Selou v. Integrity Solution Services, Inc.
Filing
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OPINION and ORDER Granting Defendant Livevox's 50 Motion to Dismiss the Second Amended Complaint and Dismissing Livevox as a Party to this Action. Signed by District Judge Linda V. Parker. (RLou)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JOD SELOU,
Plaintiff,
Civil Case No. 15-10927
Honorable Linda V. Parker
v.
INTEGRITY SOLUTION SERVICES
INC., INTEGRITY ACQUISITION, LLC,
CENTRAL CREDIT SERVICES, INC., RADIUS
GLOBAL SOLUTIONS, INC., NAVIENT
SOLUTIONS, INC., and LIVEVOX, INC.
Defendants.
________________________________/
OPINION AND ORDER GRANTING DEFENDANT LIVEVOX’S MOTION
TO DISMISS THE SECOND AMENDED COMPLAINT AND DISMISSING
LIVEVOX AS A PARTY TO THIS ACTION
Plaintiff filed this lawsuit in a Michigan state court against Defendant
Integrity Solution Services, Inc. (“Integrity”) alleging violations of the federal
Telephone Consumer Protection Act (“TCPA”) and Fair Debt Collection Practices
Act (“FCPA”) and Michigan’s Occupational Code and Regulation of Collection
Practices Act. Integrity removed the action to federal court based on federal
question jurisdiction on March 12, 2015. Plaintiff thereafter filed an Amended
Complaint, adding five additional entities as defendants. (ECF No. 8.) In the
Amended Complaint, Plaintiff asserts the following claims against those
defendants: (I) negligent violation of the TCPA; (II) willful violation of the TCPA;
(III) violations of the FDCPA; (IV) violations of the Michigan Occupational Code
(“MOC”); and (V) violations of the Michigan Collection Practices Act (“MCPA”).
Defendant LiveVox, Inc. (“LiveVox”) filed a motion to dismiss Plaintiff’s
Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on
December 30, 2015. (ECF No. 50.) Plaintiff filed a response to the motion on
January 19, 2016. (ECF No. 52.) LiveVox filed a reply brief on February 2, 2016.
(ECF No. 55.) Finding the facts and legal arguments sufficiently developed in the
parties’ pleadings, the Court is dispensing with oral argument with respect to
LiveVox’s motion pursuant to Eastern District of Michigan Local Rule 7.1(f). For
the reasons that follow, the Court now grants the motion.
I.
Rule 12(b)(6) Standard
A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of
the complaint. RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134
(6th Cir. 1996). Under Federal Rule of Civil Procedure 8(a)(2), a pleading must
contain a “short and plain statement of the claim showing that the pleader is
entitled to relief.” To survive a motion to dismiss, a complaint need not contain
“detailed factual allegations,” but it must contain more than “labels and
conclusions” or “a formulaic recitation of the elements of a cause of action . . ..”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint does not
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“suffice if it tenders ‘naked assertions’ devoid of ‘further factual enhancement.’ ”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557).
As the Supreme Court provided in Iqbal and Twombly, “[t]o survive a
motion to dismiss, a complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’ ” Id. (quoting Twombly,
550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). The
plausibility standard “does not impose a probability requirement at the pleading
stage; it simply calls for enough facts to raise a reasonable expectation that
discovery will reveal evidence of illegal [conduct].” Twombly, 550 U.S. at 556.
In deciding whether the plaintiff has set forth a “plausible” claim, the court
must accept the factual allegations in the complaint as true. Erickson v. Pardus,
551 U.S. 89, 94 (2007). This presumption, however, is not applicable to legal
conclusions. Iqbal, 556 U.S. at 668. Therefore, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Id. (citing Twombly, 550 U.S. at 555).
II.
Relevant Factual and Procedural Background
According to Plaintiff’s Amended Complaint, all of the named defendants,
except Defendant Navient Solutions, Inc. (“Navient”) and LiveVox, are entities
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related to Integrity.1 (Am. Compl. ¶¶ 16-28; 61-65.) Plaintiff alleges that the
Integrity-related defendants (hereafter collectively “Integrity Defendants”) are
“debt collector[s],” “collection agenc[ies],” or “regulated person[s]” as those terms
are defined in the FDCPA, the Michigan Occupational Code, and/or the MCPA.
(Id. ¶¶ 16, 24-25, 30-31, 40-41.) According to Plaintiff, Integrity and CCS are
defined as “any person” prohibited from auto-dialing cellular phone devices under
the TCPA, 47 U.S.C. § 227(b)(1)(iii). (Id. ¶¶ 17, 42.)
Plaintiff claims that CCS uses LiveVox’s automated dialing software
systems and Interactive Voice Response (“IVR”) systems in CCS’ debt collection
efforts. (Id. ¶¶ 45-48, 77.) An IVR system “use[s] pre-recorded voices to guide
people through various menus in a telephone communication system.” (Id. ¶ 47.)
Plaintiff alleges that “[t]he LiveVox system is an ATDS [Automated Telephone
Dialing System] under the TCPA.” (Id. ¶ 49.)
In late 2011 or early 2012, Integrity began collection activity with respect to
Plaintiff’s defaulted Sallie Mae student loan by calling Plaintiff’s cellular phone
using an ATDS. (Id. ¶¶ 69, 71.) “The defaulted debt [had been] assigned,
transferred or sold to Navient” which services and collects student loan debts. (Id.
Specifically, Plaintiff indicates that Defendant Radius Global Solutions, LLC
(“Radius”) is the successor of Integrity. (Am. Compl. ¶¶ 20, 61-62.) Defendant
Central Credit Services, Inc. is a subsidiary of Radius. (Id.) Defendant Integrity
Acquisitions LLC (“IA”) is a Florida limited liability company located in Florida.
(Id. ¶ 22.) IA’s sole member is Radius. (Id. ¶ 26.)
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¶¶ 53, 70.) While the calls temporarily ceased when Plaintiff agreed to make
payments toward the debt, she claims they resumed in Spring 2014 after she
stopped making those payments. (Id. ¶ 73.) Plaintiff claims that CSS and Integrity
also called her place of employment and her parents’ telephones. (Id. ¶¶ 78-79.)
Integrity continued making the debt collection calls to Plaintiff’s cellular phone
numbers until July 2014, when CCS took over the collection activity. (Id. ¶¶ 7375.) Plaintiff claims that she directed Integrity and CCS verbally and in writing to
stop calling, but the calls did not cease. (Id. ¶¶ 79-81.)
III.
Applicable Law and Analysis
LiveVox seeks dismissal of Plaintiff’s claims against it, arguing that
LiveVox only provides technological services through which its customers can
make phone calls and thus functions as a common carrier with no liability under
the TCPA or related statutes. (ECF No. 50 at Pg ID 643.) “Even if LiveVox is not
considered akin to a common carrier,” it argues that Integrity or CCS made the
calls at issue, not LiveVox. (Id.) Thus, LiveVox contends that Plaintiff’s claims
fail as a matter of law.
Plaintiff argues in response to LiveVox’s motion that she “added LiveVox as
a party directly liable for enabling the Defendants’ collection calls to plaintiff
through its automated telephone dialing system hardware and software platform.”
(ECF No. 52 at Pg ID 688.) Plaintiff spends a considerable portion of her response
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brief citing and/or discussing several cases holding or reflecting that LiveVox’s
system is an ATDS. (See id. at 689-692.) She then maintains that “LiveVox’s
technology made the calls” (id. at 693), but appears to alternatively argue that
LiveVox could be held vicariously liable for the calls made by Integrity and CCS
by providing the technology that enables those entities to engage in their
automated dialing collection campaigns. (Id. at 688-89, 693.) Plaintiff fails to
address LiveVox’s liability under the FDCPA, MOC, or MCPA.
As an initial matter, Plaintiff’s failure to address any claim but her TCPA
claim in response to LiveVox’s motion to dismiss is cause for dismissing those
claims. Humphrey v. U.S. Attorney General’s Office, 279 F. App’x 328, 331 (6th
Cir. 2008) (finding that a plaintiff’s failure to oppose arguments raised in the
defendants’ motion to dismiss is grounds for the district court to assume that
opposition to the motion is waived). Nevertheless, even if Plaintiff is not deemed
to have abandoned her FDCPA and state law claims, the Court finds that she fails
to state a claim against LiveVox upon which relief may be granted with respect to
those claims.
Liability under the FDCPA is limited to debt collectors. Waddington v.
Credit Acceptance Corp., 76 F.3d 103, 104 (6th Cir. 1996). Plaintiff does not
allege that LiveVox is a “debt collector” and LiveVox does not qualify as a “debt
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collector” as the statute defines that term.2 See 15 U.S.C. § 1692a(6). The Sixth
Circuit has held that a company that is not a debt collector cannot be held
vicariously liable under the FDCPA. Waddington, 76 F.3d at 108.
Like the FDCPA, the MCPA and the MOC target the conduct of debt
collectors. See Newman v. Trott & Trott, P.C., 889 F. Supp. 2d 948, 965-66 (E.D.
Mich. 2012) (citing Mich. Comp. Laws §§ 339.901(b), 445.251(g)); see also
Gamby v. Equifax Info. Servs., LLC, 462 F. App’x 552, 554 (6th Cir. 2012)
(internal quotation marks, citations, and brackets omitted) (“Generally speaking,
the [MCPA] prohibits abusive collection efforts . . ..”). Plaintiff’s MCPA and
MOC claims simply duplicate her claims under the FDCPA. In that case, the
Michigan courts have held that the plaintiff’s state law claims need not be
addressed separately and fail for the same reason as the plaintiff’s FDCPA claims.
See Scheuer v. Jefferson Capital Sys., LLC, 43 F. Supp. 3d 772 (E.D. Mich. 2014)
(citing cases).
2
Under the FDCPA, a “debt collector” is defined as:
any person who uses any instrumentality of interstate commerce or the
mails in any business the principal purpose of which is the collection
of any debts, or who regularly collects or attempts to collect, directly
or indirectly, debts owed or due or asserted to be owed or due another
... the term includes any creditor who, in the process of collecting his
own debts, uses any name other than his own which would indicate
that a third person is collecting or attempting to collect such debts.
15 U.S.C. § 1692a(6).
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Turning to Plaintiff’s TCPA claim, the statute makes it unlawful “to make
any call (other than a call made for emergency purposes or made with prior express
consent of the called party) using an automatic telephone dialing system or an
artificial or prerecorded voice . . . to any telephone number assigned to a . . .
cellular telephone service.” 47 U.S.C. § 227(b)(1)(A)(iii). The TCPA’s legislative
history reflects that Congress intended the statute to “apply to the persons initiating
the telephone call or sending the message and . . . not the common carrier or other
entity that transmits the call or message and that is not the originator or controller
of the content of the call or message.” S. Rep. No. 102-178 (1991), 1991 WL
211220, at *9 (emphasis added). The statute defines an ATDS as “equipment that
has the capacity (A) to store or produce telephone numbers to be called, using a
random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C.
§ 227(a)(1). In her Amended Complaint and in response to LiveVox’s motion to
dismiss, Plaintiff alleges that LiveVox’s technology, which Integrity and CSS used
to call Plaintiff, is an ATDS. As previously indicated, Plaintiff cites several cases
supporting this allegation, including cases directly addressing LiveVox’s
technology.
Nevertheless, whether LiveVox’s technology is an ATDS is not relevant to
the arguments raised by LiveVox in support of its motion to dismiss. In its motion,
LiveVox disputes neither that allegation nor Plaintiff’s claim that CSS and
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Integrity utilized LiveVox’s technology when making their calls.3 The relevant
issue is whether that utilization can render LiveVox liable under the TCPA.
Notably, even in the cases Plaintiff cites where LiveVox’s technology was used,
LiveVox was not named as a defendant and thus its liability was not addressed.
See Davis v. Diversified Consultants, Inc., 36 F. Supp. 3d 217 (D. Mass. 2014)
(action against debt collection agency which used LiveVox’s systems); Lardner v.
Diversified Consultants, Inc., 17 F. Supp. 3d 1215 (S.D. Fla. 2014) (action against
debt collector using LiveVox’s dialing system); Echevvaria v. Diversified
Consultants, Inc., No. 13 CIV 4980, 2014 U.S. Dist. LEXIS 32136 (S.D.N.Y. Feb.
28, 2014) (action against debt collection agency using LiveVox system to make
collection calls to debtors); Mem. Op. & Order, Haire v. Sprint Commc’ns Co.,
No. 2:13-cv-00701 (N.D. Ala. Mar. 31, 2014) (action against creditor and debt
collection agency which used LiveVox systems), ECF No. 64. Nor were the
suppliers of the calling systems used in the other cases Plaintiff cites named as
defendants. See Meyer v. Portfolio Recovery Assocs., 707 F.3d 1036 (9th Cir.
2012) (action against debt collector, only); Swope v. Credit Mgmt., LP, No.
Accordingly, it is irrelevant to this Court’s analysis of LiveVox’s motion that
another judge in this District, in an unrelated case against LiveVox and other
defendants, struck as non-responsive LiveVox’s answer addressing whether its
technology is covered by the TCPA and whether the defendant making the calls to
the plaintiff used LiveVox’s technology. (See ECF No. 52 at 696-97, citing
Longordo v. Diversified Consultants, Inc., No. 15-cv-12991 (E.D. Mich. filed Aug.
24, 2015).)
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12CV832, 2013 WL 607830 (E.D. Mo. Feb. 19, 2013) (same); Vance v. Bureau of
Collection Recovery LLC, No. 10-cv-06324, 2011 WL 881550 (N.D. Ill. Mar. 11,
2011) (same).
Plaintiff asserts in her response brief that LiveVox is “directly liable for
enabling the Defendants’ collection calls to plaintiff” and that “LiveVox’s
technology made the calls.” (ECF No. 52 at Pg ID 688, 693, emphasis added.)
What Plaintiff is claiming- as her Amended Complaint repeatedly makes clear˗ is
that CSS and Integrity made the calls, using LiveVox’s technology. (Am. Compl.
¶¶ 43, 48, 71-75, 78-87.) Case law and the rulings of the Federal Communications
Commission (“FCC”) demonstrate that, under the facts alleged, LiveVox is not
considered the maker or initiator of the calls under the TCPA.4 See Davis, 36 F.
Supp. 3d at 224 (rejecting the defendant debt collector’s argument that LiveVoxwhose system it used to call the plaintiff- was the maker of the violating calls); In
re Rules & Regulations Implementing the Telephone Consumer Protection Act of
1991, 30 FCC Rcd. 7961, 7978-7984, 2015 WL 4387780, **10-14 (July 10, 2015)
(indicating that entities that merely make available technology by which users may
“ ‘The FCC has interpretive authority over the TCPA,’ Charvat v. EchoStar
Satellite, LLC, 630 F.3d 459, 467 (6th Cir. 2010), and its ‘rulings shape the law in
this area.’ Hill v. Homeward Residential, Inc., 799 F.3d 544, 551 (6th Cir. 2015).”
Baisden v. Credit Adjustments, Inc., No. 15-3411, -- F.3d --, Slip O. at 5 (6th Cir.
Feb. 12, 2016).
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make phone calls are not the makers of those calls under the TCPA and thus do not
have liability under the statute).
Plaintiff appears to be alternatively arguing in her response brief that
LiveVox can be held vicariously liable for the alleged TCPA violations. (See ECF
No. 52 at 693-94.) In fact, in her Amended Complaint, Plaintiff summarily alleges
that all defendants are vicariously liable for the violations of the statute. (Am.
Compl. ¶¶ 117-122.) The FCC has issued a declaratory ruling advising that a
company may be vicariously liable for calls sent “on its behalf.” 5 In re Dish
Network, LLC, 28 FCC Rcd. 6574, 2013 WL 1934349 (May 9, 2013).
Nevertheless, even if vicariously liability could attach to the entity whose
involvement is limited to providing the ATDS, Plaintiff’s allegations are
insufficient to attach vicarious liability to LiveVox.
In its declaratory ruling in In re Dish Network, LLC, the FCC advised that “a
seller may be liable for violations by its representatives under a broad range of
agency principles, including not only formal agency, but also principles of
apparent authority and ratification.” 28 FCC Rcd. 6574, 6584, 6586, 2013 WL
1934349, at *9, 11 (“We find that vicarious seller liability under federal common
The FCC’s ruling focused on the fact that the calls, although not initiated by the
entity, were made “on behalf of that . . . entity.” See e.g., In re Dish Network, LLC,
28 FCC Rcd. 6574 at 6584, 2013 WL 1934349, at *9-10 (emphasis in original).
As such, the agency did not specifically address whether vicarious liability could
be a basis for holding a person or entity liable that neither made the call nor on
whose behalf the call was made.
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law agency principles is also available for violations of section 227(b).”). The
FCC provided in further detail:
The classical definition of “agency” contemplates “the 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.” Potential
liability under general agency-related principles extends beyond
classical agency, however. A principal may be liable in circumstances
where a third party has apparent (if not actual) authority. Such
“[a]pparent 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.” Other principles of agency law may support liability in
particular cases. For example, a seller may be liable for the acts of
another under traditional agency principles if it ratifies those acts by
knowingly accepting their benefits. Such ratification may occur
“through conduct justifiable only on the assumption that the person
consents to be bound by the act’s legal consequences.”
Id. at 6586-87, 2013 WL 1934349, at *11 (footnotes omitted). The mere
possibility that a defendant may be vicariously liable, however, is not sufficient to
state a claim for relief. See Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at 678.
Plaintiff must “plead[] factual content that allows the court to draw the
reasonable inference that [LiveVox] is [vicariously] liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556.) While the
Court must accept Plaintiff’s factual allegations in her Amended Complaint as true,
Erickson, 551 U.S. at 94, this presumption does not apply to Plaintiff’s legal
conclusion that LiveVox is vicariously liable for CSS’ and Integrity’s alleged
TCPA violations. Plaintiff’s Amended Complaint is devoid of facts supporting
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this legal conclusion. The facts alleged in no way suggest that LiveVox
manifested assent to CSS or Integrity for CSS or Integrity to act on LiveVox’s
behalf and subject to LiveVox’s control. Nor do the facts support the conclusion
that CSS or Integrity had actual or apparent authority to act on LiveVox’s behalf.
The facts also do not indicate that LiveVox ratified the actions of CSS or Integrity
or accepted the benefits of their actions. Plaintiff says nothing in her response
brief to lead this Court to believe that she could cure this defect by amending her
pleading. 6
For these reasons, the Court also concludes that Plaintiff fails to state a
viable TCPA claim against LiveVox.
Accordingly,
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LiveVox argues in its motion that it is not liable under the TCPA because it is a
“common carrier.” When considering the liability of a common carrier for TCPA
violations, the FCC has advised that there is no liability “absent a ‘high degree of
involvement or actual notice of an illegal use and failure to take steps to prevent
such transmissions.’ ” Rinky Dink, Inc. v. Elec. Merchant Sys., No. C13-1347,
2015 WL 778065, at *4 (W.D. Wash. Feb. 24, 2015) (quoting In the Matter of
Rules and Regulations Implementing the TCPA of 1991, 7 FCC Rcd. 8752, 877980 (1992)); see also In the Matter of Enforcement of Prohibitions Against the Use
of Common Carriers for the Transmission of Obscene Materials, 2 FCC Rcd.
2819, 2820 (1987) (relating to a different provision of the TCPA) (“[C]ommon
carriers will not generally be liable for illegal transmissions unless it can be shown
that they knowingly were involved in transmitting the unlawful material.”). “A
‘high degree of involvement’ exists where the broadcaster (1) controls the recipient
lists; and/or (2) controls the content of the transmissions.’ ” Rinky Dink, Inc., 2015
WL 778065, at *7 (quoting Rules and Regulations Implementing the TCPA of
1991, 68 F.R. 44144-01, 44169 (2003)). Plaintiff’s allegations do not support a
“high degree of involvement” by LiveVox or LiveVox’s actual knowledge of CSS’
or Integrity’s alleged unlawful activity.
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IT IS ORDERED, that LiveVox’s Motion to Dismiss the Second Amended
Complaint is GRANTED and Plaintiff’s claims against LiveVox are DISMISSED
WITH PREJUDICE. LiveVox is dismissed as a party to this action.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: February 16, 2016
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, February 16, 2016, by electronic and/or
U.S. First Class mail.
s/ Richard Loury
Case Manager
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