Boyer v. Diversified Consultants Inc et al
Filing
35
OPINION and ORDER Denying Defendant's 15 Motion to Dismiss. Signed by District Judge Judith E. Levy. (FMos)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Kenneth Boyer, individually and
on behalf of others similarly
situated,
Case No. 14-cv-12339
Hon. Judith E. Levy
Mag. Judge David R. Grand
Plaintiff,
v.
Diversified Consultants Inc.,
Mavis Pye, and LiveVox Inc.,
Defendants.
_______________________________/
OPINION AND ORDER DENYING DEFENDANT’S
MOTION TO DISMISS [15]
This is a consumer rights case. Pending is defendant Mavis Pye’s
motion to dismiss for lack of personal jurisdiction under Fed. R. Civ. P.
12(b)(2) and failure to state a claim under Fed. R. Civ. P. 12(b)(6). (Dkt.
15.)
I.
Background
Plaintiff asserts that from December 19, 2012, through January
11, 2013, defendants Diversified Consultants Inc. (“DCI”) and LiveVox
Inc. (“LiveVox”) utilized automatic dialers to call plaintiff on his cell
1
phone at least twenty times to collect on a Sprint bill. These calls are
alleged to have taken place up to three times per day.
Plaintiff alleges that Pye was “involved in creating, implementing,
modifying and/or supervising DCI’s policy or procedure relating to
contacting consumers using an automatic telephone system or using an
artificial or prerecorded voice.” (Dkt. 1 at ¶17.) In the alternative, Pye
seeks to dismiss the claims against her because she argues that plaintiff
needed to allege she had made a call or had “direct, personal
participation in or personally authorized the conduct found to have
violated the statute.” (Dkt. 15 at 9.)
II.
Standard
A motion to dismiss under Rule 12(b)(2) places the burden on
plaintiff to establish jurisdiction over defendant. Bird v. Parsons, 289
F.3d 865, 871 (6th Cir. 2002). When a court decides a Rule 12(b)(2)
motion based solely on written submissions, plaintiff must “set forth
specific facts showing that the court has jurisdiction,” such as an
affidavit, rather than rest on his or her pleadings.
Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991).
Theunissen v.
The pleadings and
affidavits are to be viewed in the light most favorable to plaintiff, and
2
the Court does not consider alternative facts pled by defendant. Welsh
v. Gibbs, 631 F.2d 436, 439 (6th Cir. 1980) (citations omitted); see also
Bird, 289 F.3d at 871 (“In this situation, we ‘will not consider facts
proffered by the defendant that conflict with those offered by the
plaintiff, and will construe the facts in a light most favorable to the
nonmoving party.’ ”).
When deciding a motion to dismiss under Fed. R. Civ. P. 12(b)(6),
the Court must “construe the complaint in the light most favorable to
the plaintiff and accept all allegations as true.” Keys v. Humana, Inc.,
684 F.3d 605, 608 (6th Cir. 2012). “To 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.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). A plausible claim 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 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
III.
Analysis
A. Personal Jurisdiction
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“A federal court may only exercise personal jurisdiction in a
diversity case if such jurisdiction is (1) authorized by the law of the
state in which the court sits; and (2) is otherwise consistent with the
Due Process Clause of the Fourteenth Amendment.” Youn v. Track,
Inc., 324 F.3d 409, 417 (6th Cir. 2003).
When a defendant is not
physically present in the forum, due process requires that he or she
have “certain minimum contacts with it such that the maintenance of
the suit does not offend traditional notions of fair play and substantial
justice.”
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
(citations omitted).
i.
Michigan Long Arm Statute
Michigan law confers jurisdiction over nonresidents through the
state’s long-arm statute, codified at M.C.L. § 600.705.
The statute
provides the bases upon which the state exercises limited jurisdiction
over individuals:
The existence of any of the following relationships between
an individual or his agent and the state shall constitute a
sufficient basis of jurisdiction to enable a court of record of
this state to exercise limited personal jurisdiction over the
individual and to enable the court to render personal
judgments against the individual or his representative
arising out of an act which creates any of the following
relationships:
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(1) The transaction of any business within the state.
(2) The doing or causing an act to be done, or consequences
to occur, in the state resulting in an action for tort.
(3) The ownership, use, or possession of real or tangible
personal property situated within the state.
(4) Contracting to insure a person, property, or risk located
within this state at the time of contracting.
(5) Entering into a contract for services to be rendered or for
materials to be furnished in the state by the defendant.
(6) Acting as a director, manager, trustee, or other officer of
a corporation incorporated under the laws of, or having
its principal place of business within this state.
(7) Maintaining a domicile in this state while subject to a
marital or family relationship which is the basis of the
claim for divorce, alimony, separate maintenance,
property settlement, child support, or child custody.
M.C.L. § 600.705. Plaintiff contends that personal jurisdiction is proper
under the first and second bases.
First, the Court must determine whether plaintiff has asserted
that defendant transacted any business in the state pursuant to
subsection (1).
The Court must determine whether any of Pye’s
“business activities reach[ed] out beyond one state and create[d]
continuing relationships and obligations with citizens of another
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state. . . .” Travelers Health Ass'n v. Virginia, 339 U.S. 643, 647 (1950).
“[I]f [the] defendant conducted even the slightest act of business in
Michigan, the first statutory criterion for personal jurisdiction . . . is
satisfied.” Lanier v. Am. Bd. of Endodontics, 843 F.2d 901, 905-06 (6th
Cir. 1988) (citing Sifers v. Horen, 385 Mich. 195, 188 N.W.2d 623
(1971)).
Plaintiff’s allegations regarding Pye’s acts do not meet the bar
required by M.C.L. § 600.705(1). The Supreme Court has held that
personal jurisdiction must be based on an individual defendant’s
contacts with the forum state, not contacts imputed from the
corporation. See Calder v. Jones, 465 U.S. 783, 790 (1984); Keeton, 465
U.S. at 781 n.13. Although there are sufficient allegations to establish
a claim that DCI conducted business in Michigan, the allegations
against Pye are premised on her supervision and direction of DCI’s
conduct, rather than on her personal transaction of business in
Michigan.
Plaintiff does not allege that Pye entered the state, personally
reached out to do business within the state, or intended to establish
continuing relationships and obligations in Michigan. While a lack of
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presence in the forum state alone is insufficient to avoid jurisdiction, see
Int’l Shoe, 326 U.S. at 310, there must be some conduct by defendant
with the forum state to establish jurisdiction under subdivision (1).
Compare Theunissen, 935 F.2d at 1464 (entrance into contracts
regarding shipments to the forum state constituted transacting
business) with Mich. Coal. of Radioactive Material Users, Inc. v.
Griepentrog, 954 F.2d 1174, 1177-78 (6th Cir. 1992) (mere telephone
calls and mailings, without solicitation of business, are insufficient to
establish a business transaction). Accordingly, plaintiff has failed to
show that personal jurisdiction is proper under subsection (1).
Next, under subsection (2), the Court must determine whether
plaintiff asserted that Pye did, caused to be done, or caused
consequences to occur in Michigan that resulted in a tort claim.
Jurisdiction exists under this provision whenever “the tortious conduct
or injury . . . occur[s] in Michigan.” Green v. Wilson, 455 Mich. 342. 352
(1997).
Pye’s status as a DCI employee does not insulate her from the
Court’s jurisdiction.
See Calder, 465 U.S. at 790.
Accordingly, the
Court will assess her contacts separately from her employer. See id.;
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Balance Dynamics Corp. v. Schmitt Indus., 204 F.3d 683, 698 (6th Cir.
2000) (“[T]he mere fact that the actions connecting defendants to the
state were undertaken in an official rather than personal capacity does
not
preclude
the
exercise
of
personal
jurisdiction
over
those
defendants.”).
In this case, plaintiff alleges that Pye created, implemented,
modified, or supervised DCI’s acts related to autodialing or utilization of
artificial or prerecorded voices. Plaintiff further alleges that these calls
resulted in interruptions and disruptions that caused damages to
plaintiff and others who received the calls.
These allegations are
sufficient to support the claim that Pye caused an act to be done in
Michigan that resulted in the present claim for damages. While Pye did
not personally call plaintiff and others in Michigan, the allegations that
she was directly responsible for the implementation and supervision of
DCI’s Michigan activities support exercising jurisdiction over her under
the Michigan long-arm statute.
ii.
Due Process
8
Next, the Court looks to whether exercise of jurisdiction over Pye
would violate the Due Process Clause of the Fourteenth Amendment.
“The Due Process Clause protects an individual's liberty interest in not
being subject to the binding judgments of a forum with which he has
established no meaningful ‘contacts, ties, or relations.’ ” Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985) (quoting Int’l Shoe, 326
U.S. at 319).
To establish the existence of specific jurisdiction in accordance
with due process, plaintiff must allege that defendant had certain
minimum contacts with the forum state. Burger King, 471 U.S. at 475.
The Sixth Circuit uses a three-pronged test to determine if a court’s
exercise of jurisdiction is reasonable and comports with due process:
(1) The defendant must purposefully avail himself or herself
of the privilege of acting in the forum state or causing a
consequence in the forum state;
(2) The cause of action must arise from the defendant's
activities [in the forum state]; and
(3) The acts of the defendant or consequences caused by the
defendant must have a substantial enough connection
with the forum state to make the exercise of jurisdiction
over the defendant reasonable.
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S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968).
All three prongs must be satisfied in order to invoke personal
jurisdiction. Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 680 (6th
Cir. 2012).
First, the Court will determine whether Pye purposefully availed
herself of the privilege of acting in Michigan or causing consequences in
Michigan.
Pye’s alleged role in implementing the system, and
supervising and overseeing of compliance with it, is sufficient to
demonstrate an active and personal connection to the activities that
generated consequences in Michigan.
Purposeful availment requires that defendant not be brought into
litigation “solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’
contacts, or of the ‘unilateral activity of another party or a third
person.’ ” Burger King, 471 U.S. at 475 (citations omitted); see also Lak,
Inc. v. Deer Creek Enters., 885 F.2d 1293, 1301 (6th Cir. 1989)
(“random,” “fortuitous,” and “attenuated” telephone calls and letters are
insufficient to establish personal jurisdiction). Instead, the Supreme
Court requires that defendant “create a ‘substantial connection’ with
the forum State” through deliberate engagement in significant activities
10
or continuing obligations with forum residents. Burger King, 471 U.S.
at 475-76.
Pye’s alleged role in implementing procedures and overseeing
compliance in a program that called Michigan residents to collect
outstanding debt constitutes more than a random or attenuated contact.
Instead, the repeated and deliberate engagement with Michigan
residents is sufficient to comport with “traditional notions of fair play
and substantial justice” that due process seeks to protect. See Balance
Dynamics, 204 F.3d at 698.
Accordingly, the first prong of the due
process analysis is satisfied.
Second, the Court will determine if plaintiff’s cause of action arose
from Pye’s activities in Michigan. “If a defendant's contacts with the
forum state are related to the operative facts of the controversy, then an
action will be deemed to have arisen from those contacts.” CompuServe,
Inc. v. Patterson, 89 F.3d 1257, 1267 (6th Cir. 1996). Defendant need
not be present in the state or have formed a contract in the state for an
exercise of jurisdiction to comport with due process. Lanier, 843 F.2d at
907 (holding jurisdiction to be proper where the non-resident defendant
communicated with the resident plaintiff exclusively by phone and
11
mail). So long as an actor purposefully directs his or her efforts towards
residents of the forum state, physical absence will not be dispositive.
Id. (quoting Burger King, 471 U.S. at 476).
Pye is alleged to have created “the procedure” that directed DCI’s
efforts towards Michigan residents. The alleged calls at issue in this
case occurred exclusively in the state of Michigan.
Accordingly, the
second prong of the due process analysis is satisfied.
Third, the Court determines whether Pye’s conduct had a
substantial enough connection with Michigan to make jurisdiction over
her reasonable. This third prong is inferred to be satisfied if the first
two are met. Bird, 289 F.3d at 875. “[O]nly the unusual case will not
meet this third criterion.” First Nat’l Bank v. J. W. Brewer Tire Co., 680
F.2d 1123, 1126 (6th Cir. 1982).
Pye’s reliance on recent Supreme Court opinions in Daimler AG v.
Bauman, 134 S.Ct. 746 (2014) and Walden v. Fiore, 134 S.Ct. 1115
(2014) is unpersuasive. In Daimler, foreign residents brought suit in
the United States against a foreign corporation for alleged human
rights violations in a foreign country, basing personal jurisdiction on
the activities of a U.S. subsidiary. Daimler, 134 S.Ct. at 751-52. The
12
tenuous connection with the forum in Daimler was insufficient to
exercise general jurisdiction over defendants. Id. at 761-62. However,
this case concerns limited personal jurisdiction for alleged conduct
causing consequences in the forum state, which is a different issue
entirely.
In Walden, a Georgia police officer seized $97,000 in cash from
individuals traveling from San Juan to Las Vegas at the Atlanta
airport. Walden, 134 S.Ct. at 1119. Respondents in the seizure filed
suit against the police officer in the United States District Court for the
District of Nevada for conduct occurring in Georgia. Id. The Court
found that the police officer lacked sufficient contacts with Nevada, and
that the exercise of jurisdiction by the Nevada court was random and
attenuated. Id. The present case differs from Walden because plaintiff
is suing Pye over intentional phone calls he is alleged to have received
in the forum state. Further, plaintiff alleged sufficient contacts with
Michigan to permit the Court to exercise personal jurisdiction over Pye.
Accordingly, exercising jurisdiction over Pye comports with due process.
B. Failure to State a Claim
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In the present case, plaintiff has stated nonconclusory allegations
upon which factual discovery is warranted. The complaint states that
Pye served as DCI’s compliance officer, during which time she was
involved in the creation, implementation, modification, or supervision of
the policy or procedure giving rise to the alleged violations against
plaintiff. These allegations are sufficient to survive a motion to dismiss.
Pye argues that plaintiff must allege she actually made a call
using an automated dialing system to state a valid TCPA claim. The
case law in this area does not support such an argument. Corporate
officers and employees of corporations may be held liable for their
conduct in violation of the TCPA.
See, e.g., Maryland v. Universal
Elections, 787 F. Supp. 2d 408, 415-16 (D. Md. 2011) (allowing claims of
personal liability under the TCPA to proceed); Baltimore-Washington
Tel. Co. v. Hot Leads Co., 584 F. Supp. 2d 736, 745 (D. Md. 2008)
(holding that individual defendants may be held jointly and severally
liable for TCPA damages); Texas v. Am. Blastfax, 164 F. Supp. 2d 892,
898 (W.D. Tex. 2001) (holding “an officer may be personally liable under
the TCPA if he had direct, personal participation in or personally
authorized the conduct found to have violated the statute”).
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There are good reasons why TCPA claims against individuals are
allowed to proceed, even when the individuals have not directly
performed the act of dialing. The language of the statute specifically
states that “[i]t shall be unlawful for any person” to make a call utilizing
an automatic dialing system or artificial or prerecorded voice to a
cellular phone.
47 U.S.C. § 227(b)(1)(A)(iii) (emphasis added).
The
automation of the prohibited act does not shield from liability those
responsible for the policies or procedures that led to the calls being
placed.
Accordingly, plaintiff has stated a plausible claim against Pye for
violation of the TCPA.
IV.
Conclusion
For the reasons stated above, it is hereby ordered that:
Defendant Mavis Pye’s motion to dismiss for lack of personal
jurisdiction and for failure to state a claim (Dkt. 15) is DENIED.
IT IS SO ORDERED.
Dated: November 19, 2014
Ann Arbor, Michigan
s/Judith E. Levy
JUDITH E. LEVY
United States District Judge
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CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served
upon counsel of record and any unrepresented parties via the Court’s
ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on November 19, 2014.
s/Felicia M. Moses
FELICIA M. MOSES
Case Manager
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