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

Filing 195

DECISION AND ENTRY LIFTING STAY AND ADOPTING 91 REPORT AND RECOMMENDATIONS. This stay previously imposed on this case (see Doc. 120) is LIFTED; Defendants' motion to dismiss (Doc. 70) is GRANTED IN PART and DENIED IN PART; All claims against Defendants F. Antone Accuardi, Steve Hamilton, International Telephone Corporation, and Pacific Telecom Communications Group are DISMISSED for failure to state a claim; All claims against Defendant Telephone Management Corporation and Defendant Fred Accuardi are DISMISSED, with the exception of Plaintiff's TCPA claims against both Defendants (Count 1) for both monetary damages and injunctive relief. Signed by Judge Timothy S. Black on 6/5/17. (gs) (This document has been sent by regular mail to the party(ies) listed in the NEF that did not receive electronic notification.)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
VINCENT LUCAS,
Plaintiff,
vs.
TELEMARKETER CALLING FROM
[phone] AND OTHER
TELEPHONE NUMBERS, et al.,
Defendants.

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Case No. 1:12-cv-630
Judge Timothy S. Black
Magistrate Judge Stephanie K. Bowman

DECISION AND ENTRY LIFTING STAY AND
ADOPTING THE REPORT AND RECOMMENDATIONS
OF THE UNITED STATES MAGISTRATE JUDGE (Doc. 91)
This case, which has been stayed since August 5, 2014 (Doc. 120), is currently
before the Court regarding the United States magistrate judge’s report and
recommendation (Doc. 91) evaluating Defendants’ motion to dismiss (Doc. 70).
I.

BACKGROUND

This case has a long and complex procedural history which is essential to
evaluating the issues presently before the Court. The following excerpt from the Court’s
previous Order holding in abeyance the magistrate judge’s report and recommendation
outlines the proceedings to that point:
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.
Plaintiff describes International Telephone Company (“ITC”) as a “shell
company” organized in the country of Belize that does business in the
United States under the name Pacific Telecom Communications Group
1

(Third Amended Complaint (“TAC”), Doc. 59 ¶¶ 1, 45). Pacific Telecom
Communications Group (“PacTel”) is a “competitive local exchange
carrier” (“CLEC”) that is registered with The Public Utilities Commission
of Ohio and currently licensed in other states, including Montana and
Washington (TAC, Doc. 59 ¶¶ 28, 81; Doc. 70 at 3). 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.” See Ohio Admin. Code 4901:1-7-01(C). In other words,
PacTel competes with other “local” telephone companies for a consumer’s
residential landline subscription. 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 to them a “Caller ID Name Management Service” (“CNAMMS”). 1 Telemarketers are required to display a telephone number and name
under the Federal Trade Commission’s 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) and Edwin Adquilen Valbuena
Jr., a Philippine business owner doing business with ITC as VICIdial (also
a named Defendant) (TAC, Doc. 59 ¶¶ 19, 30, 35, 37-38). 3
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

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

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).
2

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, and ostensible connection between, the
individual Defendants. 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 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”). He also sues under the
common law tort theories of invasion 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 a motion to dismiss all claims against
them (see Doc. 70). After briefing (see Docs. 77, 80, 86), Magistrate Judge
Stephanie K. Bowman issued a Report and Recommendation on March 20,
2014 (Doc. 91). 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 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[] . . . .” 47 U.S.C. § 227(b)(1)(B) (emphasis added). Under
the second, by virtue of subsequent regulations, 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 12month period by or on behalf of the same entity” may, in this circuit, bring
suit in the district court under the auspices of federal question jurisdiction.
See 42 U.S.C. § 227(c)(5) (emphasis added); Charvat v. NMP, LLC, 656

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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 who
“initiate[ed]” the improper calls to his landline. (See TAC, Doc. 59 at ¶¶
61, 65, 67.) 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 13-54”), a Declaratory Ruling that addressed whether sellers could
be held liable for calls made by third-party telemarketers. Although the
term “initiate” is not defined in the statute itself or in the agency’s rules, the
Federal 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 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 of apparent authority and ratification.” Id. ¶ 28. 4
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 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 13- 54 at ¶ 32)). She also
rejected his policy arguments, among them that 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
4

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.
4

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 227(b)(1)(B). Therefore,
the Magistrate Judge recommends that this particular TCPA claim against
TMC (and Defendant Fred Accuardi) remain (Doc. 91 at 18, 33, 34).
Defendants Fred Accuardi and TMC and Plaintiff have filed objections to
the Report and Recommendation (see Docs. 96 and 97, respectively).
Further, Plaintiff has filed a memorandum in opposition to Defendants Fred
Accuardi and TMC’s objection (Doc. 102), to which they have replied
(Doc. 103). 5
While the March 20, 2014 Report and Recommendation was
pending before this Court, specifically on June 18, 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)[.]
(Doc 120, at 1–9) 6.
On August 5, 2014, the Court granted Plaintiff’s motion to stay and ordered that
the magistrate judge’s report and recommendations be held in abeyance pending the
resolution of Plaintiff’s petition to the FCC. (Doc. 120). The Court found that the
5

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.
6

Some footnotes were deleted, as they contained only outdated information about this case’s
procedural history.
5

question posed by Plaintiff’s petition, while not requiring the technical expertise of the
FCC, was an issue of both first impression and wide-reaching consequence. (Id. at 11).
Accordingly, the Court determined that referral to the FCC under the primary jurisdiction
doctrine was appropriate. (Id. at 9–10 (citing Charvat v. Echostar Satellite, LLC, 630
F.3d 459 (6th Cir. 2010))).
II.
A.

ANALYSIS

The stay in this case is lifted

Nearly three years have passed since Plaintiff filed his petition with the FCC.
(see Doc. 114). The FCC made a request for public comments on the petition in July of
2014; since then, there has been no concrete action with regards to the petition.
Plaintiff’s most recent status report, filed April 26, 2017, indicates that the petition is still
on the FCC’s list of pending petitions and that there is no indication of when a ruling
could be forthcoming. (Doc. 194).
The Court no longer feels that waiting indefinitely for the FCC’s ruling on the
petition is appropriate. After nearly three years with no end in sight, “the Court's
obligation to provide a just, speedy, and efficient determination of this case weighs
against the possible benefits of awaiting an FCC decision on the identified petitions.”
Abrantes v. Northland Group, Inc., 2015 WL 1738255, at *3 (N.D. Cal. Apr. 13, 2015).
This is particularly true considering the Court’s earlier determination that
resolution of the question posed in Plaintiff’s petition does not require the FCC’s
technical expertise. While this is a matter of first impression and wide-reaching
consequence, and therefore an FCC ruling that would clarify the issue nationwide would
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be beneficial, that ruling is nowhere in sight, and this Court is well equipped to engage in
the statutory interpretation required to give the parties an answer to the question posed as
applied to this case.
Defendant argues that the Court “cannot” adopt the report and recommendations
due to the pending FCC petition, citing Charvat. The Court does not read Charvat to
require that any issue that could be referred to the FCC under the doctrine of primary
jurisdiction must invariably be deferred to the FCC without regard to timely disposition
of the underlying case. The Sixth Circuit Court of Appeals in Charvat identified several
factors to be considered by courts deciding whether to refer a matter based on primary
jurisdiction: “A review of the case law shows that courts have considered referring
matters to agencies for a variety of reasons: (1) to advance regulatory uniformity; (2) to
answer a ‘question ... within the agency's discretion’; and (3) to benefit from ‘technical or
policy considerations within the agency's ... expertise[.]’” Charvat, 630 F.3d at 466
(internal citations omitted). These factors all weighed in favor of referring Petitioner’s
question to the FCC in June 2014. However, the court in Charvat goes on to state that
“[T]he outstanding feature of the doctrine [of primary jurisdiction] is . . . its flexibility
permitting . . . courts to make a workable allocation of business between themselves and
the agencies.” Id. (quoting Civil Aeronautics Bd. v. Modern Air Transp., Inc., 179 F.2d
622, 625 (2d Cir.1950)). It is hardly “workable” for the Court to accept Plaintiff’s

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premise that the Court is required to allow this case to languish in eternity should the
FCC fail to ever rule on his petition. 7
Other district courts have arrived at a similar conclusion and opted to rule on
matters despite petitions filed by a party in their cases pending before the FCC. See, e.g.,
Shenah v. Wells Fargo Bank N.A., 56 F. Supp. 3d 1206 (N.D. Ala. 2014); Abrantes v.
Northland Group, Inc., 2915 WL 1738255 (N.D. Cali. Apr. 13, 2015); Robinson v.
Midland Funding, LLC, 2011 WL 1434919 (S.D. Cali. Apr. 13, 2011). The Court
considers this to be the best course of action here. While the Court acknowledges that
ruling on an issue currently pending before the FCC could create a situation in which the
FCC’s ultimate decisions on the issues raised by the petition is contrary to the Court’s
decision, should that circumstance arise “the court will address whether that ruling has
retroactive application and what level of deference is due.” Shenah, 56 F. Supp. 3d at
1210 (citing Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.
837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984); Heimmermann v. First Union Mort. Corp.,
305 F.3d 1257, 1260 (11th Cir.2002).
In summation, it was appropriate under Charvat for the Court to hold this case in
abeyance in June 2014 to allow the FCC to rule on Plaintiff’s petition. However, after
7

The Court also notes that the circumstances surrounding the Sixth Circuit’s decision in Charvat
gave the circuit court much greater reason to believe that an answer to the relevant FCC petition
was forthcoming than the Court has in this case. Prior to the issuance of the Charvat decision,
the FCC had filed an amicus brief with the Sixth Circuit opining on some of the issues in that
case and specifically requesting to the court that the matter be referred to the FCC under primary
jurisdiction for a quick resolution. Charvat, 630 F.3d at 460. The FCC has shown no such
interest in the relevant petition in this case. Other than making a request for public comment at
the time the petition was filed, there is no indication that the FCC has considered Plaintiff’s
petition at all.
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three years and no response, it is now appropriate for the Court to resume this case and
adjudicate the motions currently pending.
B.

The magistrate judge’s report and recommendation is adopted

As the stay on this case has now been lifted, this case is before the Court pursuant
to the Order of General Reference in the United States District Court for the Southern
District of Ohio Western Division to United States Magistrate Judge Stephanie K.
Bowman. Pursuant to such reference, the Magistrate Judge reviewed the pleadings filed
with this Court, and, on March 20, 2014, submitted a Report and Recommendations
(“R&R”). (Doc. 91). Defendants Fred Accuardi and TMC filed objections to the R&R
on April 7, 2014. (Doc. 96) 8. Plaintiff also filed an objection to the R&R on April 7,
2014. (Doc. 97) 9.
8

Defendants’ objections are not well taken. Mr. Accuardi and TMC object to the R&R’s
recommendation that Plaintiff’s TCPA claims for monetary and injunctive relief against them
survive the motion to dismiss. The objections argue that Plaintiff’s third amended complaint
failed to state a claim for relief and failed to put the specific defendants on notice of the claims
against them. The R&R adequately addressed this argument. Given the minimal pleading
standards required to survive a motion to dismiss under Rule 12(b)(6), and the fact that Plaintiff
is pro se, the Court agrees with the magistrate judge that a lenient review of the complaint for
purposes of a motion to dismiss is appropriate.
9

Plaintiff’s objections are not well taken. In the absence of an FCC ruling on the issue presented
in Plaintiff’s petition, the Court agrees with the magistrate judge’s conclusion that FCC
Declaratory Ruling 13-54, while not directly addressing a situation in which an entity is alleged
to provides substantial assistance or support to any seller or telemarketer while knowing or
consciously avoiding knowing that the seller or telemarketer is violating the TCPA, “sets forth
principles of vicarious liability that are incompatible with Plaintiff’s theories of liability in this
case.” (Doc. 91, at 13). Defendant’s arguments regarding his common law claims separate from
the TCPA were adequately addressed in the R&R, and the Court fully adopts the magistrate
judge’s well-reasoned analysis.
Since the case was stayed, Petitioner raised a new argument with respect to Defendants’ pending
motion to dismiss that the Court feel should be addressed. Petitioner’s recent response to the
Court’s Order to show cause regarding why this case should not be resumed cited a recent case
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As required by 28 U.S.C. § 636(b) and Fed. R. Civ. P. 72(b), the Court has
reviewed the comprehensive findings of the Magistrate Judge and considered de novo
all of the filings in this matter. Upon consideration of the foregoing, the Court does
determine that such R&R should be and is hereby ADOPTED in its entirety.
III.

CONCLUSION

Accordingly, for the reasons stated above:
1) This stay previously imposed on this case (see Doc. 120) is LIFTED;
2) Defendants’ motion to dismiss (Doc. 70) is GRANTED IN PART and
DENIED IN PART;
3) All claims against Defendants F. Antone Accuardi, Steve Hamilton,
International Telephone Corporation, and Pacific Telecom Communications
Group are DISMISSED for failure to state a claim;
4) All claims against Defendant Telephone Management Corporation and
Defendant Fred Accuardi are DISMISSED, with the exception of Plaintiff’s
TCPA claims against both Defendants (Count 1) for both monetary damages
and injunctive relief.
IT IS SO ORDERED.
Date: 6/5/17

_______________________
Timothy S. Black
United States District Judge

from the Northern District of Illinois in which the court held that a case could be brought against
defendants in a similar position to the virtual telephone number provider defendants in this case
on a theory of direct liability. Spiegel v. EngageTel, No. 1:15-cv-01809 (N.D. Ill. Sept. 29,
2016) (available at https://scholar.google.com/scholar_case?case=11943389373109735322).
That court held that it was “premature to rule [at the motion to dismiss stage of] the litigation that
the Defendants can under no circumstances be found to be so intimately involved in the placing
of the phone calls to [the plaintiff] as to be deemed an initiator[.]” Id. The Court disagrees with
this assessment as applied to the Defendants in this case. FCC 13-54 includes a discussion of
what constitutes “initiating” a violating phone call that indicates a required involvement far more
intimate than any conduct Plaintiff alleges of the virtual telephone number provider defendants
in this case. (See Doc. 91, at 11–12).
10