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

Filing 37

REPORT AND RECOMMENDATIONS re 22 MOTION for Preliminary Injunction against Pacific Telecom Communications Group, et al. filed by Vincent Lucas, 3 MOTION for Preliminary Injunction filed by Vincent Lucas, 27 MOTION for Default Judgment against Qual Cord Philippines Ltd. Co. filed by Vincent Lucas: that plaintiff's first and second motions for preliminary injunctive relief (Docs. 3, 22) should be DENIED; plaintiff's motion for entry of default judgment against foreign defendant Qall Cord Philippines Ltd should be GRANTED. Objections to R&R due by 6/24/2013. Signed by Magistrate Judge Stephanie K. Bowman on 6/6/13. (jl1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

VINCENT LUCAS,

Case No. 1:12-cv-630
Plaintiff,

Spiegel, J.
Bowman, M.J.

v.

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

REPORT AND RECOMMENDATION
Plaintiff paid the requisite filing fee and initiated this litigation pro se on August
20, 2012, asserting that three Defendants violated federal and state law by engaging in
illegal telemarketing practices. Pursuant to the practice and General Orders of this
Court, this pro se litigation has been referred to the undersigned magistrate judge for
review and disposition, by order or by report and recommendation, of all dispositive and
non-dispositive motions. Since initiating suit, Plaintiff has twice amended his complaint
to add new claims and defendants. (Docs. 2, 20).
Currently pending before this Court are four dispositive motions: (1) two motions
seeking a preliminary injunction against multiple Defendants; (2) Plaintiff’s motion for
default judgment against Defendant Qall Com Philippines Ltd. Co., and (3) a motion to
dismiss all claims filed by six recently added Defendants.

This Report and

Recommendation addresses the motions for preliminary injunction and motion for
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default judgment. The motion to dismiss will be addressed in a future Report and
Recommendation, after the time for responsive briefing has expired.
I. Background
On November 27, 2012, Plaintiff filed a motion seeking a preliminary injunction
against three entity Defendants named in his first amended complaint. 1 (Docs. 2, 3).
Only two of those Defendants were initially served and appeared of record: Manchester
Services, Inc., and Sub-Par Ventures, LLC - both identified as Missouri business
entities. The third, non-appearing entity, Qall Cord Philippines Ltd Co., (“Qall Cord”) is a
foreign company identified as “a business incorporated in the Philippines.”

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On January 23, 2013, Plaintiff filed a Stipulation of Dismissal, notifying the Court
that the parties had resolved all claims between Plaintiff and Defendants Manchester
Services, Inc. and Sub-Par Ventures LLC. (Doc. 14). On January 28, 2013, Plaintiff
transmitted a similar notification via email to this Court, stating that the two referenced
Defendants “are no longer parties to this case.” On February 8, 2013, Plaintiff moved
for leave to file a second amended complaint (Doc. 18), in part to add six new
Defendants. Plaintiff’s tendered Second Amended Complaint also omitted Manchester
Services, Inc. and Sub-Par Ventures LLC as Defendants, in accordance with the prior
dismissal of those Defendants (Doc. 14).
The Court granted Plaintiff’s motion to further amend his complaint, and the
amended complaint was filed on February 21, 2013. (Doc. 20). After Defendant Qall
1

A fourth Defendant (never served) is identified only as “Telemarketer Calling From (407) 4765680 and Other Telephone Numbers.
2
The spelling of this Defendant’s name is identified variously by Plaintiff as “Qall Cord” and “Qual
Cord.” (Compare Doc. 20, ¶¶8, 43, 44). For convenience, the Defendant’s name is spelled “Qall Cord” in
this R&R, consistent with the caption and in accordance with the docket sheet of this Court.

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Cord continued to fail to appear of record despite several attempts by Plaintiff to effect
service, this Court granted Plaintiff’s motion pursuant to Rule 4(f)(3), Fed. R. Civ. P., to
serve Qall Cord by email. On February 25, 2013, summons was returned executed via
the method of service authorized by this Court. (Doc. 21).
On March 11, 2013, Plaintiff filed a second motion seeking a preliminary
injunction, this time against the Defendants newly added to his second amended
complaint:

Pacific Telecom Communications Group, International Telephone

Corporation, Telephone Management Corporation, F. Antone Accuardi, Fred Accuardi,
and Steve Hamilton. (Doc. 22).

Defendants have not responded directly to the motion

for a preliminary injunction. However, after obtaining an extension of time to respond to
the second amended complaint, on May 31, 2013, the referenced Defendants filed a
motion to dismiss all claims against them for failure to state a claim. (Doc. 35).
On March 22, 2013, Plaintiff filed an application for entry of default against the
foreign Defendant, Qall Cord, and the Clerk filed an Entry of Default concerning that
Defendant on March 25, 2013. (Docs. 24, 25). On April 2, 2013, Plaintiff filed a motion
for default judgment against Qall Cord.(Doc. 27).
II. Analysis
A. Motions Seeking Preliminary Injunctive Relief (Docs. 3, 22)
Plaintiff has filed two separate motions seeking preliminary injunctions against
various Defendants. Plaintiff’s first motion will be denied on grounds that it is moot.
Plaintiff settled his claims with two of the three Defendants against which he sought
injunctive relief, and the third Defendant, Qall Cord, is a foreign entity against which
Plaintiff has already obtained an entry of default, and against which Plaintiff has moved
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for a default judgment.

Acknowledging the difficulties in enforcing injunctive relief

against such a foreign owned and operated company, Plaintiff does not seek a
permanent injunction against Qall Cord. (Doc. 27 at 9).
Plaintiff’s second motion for preliminary injunctive relief also should be denied.
Plaintiff’s second motion asserts that he is seeking a preliminary injunction under both
“specific statutory authorization” and under the Court’s general equity powers.
First, Plaintiff seeks relief under Ohio Rev. Code §4719.15(A), which authorizes a
court to “grant an injunction, temporary restraining order, or other appropriate relief”
against a “telephone solicitor or salesperson who committed the violation” of Ohio’s
statutes governing telemarketers. Plaintiff also relies upon portions of the Telephone
Consumer Protection Act (“TCPA”), 47 U.S.C. §227(b)(3) and (c)(5), that authorize “an
action based on a violation of this subsection or the regulations prescribed under this
subsection to enjoin such violation.”

Federal and state courts have concurrent

jurisdiction over private suits arising under the TCPA. See Mims v. Arrow Financial
Servs., LLC, 132 S. Ct. 740 (2012).
In addition to relying upon the referenced statutes, Plaintiff seeks a preliminary
injunction under the general equitable powers of this Court. In determining whether to
issue a preliminary injunction under its general equitable powers, the Court balances
the following factors:
1.

Whether the party seeking the injunction has shown a
substantial likelihood of success on the merits;

2.

Whether the party seeking the injunction will suffer
irreparable harm absent the injunction;

3.

Whether an injunction will cause others to suffer
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substantial harm; and
4.

Whether the public interest would be served by a
preliminary injunction.

See Procter & Gamble v. Bankers Trust Co., 78 F.3d 219, 226-227 (6th Cir. 1996).
Neither the referenced statutes, nor this Court’s general equitable powers, favor
imposition of a preliminary injunction.

Plaintiff’s second amended complaint seeks

damages and permanent injunctive relief based upon Plaintiff’s receipt of telemarketing
calls to Plaintiff’s residential telephone number, notwithstanding the fact that Plaintiff
has placed that number on the U.S. Do Not Call Registry. Plaintiff alleges that he has
received ten telephone calls from Defendant Qall Cord containing a pre-recorded
message offering to lower his interest rate. (Doc. 20, ¶¶18, 22, 27), and that his call
history reflects that he received two additional calls from Qall Cord in which no message
was left. (Doc. 20, ¶¶20, 27).
In his second amended complaint and motion, Plaintiff alleges that two of the
telemarking calls originated from telephone numbers owned by Defendant Telephone
Management Corporation (“TMC”), and that seven calls originated from telephone
numbers owned by Defendant Pacific Telecom Communications Group (“PacTel”).
Plaintiff alleges that through discovery, he has learned that PacTel assigned six
telephone numbers to Defendant International Telephone Corporation (“ITC”), an entity
allegedly located in Belize. Defendant Fred Accuardi is alleged to be the President of
TMC. Defendant Steve Hamilton is alleged to be the President, Treasurer, and
Secretary of PacTel.

(Doc. 20 at ¶75).

Plaintiff alleges that the third individual

Defendant, F. Antone Accuardi, is general counsel to both TMC and Pacific Telecom.

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ITC also is alleged to be “owned and managed by the Accuardi family.” (Doc. 22 at 5).
Defendant F. Antone Accuardi admits that he is “a private attorney whose clients
include TMC, PacTel and ITC.” (Doc. 35 at 3). The essence of Plaintiff’s claims against
all six Defendants is that they are engaged in the marketing and sale of telephone
numbers to telemarketers who engage in illegal practices, despite Defendants’
knowledge that their customers (the telemarketers) are engaged in illegal activity.
The purpose of a preliminary injunction is to maintain the relative positions of the
parties until proceedings on the merits can be conducted. University of Texas v.
Camenisch, 451 U.S. 390, 395 (1981); see also Southern Milk Sales, Inc. v. Martin, 924
F.2d 98, 102 (6th Cir. 1991). “A preliminary injunction is an extraordinary remedy which
should be granted only if the movant carries his or her burden of proving that the
circumstances clearly demand it.” See Overstreet v. Lexington-Fayette Urban County
Government, 305 F.3d 566, 573 (6th Cir.2002).
Perhaps the singular most important fact in this case is what is not alleged by
Plaintiff. Notably, Plaintiff does not allege that any of the three entity Defendants, or
three individuals against whom he seeks a preliminary injunction, are themselves
engaged in telemarketing to Plaintiff’s home.

Rather, the basis of Plaintiff’s claims

against all six Defendants rests on theories of vicarious and contributory liability,
including the Defendants’ allegedly “long history of aiding telemarketers” by permitting
and encouraging the use of Defendants’ services for illegal telemarketing purposes.
(Doc. 22 at 15). Plaintiff alleges that the entity Defendants “knew that their telephone
numbers were being used for telemarketing calls that violate 47 U.S.C. §227(b)(1)(B)
and 227(c).” (Doc. 20 at ¶50). In a footnote advocating preliminary injunctive relief,
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Plaintiff briefly posits that “there is no proof that the TMC Group [a reference to the three
entities] is not the telemarketer.” (Doc. 22 at 12, n.7). Despite that footnote, Plaintiff
has never alleged (and Defendants deny) that any of the Defendants have personally
placed telemarketing calls to his home.

The statutes on which Plaintiff relies for

preliminary injunctive relief authorize that relief against the persons engaged in
telemarketing.

The statutes do not provide the same clear basis for relief against

entities or persons who are alleged to be liable for “assisting and facilitating” illegal
telemarketing activity. See generally Baltimore-Washington Telephone Co., 584 F.
Supp.2d 736 (D. Md., 2008)(holding that the TCPA does not encompass a cause of
action for aiding and abetting).
For much the same reasons, the undersigned declines to recommend preliminary
injunctive relief against the six Defendants under the Court’s general equitable powers.
The Federal Communications Commission (“FCC”) is the federal agency directed to
promulgate regulations to implement the TCPA. Defendants recently filed a motion to
dismiss all of Plaintiff’s claims against them based upon FCC Declaratory Ruling, FCC
13-54 at ¶11 (April 17, 2013), and Plaintiff’s failure to allege an agency relationship
between Defendants and the telemarketer(s) who actually made the illegal calls to
Plaintiff’s home. Defendants additionally argue that Plaintiff has failed to plead the
essential elements of a cause of action to hold them liable under a joint enterprise
theory of liability. Defendants present multiple arguments against Plaintiff’s state law
claims.
Without prejudging the merits of Defendants’ motion, as to which Plaintiff has not
had the opportunity to respond, the Court concludes that the arguments contained
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therein raise substantial legal issues that disfavor granting Plaintiff the preliminary
injunctive relief that he seeks. In short, on the preliminary record presented to this
Court to date, Plaintiff has failed to satisfy his heavy burden of demonstrating that
extraordinary relief is warranted. 3
Plaintiff argues that he may suffer from irreparable injury due to the “invasion of
solitude and seclusion of one’s home” that results from telemarketing calls. (Doc. 22 at
18). Plaintiff alleges that he received approximately twenty-five calls from Qall Cord and
a second unknown telemarketer between July 22, 2011 and January 26, 2013. (Doc.
20 at ¶¶18-22).

He admits that his injury may be compensated by the monetary

damages provided for by statute, but speculates, due to other ongoing litigation against
the same entity Defendants, that the corporate Defendants may become insolvent by
the time that he is able to obtain a judgment in this case, and/or that Defendant “Antone
Accuardi is skilled at hiding money in Belize.” (Doc. 22 at 18). Plaintiff argues more
vigorously that the “irreparable injury to the general public is much greater,” since most
people do not seek legal recourse when they receive illegal telemarketing calls. (Id.).
It is unclear whether enjoining the referenced Defendants actually would prevent
Plaintiff from receiving the illicit telemarketing calls, given that none of the Defendants is
accused of having made those calls. Moreover, a “race to judgment” between Plaintiff
and others who may be engaged in litigation against the same Defendants is not

3

On June 3, 2013, Plaintiff filed a “Notice” that appears to reference a resolution through
settlement of “all claims brought under state law” brought against the six Defendants. Presumably, any
such settlement would also moot any basis for a preliminary injunction under state law, although this
Court independently finds that the requested relief is not warranted.

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grounds for awarding a preliminary injunction. And because this is not a class action,
Plaintiff has no standing to assert “irreparable injury” on behalf of “the general public.”
Plaintiff argues that the injunction will not cause “legitimate” harm to anyone,
because all six Defendants whose conduct he seeks to enjoin are currently “ignoring
complaints of illegal telemarketing.” (Doc. 22 at 19). But an injunction against the
Defendants is likely to harm their various businesses.

Whether the portion of that

business to which Plaintiff objects is “legitimate” remains at the heart of this case. The
public interest lies in preserving the status quo through denial of Plaintiff’s motion for a
preliminary injunction, and instead proceeding through the ordinary course of litigation.
Neither the allegations of Plaintiff’s complaint, nor those contained in his motion, favor
granting extraordinary relief.
C. Motion for Default Judgment Against Qall Cord (Doc. 27)
In contrast to Plaintiff’s motions for a preliminary injunction, the undersigned
recommends granting Plaintiff’s motion for entry of a default judgment against foreign
Defendant Qall Cord Philippines Ltd. Co. The record reflects that Plaintiff has obtained
service on Defendant Qall Cord, but that Qall Cord has chosen not to appear in this
Court. An Entry of Default was filed against Qall Cord on March 25, 2013. (Doc. 25).
Pursuant to the TCPA, an aggrieved person may recover statutory damages of
$1500 for each willful or knowing violation of the automated-call requirements,
§227(b)(3), as well as $1500 for a willful or knowing violation of the do-no-call-list
requirements, §227(c)(5).

Thus, Plaintiff may recover $3,000 per telephone call in

damages under the TCPA. Charvat v. NMP, LLC, 656 F.3d 440, 449 (6th Cir. 2011).

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Plaintiff asserts that he is entitled to additional damages under the Ohio
Consumer Sales Protection Act (“OCSPA”) for the same telephone calls. The Sixth
Circuit in Charvat held that “delivering a prerecorded message without prior express
consent, in violation of 47 U.S.C. §227(b)(3)(A), is not by itself, a violation of the
OCSPA.” Id., 656 F.3d at 450 (emphasis added). However, Chavret teaches that
violations of the TCPA can constitute independent violations of the OCSPA, so long as
the circumstances of those calls violate specific provisions of the OCSPA. Thus, in
Chavret, the plaintiff was permitted to proceed on three distinct damage claims under
Ohio law for each call, because the plaintiff alleged that each call violated provisions of
Ohio law designed to: (1) ensure a method of contacting the offending telemarketer; (2)
maintain and comply with a do-not-call registry; and (3) identify the purpose of the call.
Although the plaintiff in Chavret had alleged that the telemarketer was liable for violating
six separate provisions, the Sixth Circuit held that several of the provisions protected
the same type of injury.

Therefore, the court held that, despite citing six separate

provisions of the OCSPA, the plaintiff could recover only for three distinct claims. Id. at
451-452. As in Chavret, Plaintiff here has alleged independent violations of the OCSPA
sufficient to prove his entitlement to additional statutory damages under state law for the
ten calls during which a message was left. Although Plaintiff assumes four separate
violations of the OCSPA, the undersigned concludes that, under Chavret, Plaintiff is
entitled to damages of $200.00 per call for only three distinct claims.
Plaintiff also claims damages against Qall Cord for the two calls made to his
residential phone line on dates on which no message was left.

The undersigned

declines to recommend an award of damages for the latter two calls, because it is
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unclear that the unanswered calls, identified solely by Plaintiff’s call history, violated
state and federal law. 4
Plaintiff also claims entitlement to a discretionary award of prejudgment interest.
Plaintiff argues that the Court should exercise its discretion to award such interest
because Qall Cord’s conduct, in failing to identify itself at the time of the calls, and in
failing to accept service of process, delayed this litigation. However, the record reflects
that Plaintiff was able to identify Qall Cord approximately three months after initiating
suit. Plaintiff promptly amended his complaint as of right at that time. The docket
reflects that no activity had occurred in the intervening time. The relatively minimal
three month delay in identifying Qall Cord does not justify an award of prejudgment
interest. Similarly, the difficulty in obtaining service does not justify such an award,
given that Qall Cord is a foreign corporation located in a country that does not
participate in the Hague Convention, and as to which some difficulty in service is to be
expected. Thus, Plaintiff’s request for prejudgment interest should be denied.
In the sample order tendered to this Court, Plaintiff includes language requiring
Qall Cord to pay future monetary damages, in varying amounts depending on the nature
of the call, at any time that Defendant “calls Plaintiff at his residential telephone number”
in the future. Such prospective damages are in the nature of injunctive relief against a
foreign entity, and would not permit this Court adequate review of whether damages

4

Although TCPA regulations prohibits a person or entity from disconnecting “an unanswered
telemarketing call prior to at least 15 seconds or four (4) rings,” see 47 C.F.R. §64.1200(a), Plaintiff has
not alleged the length of the unanswered calls. It is also unclear how Plaintiff’s allegation that a call was
made from a given number equates to proof of an unlawful “solicitation,” particularly given that only two
such calls were made.

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would in fact be owed for any future misconduct. For that reason, the request for
conditional future damages also should be denied.
Except as limited by the above discussion, entry of a default judgment appears
appropriate against Qall Cord in this case, and there is no just reason for delay.
III. Conclusion and Recommendations
Accordingly, IT IS RECOMMENDED THAT:
1. Plaintiff’s first and second motions for preliminary injunctive relief (Doc. 3, 22)
should be DENIED;
2. Plaintiff’s motion for the entry of default judgment against foreign Defendant
Qall Cord Philippines Ltd. Co., the spelling of whose name is alternatively identified by
Plaintiff as Qual Cord Philippines Ltd. Co. (Doc. 27) should be GRANTED, with
Defendant Qall Cord Philippines Ltd Co. directed to pay to Plaintiff the sum of $3600.00
for each of the ten calls placed by that Defendant in violation of state and federal law,
as alleged in the Second Amended Complaint, for a total damage award of $36,000.00.

s/Stephanie K. Bowman
Stephanie K. Bowman
United States Magistrate Judge

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

VINCENT LUCAS,

Case No. 1:12-cv-630
Plaintiff,

Spiegel, J.
Bowman, M.J.

v.

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

NOTICE

Pursuant to Fed. R. Civ. P. 72(b), any party may serve and file specific, written
objections to this Report & Recommendation (“R&R”) within FOURTEEN (14) DAYS of
the filing date of this R&R. That period may be extended further by the Court on timely
motion by either side for an extension of time. All objections shall specify the portion(s)
of the R&R objected to, and shall be accompanied by a memorandum of law in support
of the objections. A party shall respond to an opponent’s objections within FOURTEEN
(14) DAYS after being served with a copy of those objections.

Failure to make

objections in accordance with this procedure may forfeit rights on appeal. See Thomas
v. Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

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