes, had
expressly consented to receive fraud-alert notification calls from
one of the defendants, a third party that had contracted with a
potential creditor to make automated fraud-alert calls.
Plaintiff responds that these decisions are distinguishable
because plaintiff provided her cell phone number to Stompeez, not
Quality.

But

Frausto,

Baird,

and

Greene

all

stand

for

the

proposition that a third-party contractor performing services for
the entity to which a plaintiff provided her cell phone number
stands in the shoes of that entity in a consent analysis.

See,

e.g., Baird, 995 F. Supp. 2d at 1106 (“No reasonable consumer could
believe that consenting to be contacted by an airline company about
a scheduled flight requires that all communications be made by
direct employees of the airline, but never by any contractors
performing services for the airline.”); Frausto, 2011 WL 3704249,
at *2 (holding that the defendant debt collector was the equivalent

- 10 -

of the party to whom the plaintiff had provided her cell phone
number for purposes of the TCPA).3
Plaintiff’s
stronger.

second

argument

regarding

consent

is

much

Plaintiff points out that she provided her phone number

to Stompeez for an explicitly limited purpose--“questions about
[her] order”--and that Quality went beyond this purpose by trying
to sell her a Budget Savers membership.4

The FCC addressed the

concept of limited consent in a 2012 order as follows:
One commenter . . . appears to suggest that oral consent
is sufficient to permit any autodialed or prerecorded
calls to wireless numbers. It argues that its customers
may orally provide their wireless phone number as a point
of contact and therefore those customers expect marketing
and service calls. We disagree. Consumers who provide
a wireless phone number for a limited purpose--for
service calls only--do not necessarily expect to receive
telemarketing calls that go beyond the limited purpose
for which oral consent regarding service calls may have
been granted.

3/

In Frausto, the court relied on an FCC Declaratory Ruling in which the
FCC responded to a request by a trade association that represents debt-collection
agencies. In that Ruling, the FCC “clarif[ied] that autodialed and prerecorded
message calls to wireless numbers that are provided by the called party to a
creditor in connection with an existing debt are permissible as calls made with
the ‘prior express consent’ of the called party.” In re Rules & Regulations
Implementing the Tel. Consumer Prot. Act of 1991, Declaratory Ruling, 23 FCC Rcd.
559, 559 ¶ 1 (Jan. 4, 2008). The FCC also stated: “We emphasize that prior
express consent is deemed to be granted only if the wireless number was provided
by the consumer to the creditor, and that such number was provided during the
transaction that resulted in the debt owed.” Id. at 564-65 ¶ 10. Moreover,
“[c]alls placed by a third party collector on behalf of that creditor are treated
as if the creditor itself placed the call.” Id. at 565 ¶ 10.
The 2008 Declaratory Ruling pertained to debt collectors, but plaintiff
does not provide any reason why the FCC’s reasoning therein should not apply to
other kinds of callers who contract to provide calling services for the entity
to whom a phone number is knowingly given.
4/
Plaintiff also maintains that Quality’s “confirmation” of her address
for the Stompeez order was a pretext to promote Budget Savers. (Pl.’s Opp’n to
Quality’s Mot at 13 n.7.) The Budget Savers call script attached to plaintiff’s
complaint acknowledges that some of the call recipients may already have received
the products they had ordered. (Third Am. Compl., Ex. A.)

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In re Rules & Regulations Implementing the Tel. Consumer Prot. Act
of 1991, Report and Order, 27 FCC Rcd. 1830, 1840 ¶ 25 (Feb. 15,
2012).
In Kolinek v. Walgreen Co., No. 13 CV 4806, 2014 WL 3056813
(N.D.

Ill.

July

7,

2014),

Judge

Kennelly

reconsidered

the

defendant’s motion to dismiss the plaintiff’s claim that defendant
Walgreens had violated the TCPA by making automated “robocalls” to
plaintiff’s cell phone reminding him to refill his prescriptions.
The plaintiff alleged that he had provided his phone number to
Walgreens “for verification purposes (i.e., if another customer
[with the same name as plaintiff] attempted to fill a prescription
at the same Walgreens, the pharmacist would be able to confirm the
correct person using the phone number on record.” 2014 WL 3056813,
at *1.

The court had previously granted the defendant’s motion to

dismiss the claim, but plaintiff argued that the court should
reconsider that ruling in light of the FCC’s rulings interpreting
the prior express consent defense as well as its recent ruling
titled In re GroupMe, Inc./Skype Communications S.A.R.L Petition
for Expedited Declaratory Ruling, Rules & Regulations Implementing
the Tel. Consumer Prot. Act of 1991, Declaratory Ruling, 29 FCC
Rcd. 3442 (Mar. 27, 2014). Judge Kennelly discussed the FCC’s 1992
and 2012 orders and its 2008 ruling, and then stated:
In retrospect, the Court should have taken from the
2012 Order an indication that the FCC considers the scope
of a consumer’s consent to receive calls to be dependent
on the context in which it is given—contrary to what the
- 12 -

Court had seen in the 1992 Order as a general rule that
consent for one purpose means consent for all purposes.
Any doubt in this regard is removed by the GroupMe Order,
issued after the Court’s February 2014 ruling. In that
order, the FCC took the opportunity to “further clarify”
the boundaries of prior express consent under the TCPA.
GroupMe Order, 2013 WL 1266074, at *5 ¶ 12. The FCC said
that a consumer gives “prior express consent” when she
provides her wireless number to the private organizer of
a text message group “agree[ing] to receive associated
calls and texts.” This, the FCC said, gives the business
entity providing the private group messaging service the
consumer’s consent to receive certain administrative
texts and calls related to the operation of the private
messaging group as well as the private group members’
texts. Id.
The FCC went on to state that the “prior
express consent requirement is satisfied with respect to
both GroupMe and the group members regarding that
particular group, but only regarding that particular
group.” Id. (emphasis added). By that last clause, the
FCC made it clear that turning over one’s wireless number
for the purpose of joining one particular private
messaging group did not amount to consent for
communications relating to something other than that
particular group.
When one reads the cited FCC orders together, it is
clear that the Court erred in its February 2014 ruling in
this case. The FCC has established no general rule that
if a consumer gives his cellular phone number to a
business, she has in effect given permission to be called
at that number for any reason at all, absent instructions
to the contrary. Rather, to the extent the FCC’s orders
establish a rule, it is that the scope of a consumer’s
consent depends on its context and the purpose for which
it is given. Consent for one purpose does not equate to
consent for all purposes.
This, in the Court’s view, is a more natural reading
of the TCPA’s exception for a call “made with the prior
consent of the called party.” 47 U.S.C. § 227(b)(1)(A).
The “rule” that the Court had erroneously found in the
FCC 2008 Order amounted to a version of implied consent.
But that is not what the statute requires; it says that
prior express consent is needed. Walgreens’ argument to
the contrary, and the out-of-district cases it has cited
in support, are unpersuasive.
Kolinek’s complaint alleges that he gave Walgreens his
cellular phone number in response to a request from a
pharmacist who said it “was needed for potential identity
- 13 -

verification purposes.” Compl. ¶ 18. If that is what
happened, it does not amount to consent to automated
calls reminding him to refill his prescription.
The
Court does not, of course, adjudicate the accuracy of
Kolinek’s claim at this point; that must await factual
development. For now, the Court is required to take his
allegation as true.
As a result, Walgreens is not
entitled to dismissal under Rule 12(b)(6) based on its
prior express consent defense.
2014 WL 3056813, at *3-4 (emphasis added and citation omitted).
Judge Kennelly’s discussion is consistent with the FCC’s orders.
Accordingly, the court rejects Quality’s contention that Toney’s
providing her phone number to Stompeez “for questions about [her]
order” constituted consent to phone calls offering the services of
Budget Savers.
The court also rejects Quality’s characterization of its call
to Toney as a “confirmation telephone call.”
3.)

(Quality’s Mot. at

In a 2003 order that established the Do Not Call Registry, the

FCC discussed “dual-purpose” calls:
The so-called “dual purpose” calls described in the
record--calls from mortgage brokers to their clients
notifying them of lower interest rates, calls from phone
companies to customers regarding new calling plans, or
calls from credit card companies offering overdraft
protection to existing customers--would, in most
instances, constitute “unsolicited advertisements,”
regardless of the customer service element to the call.
The Commission explained in the 2002 Notice that such
messages may inquire about a customer’s satisfaction with
a product already purchased, but are motivated in part by
the desire to ultimately sell additional goods or
services. If the call is intended to offer property,
goods, or services for sale either during the call, or in
the future (such as in response to a message that
provides a toll-free number), that call is an
advertisement.

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In re Rules & Regulations Implementing the Tel. Consumer Prot. Act
of 1991, Report and Order, 18 FCC Rcd. 14014, 14098 ¶ 142 (July 3,
2003).

The FCC would deem Quality’s call a sales call.

Toney

alleges that the scope of her consent was limited to questions
about her Stompeez order and did not include consent to receive an
advertisement for another party’s services.

Pursuant to the FCC’s

orders and Kolinek, Quality is not entitled to dismissal at this
stage based on a prior express consent defense.
2.

Stompeez’s Privacy Policy

Quality attempts to bolster its consent defense by introducing
the Privacy
website.

Policy

that

was

located

somewhere5

This is a matter outside the pleadings.

on

Stompeez’s

Plaintiff does

not refer to the Privacy Policy in the complaint, nor is it central
to her claims.

“If, on a motion under Rule 12(b)(6) . . ., matters

outside the pleadings are presented to and not excluded by the
court, the motion must be treated as one for summary judgment under
Rule 56.

All parties must be given a reasonable opportunity to

present all the material that is pertinent to the motion.”
Civ. P. 12(d).

Fed. R.

Because plaintiff does not object to treating

Quality’s motion as a summary judgment motion, the court will do so

5/

The archived web address is printed on the copy of the Privacy Policy
that Quality provides. (Quality’s Mot., Ex. B.) The address, however, sheds no
light on how a user of Stompeez’s website would have found the Privacy Policy,
and there is no other evidence in that regard. For example, did Stompeez’s order
form contain a link to the Privacy Policy? Was there a link at the bottom of the
Stompeez home page? Moreover, Quality provides no evidence that the Privacy
Policy attached to its motion was the version in effect at the time Toney ordered
Stompeez in December 2012.
- 15 -

with regard to the Privacy Policy and address the substance of
Quality’s argument.
Quality relies on the following provisions of Stompeez’s
Privacy Policy as evidence that Toney “agreed . . . to provide
other organizations, such as Quality, permission to call her
cellular telephone for marketing purposes” (Quality’s Reply at 13):
By using any of [Stompeez’s] Websites, you signify that
you have read, understand and agree to be bound by this
Privacy Policy.
. . .
How We Use the Information We Collect.
The information we collect is used to communicate with
you about your product orders, improve the content of our
Websites, used to customize the content and/or layout of
our page for each individual visitor, used by us to
contact consumers for marketing purposes, shared with
other organizations to help them contact consumers by
email and/or telephone for marketing purposes, disclosed
when legally required to do so, at the request of
governmental authorities conducting an investigation, to
verify or enforce compliance with the policies governing
our Websites and applicable laws or to protect against
misuse or unauthorized use of our Websites.
(Quality’s Mot., Ex. B, at 1 (emphasis added).)

In Quality’s

view, the Privacy Policy “demonstrate[s] that Plaintiff provided
her cellular telephone number knowing that she would be contacted
by other organizations, such as Quality, about her order and for
marketing purposes.”

(Quality’s Reply at 5 (emphasis added).)

Quality fails to submit any evidence indicating that Toney saw
the Privacy Policy or agreed to it when she placed her Stompeez
order.

It fails to cite any authority for the propositions that

the Privacy Policy binds Toney simply because she used Stompeez’s

- 16 -

website

or

that

the

existence

of

the

Privacy

Policy

is

the

equivalent of express consent to receive telemarketing calls.
Furthermore, the statement Quality relies upon--“[t]he information
we collect . . . is shared with other organizations to help them
contact consumers by email and/or telephone for marketing purposes”
is not a clear expression that the ordering party would be among
those consumers who would possibly be “contact[ed] by email and/or
telephone for marketing purposes.”

The phrase appears to be

deliberately vague in that sense and by referring to Stompeez’s
action, which is a step removed from contact--“sharing” information
to “help” “other organizations” contact unspecified “consumers.”
This provision of the Privacy Policy does not use same type of
direct language used in the first phrase, which states plainly to
users

that

the

information

Stompeez

collects

“is

used

to

communicate with you about your product orders” (emphasis added).
Even if Quality had provided evidence or law to support its
argument that the Privacy Policy binds Toney, the statement upon
which it relies in the Privacy Policy is not clear enough to
constitute an express notification that website users would be
contacted by third parties for marketing purposes.
C.

“Upsells”

Quality

asserts

that

“[a]fter

verifying

and

completing

Plaintiff’s order, Quality was permitted to market or upsell” a
third party’s services.

(Quality’s Mot. at 16.)

- 17 -

Quality argues

that it is therefore entitled to summary judgment, but it offers no
evidence

that

Quality called.

Toney’s

Stompeez

order

was

“incomplete”

before

(Toney’s position is that the order was complete

and that the need to “verify” her information was a pretext.)
Quality bases its “upsell” argument in part on its argument
that the complaint makes clear, or there is no genuine issue that,
Toney expressly consented to Quality’s calls, which the court has
rejected.

Quality also contends that it “abided by the applicable

TSR requirements for upselling.”

(Quality’s Mot. at 16.)

By

“TSR,” Quality is referring to the “Telemarketing Sales Rule,” 16
C.F.R. § 310.1 et seq. (the “Rule”), an FTC rule that prohibits
deceptive or abusive telemarketing acts or practices.

Quality

fails to develop its argument by explaining how the TSR interacts
with the TCPA or why compliance with the Rule would entitle it to
summary judgment on a claim for violation of the TCPA.

Moreover,

the Rule defines the act of “upselling” as “soliciting the purchase
of goods or services following an initial transaction during a
single telephone call. The upsell is a separate telemarketing
transaction, not a continuation of the initial transaction.”
C.F.R. § 310.2(ee).

16

Quality characterizes its Budget Savers offer

as an “upsell” but fails to explain why the call fits within the
Rule’s definition. Plaintiff does not allege, and Quality does not
submit any evidence, that any “initial transaction” occurred during
the call.

Accordingly, Quality’s assertion that it was permitted

- 18 -

under the TCPA to “upsell” Sempris and Provell’s services fails.
D.

Class Action Allegations

Quality

maintains

that

Toney’s

class

allegations

“implausible” and pleaded in a conclusory manner.
disagrees.

are

The court

The Third Amended Complaint contains sufficient facts

to support the class allegations.

Quality also makes a number of

premature arguments regarding the suitability of class treatment.
The court views this presentation as an improper preemptive attack
on the putative classes prior to class certification proceedings.
The parties

have

not

yet

completed

discovery,

allegations are not facially deficient.

and

the

class

See, e.g., Boatwright v.

Walgreen Co., No. 10 CV 3902, 2011 WL 843898, at *2 (N.D. Ill. Mar.
4,

2011)

(“Because

a

class

determination

decision

generally

involves considerations that are enmeshed in the factual and legal
issues comprising the plaintiff’s cause of action, . . .

a

decision denying class status by striking class allegations at the
pleading stage is inappropriate.”); Birchmeier v. Caribbean Cruise
Line, Inc., No. 12 CV 4069, 2012 WL 7062748, at *2 (N.D. Ill. Dec.
31, 2012) (“Plaintiffs have alleged the necessary elements under
Rule 23, and they have done so plausibly. Determination of whether
plaintiffs actually can establish the basis for class certification
is premature.”).
The

court

denies

Quality’s

motion

alternative for summary judgment.

- 19 -

to

dismiss

or

in

the

II.

Sempris and Provell’s Motion to Dismiss
A.

Provell

Toney alleges that she received the calls at issue here in
December 2012.

(Third Am. Compl. ¶¶ 34-35.)

Provell, which was a

Delaware corporation, maintains that its shareholders dissolved it
on October 30, 2012 and thus it could not have committed the acts
that allegedly violated the TCPA because it no longer existed as a
corporate entity.
Provell submits a Delaware Certificate of Dissolution (the
“Certificate”) for Provell, Inc., dated October 31, 2012, which
states that Provell’s dissolution was effective on October 31,
2012.

(Sempris & Provell’s Mem. in Supp. of Mot., Ex. 1.)

Provell

requests that the court take judicial notice of the Certificate,
and plaintiff does not object.

The court will do so because it may

take judicial notice of matters within the public record without
converting

a

Rule

12(b)(6)

motion

into

a motion

for

summary

judgment.

Adkins v. VIM Recycling, Inc., 644 F.3d 483, 493 (7th

Cir. 2011).
In response, Toney cites the following Delaware statute:
Continuation of corporation after
dissolution for purposes of suit and winding up affairs
All corporations, whether they expire by their own
limitation or are otherwise dissolved, shall nevertheless
be continued, for the term of 3 years from such
expiration or dissolution or for such longer period as
the Court of Chancery shall in its discretion direct,
bodies corporate for the purpose of prosecuting and
defending
suits,
whether
civil,
criminal
or
- 20 -

administrative, by or against them, and of enabling them
gradually to settle and close their business, to dispose
of and convey their property, to discharge their
liabilities and to distribute to their stockholders any
remaining assets, but not for the purpose of continuing
the business for which the corporation was organized.
With respect to any action, suit or proceeding begun by
or against the corporation either prior to or within 3
years after the date of its expiration or dissolution,
the action shall not abate by reason of the dissolution
of the corporation; the corporation shall, solely for the
purpose of such action, suit or proceeding, be continued
as a body corporate beyond the 3-year period and until
any judgments, orders or decrees therein shall be fully
executed, without the necessity for any special direction
to that effect by the Court of Chancery. . . .
Del. Code Ann. tit. 8, § 278.
Section 278 provides that a Delaware corporation like Provell
is subject to suit for at least three years after dissolution.

But

the court agrees with Provell that by relying on this statute,
Toney is confusing the ability to commence a lawsuit against an
entity after its dissolution with the ability of that entity to
perform an act that could subject it to liability.

The question is

whether Toney has stated a claim against Provell for acts that
allegedly occurred after Provell was dissolved.

Toney omits from

her citation of the statute the important exception stating that a
dissolved corporate entity is not continued “for the purpose of
continuing the business for which the corporation was organized,”
and she fails to cite any authority for the proposition that a
dissolved corporation has any ability to perform acts that would
subject it to liability.

Toney points out that the Budget Savers

website stated as late as May 2013 that it was “owned and operated
- 21 -

by Provell,”6 but that representation does not change the fact that
Provell was dissolved on October 31, 2012.
Plaintiff also contends that Provell should be liable for
Sempris’s conduct because “Provell originally wrote the contract
and came up with the telemarketing scheme that is the subject of
this case” and that the court should treat Sempris and Provell “as
a single entity for purposes of this suit” because “Sempris is a
mere corporate continuation of Provell.”
& Provell’s Mot. at 21-22.)

(Pl.’s Opp’n to Sempris

Plaintiff fails to cite authority in

support of either argument.
The court dismisses Provell with prejudice for failure to
state a claim.
B.

Sempris

Sempris contends that Toney has failed to allege facts to
support her claims under either a direct or vicarious liability
theory.7

It also contends that Toney’s “Do Not Call” claim in

Count I must be dismissed because she fails to allege that she
received more than one telephone call within a twelve-month period
by or on behalf of Sempris.

6/
This representation was promptly changed to substitute Sempris for
Provell when plaintiff’s counsel brought the matter to the attention of
defendants’ counsel. (Pl.’s Opp’n to Sempris & Provell’s Mot. at 21 n.12.)
7/
Provell also makes this argument. The court has dismissed Provell
because it did not exist at the time of the alleged misconduct, but the court
will note in this discussion how plaintiff has otherwise failed to state a claim
against Provell.

- 22 -

1.

Direct Liability

Toney does not allege that she received any phone calls from
Sempris; she alleges that Quality made all of the calls at issue.
(Third Am. Compl. ¶¶ 34-35.)

Sempris asserts that plaintiff thus

fails to state a claim against it for direct TCPA liability.
Plaintiff impliedly concedes that she fails to state a claim
against Sempris and Provell under a direct liability theory as to
Count II.

(Pl.’s Opp’n to Sempris & Provell’s Mot. at 7-11.)

As

to Count I, she does not argue outright that she has stated a claim
under a direct liability theory, but simply directs the court’s
attention to the following language of 47 U.S.C. § 227(c), the
TCPA’s Do Not Call provision:

“A person who has received more than

one telephone call within any 12-month period by or on behalf of
the same entity in violation of the regulations prescribed under
this subsection may . . . bring . . . an action based on a
violation of the regulations prescribed under this subsection . .
. .”

47 U.S.C. § 227(c)(5) (emphasis added).

She also contends

that “[i]t is well settled that a company can be liable for a
227(c)(5) violation despite having not physically dialed the call
at issue.”
fails to

(Pl.’s Opp’n to Sempris & Provell’s Mot. at 8.)
develop

any

argument,

however,

that

“on

behalf

She
of”

liability under this provision is equivalent to direct liability,
and thus waives the argument.
Toney’s direct liability argument also fails to address a 2013

- 23 -

FCC Declaratory Ruling, cited in the next section of her brief, in
which the FCC construed the term “on behalf of,” as well as case
law relying on the FCC’s construction.

The FCC clarified that a

seller is not directly liable for a violation of the TCPA unless it
“initiates” a call, meaning “tak[ing] the steps necessary to
physically place a telephone call,” but that it could “be held
vicariously liable under federal common law agency principles for
a TCPA violation by a third-party telemarketer.”

In re Joint

Petition Filed By Dish Network, LLC, Declaratory Ruling, 28 FCC
Rcd. 6574, 6582-83 ¶¶ 24-26 (May 9, 2013) (the “2013 FCC Ruling”);
Smith v. State Farm Mut. Auto. Ins. Co., No. 13 CV 2018, 2014 WL
3906923, at *3 (N.D. Ill. Aug. 11, 2014); Golan v. Veritas Entm’t,
LLC, No. 4:14 CV 00069 ERW, 2014 WL 2095310, at *4 (E.D. Mo. May
20, 2014). The parties do not dispute that Quality, not Sempris or
Provell, physically placed the allegedly unlawful calls at issue.
Plaintiff has therefore failed to state a claim against Sempris and
Provell under a direct liability theory.
2.

Vicarious Liability

Sempris contends that Toney also fails to state claims against
it for vicarious TCPA liability.

As discussed above, the FCC in

its 2013 Ruling clarified that a seller who does not initiate a
call nonetheless may be held vicariously liable under federal
common law principles of agency for violations of § 227(b) and
227(c) that are committed by third-party telemarketers.

- 24 -

2013 FCC

Ruling, 28 FCC Rcd. 6582-83 ¶¶ 24-26.

The FCC further explained

that a seller may face vicarious liability “under a broad range of
agency principles, including not only formal agency, but also
principles of apparent authority and ratification.”
28.

Id. at 6584 ¶

The parties acknowledge that this FCC ruling applies here.

Plaintiff contends that Sempris is vicariously liable for Quality’s
telemarketing calls under formal agency principles and principles
of apparent authority and ratification.
a. Formal Agency
Agency is a “fiduciary relationship that arises when one
person (a ‘principal’) manifests assent to another person (an
‘agent’) that the agent shall act on the principal’s behalf and
subject to the principal’s control, and the agent manifests assent
or otherwise consents so to act.”
1.01 (2006).8
apparent.

Restatement (Third) of Agency §

The agent’s authority to act may be either actual or

Id. §§ 2.01, 2.03 (2006); 2013 FCC Ruling, 28 FCC Rcd.

6586 ¶ 34.

“An essential element of agency is the principal’s

right to control the agent’s actions.”

Restatement (Third) of

Agency § 1.01, cmt. f(1) (2006). In particular, “[t]he power to
give

interim

instructions

distinguishes

principals

in

agency

relationships from those who contract to receive services provided
by persons who are not agents.”

Id.

8/
The federal common law of agency is in accord with the Restatement.
Opp v. Wheaton Van Lines, Inc., 231 F.3d 1060, 1064 (7th Cir. 2000); NECA-IBEW
Rockford Local Union 364 Health & Welfare Fund v. A & A Drug Co., 736 F.3d 1054,
1058 (7th Cir. 2013).

- 25 -

Viewing

the

allegations

in

the

light

most

favorable

to

plaintiff and drawing all reasonable inferences in her favor, as
the court must, plaintiff has alleged sufficient facts to make it
plausible that Quality was acting as Sempris’s agent when it placed
the calls at issue. Plaintiff alleges that Quality and Sempris had
a telemarketing agreement pursuant to which Sempris authorized
Quality, and Quality assented, to make telemarketing calls like the
ones to plaintiff for the purpose of entering into Budget Savers
contracts with the call recipients on Sempris’s behalf, and that
Sempris was authorized to enter into contracts on Sempris’s behalf.
(Third Am. Compl. ¶¶ 2, 37-40, 49-52.)9

Plaintiff further alleges

that Sempris had the right to, and did, control the manner and
means of Quality’s telemarketing that promoted Budget Savers;
participated in developing the script and sales pitch that Quality
used; required that solicitations be presented “verbatim” to call
recipients; required the consensual recording of all calls made on
Sempris’s behalf; required that Quality provide Sempris’s toll-free
phone number during telemarketing calls; and, in regard to sales,
imposed strict guidelines about Quality’s handling of credit card
numbers

and

conditions.

customers’

acceptance

(Id. ¶¶ 53-57, 59.)

of

Sempris’s

terms

and

Furthermore, plaintiff alleges

9/
Plaintiff does not allege that Provell and Quality had the same
contract, but merely a “similar arrangement.”
(Third Am. Compl. ¶ 52.)
Moreover, plaintiff does not allege that Provell exercised control over Quality
to the extent that Sempris did. Accordingly, plaintiff fails to state a claim
against Provell for vicarious TCPA liability pursuant to a formal agency theory.

- 26 -

that Sempris directly participated in the telemarketing in that
Quality uses a script in which the caller informs call recipients
that “the verification department is going to hop on the line to
make

sure

[the

caller]

covered

everything”

and

asks

if

the

recipient has any questions “about Budget Savers before [the
caller] brings them on the line.”

Plaintiff alleges that the

“verification department” is Sempris itself.10
Sempris

contends

that

plaintiff’s

(Id. ¶ 60.)

allegations

“directly

contradict the contract between Quality and Sempris, which provides
that ‘Sempris shall not have any direct or indirect control over
[Quality’s] methods of marketing the [Budget Savers] Programs or
its Marketing Solicitations.’”

(Sempris & Provell’s Mem. in Supp.

of Mot. at 10 (quoting Ex. 2 at 1).)

The full quotation from the

Telemarketing Program Sales Agreement (the “Agreement”), however,
reads: “Although Sempris shall not have any direct or indirect
control over [Quality’s] methods of marketing the Programs or its
Marketing

Solicitations,

[Quality]

agrees

to

adhere

to

the

Confirmation and Verification Criteria described in Exhibit B

10/

Plaintiff acknowledges in her brief that “there appears to be a
question as to whether Quality is the true entity that closes and verifies the
sale, because Quality is the entity that is in possession of the recordings of
such verification conversations,” but that both possibilities “support a finding
of liability,” under a formal agency theory if Sempris actually participated in
the call or otherwise an apparent authority theory because Sempris authorized
Quality to represent that it was transferring the call to “Budget Savers.”
(Pl.’s Opp’n to Sempris & Provell’s Mot. at 15 n.9.)
Sempris contends that plaintiff’s argument “plainly distorts” Quality’s
call script in that the reference to “them” being brought “on the line” means
Quality’s “verification department,” not Budget Savers. (Sempris & Provell’s
Reply at 6 n.3.) Plaintiff concedes that “it seems less likely” that Sempris
actually “c[a]me onto the line.” (Pl.’s Opp’n to Sempris & Provell’s Mot. at 15
n.9.) The call script is ambiguous.
- 27 -

attached hereto.”

(Id.)

Exhibit B to the Agreement states: “All

sales must comply with the following Confirmation and Verification
criteria without any deviation whatsoever” and contains a detailed
list of requirements. It demonstrates a certain amount of control,
regardless of the label that Quality and Sempris chose to utilize.
Sempris also points out that the Agreement states that it
“creates no agency, partnership or joint venture relationship.”
(Sempris & Provell’s Mem. in Supp. of Mot., Ex. 2, at 6.)

But the

existence of an agency relationship is a question of fact, and
agency can be created by contract or by conduct.

See, e.g.,

Chemtool, Inc. v. Lubrication Techs., Inc., 148 F.3d 742, 745-46
(7th Cir. 1998).
relationship

to

How Sempris and Quality intended for their
operate

is

of

course

relevant,

but

not

determinative, of how it actually functioned. The court is mindful
that discovery is not yet complete and therefore plaintiff does not
have access to all of the details about Sempris and Quality’s
relationship.
Sempris also asserts that plaintiff fails to allege that
Sempris had the power to give Quality interim instructions, which
is

the

hallmark

of

an

agency

relationship.

Admittedly,

the

existence of a contract between Sempris and Quality, even one that
imposes many constraints on Quality, does not necessarily mean that
Sempris had the power to give interim instructions to Quality.
Plaintiff, however, alleges sufficient facts to show that Sempris

- 28 -

in fact exercised a level of control over Quality’s telemarketing
activities

to

make

the

existence

of

an

agency

relationship

plausible. Those facts alone ultimately may not be enough to allow
plaintiff to prevail, but they are enough to satisfy federal
notice-pleading standards with respect to this issue.

See Iqbal,

556 U.S. at 678.
b.

Apparent Authority

“Apparent authority holds a principal accountable for the
results of third-party beliefs about an actor’s authority to act as
an agent when the belief is reasonable and is traceable to a
manifestation of the principal.”
2.03 cmt. c (2006).

Restatement (Third) of Agency §

Accordingly, to plead apparent authority,

Toney must allege that she reasonably believed that Quality called
her as Sempris’s agent and that her belief is traceable to a
manifestation of Quality’s authority from Sempris.

See id.

Toney fails to plead a plausible basis for holding Sempris
liable under an apparent authority theory. She fails to plead that
she reasonably believed that Quality was Sempris’s agent, and she
also

fails

to

trace

any

belief

she

may

have

had

about

the

relationship between Quality and Sempris to a manifestation of
Sempris (the alleged principal), rather than a representation made
by

Quality

(the

alleged

agent).

It

is

well

established

that

apparent authority must derive from the statements or actions of
the alleged principal, not the alleged agent.

- 29 -

See Opp, 231 F.3d at

1064 (“[O]nly the words or conduct of the alleged principal, not
the alleged agent, establish the actual or apparent authority of an
agent.”(brackets omitted)); see also Restatement (Third) of Agency
§ 2.03 cmt. c (2006) (“An agent’s success in misleading the third
party as to the existence of actual authority does not itself make
the

principal

accountable.”).

In

other

words,

for

apparent

authority to exist, the principal “must communicate either directly
or indirectly with the third party” or take some action that
instills in the third party a reasonable belief that the actor had
authority to act as the principal’s agent.

See Bridgeview Health

Care Ctr. Ltd. v. Clark, No. 09 CV 5601, 2013 WL 4495221, at *3
(N.D.

Ill.

Aug.

21,

2013).

Toney

cannot

base

her

apparent

authority theory solely on Quality’s representations.

Because

Toney did not communicate directly or indirectly with Sempris, she
has failed to plead a plausible basis for holding Sempris liable
under an apparent authority theory.

See, e.g., Opp, 231 F.3d at

1064; see also Restatement (Third) of Agency § 3.03 cmt. b (2006).
Plaintiff relies solely on the 2013 FCC Ruling to support her
apparent authority argument.
paragraphs

of

“guidance”

In that ruling, the FCC provided two

containing

“illustrative

examples

of

evidence that may demonstrate that [a] telemarketer is [a] seller’s
authorized representative with apparent authority to make the
seller vicariously liable for the telemarketer’s section 227(b)
violations.”

See 2013 FCC Ruling, 28 FCC Rcd. 6592–93 ¶¶ 46–47.

- 30 -

Plaintiff’s allegations pertaining to apparent authority closely
track several of the examples the FCC provided.

She alleges, for

example, that (1) Sempris “allow[ed] the outside sales entity
access to information and systems that normally would be within the
seller’s exclusive control, including . . . access to detailed
information regarding the nature and pricing of the seller’s
products”; (2) Quality has the “ability . . . to enter consumer
information into the seller’s sales or customer systems”; and (3)
Sempris reviewed and edited Quality’s telemarketing scripts. (Third
Am. Compl. ¶¶ 75-77 (quoting the 2013 FCC Ruling).)
The FCC’s “guidance” on this subject, however, is not binding
on the court, is not entitled to deference, and “has force only to
the

extent

conclusion.”

the

[FCC]

can

persuade

[the

court]

to

the

same

Dish Network, L.L.C. v. FCC, 552 F. App’x at 1–2

(D.C. Cir. 2014).

Federal common law principles of apparent

authority impose liability on a principal for its alleged agent’s
actions even though the agent lacked authority to take such actions
when a third party reasonably believed that the agent did, in fact,
act

within

its

authority,

and

the

belief

is

traceable

to

a

manifestation of the principal.

Neither the FCC nor plaintiff has

provided

for

a

persuasive

reason

the

court

to

deviate

from

established principles of federal agency law here. While it may be
possible for plaintiffs in some cases to allege apparent authority
through the examples the FCC provided, plaintiff’s attempt to do so

- 31 -

here fails for the reasons explained above.11
c.

Ratification

“Ratification

is

the

affirmance

of

a

prior

act

done

by

another, whereby the act is given effect as if done by an agent
acting with actual authority.”
4.01(1) (2006).

Restatement (Third) of Agency §

A principal can ratify an act by “(a) manifesting

assent that the act shall affect the person’s legal relations, or
(b) conduct that justifies a reasonable assumption that the person
so consents.”

Id. § 4.01(2).

A principal, however, “is not bound

by a ratification made without knowledge of material facts about
the agent’s act unless the principal chose to ratify with awareness
that such knowledge was lacking.”

Id. § 4.01 cmt. b.

“[K]nowing

acceptance of the benefits of a transaction ratifies the act of
entering into the transaction.”

Restatement (Third) of Agency §

4.01 cmt. d.
Plaintiff alleges that Sempris ratified Quality’s misconduct
by knowingly accepting the benefits from tens of thousands of sales
of Budget Savers memberships that Quality completed, while knowing
that Quality was using automated dialing to obtain those customers.
(Third Am. Compl. ¶¶ 39-40, 79, 83-84.)

Plaintiff also alleges

that Quality and Sempris were aware of a host of complaints that
call

recipients

had

lodged

concerning

Quality’s

calls

about

Stompeez and Budget Savers but that they nevertheless persisted
11/
For the same reasons, plaintiff also fails to state a claim against
Provell for vicarious TCPA liability pursuant to a theory of apparent authority.

- 32 -

with the telemarketing campaign and accepted its benefits.

(Third

Am. Compl. ¶¶ 82-84; Pl.’s Opp’n to Sempris & Provell’s Mot. at 1920.)
Plaintiff’s ratification theory fails because plaintiff does
not allege that Sempris or Provell accepted any benefit that
stemmed from Quality’s telemarketing calls to plaintiff.

Indeed,

plaintiff fails to allege that she did business with Sempris or
Provell as a result of Quality’s calls.
3.

Do Not Call Claim (Count I)

Sempris asserts that Toney’s “Do Not Call” claim in Count I
fails as a matter of law because Toney admits in the complaint that
she answered only one call during which Budget Savers was allegedly
marketed to her.

To state a “Do Not Call” claim, Toney must allege

facts allowing a reasonable inference that she “received more than
one telephone call within any 12-month period by or on behalf of
the same entity in violation of the regulations.”
227(c)(5).

47 U.S.C. §

Sempris does not dispute that Quality initiated four

calls to Toney in December 2012, Sempris & Provell’s Reply at
11-12, but contends that Toney “cannot plausibly allege that the
three unanswered calls she purportedly received were initiated by
Quality for the purpose of marketing Sempris’s Budget Savers
membership program, because Toney does not allege--and cannot
allege--that she has any personal knowledge of what the content of
those calls would have been.”

(Sempris & Provell’s Reply at 12.)

- 33 -

Toney alleges that the three unanswered calls she received on
December 10, 2012 were made by Quality “at the direction of, and
for the benefit of, Sempris/Provell.”

(Third Am. Compl. ¶ 34.)

Sempris submits that Quality “just as easily could have been
calling Toney to market the goods or services of another company it
contracts with, for the exclusive purpose of confirming Toney’s
Stompeez order, or for a different purpose altogther” and that
“Toney’s assertion that that Quality made the three unanswered
calls for the purpose of marketing Budget Savers is nothing more
than rank speculation.” (Sempris & Provell’s Reply at 12-13.) The
court disagrees.

Toney has alleged that she received and answered

a call from Quality in which the caller tried to sell her a Budget
Savers membership the day after she received three unanswered calls
from Quality.

The content and timing of the fourth call allows the

court to draw a reasonable inference that Quality made the first
three calls to market Sempris’s services.
The court denies Sempris and Provell’s motion to dismiss as to
defendant Sempris.
CONCLUSION
The court denies the motion of defendant Quality Resources,
Inc. to dismiss the Third Amended Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(6) or for summary judgment pursuant
to Federal Rule of Civil Procedure 56(c) [140].

The court grants

in part and denies in part the motion of defendants Sempris, LLC

- 34 -

and Provell, Inc. to dismiss the Third Amended Complaint pursuant
to Federal Rule of Civil Procedure 12(b)(6) [135].

The court

dismisses Provell, Inc. from this lawsuit with prejudice but denies
the motion to dismiss with respect to Sempris, LLC.

The Third

Amended Complaint contains sufficient factual allegations to plead
a plausible basis for holding Sempris, LLC vicariously liable for
the alleged misconduct of Quality Resources, Inc. under a formal
agency theory, but not under theories of apparent authority or
ratification.
A status hearing is set for December 9, 2014 at 11:00 a.m. to
set a date for the close of discovery.

DATE:

December 1, 2014

ENTER:

_________________________________________________
Amy J. St. Eve, United States District Judge

- 35 -