Lucas v. Telemarketer Calling From [phone] and Other Telephone Numbers

Filing 120

OPINION AND ORDER granting 115 Plaintiff's Motion to Stay Defendants' Motion to Dismiss. The Court will continue to HOLD IN ABEYANCE the 3/20/2014 Report and Recommendation of Magistrate Judge Stephanie K. Bowman 116 concerning the Mot ion to Dismiss filed by Defendants F. Antone Accuardi, Fred Accuardi, Steve Hamilton, International Telephone Corporation, Pacific Telecom Communications Group, and Telephone Management Corporation, Inc. 70 . The Court notes that the FCC's Con sumer and Government Affairs Bureau already has released a Public Notice seeking comments on the Lucas Petition, having established 8/8/2014 as the deadline for comments and 8/25/2014 for reply comments. THE COURT URGES THE FCC TO ACT PROMPTLY UPON THE CONCLUSION OF THE COMMENT PERIOD, AS THIS ISSUE HAS WIDESPREAD IMPLICATIONS. Finally, Plaintiff and the Accuardi Defendants are ORDERED to file with the Clerk a joint report describing the status of the Lucas Petition before the FCC on or before 1/5/2015, and every 120 days thereafter, until a ruling is released. Signed by Judge S Arthur Spiegel on 8/5/2014. (km1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

VINCENT LUCAS,

:
:
:
:
:
:
:
:
:
:
:
:
:

Plaintiff,

v.

TELEMARKETER CALLING FROM
[phone] AND OTHER
TELEPHONE NUMBERS, et al.,
Defendants.

No. 1:12-cv-00630

OPINION AND ORDER

This matter is before the Court on Plaintiff’s Motion to
Stay Defendants’ Motion to Dismiss (doc. 115), Defendants F.
Antone Accuardi, Fred Accuardi, Steve Hamilton, International
Telephone Corporation, Pacific Telecom Communications Group, and
Telephone

Management

Corporation,

Inc.

(hereinafter

“Accuardi

Defendants”) memorandum in opposition (doc. 117) and Plaintiff’s
reply (doc. 118).

For the reasons that follow, Plaintiff’s

motion is GRANTED.
I.

Background
It is essential to understand who the current Defendants

are in this litigation and their alleged relationship to one
another.

The Accuardi Defendants consist of three corporate

entities

and

three

individuals.

1

Plaintiff

describes

International

Telephone

Company

(“ITC”)

as

a

“shell

company”

organized in the country of Belize that does business in the
United
Group

States
(Third

Pacific

under

the

Amended

Telecom

name

Pacific

Complaint

Telecom

(“TAC”),

Communications

Communications

doc.

Group

59

¶¶

1,

(“PacTel”)

45).

is

a

“competitive local exchange carrier” (“CLEC”) that is registered
with

The

licensed

Public
in

Utilities

other

Commission

states,

including

of

Ohio

Montana

(TAC, doc. 59 ¶¶ 28, 81; doc. 70 at 3).

and
and

currently
Washington

As a CLEC, PacTel

serves as an alternative to the providers that were incumbent as
of the date of the enactment of the Telecommunications Act of
1996, once known as the “Baby Bells.”
4901:1-7-01(C).
“local”

In

telephone

other

words,

companies

landline subscription.

for

See Ohio Admin. Code

PacTel
a

competes

consumer’s

with

other

residential

Telephone Management Corporation, Inc.

(“TMC”) supplies telephone numbers to its various telemarketer
clients from which they make solicitation calls, and, as part of
the

package,

provides

Service” (“CNAM-MS”).1

to

them

a

“Caller

ID

Name

Management

Telemarketers are required to display a

telephone number and name under the Federal Trade Commission’s

1

TMC’s CNAM-MS portal allows its clients to specify any name they
wish to be displayed on the caller ID feature to which a call
recipient may have opted to subscribe through his or her
provider.
2

Telephone Sales Rule, see 16 C.F.R. § 310.4(a)(8)2; subscription
to a CNAM-MS such as TMC is apparently one method to achieve
compliance.

Plaintiff

alleges

that

PacTel

has

assigned

“thousands of telephone numbers” within its control to ITC (see,
e.g., TAC, doc. 59 ¶¶ 2, 19, 30, 47, 69).

In turn, ITC has

“reassigned” them to (that is, permitted them to be used by)
telemarketing companies such as Capital Solutions Group, S.A.
(organized in Panama), All In One Service AIOS, LLC (a named
Defendant)3

and

Edwin

Adquilen

Valbuena

Jr.,

a

Philippine

business owner doing business with ITC as VICIdial (also a named
Defendant)4 (TAC, doc. 59 ¶¶ 19, 30, 35, 37-38).5
2

One example of when a telemarketer commits an “abusive
telemarketing act or practice”—and thus a Rule violation—occurs
when there is a:
Fail[ure] to transmit or cause to be transmitted the
telephone number, and, when made available by the
telemarketer's carrier, the name of the telemarketer, to
any caller identification service in use by a recipient of
a telemarketing call; provided that it shall not be a
violation to substitute (for the name and phone number used
in, or billed for, making the call) the name of the seller
or charitable organization on behalf of which a
telemarketing call is placed, and the seller's or
charitable organization's customer or donor service
telephone number, which is answered during regular business
hours.

16 C.F.R. § 310.4(a)(8) (emphasis added).
3

Plaintiff’s Motion for Default Judgment against All In One
Service AIOS, LLC (doc. 87) is currently pending before the
Magistrate Judge (see doc. 91 at 5 n.4).
4

An Entry of Default against Edwin Adquilen Valbuena Jr. was
entered by the Clerk on May 15, 2014 (doc. 108). To date,
3

Each

time

a

provider

“queries”

a

CNAM-MS

database

to

retrieve caller ID information so that it can be displayed on a
residential landline as required, it pays a business such as TMC
a “dip” fee (TAC, doc. 59 ¶¶ 2-3, 10, 52; doc. 70 at 3).

TMC

then shares a portion of that fee with the client that made the
telemarketing call (TAC, doc. 59 at 55).

Dip fees are financed

by the revenue collected from consumers via payment of their
monthly residential telephone bills (TAC, doc. 59 ¶ 11).
We

turn

now

to

the

identity,

between, the individual Defendants.

and

ostensible

connection

Fred Accuardi is alleged to

run ITC and be a director of PacTel and president of TMC (TAC,
doc. 59 ¶¶ 43, 93).

According to Plaintiff, he has commingled

his personal finances with those of ITC and TMC (TAC, doc. 59
¶88).

Mr. Accuardi’s son, F. Antone Accuardi, is legal counsel

to all three entities (TAC, doc. 59 ¶ 46).

Steve Hamilton is

listed as the only officer of PacTel, serving as its president,
secretary, treasurer and sole director (TAC, doc. 59 ¶ 84).

Plaintiff has not filed a Motion for Default Judgment against
this Defendant.
5

The Defendant against which default judgment has been rendered,
Qall Cord Philippines Ltd. Co. (see doc. 52), was not supplied
telephone numbers by PacTel, ITC or TMC. (TAC, doc. 59 ¶ 8.)
Qall Cord was alleged to have placed ten calls to Plaintiff’s
residential line leaving two different pre-recorded messages on
his answering machine (TAC, doc. 59 ¶¶ 18-19, 22, 27), as well
as two additional calls in which no message was left (TAC, doc.
59 ¶¶ 20, 27).
4

Plaintiff

claims

that

the

conduct

of

all

Defendants,

including the Accuardi Defendants, constituted violations of the
federal Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. §
227, as well as the Ohio Telemarketing Act, the Ohio Telephone
Solicitation Act, and the Ohio Consumer Sales Protection Act
(“OCSPA”).
invasion

He also sues under the common law tort theories of
of

privacy,

negligence

and

nuisance,

and

in

this

regard, maintains that individual Defendants Fred Accuardi, F.
Antone Accuardi and Steve Hamilton are personally liable for the
corporate actions of their alter egos, namely ITC and TMC in the
case of the Messrs. Accuardi, and PacTel in the case of Mr.
Hamilton.
The

Accuardi

Defendants

filed

claims against them (see doc. 70).
77,

80,

86),

Magistrate

Judge

a

motion

to

dismiss

all

After briefing (see docs.

Stephanie

K.

Bowman

issued

Report and Recommendation on March 20, 2014 (doc. 91).

a

Relevant

to the issue at hand are those portions of her report—that we
now

condense—with

regard

to

Plaintiff’s

claims

under

two

provisions of the TCPA.

The first makes it unlawful for a

person

any

telephone

an

artificial

to

telephone
deliver

“initiate
line

a

using

message

without

called party[] . . . .”
added).

the

prior

call
or

to

any

residential

prerecorded

express

voice

consent

of

to
the

47 U.S.C. § 227(b)(1)(B) (emphasis

Under the second, by virtue of subsequent regulations,
5

telemarketers

also

are

prohibited

from

making

live

calls

to

residential telephone numbers placed on the national do-not-call
registry (see 47 C.F.R. § 64.1200(c)(2)), and any person who has
“received

more

than

one

telephone

call

within

any

12-month

period by or on behalf of the same entity” may, in this circuit,
bring suit in the district court under the auspices of federalquestion

jurisdiction.

See

42

U.S.C.

§

227(c)(5)

(emphasis

added); Charvat v. NMP, LLC, 656 F.3d 440, 446 (6th Cir. 2011)
(citing Charvat v. EchoStar Satellite, LLC, 630 F.3d 459, 465
(6th

Cir.

2010)).

Plaintiff

urges

the

Court

to

hold

the

corporate entities “vicariously and/or contributorily” liable on
the theory that they “assisted and facilitated” the third-party
telemarketers
landline.

who

“initiate[ed]”

the

improper

calls

(See TAC, doc. 59 at ¶¶ 61, 65, 67.)

to

his

The Accuardi

Defendants seek dismissal on the basis of In re Dish Network,
LLC, 28 FCC Rcd. 6574, 2013 WL 1934349 (May 9, 2013) (“FCC 1354”), a Declaratory Ruling that addressed whether sellers could
be

held

liable

Although
itself

or

the
in

for

term
the

calls

made

“initiate”
agency’s

by

is

rules,

third-party

not
the

defined
Federal

telemarketers.
in

the

statute

Communications

Commission (“FCC”) rejected an interpretation that would have
equated mere involvement with “initiat[ion.]”

Id. ¶ 26.

To

this end, it noted “a clear distinction” between a call made by
a seller itself and one made by a telemarketer on that seller’s
6

behalf.

That said, however, the FCC recognized that a seller

and a telemarketer are sometimes one in the same, and that, in
certain instances, a seller can exert so much control over a
telemarketer as to make any distinction dissolve.

Id. ¶ 27.

But the FCC agreed that inclusion of the phrase “on behalf of”
(appearing—but not defined—in Section 227(c)(5)) allowed for a
seller to be held vicariously liable under traditional agency
tenets, including “not only formal agency, but also principles
Id. ¶ 28.6

of apparent authority and ratification.”

Against this backdrop, the Accuardi Defendants posit that
they cannot be held vicariously liable because Plaintiff has not
alleged

a

formal

agency

relationship

between

them

and

the

telemarketers or pled a theory of either apparent authority or
ratification.

To

the

contrary,

they

highlight

Plaintiff’s

premise that they turned a “blind eye” of sorts by consciously
avoiding knowledge that the telephone numbers they assign are
being used for illegal telemarketing (see TAC, doc. 59 ¶ 2).
The

Magistrate

Judge

agrees

that

FCC

13-54

establishes

a

standard of vicarious liability “incompatible” with Plaintiff’s
theory of his case (doc. 91 at 13).

She rejected Plaintiff’s

reliance on what might appropriately be termed dicta, including
6

Even though that same language does not appear in the provision
authorizing a private right of action for prerecorded calls (see
47 U.S.C. § 227(b)(3)), the FCC indicated that both provisions
should, in the absence of notice and comment rulemaking, be
interpreted in like manner. FCC 13-54 ¶ 32.
7

but not limited to the FCC’s remark that “it may well be that
the

Commission

could

ultimately

decide

that

‘on

behalf

of’

liability goes beyond agency principles[]” (id. (quoting FCC 1354 at ¶ 32)).
them

that

She also rejected his policy arguments, among

a

failure

to

expand

liability

to

the

Accuardi

Defendants, and those like them, will serve only to encourage
illegal telemarketing through a scheme of shared revenue, with
said

revenue

increasing

with

every

call

made

(id.

at

14)).

Accordingly, she has recommended that the Accuardi Defendants’
motion to dismiss for failure to state a claim on a theory of
vicarious liability be granted.

However, the Magistrate Judge

reads paragraph 34 (in conjunction with paragraphs 22 and 32) of
the

Third

Amended

Complaint

to

be

an

allegation

of

direct

liability against TMC itself as the originator of two calls
(from 508-475-1352 and 508-475-1394) received by Plaintiff.

In

this purported circumstance, TMC “initiated” and hence stands in
the shoes of a telemarketer, thus exposing it to liability for
the prerecorded message left on Plaintiff’s answering machine
under

Section

recommends
Defendant
Defendants

227(b)(1)(B).

that
Fred
Fred

this

Therefore,

particular

Accuardi)
Accuardi

remain
and

TCPA

claim

(doc.

TMC

the

and

91

Magistrate

Judge

against

TMC

(and

at

33,

34).

18,

Plaintiff

have

filed

objections to the Report and Recommendation (see docs. 96 and
97, respectively).

Further, Plaintiff has filed a memorandum in
8

opposition to Defendants Fred Accuardi and TMC’s objection (doc.
102), to which they have replied (doc. 103).7
While
pending

the

before

March

20,

2014

this

Court,

Report

and

specifically

Recommendation
on

June

18,

was

2014,

Plaintiff filed a notice with the Clerk advising that he had
filed with the FCC a “Petition for Expedited Declaratory Ruling”
asking the Commission to hold that “a person is vicariously or
contributorily

liable

if

that

person

provides

substantial

assistance or support to any seller or telemarketer when that
person knows or consciously avoids knowing that the seller or
telemarketer is engaged in any act or practice that violates 47
U.S.C. § 227(b) or (c)[]” (see docs. 114 & 114-1 at i).

He

concomitantly filed the instant motion to stay (doc. 115), which
is ripe for this Court’s consideration.
II.

Thus we proceed.

Discussion

The instant motion asks not only for a stay, but also for a
referral to the FCC—under the primary jurisdiction doctrine—of
the question presented in Plaintiff’s Petition.

See Charvat v.

EchoStar Satellite, LLC, 630 F.3d 459 (6th Cir. 2010).

Such a

referral is indicated when a ruling by the agency will advance

7

In his Motion to Stay, Plaintiff advises that the objection
filed by Defendants Fred Accuardi and TMC soon will be rendered
moot because they have produced credible evidence that “someone
other than TMC” originated the two calls described in paragraph
34 of the Third Amended Complaint (doc. 115 at 2). It appears,
then, that he intends to abandon this allegation.
9

regulatory uniformity, or when the issue either falls within the
agency’s discretion or would benefit from technical or policy
considerations
(citations
counts—that

and

within

the

quotations

this

is

such

agency’s

expertise.

Id.

omitted).

We

agree—on

a

The

theory

case.

at

466

all

three

upon

which

Plaintiff proceeds appears to be one of first impression and
wide-reaching consequence.

In essence, he is asking this Court

to read Sections 227(b) and (c) as if the language appearing
within 16 C.F.R. § 310.03(b)8 is implicit.
FCC,

the

principal

agency

dedicated

We believe that the
to

policing

the

telecommunications industry, is in the best position to opine
first on this topic.

8

§ 310.3 Deceptive telemarketing acts or practices.

. . . .
(b) Assisting and facilitating. It is a deceptive telemarketing
act or practice and a violation of this Rule for a person to
provide substantial assistance or support to any seller or
telemarketer when that person knows or consciously avoids
knowing that the seller or telemarketer is engaged in any act or
practice that violates §§ 310.3(a), (c) or (d), or § 310.4
[Abusive telemarketing acts or practices.] of this Rule.
. . . .
16 C.F.R. § 310.3 (emphasis added). The Court recognizes that
this rule was promulgated by the Federal Trade Commission, not
the FCC, under the regulatory authority of the Telemarketing and
Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-6108,
not the TCPA. However, there is a certain interplay and overlap
between these statutes and the protection they are designed to
effect.

10

Defendants’ arguments to the contrary are unavailing.

To

state that the Commission already has ruled on this issue in FCC
13-54 is simply inaccurate.

Plaintiff does not allege that the

Accuardi Defendants are sellers.

Nor do they present themselves

as

alleges

such.

Accuardi
calls,

Rather,
Defendants

both

collect.

Plaintiff

legal

benefit

and

that—like

financially

illegal,

through

from
the

sellers—the

telemarketing

“dip”

fees

they

He further alleges that this financial benefit is not

happenstance, but instead the product of an intentional abuse of
the

statutory

scheme

in

place

to

protect

consumers.

Only

through voluminous calling, he avers, will either party turn a
substantial profit.
This issue plainly does not require the technical expertise
of

the

Commission,

consideration

of

Circuit,

only

bound,

the

but

major

it

obviously

proportion.

circuit

concluded—in

very

court

EchoStar—that

of
a

presents

Moreover,
appeals
referral

by

if

a
the

which

was

policy
Sixth
we

are

appropriate

concerning the vicarious liability of sellers, it follows that
it would make the same choice with regard to CNAM-MS providers
and

CLECs.

We

make

no

predictions

whether,

as

Defendants

intimate, the Commission will be more “sympathetic” to Plaintiff
(see doc. 117 at 7-8).

However, in advance of this Court ruling9

9

The Accuardi Defendants are premature in stating that Plaintiff
has been “unsuccessful” at the trial court level. Magistrate
11

on Defendants’ motion to dismiss, we think it proper to “appeal”
to the Commission’s expertise so as to inform our opinion, but
not bind our decision, on this question.
III. Conclusion
For the reasons set forth above, the Court hereby REFERS
the

question

presented

in

Plaintiff

Vincent

Lucas’

Petition

filed June 18, 2014 to the Federal Communications Commission for
a Declaratory Ruling.

Accordingly, Plaintiff’s Motion to Stay

Defendants’ Motion to Dismiss (doc. 115) is hereby GRANTED and
we will continue to HOLD IN ABEYANCE the March 20, 2014 Report
and Recommendation of Magistrate Judge Stephanie K. Bowman (see
doc. 116) concerning the Motion to Dismiss filed by Defendants
F. Antone Accuardi, Fred Accuardi, Steve Hamilton, International
Telephone Corporation, Pacific Telecom Communications Group, and
Telephone Management Corporation, Inc. (doc. 70).
notes

that

the

FCC’s

Consumer

and

Government

The Court

Affairs

Bureau

already has released a Public Notice seeking comments on the
Lucas

Petition,

having

established

August

8,

2014

as

the

deadline for comments and August 25, 2014 for reply comments.
THE COURT URGES THE FCC TO ACT PROMPTLY UPON THE CONCLUSION OF
THE COMMENT PERIOD, AS THIS ISSUE HAS WIDESPREAD IMPLICATIONS.

Judge Bowman has issued a thoughtful and detailed report in
which she recommends that we grant the bulk of Defendants’
motion to dismiss. This Court, however, has yet to accept,
reject or modify her recommendation.
12

Finally, Plaintiff and the Accuardi Defendants are ORDERED to
file with the Clerk a joint report describing the status of the
Lucas Petition before the FCC on or before January 5, 2015, and
every one hundred twenty (120) days thereafter, until a ruling
is released.
SO ORDERED.

Dated:

August 5, 2014

s/S. Arthur Spiegel________________
S. Arthur Spiegel
United States Senior District Judge

13