Hammann v. 1-800 Ideas Inc

Filing 208

ORDER Denying 124 and 126 Motions for Summary Judgment. Signed by Judge Lloyd D. George on 3/23/12. (Copies have been distributed pursuant to the NEF - EDS)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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JEROLD ALAN HAMMANN,

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2:08-cv-0886-LDG-GWF

Plaintiff,
ORDER

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v.

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800 IDEAS INC.,

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Defendant.

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After cross-motions for summary judgment were filed in this case, the court reopened

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discovery as to a principal witness and ordered supplemental briefing. The court now addresses

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the motions for summary judgment (#124 and #126), renewed and incorporated by the

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supplemental briefing.

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Summary judgment is appropriate only if the pleadings, the discovery and disclosure

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materials on file, and any affidavits show that there is no genuine issue as to any material fact and

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that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56c. In determining

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whether summary judgment is appropriate, the court views the facts in the light most favorable to

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the non-moving party and draws reasonable inferences in favor of that party. Scheuring v. Traylor

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Bros., Inc.,476 F.3d 781, 784 (9th Cir. 2007) (citing Anderson v. Liberty Lobby, Inc., 477 U.S.

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242, 255 (1986)). To defeat summary judgment, the opposing parties must make a showing

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sufficient to establish a genuine dispute of a material fact regarding the existence of the essential

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elements of [the] case that [they] must prove at trial.” Galen v. County of Los Angeles, 477 F.3d

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652, 658 (9th Cir.2007) (citation omitted). On a motion for summary judgment, it is not the

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province of a district court judge to weigh the evidence. Anderson, 477 U.S. at 255 (“Credibility

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determinations, the weighing of the evidence, and the drawing of legitimate inferences from the

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facts are jury functions, not those of a judge, whether [she or] he is ruling on a motion for

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summary judgment or for a directed verdict.”).

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Plaintiff essentially claims in this case that he was prevented from starting his business

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“Choice Time” because defendant 800 Ideas, Inc. (“800 Ideas”), or 1-800 Ideas.com, Inc., an

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alleged affiliate, wrongfully deprived him of two vanity toll-free telephone numbers, 800 246-4238

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(the “800 disputed number”) and 888 246-4238 (the “888 disputed number”). Plaintiff contends

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that this conduct violated FCC regulations relating to the administration of toll-free numbers and

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antitrust laws. Defendant 800 Ideas’ argument for summary judgment is narrow and direct. It

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asserts that there is no evidence to show that defendant 800 Ideas possessed the disputed numbers

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in August 2000, when Hammann requested them, or that 1-800 Ideas.com, Inc., the actual

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subscriber to the disputed numbers at the time, was the same corporate entity as defendant 800

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Ideas. Rather, defendant 800 Ideas contends that the evidence shows that it never subscribed to the

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888 disputed number, and while it possessed the 800 disputed number for a period of time between

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1993 and 1997, it relinquished it almost three years before plaintiff sought to obtain it in 2000.

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Defendant 800 Ideas characterizes its argument regarding the lack of evidence of its

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subscription to the disputed numbers in large part with reference to the affidavit of Susan Parker

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(“Parker”) dated June 23, 2010. In that affidavit, Parker describes how she received sole

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ownership rights to defendant 800 Ideas in 1994 as a result of the dissolution of her marriage to

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Steve Parker. As owner of defendant 800 Ideas, Parker applied her experience in the travel

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industry in managing defendant 800 Ideas as a specialized distributor of domestic airline

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reservations, selling airline tickets primarily through its call center. Defendant 800 Ideas marketed

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its business, in part, through the use of mnemonic telephone numbers such as 1-800-FLY CHEAP

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and 1-800-CHEAP CRUZ. In 1993, defendant 800 Ideas sought trademark protection for the

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equivalent of its toll free number 1-800-IDEAS INC. for telecommunication services.

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Parker’s affidavit further explains that in 1997, defendant 800 Ideas sold all of its assets to

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Travel Services, and transferred all its remaining toll-free telephone numbers to Travel Services,

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which primarily included its travel related mnemonic toll-free telephone numbers. Travel Services

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acquired and combined defendant 800 Ideas’ assets with those of four other travel-related

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companies and made an initial public offering. Parker’s affidavit observes that in written

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discovery months before, defendant provided information indicating that all of its toll-free

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numbers would have been transferred to Travel Services in or about 1997 upon the sale of assets.

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Parker changes that position in her affidavit, testifying that “[u]pon further investigation, it was

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revealed that Defendant relinquished the use of the 800 Disputed Number to 1-800 Long Distance,

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the predecessor in interest to 1-800 Ideas.com, Inc., sometime in or before 1997.” (emphasis

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added).

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Parker continues to maintain that defendant 800 Ideas never used or controlled the 888

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disputed number because it was 1-800 Ideas.com, Inc. that subscribed to it in or about 1999.

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According to Parker, defendant 800 Ideas continued to act as an inactive holding company for

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stocks and bonds that it received from the sale of its assets to Travel Services in 1997. Morever,

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all business records in the possession, custody, or control of defendant 800 Ideas were transferred

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to Travel Services upon the sale of defendant 800 Ideas assets, other than a small volume of

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records related to defendant 800 Ideas’ status as an inactive holding company for stock and bonds.

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Parker testifies that defendant 800 Ideas did not acquire or reacquire any toll-free telephone

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numbers at any time after the 1997 sale.

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In its motion for summary judgment, defendant 800 Ideas describes the entity known as 1-

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800 Ideas.com, Inc. According to Parker, she owned this entity’s predecessor, 1-800-Long

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Distance, until it was sold in January 1999 to Steve Parker. After the sale, Steve Parker changed

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the name of the company to 1-800 Ideas.com, Inc. Parker testifies that, following the sale of 1-

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800-LONG DISTANCE, she did not act as shareholder, director, officer, employee or independent

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contractor to the company under its original name, or after it was named 1-800 Ideas.com, Inc.

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Thus, defendant 800 Ideas claims that at the time that it allegedly deprived plaintiff of the 800

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disputed number in 2000, 1-800 Ideas.com, Inc., and not it, owned the number. Likewise, Parker

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affies that she owned 1-800-SAN DIEGO between 1997, when it was incorporated in California,

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and 1999, when she sold it to Steve Parker. Following the sale, Parker asserts that she was not a

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shareholder, director, officer, employee or independent contractor of 1-800-SAN DIEGO, and that

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in 2004, it became a subsidiary of 1-800 Ideas.com, Inc.

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Plaintiff has offered a number of different scenarios to challenge defendant 800 Ideas’

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assertion that it was not a subscriber to the disputed numbers at the time plaintiff sought to acquire

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them. Plaintiff sets forth two general positions: First, defendant still possessed the disputed

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numbers in 2000; and second, even if Parker claims either to have sold the 800 disputed number to

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Steve Parker, or never subscribed to the 888 disputed number (which was subscribed to by Steve

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Parker’s company 1-800-Ideas.com, Inc.), Parker’s post-sale business and Steve Parker’s

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company, 1-800-IDEAS.com, Inc., lacked corporate separateness and were in fact the same

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company. In view of the applicable law, the court looks at the evidence to determine if the facts,

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viewed in the light most favorable to, and drawing all inferences in favor of, the plaintiff, suggests

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a linkage between defendant 800 Ideas and the disputed numbers during the relevant time frame.

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Initially, the court addresses several legal issues which bear on the motions for summary

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judgment. Plaintiff argues that defendant had the duty to return at least the disputed numbers to

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the SMS/800 Database after they no longer intended to use the numbers in their own toll-free

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telephone services. An extension of this argument leads the court, and the parties, to the FCC

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regulations regarding hoarding, brokering, and routing of toll free numbers. Title 47 C.F.R.

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52.107(a) provides in pertinent part:

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[H]oarding is the acquisition by a toll free subscriber . . . . of more toll free numbers than

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the toll free subscriber intends to use for the provision of toll free service. The definition

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of hoarding also includes number brokering, which is the selling of a toll free number b a

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private entity for a fee.

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(1)

Toll free subscribers shall not hoard toll free numbers.

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...

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The prohibition on subscribers selling their interests in toll free numbers appears to run

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afoul of defendant’s original position that the disputed numbers were included in the sale and

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transfer of defendant 800-IDEAS’ assets to Travel Services in 1997. Defendant 800 Ideas argues

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that despite the language of the regulation, a subscriber has the right to transfer a toll free number

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to another subscriber, completely foregoing returning the number to the SMS/800 database, as

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long as there is no violation of the lag time, hoarding rules, and first come, first served policy.

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Defendant 800 Ideas cites Ford Motor Co. v. U.S. Auto Club, Motoring Div., 2008 WL 4387077

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(N.D. Tex. Sept. 26., 2008), for the proposition that companies can transfer toll free numbers back

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and forth while receiving monetary benefit, at least indirectly from the transfers, without violating

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the FCC regulations. That case, however, is different than this one, because in that case the use of

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the numbers in question was temporarily transferred under a service contract, and Ford did not

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give up its permanent rights to them. At the termination of the roadside assistance contract the

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transferee merely transferred the numbers back to Ford. See also Business Edge Group, Inc., v.

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Champion Mortgage Co., 519 F.3d 150, 154 (3d Cir. 2008) (finality of transfer of rights

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component of sale under 52.107).

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Furthermore, while 52.107 was apparently adopted in April of 1997, defendant 800 Ideas

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has not clarified the exact date of the 1997 sale of its assets, nor made a substantial argument in

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opposition to plaintiff’s position that a subscriber’s practice of selling a toll-free number was not

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legitimate even before the regulation. In addition, plaintiff puts forth a letter dated November 12,

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1997, purportedly from defendant 800 Ideas to Choice Mortgage USA dealing with the 800

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disputed number. Previously, defendant 800 Ideas argued that the letter is not evidence that it

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subscribed to the 800 disputed number when plaintiff attempted to acquire the number in 2000; but

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it also cuts the other way, suggesting that defendant 800 Ideas controlled the number at least

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through most of 1997, and therefore would have subjected it to the 52.107 anti-hoarding

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regulation.

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Here, a genuine issue of fact exists regarding whether defendant 800 IDEAS transferred the

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800 disputed number at the sale of assets in 1997 in violation of 52.107 as defendant 800 IDEAS

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appears to have asserted in its discovery, as opposed to defendant 800 IDEAS’ clarification that it

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“relinquished” the use of the number sometime before the sale of the assets. This issue of fact also

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impacts defendant 800-IDEAS’ statute of limitations argument since the violation of the regulation

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arguably would have continued through the time period in which plaintiff sought the number and

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up until the time in which he acquired the numbers in the settlement of the Minnesota action.

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Finally, plaintiff’s self-generated summaries are not sufficiently authenticated pursuant to

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Fed. R. Evid. 901(b)(1) to consider in a motion for summary judgment as they are not a document

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authenticated through personal knowledge by affidavit of a “witness who wrote [it], signed, used

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it, or saw others do so.” Orr v. Bank of Am., NT & SA, 285 F.3d F.3d 764, 773 (9th Cir. 2002).

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Under Fed. R. Evid. 901(b)(4), however, the district court can consider alternative means of

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authentication including review of the document’s appearance, content, substance, internal

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patterns, or their distinctive characteristics, taken in conjunction with circumstances. Plaintiff

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asserts that the foundation documents for the summaries he presents are sealed documents

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disclosed in the Minnesota action. A review of the summaries indicates that they contain detailed

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billing information, and taking into account the lack of challenge of the accuracy of the

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information in the Minnesota action, and by defendant 800 Ideas in this motion, the court, for the

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narrow purpose of summary judgment, considers them in opposition to defendant’s motion. Also,

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what plaintiff describes as printouts and documents from electronic files produced during the

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Minnesota action, while lacking some foundation, will be considered on the same basis.

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Plaintiff’s materials contain no smoking gun regarding defendant 800 Ideas’ continuing

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control over the disputed numbers or a lack of corporate separateness between defendant 800 Ideas

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and 1-800 Ideas.com, Inc. But they do minimally raise, in the opinion of the court, significant

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questions as to which entity was invoiced for and listed as the subscriber to the disputed numbers

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during the relevant time period. The court notes that in the affidavit of Steven Parker sworn to on

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December 1, 2004, in the Minnesota action, he testified that “[b]eginning in November 1997, the

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800 Disputed Number was in use by 800 Ideas.com on behalf of its customer, Choice mortgage

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USA.” (Dkt. 21-3 at 9:45). Of course, as addressed previously, the letter dated November 12,

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1997, dealing with this relationship is purportedly from defendant 800-IDEAS, not 1-800

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Ideas.com, Inc. In the end, while plaintiff’s extensive evidentiary submissions are not a model of

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precision, taken in their totality, they raise a genuine issue of material fact regarding defendant 800

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Ideas’ involvement with the disputed numbers. The court further finds unpersuasive the other

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arguments presented by the parties in support of their motions. Accordingly,

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THE COURT HEREBY ORDERS that plaintiff’s motion for summary judgment (#124)
and defendant 1-800 Ideas Inc.’s motion for summary judgment (#126) are DENIED.

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DATED this _____ day of March, 2012.

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______________________________
Lloyd D. George
United States District Judge

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