CITY SELECT AUTO SALES, INC. v. DAVID RANDALL ASSOCIATES, INC. et al

Filing 129

OPINION FILED. Signed by Chief Judge Jerome B. Simandle on 9/24/14. (js)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

CITY SELECT AUTO SALES, INC.,
a New Jersey corporation,
individually and as the
representative of a class of
similarly situated persons,

Civil Action
No. 11-2658 (JBS/KMW)
OPINION

Plaintiff,
v.
DAVID RANDALL ASSOCIATES,
INC., et al.,
Defendants.

APPEARANCES:
Alan C. Milstein, Esq.
Sherman, Silverstein, Kohl, Rose & Podolsky, PC
Eastgate Corporate Center
30 Harper Drive
Suite 200
Moorestown, NJ 08057
-andTod Lewis, Esq.
Jonathan Piper, Esq.
Bock & Hatch, LLC
134 N. La Salle St., Ste. 1000
Chicago, IL 60602
Attorneys for Plaintiff City Select Auto Sales, Inc.
F. Emmett Fitzpatrick, III, Esq.
Flamm Boroff & Bacine PC
794 Penllyn Pike
Blue Bell, PA 19422
Attorney for Defendants and Third Party Plaintiffs David
Randall Associates, Inc. and Raymond Miley, III

SIMANDLE, Chief Judge:
I.

INTRODUCTION
In this Telephone Consumer Protection Act (hereinafter, the

“TCPA”) class action concerning transmission of unsolicited fax
advertisements,

Defendant

David

Randall

Associates,

Inc.

(hereinafter, “David Randall”) and its owner, Defendant Raymond
Miley,

III

(hereafter

“Miley”

and

collectively

with

David

Randall, the “Defendants”), move for summary judgment on all
claims.1
the

[Docket Item 114.]

undisputed

facts

in

Defendants specifically assert that
this

litigation

fail

to

support

Plaintiff’s TCPA, state law conversion, and individual liability
claims. Plaintiff generally asserts in opposition that factual
disputes

concerning

Defendants’

liability

for

the

facsimile

advertisements in this litigation preclude the entry of summary
judgment.
The

parties

do

not

dispute

that

a

third-party

entity,

Business to Business Solutions (hereinafter, “B2B”), transmitted
the facsimile advertisements that form the predicate for this
action.

Nor

broadcasted

1

do
and

the

parties

distributed

the

genuinely
facsimile

dispute

that

advertisements

Plaintiff also filed three motions for leave to submit
supplemental authority in opposition to Defendants’ motion for
summary judgment. [Docket Items 119, 126, & 128.] Defendants
have filed no opposition. The Court will therefore grant the
motions.
2

B2B
on

behalf of Defendants.

Rather, the parties primarily dispute

whether

of

solely

the
the

definition
entity

that

“sender”

physically

or

entity

goods

and/or

services

The

principal

issues

advertisements.

such

the

TCPA

definition

envelops

the

transmitted

advertisement,
whose

whether

under

facsimile

also

are

includes

subject

before

the
the

Court

the

to

are

therefore whether the TCPA limits liability to only those who
directly

transmit

facsimile

advertisements

and,

relatedly,

whether triable issues of fact exist with respect to whether,
and

to

what

extent,

Miley

bore

personal

involvement

in

the

disputed transmissions.
For
factual

the

reasons

disputes

Defendants’

favor

explained

preclude
with

the

respect

below,
entry
to

of

all

the

Court

summary
claims

finds

that

judgment

set

forth

in
in

Plaintiff’s Complaint. The Court will therefore deny Defendants’
motion for summary judgment.2
II.

BACKGROUND
A. Factual Background
In the spring of 2006—the time period relevant to the

pending action—Defendant Raymond Miley, III acted as President

2

The Court exercises subject matter jurisdiction over
Plaintiff’s TCPA claims pursuant to 28 U.S.C. § 1332(d), and
exercises supplemental jurisdiction over Plaintiff’s state law
claims under 28 U.S.C. § 1367(a).
3

of Defendant David Randall Associates, Inc., a commercial
roofing company organized under the laws of the Commonwealth of
Pennsylvania.
omitted).)

(Defs.’ SMF [Docket Item 114], ¶¶ 1-2 (citation

During the same period, Third Party Defendants

Caroline Abraham and Joel Abraham “operated an unincorporated
advertising business” named “‘Business to Business Solutions’”
(as defined above, “B2B”).3

(Pl.’s SMF [Docket Item 116], 4

(citation omitted).)
B2B “solicited” David Randall’s business, and specifically
offered to market David Randall’s roofing services through B2B’s
fax broadcasting program.

(Id. at 6 (citing Ex. C at 66:1-68:5

(deposition of Raymond H. Miley, III)).)

Upon receipt of B2B’s

solicitation, April T. Clemmer, Miley’s administrative assistant
(Ex. C. at 14:14-18), contacted B2B to inquire into the specific

3

Though Plaintiff failed to furnish a responsive statement of
undisputed material facts, Plaintiff’s opposition brief contains
detailed citations to the record that make clear certain
disputed facts. Although Plaintiff failed to comply with Local
Civil Rule 56.1, the Court declines to ignore Plaintiff’s
citations. However, to the extent Plaintiff failed to make clear
any dispute of material fact in Defendants’ Rule 56.1 statement,
the Court will deem any such fact undisputed for purposes of the
pending motion. See L. CIV. R. 56.1(a) (“[A]ny material fact not
disputed shall be deemed undisputed for purposes of the summary
judgment motion.”). Consequently, though the Court will not
ignore counter-stated facts that are readily apparent from
Plaintiff’s brief, the Court need not comb the record in search
of disputed facts that should have been part of Plaintiff’s
response to Defendants’ Rule 56.1 statement.
4

pricing and distribution details of B2B’s fax marketing
services.

(Ex. A at 10:5-11:7, 14:11-15:16.)

David Randall,

with Miley’s authorization, then contracted with B2B “‘to
develop and conduct a fax advertising campaign on its behalf’”
(Pl.’s SMF at 4), and provided certain information concerning
David Randall’s services, in addition to information concerning
the targeted radius for advertisement dissemination.

(See Ex. A

at 17:1-18:14; Ex. B; Ex. C at 35:1-25; Ex. D at 17 on the
docket (Miley’s advertisement approval).)
B2B thereafter sent multiple fax advertisements on David
Randall’s behalf to “‘a list of persons’” purchased by B2B.
(Defs.’ SMF at ¶ 5 (citation and emphasis omitted).)

The

advertisements, ultimately transmitted to “29,113 unique fax
numbers[,]” described the roofing services provided by David
Randall, provided its contact information, and generally stated
“Roof Leaks??? Repairs Available.”

(Id. at ¶ 5; Exhibit B

[Docket Item 116-2].)
B. Procedural History
Plaintiff filed the initial Complaint in this action on May
10, 2011.

(See Class Action Compl. [Docket Item 1], ¶ 1.)

In

its Complaint, Plaintiff generally alleges that Defendants have
a “policy and practice of faxing unsolicited advertisements” in
contravention of the TCPA and state tort law.
5

(Id. at ¶ 1.)

In

accordance with this purported policy, Plaintiff alleges that,
on April 4, 2006 and May 15, 2006, Defendants sent two (2) such
advertisements to Plaintiff, without its “prior express
permission or invitation.”

(Id. at ¶¶ 13, 29.)

Plaintiff also

states that Defendants similarly transmitted the identical “form
facsimile” 44,832 times “without error to 29,113 unique fax
numbers” from March 29, 2006 to May 16, 2006.

(Id. at ¶ 14.)

Plaintiff therefore contends that Defendants’ unsolicited
transmissions violated the TCPA and also “improperly converted”
Plaintiff’s fax machine, toner, paper, and employees’ time for
Defendants’ “unauthorized purpose.”

(Id. at ¶¶ 30-41.)

Plaintiff therefore seeks, on behalf of all persons who received
such fax advertisements during the spring of 2006, declaratory
and injunctive relief and monetary damages, jointly and
severally, against David Randall and Miley.

(Id. at ¶¶ 29, 41.)

Thereafter, Defendants moved to dismiss Plaintiff’s
Complaint, asserting that the applicable limitations period and
New Jersey’s entire controversy doctrine collectively barred
Plaintiff’s claims.

[Docket Item 8.]

The Court’s February 7,

2012 Opinion denying Defendants’ motion found the entire
controversy doctrine inapplicable and further concluded that the
pendency of a state court action had tolled the limitations
period and, accordingly, effected no bar of Plaintiff’s claims.
6

City Select Auto Sales, Inc. v. David Randall Assocs., Inc., No.
11-2658, 2012 WL 426267, at *5 (D.N.J. Feb. 7, 2012).
Defendants thereafter answered Plaintiff’s Complaint, and
filed third party claims against the operators of B2B, Caroline
Abraham and Joel Abraham (hereinafter, the “Abrahams”). [Docket
Item 23.]

Though Defendants effectuated service of the Third

Party Complaint on March 22, 2012 [Docket Items 32 & 33], the
Abrahams filed no response.

Defendants therefore moved for

default [Docket Item 42], which the Court granted on December
17, 2012. [Docket Item 53.]
On January 30, 2013, Plaintiff moved to certify its TCPA
claim under Federal Rule of Civil Procedure 23(b)(3) on behalf
of the following class:4

4

On December 17, 2012, the Court dismissed Plaintiff’s initial
motion for class certification, and directed that any renewed
motion “incorporate briefing on the effect of 47 U.S.C. §
227(b)(3), and the application of New Jersey’s laws and rules of
court,” particularly with respect to the Third Circuit’s
decision in Landsman & Funk PC v. Skinder-Strauss Assocs., 093105, 2012 WL 2052685 (3d Cir. Apr. 17, 2012). [Docket Item
53.] Plaintiff’s renewed motion to certify followed on January
30, 2013. [Docket Item 60.] On March 5, 2013, the Court stayed
this action and administratively terminated Plaintiff’s renewed
motion, pending the Third Circuit’s consideration of an
interlocutory appeal in Bais Yaakov of Spring Valley v.
Peterson’s Nelnet, LLC, No. 11-00011 (AET), 2013 WL 663301
(D.N.J. Feb. 21, 2013), a case involving a TCPA issue directly
relevant to this litigation. [Docket Item 72.] On May 21,
2013, however, Plaintiff informed the Court that the Third
Circuit declined to certify the interlocutory appeal and the
7

All persons who were successfully sent one or more
faxes during the period March 29, 2006, through May
16, 2006, stating, “ROOF LEAKS??? REPAIRS AVAILABLE
Just give us a call and let our professional service
technicians
make
the
repairs!”
and
“CALL:
David/Randall Associates, Inc. TODAY.”
City Select Auto Sales, Inc. v. David Randall Assocs., Inc., 296
F.R.D. 299, 308 (D.N.J. 2013).

By Opinion dated December 20,

2013, the Court found that the proposed class satisfied the
requirements of Federal Rule of Civil Procedure 23 and,
therefore, granted Plaintiff’s motion for class certification.
See generally id.

In so concluding, the Court rejected

Defendants’ argument that state, rather than federal, law
applied to class certification in the TCPA context, and that
Plaintiff lacked standing to pursue its claims.

Id. at 311-12.

By Memorandum Opinion dated February 3, 2014, the Court then
approved, subject to certain revisions, Plaintiff’s proposed
class notice form.

See City Select Auto Sales, Inc. v. David

Randall Assocs., Inc., No. 11-2658, 2014 WL 413533, at *3
(D.N.J. Feb. 3, 2014.)

The Court also found Plaintiff’s

proposed method of dissemination, i.e., by fax, “most
practicable” under the circumstances.

Id. at *8.

In permitting

notice by such method, the Court noted “the irony of using faxes
to disseminate class notice in a lawsuit regarding unsolicited

Court, accordingly, lifted the stay and restored Plaintiff’s
motion to the Court’s active docket. [Docket Item 74.]
8

fax advertisements.”

Id. at *2.

The Court found, however,

notification by facsimile to be most practicable under the
circumstances, particularly in light of the sheer quantity of
“distinct recipients” (“more than 29,000”), the relative speed
and cost of notification by fax, and the easily verifiable
nature of a successful transmission.

Id. at *3.

C. Parties’ Arguments
Defendants generally argue that summary judgment must be
granted with respect to Plaintiff’s TCPA claim because
Defendants cannot, as a matter of law, “be held directly liable”
for the acts of a third party.

(Defs.’ Br. at 5-6.)

Defendants

specifically assert that the Federal Communications Commission
(hereinafter, the “FCC”) has concluded, in a decision “binding
upon [] District Courts,” that “a seller cannot be held directly
liable for a TCPA violation unless the seller itself perform[ed]
the acts[.]”

(Id. at 6 (citation omitted).)

Defendants

therefore argue that the FCC ruling compels the Court to find
Defendants entitled to judgment, as a matter of law, on
Plaintiff’s TCPA claims.

(Id. at 7.)

Defendants also assert

that Plaintiff’s state law conversion claim, which rests upon
allegations identical to Plaintiff’s TCPA claim, fails for the
same reasons.

(Id. at 9-12.)

Moreover, though Defendants

concede that undisputed facts support a theory of vicarious
9

liability, Defendants argue that Plaintiff’s failure to
“specifically” plead such theory constitutes a “fatal pleading
deficiency” that cannot now be cured in response to Defendants’
motion for summary judgment.

(Id. at 8-9.)

Rather, Defendants

assert that summary judgment must be granted with respect to any
and all claims of liability against David Randall.

(Id.)

Finally, Defendants argue that summary judgment must be granted
with respect to Plaintiff’s “individual liability” claim against
Miley, because the record fails to demonstrate Miley’s “personal
involvement in the commission of any tort of the violation of
any statute[,]” nor Miley’s awareness of the “unlawful” nature
of the disputed solicitations.

(Id. at 12-14.)

Plaintiff counters that the FCC’s decision constitutes mere
guidance to District Courts, and that the decision cannot trump
or otherwise contravene the statutory and regulatory definition
of “sender” under the TCPA.
11.)

(Pl.’s Opp’n [Docket Item 116], 7-

Rather, Plaintiff asserts that liability under the TCPA

expressly attaches to any “‘entity on whose behalf a facsimile
unsolicited advertisement is sent’” and/or any entity “‘whose
goods or services are advertised or promoted in the unsolicited
advertisement.’” (Id. at 7 (citing 47 C.F.R. § 64.1200(f)(10))
(emphasis omitted).)

Plaintiff also argues that it has

“sufficiently pleaded liability against Defendants[,]”
10

particularly to the extent Plaintiff’s Complaint “clearly
articulate[s]” that third party actions form the basis for
Plaintiff’s liability claims.
citations omitted).)

(Id. at 12 (emphasis and

Lastly, Plaintiff argues that the record

“clearly” demonstrates that Miley “authorized, directed, and
facilitated” the TCPA violations alleged in this action, and
that he cannot now exculpate himself from liability by
“outsourcing [] telemarketing activities to unsupervised third
parties[.]’”
III.

(Id. at 14, 16, 18.)

STANDARD OF REVIEW
Federal Rule of Civil Procedure 56(a) generally provides

that the “court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact” such
that the movant is “entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a). A “genuine” dispute of “material” fact
exists where a reasonable jury’s review of the evidence could
result in “a verdict for the non-moving party” or where such
fact might otherwise affect the disposition of the litigation.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Disputes over irrelevant or unnecessary facts, however, fail to
preclude the entry of summary judgment. Id.

In evaluating a

motion for summary judgment, the Court must view the evidence in
the light most favorable to the non-moving party, and must
11

provide that party the benefit of all reasonable inferences.
Scott v. Harris, 550 U.S. 372, 378 (2007); Halsey v. Pfeiffer,
750 F.3d 273, 287 (3d Cir. 2014).

However, any such inferences

“must flow directly from admissible evidence[,]” because “‘an
inference based upon [] speculation or conjecture does not
create a material factual dispute sufficient to defeat summary
judgment.’”

Halsey, 750 F.3d at 287 (quoting Robertson v.

Allied Signal, Inc., 914 F.2d 360, 382 n. 12 (3d Cir. 1990);
citing Anderson, 477 U.S. at 255).
IV.
A.

DISCUSSION
TCPA Claim
“Enacted in 1991 as part of the Federal Communications

Act,” the TCPA seeks to address “an increasingly common
nuisance—telemarketing.” Erienet, Inc. v. Velocity Net, 156 F.3d
513, 514 (3d Cir. 1998).

The TCPA prohibits the “use of any

telephone facsimile machine, computer, or other device to send,
to a telephone facsimile machine,” an advertisement without the
recipient’s prior express invitation or permission, unless the
“sender” of such transmission meets certain exceptions. 47
U.S.C. §§ 227(a)(4), (b)(1)(C).

The ban on unsolicited

facsimile advertisements specifically does not apply if: (1) the
sender has an “established business relationship” with the
recipient, 47 U.S.C. § 227(b)(1)(C)(i); (2) the sender obtained
12

the recipient's facsimile number from “a directory,
advertisement, or site on the Internet to which the recipient
voluntarily agreed to make available its facsimile number for
public distribution,” 47 U.S.C. § 227(b)(1)(C)(ii); or (3) the
advertisement contains a disclosure statement that easily
enables the recipient to unsubscribe from any future
distributions, 47 U.S.C. § 227(b)(1)(C)(iii).
The TCPA accordingly enables an aggrieved individual or
entity to bring a private right of action to recover the greater
of the party’s “actual monetary loss” from the TCPA violation,
or “$500 in damages for each such violation[.]
227(b)(3)(A)-(C).

47 U.S.C. §

In addition, the Court “may, in its

discretion,” award treble damages for each statutory damage.
U.S.C. § 227(b)(3).

47

However, the plaintiff must specifically

demonstrate that: (1) the defendant utilized a “telephone
facsimile machine, a computer, or other devise to send one or
more faxes to the plaintiff’s facsimile machine[;]” (2) the
transmissions constituted “‘advertisements[;]’” and (3) the
defendant sent the transmissions without the plaintiff’s prior
express invitation or permission.

Brodsky v. HumanaDental Ins.

Co., No. 10-C-3233, 2014 WL 2780089, at *6 (N.D. Ill. June 12,
2014) (citation omitted).

13

a.

The Undisputed Facts do not Entitle Defendants to
the Entry of Judgment as a Matter of Law

Defendants argue that they do not constitute a “sender”
under the TCPA, thereby exculpating Defendants from any
liability under the TCPA.

(Defs.’ Br. at 5-7.)

The FCC’s TCPA

regulations define “sender” as “the person or entity on whose
behalf a facsimile unsolicited advertisement is sent or whose
goods or services are advertised or promoted in the unsolicited
advertisement.”

47 C.F.R. § 64.1200(f)(10); see also In Re

Rules and Regulations Implementing the Tel. Consumer Prot. Act
of 1991, 10 F.C.C.R. 12391, 12407–08 (1995) (clarifying that
“the entity or entities on whose behalf facsimiles are
transmitted are ultimately liable for compliance with the rule
banning unsolicited facsimile advertisements”).

The parties do

not dispute that B2B acted as the actual sender of the
facsimiles that give rise to this litigation.
Pl.’s SMF.)

(See Defs.’ SMF;

The Court must therefore turn to whether B2B sent

the facsimile transmissions on Defendants’ behalf and/or for the
purpose of advertising or promoting Defendant’s “goods or
services”—either of which would, as explained below, render
Defendants potentially liable under the TCPA.

47 C.F.R. §

64.1200(f)(10).
The TCPA, by its own terms, “‘creates a form of vicarious
liability making an entity liable when a third party sends
14

unsolicited communications on its behalf in violation of the
Act.’”

Brodsky, 2014 WL 2780089, at *6 (quoting Bridgeview

Health Care Ctr. v. Clark, No. 09-C-5601, 2013 WL 1154206, at *4
(N.D. Ill. Mar. 19, 2013)).

Moreover, defendants cannot

exculpate themselves from “‘liability simply by hiring an
independent contractor’” for the purposes of transmitting
“‘unsolicited facsimiles on their behalf.’”

¨Brodsky, 2014 WL

2780089, at *6 (citations omitted).
The parties do not dispute that, in 2006, April T. Clemmer,
a former David Randall employee, corresponded with B2B
concerning a potential fax broadcasting advertisement of David
Randall’s roofing services.
15:16.)

(See Ex. A at 10:5-11:7, 14:11-

The parties further agree that David Randall ultimately

contracted with B2B precisely for the purpose of advertising
and/or promoting David Randall’s services on Defendants’ behalf.
(See id. at 17:1-18:14; Ex. B, Ex. C at 35:1-25; Ex. D at 17 on
the docket.)

Indeed, the disputed facsimiles solely concern

David Randall’s roofing services, and nowhere advertise the
goods, services, or products of any other individual or entity.
(See Ex. D.)

Moreover, Defendants do not dispute that certain

facts support an “on behalf of” theory of liability against
Defendants for B2B’s acts.

(See generally Defs.’ Br. at 5-9.)

Rather, the parties present primarily a legal dispute concerning
15

whether liability passes to Defendants under the TCPA solely by
virtue of B2B’s undisputed transmission of Defendants’
advertisement.
i. Liability under the TCPA
The TCPA prescribes two parallel, and often blended,
theories of liability relevant to this litigation: the first
applies to “the person or entity” on “whose behalf” a third
party transmits an unsolicited facsimile advertisement; the
other applies to the person or entity “whose goods or services
are advertised or promoted in the unsolicited advertisement.”
47 C.F.R. § 64.1200(f)(10).

The “scope of ‘on behalf of’

liability” remained initially unsettled.

Avio, Inc. v.

Alfoccino, Inc., ___ F. Supp. 2d ____, No. 10-10221, 2014 WL
1870108, *10 (E.D. Mich. May 9, 2014) (citation omitted).

The

FCC’s order relied upon by Defendants, however, addressed
whether a “seller[,]” but not the entity that “‘initiates’”
calls under the TCPA, may be held vicariously liable under
agency principles for TCPA violations committed by third-party
telemarketers.

In re Joint Petition filed by DISH Network LLC,

28 F.C.C. 6574 (2013) (hereinafter, the “FCC’s DISH Network
ruling”). In addressing provisions of the TCPA applicable in
that instance, the FCC expressly rejected the notion that the
TCPA creates strict liability, and instead concluded that a
16

“principal” may be liable under the TCPA for acts of a third
party if the party acted in accordance with a formal agency
relationship, possessed “apparent (if not actual) authority” for
its conduct, or if the principal “ratifie[d]” the third-party’s
acts “by knowingly accepting their benefits.”

Id. at 6586-87.

In so concluding, the FCC found incorporation of “general common
law agency principles of vicarious liability” concordant with
the TCPA’s statutory text and legislative purpose and,
accordingly, read such “baseline agency principles” into its
interpretation of the telemarketing provisions of the TCPA.
at 6587.

Id.

Consequently, though the FCC stated that “an action

taken for the benefit of a seller by a third-party” fails,
without more, “to trigger” liability, the FCC found “no reason”
to exculpate a seller for the acts of a “third-party” where the
seller “authorized” or otherwise possessed some supervisory
authority over the third party’s conduct.

Id. at 6593.

The parties acknowledge the interpretive relevance of the
FCC’s ruling, albeit to significantly varied extents, but
dispute the effect of such ruling on the Court’s resolution of
the pending motion. Defendants assert that the ruling compels
the Court to grant summary judgment in its favor (Defs.’ Br. at
5-7); Plaintiff counters, however, that the ruling bears only
marginal relevance to the pending dispute because the statutory
17

language at issue in the ruling—the telemarketing provisions
that reference the initiation of telephone calls—differs, in
material respects, from the junk-fax provisions implicated in
this litigation, (Pl.’s Opp’n at 7-11).
The Court finds both positions somewhat unconvincing.

The

Court first notes that the Hobbs Act, 28 U.S.C. § 2342(1),
requires the Court to apply a final order of the FCC, to the
extent such order squarely addresses the disputed issue.

See

Avio, Inc., 2014 WL 1870108, at *11 (“Because Dish Network is an
on-point final order, this Court must, under the Hobbs Act, find
its reasoning controlling.”) (citations omitted); Savanna Grp.,
Inc. v. Trynex, Inc., No. 10-7995, 2013 WL 4734004, at *5 (N.D.
Ill. Sept. 3, 2013) (“Under the Hobbs Act, the Court must apply
a final FCC order if it governs the matter at issue.”)
(citations omitted); Addison Automatics, Inc. v. RTC Grp., Inc.,
No. 12-9869, 2013 WL 3771423, at *4 (N.D. Ill. July 16, 2013)
(noting that the court had “no authority” to “disregard” the
FCC’s ruling); CE Design, Ltd. v. Prism Bus. Media, Inc., 606
F.3d 443, 446 (7th Cir. 2010) (“[T]he Hobbs Act prevents the
district court from reviewing the validity of FCC
regulations.”).

District Courts must consequently follow the

FCC’s orders if, but only if, such orders actually dispose of
the issue disputed in the litigation.
18

See Dobkin v. Enterprise

Fin. Grp., No. 14-1989, 2014 WL 4354070, at *3 (D.N.J. Sept. 3,
2014).
In the wake of the FCC’s DISH Network ruling, numerous
courts rejected arguments that the FCC’s interpretation of the
TCPA’s telemarketing provisions had no application to the
interpretation of the TCPA’s junk-fax provisions.

Avio, Inc.,

2014 WL 1870108, at *11 (collecting cases); compare 47 C.F.R. §
64.1200(f)(9) (“The term seller means the person or entity on
whose behalf a telephone call or message is initiated for the
purpose of encouraging the purchase or rental of, or investment
in, property, goods, or services, which is transmitted to any
person.”), with 47 C.F.R. § 64.1200(f)(10) (“The term sender for
purposes of paragraph (a)(4) of this section means the person or
entity on whose behalf a facsimile unsolicited advertisement is
sent or whose goods or services are advertised or promoted in
the unsolicited advertisement.”).

Indeed, the majority of

courts expressly imputed the FCC’s DISH Network interpretation
into courts’ interpretations of the TCPA’s junk-fax provisions.
See, e.g., Avio, Inc., 2014 WL 1870108, at *11 (citing Imhoff
Inv., LLC v. SamMichaels, Inc., No. 10-10996, 2014 WL 172234, at
*6 (E.D. Mich. Jan. 15, 2014) (“Even though the FCC's
declaratory ruling addressed the definition of seller within the
telemarketing context, not sender within the faxing context, the
19

definitions are similar and the ruling has been applied to
senders as well.”); Savanna Grp., Inc., 2013 WL 4734004, at *5
(“Given the substantial similarity between the definitions of
‘seller’ and ‘sender’ and the broad language of the ruling
concerning violations of § 227(b), [the FCC’s declaratory
ruling] is controlling in this case.”)) (citation omitted).
However, in an amicus letter dated July 17, 2014 and filed
in connection with a pending appeal before the Eleventh Circuit,
Palm Beach Golf Center-Boca, Inc. v. Sarris, No. 13-14013 (11th
Cir. 2013), the FCC squarely stated that its DISH Network ruling
“applies only to liability for telemarketing calls and neither
addresses nor alters the [FCC’s] pre-existing regulatory
treatment of unsolicited facsimile advertisements.”
Item 126-2 at 6.]

[Docket

Moreover, because DISH Network solely

concerned telemarketing calls, the FCC specifically stated that
it “had no occasion to opine on direct or vicarious liability”
in the context of such facsimile transmissions.
126-2 at 6.]

[Docket Item

Rather, the FCC emphasized that the junk-fax

provisions of the TCPA “clearly ‘allow[] a plaintiff to recover
damages [under a theory of direct liability] from a defendant
who [transmitted] no facsimile to the plaintiff, but whose
independent contractor did,’” provided that “the transmitted fax
constitutes an unsolicited facsimile advertisement promoting the
20

defendant’s goods or services” in accordance with the “binding
regulatory definition” of “sender” set forth in 47 C.F.R. §
64.1200(f)(1).

[Docket Item 126-2 at 6-7.]

Consequently, even

if the FCC’s DISH Network ruling could have been construed to
preclude any assertion of direct liability under the TCPA for
the acts of a third-party, as argued by Defendants (Defs.’ Br.
at 5-7), the FCC’s subsequent amicus letter unambiguously
rejects such interpretation, and the Court need not apply the
FCC’s DISH Network ruling in this instance.
2.]

[Docket Item 126-

Rather, the Court finds Defendants’ position that the TCPA

precludes a finding of liability against Defendants without
merit, particularly because the record contains no dispute that
the fax transmissions advertised Defendants’ roofing services
and that B2B transmitted such advertisements on behalf of
Defendants.

See 47 C.F.R. § 64.1200(f)(10) (defining a liable

“sender” under the TCPA as “the person or entity on whose behalf
a facsimile unsolicited advertisement is sent or whose goods or
services are advertised or promoted in the unsolicited
advertisement”) (emphasis added).
such facts.

Indeed, Defendants concede

(See, e.g., Defs.’ SMF at ¶ 5 (“‘B2B successfully

sent 44,832 faxes for Defendants to 29,113 unique fax numbers. .
. . the junk fax was sent ‘on behalf of’ [] Defendants’”)
(emphasis in original).)

Consequently, the undisputed facts
21

fail to demonstrate Defendants’ entitlement to judgment as a
matter of law on Plaintiff’s TCPA claim.

The Court therefore

denies Defendants’ motion for summary judgment with respect to
such claim.5

5

Defendants also challenge Plaintiff’s TCPA claim on the basis
that Plaintiff failed “to plead vicarious liability[.]” (Defs.’
Br. at 8.) Plaintiff asserts, however, that Plaintiff
“explicitly pled” vicarious liability under the statute, “by
stating that Defendants: ‘approved, authorized and participated
in a scheme to broadcast faxes by (a) directing a list to be
purchased and assembled; (b) directing and supervising employees
and third parties to send the faxes; (c) creating and approving
the form of the faxes to be sent; (d) determining the number and
frequency of the facsimile transmissions; and (e) approving and
paying third parties to send the faxes.’” (Pl.’s Opp’n at 12
(citing Class Action Compl. at ¶ 12).) Moreover, even if
insufficiently plead, Plaintiff argues that its allegations
concerning the “‘sending’” of faxes expressly incorporate the
“‘on behalf of’” definition of “‘sender’” under the TCPA.
(Pl.’s Opp’n at 12.) Other courts that have addressed vicarious
liability under the TCPA have, in reliance on the FCC’s DISH
Network ruling, applied federal common law agency principles to
determine vicarious seller liability for violations of the TCPA.
See, e.g., Siding & Insulation Co. v. Combined Ins. Grp., Ltd.,
No. 11-1062, 2014 WL 1577465, at *3 (N.D. Ohio Apr. 17, 2014);
Imhoff Inv., LLC., 2014 WL 172234, at *6-*7. Certain of those
courts, however, also recognized that “the application of the
heightened standard of agency liability does not entirely square
with 47 C.F.R. § 64.1200(f)(10).” Savanna Grp., 2013 WL
4734004, at *5; see also Addison Automatics, Inc. v. RTC Grp.,
Inc., No. 12-9869, 2013 WL 3771423, at *4 (N.D. Ill. July 16,
2013) (finding the cases requiring plaintiffs to “establish the
existence of an agency relationship in order to hold” defendants
vicariously liable under the TCPA unpersuasive, particularly in
light of the FCC’s regulatory definition of “‘senders’”). Here,
however, vicarious liability constitutes an alternative theory
of liability over which the Court need not belabor, particularly
given the FCC’s most-recent, and unequivocal, expression
concerning liability under 42 U.S.C. § 227(b)(1)(C). [Docket
Item 126-2.]
22

B.

Factual Disputes Preclude Summary Judgment with respect
to Plaintiff’s State Law Conversion Claim
Defendants assert that Plaintiff’s conversion claim fails

as a matter of law because the facsimile transmissions in this
litigation resulted in harm too “trivial” and “de minimis” to be
compensable in the context of a conversion claim.
at 10 (emphasis omitted).)

(Def.’s Br.

Defendants specifically assert that

the conversion of “‘fax machines, toner and paper[]’” fails to
constitute cognizable legal damage, particularly because the
Court permitted the dissemination of class notice by fax.6

(Id.

at 10-11.)
“Under New Jersey law, ‘t]he tort of conversion is the
wrongful exercise of dominion and control over property owned by
another in a manner inconsistent with the owner's rights.’”

D &

D Tech., Inc. v. CytoCore, Inc., No. 14-4217, 2014 WL 4367314,
at *4 (D.N.J. Sept. 2, 2014) (quoting Advanced Enters.

6

The Court rejects Defendants’ reliance upon the Court’s
February 3, 2014 Order as a basis to find the damages derived
from the unsolicited facsimile advertisements de minimis.
(Defs.’ Br. at 11.) It is readily apparent from the Court’s
Order that the Court permitted “notice via fax” primarily
because “the original list of class members” set forth fax
numbers, not “names and addresses.” City Select Auto Sales,
Inc., 2014 WL 413533, at *1. The Court therefore concluded that
notice be facsimile best comported with Federal Rule of Civil
Procedure 23(c)(2)(B)’s requirement that class notice be the
most “‘practicable under the circumstances’” to advise class
members of the pendency of this litigation. Id. at *3 (citation
omitted).
23

Recycling, Inc. v. Bercaw, 869 A.2d 468, 472 (N.J. Super. Ct.
App. Div. 2006)).

The theory of conversion therefore envisions

interference of “‘such a major and serious’” degree that the law
permits, in essence, a forced “‘judicial sale of the chattel
upon the defendant.’”

Arcand v. Brother Int’l Corp., 673 F.

Supp. 2d 282, 311 (D.N.J. 2009) (quoting LaPlace v. Briere, 962
A.2d 1139, 1145 (N.J. Super. Ct. App. Div. 2009)).

New Jersey

law accordingly requires “an interference” that either destroys
a person’s property, or otherwise materially alters its
“quality[.]

Knox v. Samsung Elecs. Am., Inc., No. 08-4308, 2009

WL 1810728, at *10 (D.N.J. 2009) (citation omitted).
The Court finds Defendants’ de minimis argument unavailing,
particularly in light of the fact that New Jersey courts permit
conversion claims for only nominal damages and, in certain
instances, even permit an award of punitive damages in the
absence of compensatory damages.

See Winkler v. Hartford

Accident & Indem. Co., 168 A.2d 418, 422 (N.J. Super Ct. App.
Div. 1961) (finding in an action for conversion that, “the
better view appears to be that exemplary damages may be awarded”
even if “compensatory damages cannot be proved beyond a nominal
sum”), certif. denied, 170 A.2d 544 (1961).

In that regard,

Defendants’ position conflates “‘two separate inquiries: first,
the degree to which the property at issue (paper and ink/toner)
24

was converted, and second, the value of the property at issue.’”
Bell v. Money Res. Corp., No. 08-639, 2009 WL 382478, at *4
(E.D. Pa. Feb. 13, 2009) (citation omitted).

Moreover, various

courts have recognized that “unwanted fax[es]” result in the
permanent destruction of paper, ink, and toner, therefore
completely depriving the owner of their use.

See id. (citing

Centerline Equip. Corp. v. Banner Pers. Serv., Inc., 545 F.
Supp. 2d 768, 782 (N.D. Ill 2008)).

Here, however, in addition

to alleging that the facsimile transmissions “misappropriated”
fax machines, toner,” and paper, Plaintiff also alleges that the
transmissions “converted Plaintiff’s employees’ time” in
connection with the review and processing of the faxes.
Action Compl. at ¶ 35.)

Plaintiff’s allegations therefore

clearly suffice to demonstrate cognizable legal damage.
id.)

(Class

(See

Moreover, factual disputes clearly exist with respect to

the actual amount of Plaintiff’s damages, particularly because
Plaintiff received more than one disputed transmission, and
because Plaintiff also seeks compensation for the employee time
necessarily expended as a result of its receipt of unsolicited
faxes.

(See Defs.’ SMF at ¶ 4 (noting that Defendants “‘sent

the same form of facsimile’ 44,832 times to 29,113 unique fax
numbers”) (citation omitted).)

See also Old Town Pizza of

Lombard, Inc. v. Corfu-Tasty Gryo’s Inc., No. 11-6959, 2012 WL
25

638765, at *4 (N.D. Ill. Feb. 23, 2012) (applying the de minimis
doctrine where plaintiff “only alleged damage from conversion
for a single sheet of paper and the toner used to produce the
message on the paper”).

Consequently, even if the Court

accepted application of the de minimis doctrine, factual
disputes concerning the extent (or, the de minimis nature) of
the transmissions preclude entry of summary judgment with
respect to Plaintiff’s state law conversion claim.7

See Bell,

2009 WL 382478, at *5 (rejecting application of the de minimis

7

The Court is, of course, mindful that Plaintiff’s conversion
claim seeks relief that mirrors in part the relief sought by
Plaintiff’s TCPA claims. (See generally Class Action Compl.
[Docket Item 1].) See also Klein v. Vision Lab. Telecomm., 399
F. Supp. 2d 528, 540 (S.D.N.Y. 2005) (“The TCPA provides for
injunctive and compensatory relief in order to stop and/or
compensate the plaintiff for the annoyance, the conversion of
paper and ink and the effective preemption of his fax machine
during the intervals when it is receiving advertisement
transmissions.”) (citation omitted). Indeed, one court has
stated that the legislative history of the TCPA indicates that
the statute directly endeavors to address the injury derived
from “the cost of the paper and ink” borne by the owner, in
addition to “the fax machine owner’s loss” of the machine’s use.
Compressor Eng’g Corp. v. Mfrs. Fin. Corp., 292 F.R.D. 433, 44748 (E.D. Mich. 2013). The arguably duplicative nature of
Plaintiff’s conversion claim does not, however, dictate the
entry of summary judgment in Defendants’ favor with respect to
such claim. The Court would point out, however, that if the
TCPA claim were not present, the remaining conversion claim
would likely not satisfy the $5 million threshold for
jurisdiction under 28 U.S.C. § 1332(d). With only 29,113 unique
fax numbers receiving either one or two fax transmissions, even
if we assumed the toner, paper, and labor associated with two
sheets of paper added up to one dollar, the monetary dispute is
$29,113 in damages, with no shifting of attorney fees on the
conversion claim.
26

doctrine in the TCPA context, and declining “to dismiss a
conversion claim that could, if successful, recover nominal
damages”).

The Court, therefore, also denies Defendants’ motion

for summary judgment as to Plaintiff’s state law conversion
claim.
C.

Factual Disputes Preclude Summary Judgment with respect
to Plaintiff’s Claim of Individual Liability against
Miley
Finally, Defendants argue that summary judgment must be

granted with respect to Plaintiff’s personal liability claim
against Miley, because the record purportedly fails to
demonstrate Miley’s “personal involvement in the commission of
any tort or the violation of any statute.”

(Defs.’ Br. at 13.)

The Court finds Defendants’ argument unpersuasive.

Numerous

district courts have concluded that individuals acting on behalf
of a corporation may be held personally liable for violations of
the TCPA where they “had direct, personal participation in or
personally authorized the conduct found to have violated the
statute.”

Connor v. Lifewatch, Inc., No. 13-3507, 2014 WL

4198883, at *5 (D.S.C. Aug. 20, 2014) (collecting cases).
Indeed, one such district court observed that any contrary
interpretation would effectively erode “much of [the TCPA’s]
force.”

Md. v. Universal Elections, 787 F. Supp. 2d 408, 415–16

(D. Md. 2011) (citation omitted).
27

Moreover, the factual record in this instance is replete
with factual disputes concerning Miley’s personal involvement in
the junk faxes that form the predicate of this litigation.

In

support of Defendants’ argument that Plaintiff’s claim of
individual liability fails, Defendants rely, almost exclusively,
on Miley’s allegedly “undisputed testimony.”
13.)

(Defs.’ Br. at

Miley’s testimony concerning his involvement, however, is

certainly not without dispute.

Indeed, as correctly noted by

Plaintiff, Miley’s deposition testimony contains little more
than “broad memory failures and general denials” concerning his
involvement in the dissemination of the facsimile transmissions.
(Pl.’s Opp’n at 16.)
For example, Miley specifically testified that, though he
authorized payment of marketing-related expenses, he had no
responsibility for the oversight of David Randall’s marketing
materials, nor any knowledge of the individual responsible for
the advertising and marketing of David Randall’s roofing
services.

(Ex. C at 16:17-17:19.)

Miley further acknowledged

his signature on correspondence approving the disputed facsimile
transmission in this instance, but otherwise stated that he
recalled no additional details concerning the contracting for,
and design of, the advertisement.

(Id. at 35:5-40:19.)

Miley

also testified that he had no personal contact with B2B, but
28

that he assumed, without support, that B2B conducted a lawful
and “legitimate” operation.

(Id. at 66:1-68:5.)

Notwithstanding Miley’s testimony, the testimony of April
T. Clemmer, Miley’s former administrative assistant during the
relevant period, clearly depicts Miley as intimately involved
(albeit through Clemmer) in the discussions and negotiations
with B2B concerning the fax broadcasting program.
generally Ex. A [Docket Item 116-1].)

(See

Clemmer explicitly

testified that Miley commended B2B’s initial correspondence to
her attention, and thereafter directed Clemmer, on numerous
occasions, to contact B2B on Miley’s behalf concerning various
aspects of the proposed facsimile advertisement.
16:1.)

(Id. at 9:22-

Indeed, Clemmer testified that Miley acted as “the

ultimate decision-maker in approving the” ads’ forms,
“determined the number of faxes” to be disseminated, the time
within which to transmit such faxes, and authorized payment for
B2B’s services.

(Id. at 20:4-21:8.)

The Court therefore concludes that factual disputes
preclude the entry of summary judgment as to Plaintiff’s
individual liability claim against Miley.

See Sandusky Wellness

Ctr., LLC v. Wagner Wellness, Inc., No. 12-2257, 2014 WL
1333472, at *3 (N.D. Ohio Mar. 28, 2014) (finding disputed facts
precluded the entry of summary judgment with respect to
29

plaintiff’s claim of personal liability against defendant’s
officer for any violations of the TCPA); Jackson Five Star
Catering, Inc. v. Beason, No. 10-10010, 2013 WL 5966340, at *4
(E.D. Mich. Nov. 8, 2013) (granting plaintiff’s motion for
summary judgment where the record contained no dispute that the
individual corporate officer participated in the payment of and
authorization for the fax ads).
Nor does the Court find that Miley’s purported lack of
knowledge concerning the legality of the fax advertisements
compels any contrary conclusion.

(See Defs.’ Br. at 13-14.)

Indeed, the TCPA does not absolve individuals of culpability
simply because such individual “‘hir[ed] an independent
contractor’ to send unsolicited facsimiles on [his] behalf[,]’”
without first engaging in the requisite degree of due diligence.
Bridgeview Health Care Ctr., 2013 WL 1154206, at *4 (citations
omitted).

Here, Miley testified that he presumed that B2B

presented an offer to disseminate “legitimate” fax
advertisements, but concedes that he never personally contacted
B2B nor engaged in any investigation into B2B’s operation.
C at 66:23-68:5.)

(Ex.

Clemmer, however, testified that Defendants

received numerous requests to be removed from the fax
broadcasts, and that Miley authorized subsequent fax broadcasts,
notwithstanding Defendants’ receipt of such requests.
30

(See Ex.

A at 73:14-77:17 (Clemmer’s testimony concerning Miley’s
approval of a May 15, 2006 fax broadcast, despite receipt of
requests for removal from the fax dissemination); Ex. B at 50,
62 on the docket (requests dated March 29, 2006 and April 5,
2006, requesting that certain numbers be removed from B2B’s fax
broadcasting).

The TCPA, however, affords no relief to

individuals who turn a blind eye to the conduct of third parties
with whom they contract.

See Compressor Eng’g Corp., 292 F.R.D.

at 436. Consequently, because factual disputes concerning the
level of Miley’s personal involvement pervade the record, the
Court will deny Defendants’ motion for summary judgment on this
claim as well.
D.

CONCLUSION
In sum, the Court concludes that factual disputes preclude

the entry of summary judgment in Defendants’ favor with respect
to Plaintiff’s claims.

Consequently, the Court will deny

Defendants’ motion for summary judgment in its entirety.

An

appropriate Order will be entered.

September 24, 2014
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

31