McCabe v. B.L. Vacation Ownership, Inc. et al
Filing
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ORDER: For the reasons stated in the attached memorandum and order, defendants' 23 motion to dismiss for failure to state a claim is granted as to all defendants except Caribbean Cruise Line. Defendants' motion to dismiss the breach of contract claim is granted. The 25 motion to stay is denied. Ordered by Judge John Gleeson on 7/3/2014. (Herling, Adam)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
FOR ONLINE PUBLICATION
KEVIN McCABE, Individually and on Behalf
of All Others Similarly Situated,
Plaintiff,
- versus -
MEMORANDUM
AND ORDER
13-CV-6131
CARIBBEAN CRUISE LINE, INC. et al.,
Defendants.
A P P E A R A N C E S:
TODD C. BANK
119-40 Union Turnpike
4th Floor
Kew Gardens, New York 11415
By:
Todd C. Bank
Attorney for Plaintiff
GREENSPOONER MARDER, P.A.
200 E. Broward Blvd.
Suite 1500
Fort Lauderdale, FL 33301
By:
Jeffrey Blackman
Attorneys for Defendants
JOHN GLEESON, United States District Judge:
Kevin McCabe brings this action individually and on behalf of a putative class
alleging that defendants violated provisions of the Telephone Consumer Protection Act, 47
U.S.C. § 227, et seq., (the “TCPA”) and New York General Business Law (“NYGBL”) § 399p(3)(a) by making a call (or causing a call to be made) to his cellular telephone using an
automatic-dialing mechanism with a prerecorded message offering a “free cruise” in exchange
for completing a survey. He also asserts a claim for breach of contract based on the allegation
that the cruise offered in the call is not actually free. McCabe claims that defendants are
responsible for “millions” of identical or very similar calls made to individuals throughout the
country. Defendants Celebration Cruise Line, LLC, Celebration Cruise Line Management, LLC,
Celebration Cruise Operator, Inc., National Travel Services, Inc., Plaza Resorts, Inc., and
Vacation Ownership Marketing Tours, Inc. move to dismiss the complaint for lack of personal
jurisdiction. All defendants move to dismiss the complaint for failure to state a claim. In the
alternative, defendants move for a stay of the case pending the resolution of two other actions in
the Eastern District of New York that they view as substantially similar to this action. I heard
oral argument on May 30, 2014. For the reasons stated below, defendants’ motion to dismiss for
failure to state a claim is granted as to the claims against all defendants except Caribbean Cruise
Line; 1 defendants’ motion to dismiss the breach of contract claim as to all defendants is also
granted. Defendants’ motion to stay is denied.
BACKGROUND
McCabe’s amended complaint alleges the following facts, which I assume to be
true for the purposes of this motion. See Harris v. Mills, 572 F.3d 66, 71 (2d Cir. 2009).
Defendants National Travel Services, Plaza Resorts, The Berkley Group, and
Vacation Ownership Marketing Tours (the “Vacation Marketers”) or those operating on their
behalf, have placed “millions” of “free cruise robocalls” to cellular and residential telephone
lines offering a “free cruise” in exchange for completing a survey. Am. Compl. ¶ 35, ECF No.
19. The Vacation Marketers promote the sale of vacation and timeshare packages through
presentations that individuals who accept the “free cruise” offer are required to attend. Id. ¶¶ 3031. Defendants Caribbean Cruise Line, Inc., Celebration Cruise Line, LLC, Celebration Cruise
Line Management, LLC, Celebration Cruise Operator, Inc. (the “Cruise Operators”) provide the
1
Because all claims against the defendants moving to dismiss the complaint pursuant to Rule
12(b)(2) are dismissed for failure to state a claim, I do not reach the issue of whether the complaint alleges facts
sufficient for the Court to exercise personal jurisdiction over these defendants.
2
cruises offered in the free cruise robocalls. Id. ¶¶ 27-29. The free cruise robocalls “are made
pursuant to contracts to which Caribbean Cruise Line is a party.” Id. ¶ 29.
On or about September 23, 2013, McCabe, a New York resident, id. ¶ 16,
received a free cruise robocall on his cellular telephone, which has a New York area code. Id. ¶¶
38, 40. The automated recording encouraged McCabe to “press 1” to take a “free cruise survey.”
Id. ¶ 35. After pressing “1” on his phone, McCabe was presented with a survey, which he
completed. Id. ¶¶ 35, 39. McCabe had not given any of the defendants permission to call his
telephone, id. ¶ 42, and the recording did not state at the beginning of the call the name of the
person responsible for placing the call, or state at the end of the recording the name, address, or
phone number of the person responsible for the call. Id. ¶¶ 36-37.
Despite the promise of a “free” cruise in exchange for completing the survey,
Caribbean Cruise Line’s website shows there are several charges for the cruise, including
“required charges” of $59 per person for “port charges” and “government taxes” as well as $12
per person per day in “fuel fees” if the price of light sweet crude oil is listed on the New York
Mercantile Exchange Index (“NYME”) at over $40 per barrel. 2 At the bottom of the webpage, in
bold, is the disclaimer that “This advertising material is being used for the purpose of soliciting
sales of a vacation ownership plan.” Id. The other Cruise Operator defendants charge identical
or very similar fees for the supposedly “free” cruises. Id.
According to McCabe, “thousands” of substantially identical calls have been
made by the defendants to New York and non-New York telephone numbers belonging to
individuals who have not consented to being contacted by the defendants. Id. ¶¶ 41-42. In
2
McCabe notes that the price of sweet light crude has not been listed below $40 per barrel on the
NYME for the past eight years. Id. ¶ 46.
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addition, the same “free cruises” have been made available to the general public, without the
need to complete the survey. Id. ¶ 49.
McCabe contends that the Cruise Operators benefit financially from individuals
who take a cruise as a result of receiving a free cruise robocall, id. ¶ 54, and that the Vacation
Marketers benefit financially from individuals who end up buying a timeshare property after
being required to attend a timeshare sales presentation as part of the “free cruise.” Id. ¶ 55. All
defendants, according to McCabe, were aware of these robocalls, approved their use, and
intended the calls to benefit them financially. Id. ¶ 57.
DISCUSSION
A. Failure to State a Claim
1. The Standard of Review
To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must allege
sufficient facts to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009); Bigio v. Coca-Cola Co., 675 F.3d 163, 173 (2d Cir. 2012). In making this
determination, a court should assume all well-pleaded allegations in the complaint to be true
“and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S.
at 679; see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (“Factual allegations must
be enough to raise a right to relief above a speculative level . . . on the assumption that all the
allegations in the complaint are true (even if doubtful in fact).” (internal citation omitted)).
However, “the tenet that a court must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678.
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2. Analysis
a. “Lumping” Defendants
Defendants argue that the amended complaint impermissibly “lumps” the
defendants together and fails to plausibly plead that each of the defendants was responsible for
the telephone call received by McCabe. I agree. The complaint contains only conclusory
allegations that the defendant Vacation Marketers engaged in the unlawful conduct alleged in the
complaint “with the authorization of, and in concert with, the Cruise Operators,” Am. Compl. ¶
32, ECF No. 19, and that the Vacation Marketers “or those operating on their behalf, have placed
millions of ‘Free Cruise’ robocalls.” Id. ¶ 35. These allegations are insufficient to state a
plausible claim against these defendants. See Cellco P’ship v. Plaza Resorts Inc., No. 12-CV81238, 2013 WL 5436553, at *6 (S.D. Fla. Sept. 27, 2013) (finding allegations that “the
[defendants] are ‘affiliated’ and ‘act in concert’ with each other . . . simply too conclusory” and
granting motion to dismiss).
The complaint does allege, however, that “[t]he ‘Free Cruise’ Robocalls are made
pursuant to contracts to which Caribbean Cruise Line is a party.” Am. Compl. ¶ 29, ECF No. 19.
This specific allegation, in conjunction with the more general allegations contained in the
complaint, is sufficient to plausibly plead a claim against Caribbean Cruise Line (“CCL”).
Accordingly, the claims against all the defendants except CCL are dismissed for failure to state a
claim.
b. Sufficiency of the TCPA and NYGBL Claims
McCabe alleges that CCL violated §§ 227(b)(1)(A)(iii) and 227 (b)(1)(B) of the
TCPA and NYGBL § 399-p(3)(a). Section 227(b)(1)(A)(iii) makes it unlawful for any person:
to make any call (other than a call made for emergency purposes or made with
the prior express consent of the called party) using any automatic telephone
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dialing system or an artificial or prerecorded voice . . . to any telephone number
assigned to a paging service, cellular telephone service . . . or any service for
which the called party is charged for the call . . . .
47 U.S.C.A. § 227(b)(1)(A)(iii). Section 227(b)(1)(B) makes it unlawful for any person:
to initiate any telephone call to any residential telephone line using an artificial or
prerecorded voice to deliver a message without the prior express consent of the
called party, unless the call is initiated for emergency purposes or is exempted by
rule or order by the Commission . . . .
47 U.S.C.A. § 227(b)(1)(B). Finally, NYGBL § 399-p(3)(a) provides, in part, that:
Whenever telephone calls are placed through the use of an automatic dialingannouncing device, such device shall do all of the following: (a) state at the
beginning of the call the nature of the call and the name of the person or on whose
behalf the message is being transmitted and at the end of such message the
address, and telephone number of the person on whose behalf the message is
transmitted, provided such disclosures are not otherwise prohibited or restricted
by any federal, state or local law . . . .
N.Y. Gen. Bus. Law § 399-p(3)(a).
CCL contends that McCabe’s TCPA claims must be dismissed because vicarious
liability is unavailable “as a matter of law” under the relevant subsections of § 227(b), which
make it unlawful to “make” and “initiate” the prohibited call but do not specifically reference
“on behalf of” liability. Defs. Mem. in Supp. of Mot. to Dismiss, ECF No. 23, at 7. This
argument is unavailing. I recently held in a very similar case against CCL that traditional
vicarious liability principles apply to actions brought under the TCPA. See Bank v. Caribbean
Cruise Line, Inc. (“Bank I”), No. 12-CV-584, at 22-23, ECF No. 49 (E.D.N.Y. August 26,
2013), adopted Sept. 30, 2013. 3 The thorough Report and Recommendation prepared by
Magistrate Judge Vera Scanlon, which I adopted, concluded that traditional principles of
vicarious liability apply to actions brought under the TCPA because any other interpretation
would allow companies “to evade TCPA liability” simply by “creative contracting.” Id. at 23.
3
In Bank I, CCL was represented by the attorneys who represent it in this action, and the pro se
plaintiff in that case, Todd C. Bank, is McCabe’s counsel in this action.
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This conclusion is consistent with other cases that have also held that vicarious liability is
applicable to actions brought under § 227(b). In Birchmeier v. Caribbean Cruise Line, Inc., for
example, the court denied a motion to dismiss premised on the same argument advanced here,
i.e., that the defendants could not be liable under the TCPA because they had contracted with
some other party to initiate the unlawful calls for them. 2012 WL 7062748, at *3 (N.D. Ill. Dec.
28, 2012); see also Thomas v. Taco Bell Corp., 879 F. Supp. 2d 1079, 1084-85 (C.D. Cal. 2012)
(holding that while statutory “on behalf of” liability – which amounts to a strict liability standard
– is not applicable under § 227(b)(1), general tort vicarious liability requiring evidence of agency
and control is applicable to such actions); Mey v. Pinnacle Sec., LLC, 2012 WL 4009718, at *4-5
(N.D. W.Va. Sept. 12, 2012) (same).
CCL argues in the alternative that even if vicarious liability is available under §
227(b), McCabe has not sufficiently pled facts to support a plausible claim of such liability. This
argument also fails. While McCabe’s allegation that the free cruise robocall was made pursuant
to a contract to which CCL is a party is sparse, in conjunction with the other allegations
contained in the amended complaint it suffices to “nudge” his claims against CCL “across the
line from conceivable to plausible . . . .” Twombly, 550 U.S. at 570.
CCL also asserts that McCabe has not sufficiently pled that the call in question
was made using “an automatic telephone dialing system or an artificial or prerecorded voice” as
required by the TCPA or an “automatic dialing-announcing device” as required by NYGBL §
399-p(3). I conclude, however, that McCabe’s allegations that the call he received contained a
“prerecorded message” and was made by an “automatic-dialing mechanism,” Am. Compl. ¶ 2,
ECF No. 19, are sufficient to plausibly state a claim under these statutes. Claims based on
alleged violations of the TCPA or NYGBL § 399-p3 need not be pled with particularity. See
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Robinson v. Midland Funding, LLC, No. 10-CV-2261, 2011 WL 1434919, at *1 (S.D. Cal. Apr.
13, 2011) (denying a motion to dismiss for failure to state a claim where plaintiff’s pleading
regarding the use of an automatic telephone dialing system or artificial or prerecorded voice was
nearly identical to the instant allegation); Reyes v. Saxon Mortg. Servs., Inc., No. 09-CV-1366,
2009 WL 3738177, at *4 (S.D. Cal. 2009) (same).
c. Breach of Contract
CCL also argues that McCabe fails to plausibly allege a claim for breach of
contract. I agree. To state a claim for breach of contract under New York law, a plaintiff must
adequately allege each of the following elements: “(1) the existence of an agreement, (2)
adequate performance of the contract by the plaintiff, (3) breach of contract by the defendant,
and (4) damages.” Harsco Corp. v. Segui, 91 F.3d 337, 348 (2d Cir. 1996); see also Fischer &
Mandell, LLP v. Citibank, N.A., 632 F.3d 793, 799 (2d Cir. 2011). With regard to the existence
of a contract, the New York Court of Appeals has explained that:
To create a binding contract, there must be a manifestation of mutual assent
sufficiently definite to assure that the parties are truly in agreement with respect to
all material terms. This requirement assures that the judiciary can give teeth to
the parties’ mutually agreed terms and conditions when one party seeks to uphold
them against the other. . . . The first step then is to determine whether there is a
sufficiently definite offer such that its unequivocal acceptance will give rise to an
enforceable contract. . . . [D]efiniteness as to material matters is of the very
essence of contract law. Impenetrable vagueness and uncertainty will not do.
Express Indus. and Terminal Corp. v. N.Y. State Dept. of Transp., 93 N.Y.2d 584, 589-90 (1999)
(internal quotation marks and citations omitted); see also Sever v. Glickman, 298 F. Supp. 2d
267, 272 (D. Conn. 2004) (same).
Applying these principles to the case at hand, the complaint alleges that the
prerecorded telephone call McCabe received promised that he would be “given a ‘free cruise’ in
exchange for completing a survey.” Am. Compl. ¶ 2, ECF No. 19. This lone allegation, lacking
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any mention of the specific terms of the alleged agreement, is simply too vague and indefinite to
plausibly establish the existence of a contract between McCabe and CCL. See Ross v. FSG
PrivatAir, Inc., No. 03-CV-7292, 2004 WL 1837366, at *3 (S.D.N.Y. Aug. 17, 2004) (To
survive a motion to dismiss a claim for breach of contract “must denote the essential terms of the
parties’ purported contract . . . .”). In short, the facts alleged do not support an inference that
there was an objective meeting of the minds between McCabe and CCL sufficient to give rise to
a binding and enforceable contract. See Friedman v. Schwartz, No. 08-CV-2801, 2009 WL
701111, at *9-10 (E.D.N.Y. Mar. 13, 2009). Accordingly, CCL’s motion to dismiss the breach
of contract claim is granted. 4
d. Class Action Claim
Lastly, defendants argue that McCabe fails to plausibly plead facts to support
class certification under Rule 23. This argument is premature; it will be addressed if and when
McCabe makes a motion for class certification. Thus, CCL’s motion to dismiss the claims to the
extent they are alleged on behalf of a class is denied.
B. Motion to Stay
Defendants also move for a stay of this case pending resolution of a substantially
similar action currently before me, Bank v. Caribbean Cruise Line, Inc. (“Bank I”), No. 12-CV0584 (E.D.N.Y. filed Feb. 6, 2012), and another similar action pending before Judge Eric
Vitaliano, Bank v. Caribbean Cruise Line, Inc. (“Bank II”), No. 12-CV-5572 (E.D.N.Y filed
Nov. 8, 2012). McCabe’s attorney in this case, Todd C. Bank, is the pro se plaintiff in each of
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My decision to dismiss the breach of contract claim is further supported by McCabe’s counsel’s
representation at oral argument that the pre-recorded phone call only offered those who completed the survey the
opportunity “to hear about a free cruise,” rather than offering a free cruise outright. Tr. 23:10-12 (emphasis added).
While McCabe’s counsel may not see the difference between being offered the opportunity to hear about a free
cruise and being offered a free cruise outright, this admission further demonstrates how vague and indefinite the
complaint is in regard to the alleged existence of a contract between McCabe and CCL.
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these other actions. While it is true that these cases all arise from substantially similar alleged
phone calls, because the instant action involves different parties (McCabe is not a party in either
Bank I or Bank II) as well as different claims (neither Bank I nor Bank II include claims for
breach of contract or violation of NYGBL § 399p-3), I decline to exercise my discretion to grant
a stay. See Trikona Advisors Ltd. v. Kai-Lin Chuang, No. 12-CV-3886, 2013 WL 1182960, at *2
(E.D.N.Y. Mar. 20, 2013) (“It is within the sound discretion of a district court to enter a stay
pending the outcome of independent proceedings that are likely to affect a case on its
calendar.”).
CONCLUSION
For the reasons stated above, defendants’ motion to dismiss for failure to state a
claim is granted as to all defendants except Caribbean Cruise Line. Defendants’ motion to
dismiss the breach of contract claim is granted. The motion for a stay is denied.
So ordered.
John Gleeson, U.S.D.J.
Dated: July 3, 2014
Brooklyn, New York
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