DOBKIN v. ENTERPRISE FINANCIAL GROUP, INC et al
OPINION. Signed by Judge William H. Walls on 9/3/2014. (nr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MICHAEL DOBKIN, individually and on behalf of
all others similarly situated,
ENTERPRISE FINANCIAL GROUP, INC., a Texas
corporation, and PRECISE ENTERPRISES LLC
d/b/a Precise Auto Protection, a California limited
Civ. No. 2:14-cv-01989 (WHW) (CLW)
Walls, Senior District Judge
Defendant Enterprise Financial Group, Inc. (“EFG”) moves to dismiss the complaint under
Federal Rule of Civil Procedure 12(b)(6). This motion, decided without oral argument under
Federal Rule of Civil Procedure 78(b), is denied.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff Michael Dobkin brings this action individually and on behalf of a putative class
of similarly situated people against EFG and Precise Enterprises LLC (“Precise”) for violations
of the Telephone Consumer Protection Act (the “TCPA”), 47 U.S.C. § 227(c), and related
regulations. Compl. ¶¶ 3, 41-49, ECF No. 1.
Plaintiff is a New Jersey citizen whose landline telephone number is registered with the
national Do Not Call Registry. Id. ¶¶ 6, 31. Defendant EFG is a Texas corporation that sells
financial products and services related to automobiles, such as auto warranties. Id. ¶¶ 1, 7.
Defendant Precise is a California limited liability company that markets and sells EFG’s
products and services to consumers. Id. ¶¶ 2, 8.
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Plaintiff alleges that Precise is EFG’s “telemarketing agent” and places “outbound
telemarketing calls to consumers’ telephones” to market EFG’s products. Id. ¶¶ 14-15. Plaintiff
contends that, during these calls, Precise’s representatives promote EFG’s auto warranties and
sometimes “identify themselves as calling from EFG, or on behalf of EFG, or for the purpose of
selling EFG’s products.” Id. ¶ 15. These warranties are described on both Precise’s and EFG’s
websites. Id. ¶¶ 17-18. Plaintiff asserts that Precise and EFG “jointly benefit from these calls
through a revenue sharing agreement.” Id. ¶ 14.
Plaintiff also claims that Precise is one of EFG’s “clients,” to whom EFG provides
various consulting and training services. Id. ¶¶ 19-20. As such, EFG is “heavily involved with
Precise Enterprises’s sales practices and marketing procedures, and has full visibility into Precise
Enterprises’s telemarketing practices.” Id. ¶ 21.
Beginning in or around February 2014, Plaintiff alleges he “began receiving calls to his
landline” phone from Precise without his consent. Id. ¶¶ 26-30. Plaintiff and his wife answered
many of these calls and requested that they stop. Id. ¶ 27. When the calls did not stop, Plaintiff
asked the caller about the company making the calls. Id. ¶ 28. The caller’s supervisor said he
was calling from “Precise Auto Protection” to offer Plaintiff the “Choice” auto warranty package
for $3,600. Id. Plaintiff requested a website to get more information about the warranty, and the
supervisor directed him to “TheTechChoice.com.” Id. ¶ 29. This web address automatically
redirects visitors to the website “TechChoice.EFGcompanies.com,” which is a part of EFG’s
website. Id. ¶ 16. Plaintiff alleges that in total he received “numerous, and no less than four,
phone calls from Defendants.” Id. ¶ 32.
Drawing on this experience, Plaintiff asserts that “Defendants made (and continue to
make) these telemarketing calls” to consumers who have registered their numbers on the national
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Do Not Call Registry and who have requested that the calls stop, id. ¶¶ 22-23, thereby inflicting
unwanted aggravation, nuisance, invasion of privacy, and phone service charges. Id. ¶ 4.
Plaintiff seeks to represent a class of “[a]ll individuals in the United States (1) who had
his or her telephone number(s) registered with the National Do Not Call Registry for at least
thirty days; (2) who received more than one telephone call made by or on behalf of Defendants
that promoted Defendants’ products or services; (3) within a 12-month period; and (4) for whom
Defendants had no current record of consent to place such calls to him or her.” Id. ¶ 34.
Plaintiff supports the existence of this class by asserting that “consumer complaints online
regarding unwanted phone calls from Defendants . . . are legion.” Id. ¶ 24. Plaintiff cites several
websites that aggregate complaints about phone calls from numbers potentially used by
Alleging these facts, Plaintiff maintains that Defendants violated the TCPA and related
Federal Communications Commission (“FCC”) regulations. Id. ¶¶ 40-49. First, Plaintiff claims
that Defendants violated the FCC rule codified at 47 C.F.R. § 64.1200(c) (2013) by initiating
telephone solicitations to telephone subscribers who registered their phone numbers on the
national Do Not Call Registry. Id. ¶ 45. Second, Plaintiff claims that Defendants violated the
FCC rule codified at 47 C.F.R. § 64.1200(d) by initiating telemarketing calls without
maintaining a list of persons who request not to receive calls. Id. ¶ 47. Finally, based on these
predicate violations of the FCC regulations, Plaintiff contends that Defendants violated the
TCPA, 47 U.S.C. § 227(c)(5), and seeks an injunction, actual and statutory damages, and
attorneys’ fees and costs. Id. ¶ 48.
Defendant EFG moves to dismiss Plaintiff’s complaint under Federal Rule of Civil Procedure
12(b)(6). EFG argues that the complaint does not state a plausible claim that EFG is directly or
vicariously liable for the calls Plaintiff received. EFG also asserts that the TCPA’s private right of
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action incorporates New Jersey state law and that this has the effect of foreclosing Plaintiff’s class
action claim. Finally, EFG argues that Plaintiff’s request for relief arising from calls made to
wireless phones must be dismissed because Plaintiff does not allege that he received a call on a
wireless phone. EFG’s arguments are considered in turn.
STANDARD OF REVIEW
On a motion to dismiss, the court is required to “accept all factual allegations as true,
construe the complaint in the light most favorable to the plaintiff, and determine whether, under
any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Broadcom Corp.
v. Qualcomm Inc., 501 F.3d 297, 306 (3d Cir. 2007). “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) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). A claim is plausible on its face “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.
“[O]nce a claim has been stated adequately, it may be supported by showing any set of
facts consistent with the allegations in the complaint.” Twombly, 550 U.S. at 563 (2007) (citations
omitted). It follows that “a district court weighing a motion to dismiss asks ‘not whether a plaintiff
will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.’”
Id. at 563 n.8 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
A. Direct Liability
EFG argues that the complaint fails to establish EFG’s direct liability for the alleged
unlawful calls because it asserts that Precise, not EFG, made the calls. Def.’s Br. in Supp. of Mot.
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to Dismiss (“Def.’s Br.”) 6-9, ECF No. 17-1. The Court agrees that Plaintiff has failed to state a
plausible claim for EFG’s direct liability.
The FCC’s TCPA regulations make it unlawful to “initiate” telemarketing calls to phone
numbers registered on the national Do Not Call Registry or without maintaining a list of persons
who request not to receive calls.1 Interpreting the meaning of the word “initiate” in its TCPA
regulations, the FCC has clarified that a “person or entity ‘initiates’ a telephone call when it takes
the steps necessary to physically place a telephone call.” In re Dish Network, LLC, 28 F.C.C. Rcd.
6574, 6582-83 (2013). The FCC’s interpretation of its regulations implementing the TCPA merits
substantial deference. Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994) (reviewing
courts “must give substantial deference to an agency’s interpretation of its own regulations”).
Because Plaintiff’s complaint alleges only that Precise, and not EFG, placed unlawful phone calls,
it follows that Plaintiff has not adequately alleged that EFG is directly liable for any unlawful
calls.2 See also Thomas v. Taco Bell Corp., No. 12-56458, 2014 WL 2959160, at *1 (9th Cir. July
2, 2014) (finding that direct liability for TCPA violation was inapplicable to seller when actual
sender of unlawful text message solicitation was a third party).
Without disputing that Precise placed the alleged unlawful calls, Plaintiff argues that EFG
can still be directly liable for initiating them because it was highly involved in Precise’s
telemarketing efforts. Pl.’s Opp. to Mot. to Dismiss (“Pl.’s Opp.”) 6, ECF No. 27. To support this
FCC regulations 47 C.F.R. §§ 64.1200(c) and (d), which Plaintiff claims EFG violated, make it
unlawful, subject to certain statutory exceptions, for any person or entity to “initiate any
telephone solicitation” to any telephone subscriber who has registered his or her phone number
on the national Do Not Call Registry, 47 C.F.R. § 64.1200(c), and to “initiate any call for
telemarketing purposes” without instituting procedures for maintaining a list of persons who
request not to receive such telemarketing calls, 47 C.F.R. § 64.1200(d).
Where Plaintiff’s complaint alleges that “Defendants” made the telemarketing calls without
differentiating the Defendants by name, Compl. ¶¶ 12, 22, 23, 25, the Court does not interpret
these allegations as asserting that EFG physically placed the calls because the complaint
elsewhere indicates that Precise placed the calls. Id. ¶¶ 13, 14, 21, 28.
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argument, Plaintiff relies on the FCC’s comment that “one can imagine a circumstance in which a
seller is so involved in the placing of a specific telephone call as to be directly liable for initiating
it—by giving the third party specific and comprehensive instructions as to the timing and the
manner of the call, for example.” In re Dish Network, LLC, 28 F.C.C. Rcd. at 6583. This argument
fails because Plaintiff’s complaint does not indicate that this circumstance exists here.
Plaintiff has not alleged that EFG was directly involved in placing any specific phone call
to Plaintiff or a putative class member. Rather, Plaintiff alleges that EFG “outsourced the telesales
of its products to Defendant Precise Enterprises,” Compl. ¶ 21, and that it was Precise’s distinct
role to “market EFG’s products and services through widespread telemarketing.” Id. ¶ 13.
Although Plaintiff states that EFG was “heavily involved with Precise Enterprises’s sales practices
and marketing procedures” and assisted Precise with various types of consulting and training, id.
¶¶ 19-21, Plaintiff never alleges that EFG was involved in placing any particular phone call. Given
the FCC’s emphasis that one “initiates” a phone call by physically placing it, and the existence of
vicarious liability for sellers who engage third parties to make unlawful telemarketing calls,
Plaintiff’s allegations that EFG oversaw and advised Precise’s telemarketing do not suffice to bring
EFG’s actions within the ambit of direct liability. As such, Plaintiff has not stated a plausible
claim for EFG’s direct liability.
B. Vicarious Liability
EFG also argues that Plaintiff has failed to assert a plausible theory of vicarious liability.
EFG does not dispute that a seller can be vicariously liable under the TCPA for a third party agent’s
unlawful telemarketing calls. Def.’s Br. 9-10. Instead, EFG argues that it cannot be held
vicariously liable for Precise’s telemarketing calls because Plaintiff failed to plead facts
establishing that Precise was EFG’s agent. Id. at 10. The Court disagrees. Plaintiff has pled
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enough facts to make it plausible that Precise had actual authority from EFG when it made the
telemarketing calls at issue, thereby creating vicarious liability for EFG.
The Third Circuit has held that “[a]n agency relationship is created when one party
consents to have another act on its behalf, with the principal controlling and directing the acts of
the agent.” Covington v. Int’l Ass’n of Approved Basketball Officials, 710 F.3d 114, 120 (3d Cir.
2013) (internal citations omitted). “Vicarious liability due to an agency relationship can be based
on the agent’s actual authority. An agent acts with actual authority when, at the time of taking
action that has legal consequences for the principal, the agent reasonably believes, in accordance
with the principal’s manifestations to the agent, that the principal wishes the agent so to act.” Id.
(citing Restatement (Third) of Agency § 2.01 (2006)).
Plaintiff’s allegations suffice to make out a claim that Precise had actual authority to sell
EFG’s products through telemarketing calls when it made the alleged unlawful calls. Plaintiff
asserts that EFG “outsourced the telesales of its products” to Precise and that EFG and Precise
“jointly benefit from these calls through a revenue sharing agreement where each is paid when an
EFG product is sold by Precise.” Compl. ¶¶ 14, 21. The complaint also states that EFG’s and
Precise’s websites display the same product information, id. ¶¶ 17-18, and that Precise offered to
sell Plaintiff the “Choice” warranty package that appears on both websites. Id. ¶ 28. Taken as
true, these facts substantiate an outsourcing arrangement in which Precise had actual authority to
sell EFG’s products through telemarketing calls. The complaint also exhibits Precise’s actual
authority with assertions that Precise representatives viewed themselves as EFG’s agents and
would sometimes identify themselves as calling from or on behalf of EFG when they spoke with
consumers. Id. ¶ 15.
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Beyond the indications of actual authority, Precise’s status as EFG’s agent is supported by
Plaintiff’s assertions that Precise was acting under EFG’s control and direction. As example,
Plaintiff alleges that EFG was “heavily involved with Precise Enterprises’s sales practices and
marketing procedures” and maintained “full visibility into Precise Enterprises’ telemarketing
Id. ¶ 21.
Similarly, Plaintiff’s allegation that Precise representatives directed
consumers to a website which automatically rerouted to EFG’s website suggests that EFG exerted
control over Precise’s telemarketing strategy. Id. ¶ 16. Plaintiff has adequately pled facts to make
it plausible that EFG could be vicariously liable for Precise’s alleged unlawful calls.
Because Plaintiff has sufficiently alleged EFG’s vicarious liability under an actual
authority theory, this Court need not consider the adequacy of Plaintiff’s complaint with regard to
other bases of vicarious liability.
C. The TCPA’s Private Right of Action
Defendant EFG also contends that Plaintiff’s complaint must be dismissed because the
TCPA’s private right of action incorporates New Jersey state law and New Jersey law prohibits
TCPA class actions. See Def.’s Br. 15-24.
The TCPA’s relevant private right of action clause provides that a person “may, if
otherwise permitted by the laws or rules of court of a State bring in an appropriate court of that
State” an action for an injunction and monetary damages. 47 U.S.C. § 227(c)(5). Defendant EFG
argues that TCPA class actions are not “otherwise permitted” under New Jersey state law and that,
consequently, the statute’s plain language requires this Court to dismiss Plaintiff’s case. Def.’s
Br. 15-18. In opposition, Plaintiff contends that the Supreme Court’s interpretation of the TCPA
in Mims v. Arrow Financial Services, 132 S. Ct. 740 (2012), dictates that federal law, not state
law, governs TCPA class actions brought in federal court. Pl.’s Opp. 17-22. This Court, in keeping
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with the many federal courts that have considered this issue, agrees with Plaintiff that federal law
governs TCPA class actions brought in federal court.
In Mims, the Supreme Court held that state and federal courts have concurrent jurisdiction
over TCPA claims. Mims, 132 S. Ct. at 745. Analyzing 47 U.S.C. § 227(b)(3), a separate private
right of action clause in the TCPA statute that is nearly identical to the one relevant here, 47 U.S.C.
§ 227(c)(5), the Court stated that the clause provides a “permissive grant of jurisdiction to state
courts,” and that “[n]othing in the permissive language of § 227(b)(3) makes state-court
jurisdiction exclusive, or otherwise purports to oust federal courts of their 28 U.S.C. § 1331
jurisdiction over federal claims.” Id. at 745, 749. The Court found that “by providing that private
actions may be brought in state court ‘if otherwise permitted by the laws or rules of court of [the]
State,’ Congress arguably gave States leeway they would otherwise lack to decide whether to
entertain TCPA claims.” Id. at 751 (internal citations omitted). It follows that the Supreme Court
interpreted the statute’s “if otherwise permitted” language as giving states discretion over their
own state court TCPA enforcement, not as tethering TCPA enforcement in federal courts to state
The Supreme Court also noted that subjecting federal court TCPA cases to each state’s
TCPA policies would undermine Congress’s intent to establish “uniform, federal substantive
prescriptions” for telemarketing. Id. (“Congress’ design would be less well served if consumers
had to rely on ‘the laws or rules of court of a State,’ . . . or the accident of diversity jurisdiction, to
gain redress for TCPA violations”). The Supreme Court’s construction of the TCPA’s “if
otherwise permitted” language as simply giving states their own TCPA enforcement discretion
and its conclusion that Congress intended to install uniform TCPA enforcement in federal courts
together instruct that federal law should govern TCPA claims brought in federal court. Although
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the Third Circuit has not addressed this issue, the Second Circuit has reached the same conclusion,
finding that Mims “emphasizes that Congress had a strong federal interest in uniform standards for
TCPA claims in federal court” and holding that “Federal Rule of Civil Procedure 23, not state law,
governs when a federal TCPA suit may proceed as a class action.” Bank v. Independence Energy
Grp. LLC, 736 F.3d 660, 661 (2d Cir. 2013). This is also far from the first time the District of
New Jersey has considered this issue and arrived at this result. See City Select Auto Sales, Inc. v.
David Randall Associates, Inc., 296 F.R.D. 299, 312 (D.N.J. 2013); Fitzgerald v. Gann Law Books,
Inc., 956 F. Supp. 2d 581, 584-87 (D.N.J. 2013); Landsman & Funk, P.C. v. Skinder-Strauss
Associates, No. CIV.A. 08-3610 KSH, 2012 WL 6622120, at *6-8 (D.N.J. Dec. 19, 2012);
Goodrich Mgmt. Corp. v. Afgo Mech. Servs., Inc., No. CIV. 09-43 WJM, 2012 WL 6554221, at
*3 (D.N.J. Dec. 14, 2012); Bais Yaakov of Spring Valley v. Peterson’s Nelnet, LLC, Civ. 11–00011,
2012 WL 4903269, at *7 (D.N.J. Oct. 17, 2012).
Despite Mims and its progeny, EFG argues that a plain reading of the TCPA’s “if otherwise
permitted” language compels the application of New Jersey state law. Def.’s Br. 16-17. The Court
disagrees. The Supreme Court explained in Mims that federal courts’ jurisdiction in TCPA cases
is derived from the “familiar default rule” that “[f]ederal courts have § 1331 jurisdiction over
claims that arise under federal law.” Mims, 132 S. Ct. at 753. Federal subject matter jurisdiction
over Plaintiff’s TCPA claim arises because the TCPA is a federal statute, not from the statute’s
permissive grant of jurisdiction to state courts. Because federal question jurisdiction arises not
from the TCPA’s text but from its federal provenance, the “if otherwise permitted” language is
properly read as applying to actions brought in state courts. See also Landsman & Funk, 2012 WL
6622120, at *8 (finding that “the restrictive language applies to actions brought in courts of a
state”); Bais Yaakov of Spring Valley, 2012 WL 4903269, at *7 (finding that “there is no direct
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conflict between Rule 23 and state law such as to imply a congressional limitation on Rule 23,
because the section at issue applies to a suit brought in state court, not federal”).
This Court agrees with the others which have determined that federal law, not New Jersey
law, applies to Plaintiff’s TCPA class action claim in federal court. New Jersey’s treatment of
TCPA class action claims is inapplicable.
D. Alleged Calls to Wireless Telephones
EFG’s remaining argument is that Plaintiff’s complaint should be dismissed to the extent
it seeks relief from calls made to wireless telephones because Plaintiff does not allege that he
received such calls. Def.’s Br. 15. The Court finds this argument unavailing.
Plaintiff’s complaint does not seek individual relief for calls made to a wireless phone.
Rather, it states a claim to individual relief from alleged unlawful calls to Plaintiff’s landline.3
Plaintiff’s failure to allege that he received unlawful calls to a wireless phone does nothing to
undermine his pleading.
Second, it is too early to resolve class certification questions. Plaintiff seeks to represent a
class of “[a]ll individuals in the United States” who had their phone numbers registered with the
national Do Not Call Registry but still received multiple telemarketing calls from Defendants in a
twelve month period without consent. Compl. ¶ 34. On its face, Plaintiff’s complaint indicates
that Plaintiff shares the same claim as putative class members. The complaint’s only references
to wireless phone calls serve to allege that the relevant FCC TCPA regulations do not distinguish
between telemarketing calls to wireless and landline phones. Id. ¶¶ 43, 45, 47.
Because Plaintiff has adequately stated an individual claim for relief, EFG’s reference to Paldo
Sign & Display Co. v. Hansen, 2011 U.S. Dist. LEXIS 49585 (N.D. Ill. May 6, 2011), in which
the plaintiff did not have a viable individual claim against the defendant, is inapposite.
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While EFG’s argument points to a difference between Plaintiff’s claim and those of other
potential class members, in that class members may have received unlawful calls to wireless
phones instead of landline phones, this issue is best addressed at the class certification stage. The
Third Circuit has emphasized that “rigorous analysis” is required before a district court makes
class certification decisions. Landsman & Funk PC v. Skinder–Strauss Associates, 640 F.3d 72,
93 (3d Cir. 2011) (finding that the district court’s class certification decision on motion to dismiss,
where there had been no motion for class certification and no discovery, was premature).
Accordingly, district courts in the Third Circuit commonly deny motions to strike class allegations
prior to the class certification stage. See P.V. ex rel. Valentin v. Sch. Dist. of Philadelphia, 2:11CV-04027, 2011 WL 5127850, at *3-6 (E.D. Pa. Oct. 31, 2011); Humphreys v. Budget Rent A Car
Sys. Inc., 10-CV-1302, 2014 WL 1608391, at *11 (E.D. Pa. Apr. 22, 2014). Given that EFG’s
challenge to Plaintiff’s class action allegations precedes a motion for certification as well as any
pre-certification discovery, it is premature.
Plaintiff’s failure to allege that he received unlawful calls to a wireless phone does not
undermine his pleading or necessitate dismissal of his class allegations.
The Court denies Defendant EFG’s motion to dismiss. An appropriate order follows.
Date: September 3, 2014
/s/ William H. Walls
United States Senior District Judge
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