RICHARDSON et al v. VERDE ENERGY USA, INC.

Filing 25

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE LAWRENCE F. STENGEL ON 12/19/16. 12/20/16 ENTERED AND COPIES E-MAILED.(kw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRIAN RICHARDSON, et al.,
Plaintiffs
vs.
VERDE ENERGY USA, INC.,
Defendant

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CIVIL ACTION

NO. 15-6325

MEMORANDUM
STENGEL, J.

December 19, 2016

This class action arises under the Telephone Consumer Protection Act (the “Act”),
47 U.S.C. §§ 227, et seq, which generally forbids telemarketers from contacting
prospective customers on cell phones by automatic telephone dialing systems without
their express written consent, and forbids contacting consumers who have requested that
calls stop.
Defendant Verde Energy USA, Inc., filed a motion to dismiss the amended
complaint, and the plaintiff has responded. For the following reasons, I will deny the
motion in part, and grant it in part.
I. BACKGROUND 1
Defendant Verde Energy USA operates an energy company that purportedly offers
consumers low priced electricity. The amended complaint alleges that the defendant
utilizes a sophisticated telephone dialing system to call individuals en masse promoting
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The facts are gleaned from the amended complaint and any extrinsic documents upon which it
is based. See GSC Partners, CDO Fund v. Washington, 368 F.3d 228, 236 (3d Cir. 2004). For
the purposes of this motion, they are presented in the light most favorable to the plaintiffs, as the
non-moving parties, and are accepted as true with all reasonable inferences drawn in their favor.

its services. It obtained these telephone numbers by purchasing marketing lists
containing consumers’ telephone numbers. The amended complaint further alleges that
the defendant knowingly places phone calls to consumers who never provided prior
express written consent to call and to consumers having no relationship with the
defendant. It allegedly continues to make calls to consumers even after they request that
the calls stop.
The amended complaint describes similar conduct by the defendant directed to
each of the named plaintiffs. Beginning in October and November of 2015, the defendant
began contacting the plaintiffs on their cellular telephones multiple times without first
obtaining their written consent. When the plaintiffs answered the first call, the other end
of the line was silent until they were eventually greeted by a live representative who tried
to convince them to switch energy providers. The plaintiffs told the caller that they were
not interested and asked the caller to stop calling. Nevertheless, the calls continued. In
fact, many of the plaintiffs still receive multiple calls from the defendant each day.
Because of the extraordinarily high volume of calls, it became obvious to the plaintiffs
that a computer was dialing their number.
The amended complaint finally alleges that the plaintiffs understood that the
purpose of the defendant’s calls was to solicit business from them. Each plaintiff
believes that the calls the defendant made to them invaded their privacy and violated 47
U.S.C. § 227(b)(1).

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II. LEGAL STANDARD
A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure
examines the legal sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46
(1957). The factual allegations must be sufficient to make the claim for relief more than
just speculative. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). In
determining whether to grant a motion to dismiss, a federal court must construe the
complaint liberally, accept all factual allegations in the complaint as true, and draw all
plausible inferences in favor of the plaintiff. Id.; see also D.P. Enters. v. Bucks County
Cmty. Coll., 725 F.2d 943, 944 (3d Cir. 1984).
It remains true that the Federal Rules of Civil Procedure do not require a plaintiff
to plead in detail all of the facts upon which he bases his claim. Rather, the Rules require
“a short and plain statement of the claim showing that the pleader is entitled to relief.”
FED. R. CIV. P. 8(a)(2). In recent rulings, however, the Supreme Court has rejected
language in Conley stating that “a complaint should not be dismissed for failure to state a
claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support
of his claim which would entitle him to relief.” Twombly, 550 U.S. at 561. Rather, a
“complaint must allege facts suggestive of [the proscribed] conduct,” Twombly, 550
U.S. at 564, and it must contain enough factual matters to suggest the required elements
of the claim or to “raise a reasonable expectation that discovery will reveal evidence of”
those elements. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008)
(quoting Twombly, 550 U.S. at 556). Neither “bald assertions” nor “vague and

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conclusory allegations” are accepted as true. See Morse v. Lower Merion School Dist.,
132 F.3d 902, 906 (3d Cir. 1997).
In assessing the merits of a motion to dismiss, courts must be careful to recognize
that, “the tenet that a court must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). “[O]nly a complaint that states a plausible claim for relief survives a motion to
dismiss.” Id. at 679 (emphasis added). In recognition of these principles, courts must
first identify those allegations in a complaint that are mere conclusions and are therefore
not entitled to the assumption of truth, and next, consider whether the complaint’s factual
allegations, which are entitled to a presumption of truth, plausibly suggest an entitlement
to relief. Id. at 680 (emphasis added).
III. DISCUSSION
A. Use of an Automatic Telephone Dialing System
The defendant first argues that the amended complaint should be dismissed
because the plaintiffs fail to allege adequately the use of an Automatic Telephone Dialing
System. I do not agree.
To state a cause of action under the Telephone Consumer Protection Act, a
plaintiff must allege that (1) a call was made; (2) the caller used an Automatic Telephone
Dialing System or artificial or prerecorded voice; (3) the telephone number called was
assigned to a cellular telephone service; and (4) the caller did not have prior express
written consent of the recipient. See 47 U.S.C. § 227(b)(1)(A)(iii); 47 C.F.R. §
64.1200(a)(1). In their amended complaint, the plaintiffs allege that the defendant used
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an Automatic Telephone Dialing System in placing its calls. They bolster that allegation
by indicating that when they answered the defendant’s calls, there was silence and “dead
air” before a live person began to speak. They further support the claim by alleging that
they received an extraordinarily high volume of calls, and that they continued to receive
the calls despite having asked the defendant to stop calling.
Many district courts have found that similar allegations are sufficient to survive a
motion to dismiss. See Abella v. Student Aid Center, Inc., 2015 U.S. Dist. LEXIS
147299 (E.D. Pa. Oct. 30, 2015) (the plaintiffs have adequately stated a claim under the
Telephone Consumer Protection Act by alleging the “use [of] an automatic telephone
dialing system”); see also Gross v. Weinstein, Weinburg & Fox, LLC, 123 F. Supp. 3d
575, 580 (D. Del. 2015) (denying motion to dismiss where the plaintiffs alleged that the
defendant “used, controlled, and/or operated automatic telephone dialing systems”);
Kristensen v. Credit Payment Servs., 12 F. Supp. 3d 1292, 1302 (D. Nev. 2014) (denying
motion to dismiss where plaintiff alleged “that the message was sent using an ATDS”);
Iniguez v. The CBE Grp., 969 F. Supp. 2d 1241, 1247-48 (E.D. Cal. 2013) (“Plaintiff’s
complaint alleges both that the defendant used an automatic telephone dialing system and
that the defendant’s system utilized an artificial voice. . . . Either allegation is sufficient
on its own to support the plaintiff’s claims.”) This is especially so where, as here, a
plaintiff alleges “there was a brief and unnatural period of silence after [he] answered the
call.” Evans v. Nat’l Auto Div., L.L.C., 2016 U.S. Dist. LEXIS 29348 (D.N.J. Mar. 8,
2016); Connelly v. Hilton Grant Vacations Co., LLC, 2012 U.S. Dist. LEXIS 81332
(S.D. Cal. June 11, 2012) (holding that plaintiffs adequately alleged the use of an ATDS
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where they alleged that “the calls had a delay prior to a live person speaking to the
plaintiffs”); Oliver v. DirecTV, LLC, 2015 U.S. Dist. LEXIS 47964 (N.D. Ill. Apr. 13,
2015) (holding that plaintiff’s allegation of a “momentary pause” was “sufficient to draw
a reasonable inference that the defendant used an ATDS”).
Accordingly, I find that the plaintiffs have adequately stated a claim under the
Telephone Consumer Protection Act by alleging the “use [of] an automatic telephone
dialing system.” I will not grant the motion to dismiss on this basis.
B. Case or Controversy
The defendant next argues that because the plaintiffs have only experienced
transitory inconvenience, the plaintiffs have not suffered the concrete or particularized
injury-in-fact required for Article III standing. Thus, the defendant argues, this court has
no subject matter jurisdiction, and the amended complaint must be dismissed. Again, I
must disagree.
Standing is a threshold jurisdictional requirement, based on the “case or
controversy” language of Article III of the United States Constitution. Pub. Interest
Research Grp. of N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 117 (3d Cir.
1997). To establish standing, a plaintiff must demonstrate that (1) he suffered an injury
in fact, namely, an invasion of a legally protected interest that is concrete and
particularized; (2) there is a causal connection between the injury and the conduct
complained of; and (3) the injury will be redressed by a favorable decision. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).

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Here, the defendants argue that the plaintiffs have not pled an injury-in-fact
because the plaintiffs have only experienced transitory inconvenience. However, a
review of the amended complaint reveals that the plaintiffs assert the following injuries
based on the defendant’s alleged conduct:
Plaintiffs and the Class members were harmed by
Defendant’s acts in at least the following ways:
Defendant, either directly or through its agents, illegally
contacted Plaintiffs and the Class via their cellular
telephones by using an [Automatic Telephone Dialing
System], thereby causing Plaintiffs and the Class to incur
certain cellular telephone charges or reduce cellular
telephone time for which Plaintiffs and the Class
members previously paid; and Plaintiffs and Class
members’ privacy was invaded.
See Am.Compl. ¶ 78. I find that these purported injuries provide an adequate injury-infact for standing purposes. As the Third Circuit Court of Appeals has noted, the injuryin-fact standard is “very generous.” Bowman v. Wilson, 672 F.2d 1145, 1151 (3d Cir.
1982). “The standard is met as long as the party alleges a specific, identifiable trifle of
injury, or a personal stake in the outcome of the litigation.” In re Glob. Indus. Techs.,
Inc., 645 F.3d 201, 210 (3d Cir. 2011); see also Simon v. E. Kentucky Welfare Rights
Org., 426 U.S. 26, 61 (1976) (Brennan, J., concurring in the judgment) (noting that
“significant” injury need not be alleged); United States v. Students Challenging
Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 690 (1973) (same). Because the
plaintiffs plead the existence of concrete injuries, however small, I will not dismiss the
amended complaint on this basis.

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C. Vicarious Liability under the TCPA
The defendant argues that the language of the Telephone Consumer Protection Act
does not allow for vicarious liability. It also argues that even if it did, the amended
complaint fails to plead facts sufficient to establish vicarious liability.
First, as the plaintiffs point out, the amended complaint does not seek to hold the
defendant liable solely on a theory of vicarious liability. In paragraph #2, the amended
complaint alleges that “Defendant made one or more authorized calls to Plaintiffs’ cell
phones using an [Automatic Telephone Dialing System] and/or pre-recorded voice for the
purpose of soliciting business.” (Emphasis added). The amended complaint also alleges:
93.

Defendant made unsolicited and unauthorized calls
using an [Automatic Telephone Dialing System] or
pre-recorded voice to Plaintiffs; and the Class
members’ cellular telephones for the purpose of
marketing products and/or services to Plaintiffs and
the Classes.

94.

Defendant made the calls without obtaining prior
express written consent from Plaintiffs and the
Classes, and continued to make calls after being
told to stop.

95.

The foregoing acts and omissions of Defendant
constitute numerous and multiple violations of the
TCPA, including but not limited to each and every
one of the above-cited provisions of 47 U.S.C. §
227, et seq.

96.

Defendant’s conduct invaded Plaintiffs’ privacy.

(Emphasis added). The plaintiffs allege that the defendant itself is liable for violating the
Telephone Consumer Protection Act, rather than a third party agent acting on the
defendant’s behalf.
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Second, even if discovery shows that a third party agent acting on the defendant’s
behalf made the calls in question, the Telephone Consumer Protection Act would still
provide for liability. The Supreme Court of the United States recently clarified that the
Telephone Consumer Protection Act does provide for vicarious liability. See CampbellEwald Co. v. Gomez, 136 S.Ct. 663, 673 (2016) (the Federal Communication
Commission “has ruled that, under federal common-law principles of agency, there is
vicarious liability for TCPA violations . . . and we have no cause to question it”). Other
courts agree that “the TCPA can impose liability directly or vicariously upon any person
or entity on whose behalf a third party places a call in violation of § 227(b)(1)(A).”
Hartley-Culp v. Green Tree Servicing, LLC, 52 F. Supp. 3d 700, 703 (M.D. Pa. 2014);
see also Lofton v. Verizon Wireless (VAW) LLC, 2015 U.S. Dist. LEXIS 34516 (N.D.
Cal. Mar. 18, 2015) (“Under the TCPA, a defendant may be held vicariously liable for
calls it does not directly initiate ‘under federal common law principles of agency.’”)
(quoting In re Joint Petition filed by Dish Network, LLC, 2013 FCC LEXIS 2057 (May
9, 2013) (a seller may be liable for violations by its representatives under a broad range
of agency principles, including not only formal agency, but also principles of apparent
authority and ratification); Thomas v. Taco Bell Corp., 582 F.App’x 678, 679 (9th Cir.
2014) (“Vicarious liability can provide the basis for liability for a TCPA violation”).
Accordingly, I will also not grant the defendant’s motion to dismiss the amended
complaint on this basis.

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D. Use of an Artificial or Pre-Recorded Voice
The defendant next claims that the focus of the amended complaint appears to be
on calls allegedly made with an Automated Telephone Dialing System rather than on
calls allegedly made with a pre-recorded voice. It argues that the amended complaint
only makes passing and inadequate references to the alleged use of a pre-recorded voice,
and thus it should be dismissed. This claim is meritless.
A plain reading of the relevant section of the Telephone Consumer Protection Act
belies the defendant’s argument. Title 47 of the United States Code, Section
227(b)(1)(A)(iii) provides, in pertinent part, that “It shall be unlawful for any person
within the United States . . . to make any call . . . using any automatic telephone dialing
system or an artificial or pre-recorded voice . . . to any telephone number assigned to a . .
. cellular phone service. . .” (Emphasis added). A plaintiff’s allegation is sufficient if it
includes calls being made with an Automated Telephone Dialing System, or an artificial
voice, or a pre-recorded voice. No reference to artificial voice or pre-recorded voice is
required to state a claim. Accordingly, I will not grant the defendant’s motion to dismiss
the amended complaint on this claim.
E. Internal Do-Not-Call List
The defendant argues that the plaintiffs fail to state any valid claim for what they
label an internal do-not-call list violation. It insists that Section 227(b) addresses only
calls using an Automatic Telephone Dialing System, an artificial or prerecorded voice, or
a fax machine, and does not address “internal do-not-call” requirements. This claim is
meritless.
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A review of the amended complaint reviews that it adequately pleads the
regulatory and statutory basis for alleging violations of the “internal do-not-call”
requirement. Paragraph 22 of the amended complaint provides:
Finally, the TCPA established the National Do-Not-Call
list, as well as the requirement that all businesses that place
calls for marketing purposes maintain an “internal” DoNot-Call list (“IDNC list”). The IDNC is “a list of persons
who request not to receive telemarketing calls made by or
on behalf of that [seller].” Id. The TCPA prohibits a
company from calling individuals on its IDNC list or on
the IDNC list of a seller on whose behalf the telemarketer
calls, even if those individuals’ phone numbers are not on
the National Do-Not-Call Registry. Id. at § 64.1200(d)(3),
(6). Any company, or someone on the company’s behalf,
who calls a member of the company IDNC violates the
TCPA. The called party is then entitled to bring a private
action under the TCPA for monetary and injunctive relief.
It is apparent from the context of this paragraph that the plaintiffs are citing 47 C.F.R. §
64.1200(d)(3), and (6) for the “internal-do-not call” regulation. Those subsections
provide:
(d) No person or entity shall initiate any call for
telemarketing purposes to a residential telephone
subscriber unless such person or entity has instituted
procedures for maintaining a list of persons who request
not to receive telemarketing calls made by or on behalf of
that person or entity. The procedures instituted must
meet the following minimum standards: . . .
(3) Recording, disclosure of do-not-call requests. If a
person or entity making a call for telemarketing purposes
(or on whose behalf such a call is made) receives a
request from a residential telephone subscriber not to
receive calls from that person or entity, the person or
entity must record the request and place the subscriber’s
name, if provided, and telephone number on the do-notcall list at the time the request is made. Persons or
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entities making calls for telemarketing purposes (or on
whose behalf such calls are made) must honor a
residential subscriber’s do-not-call request within a
reasonable time from the date such request is made. This
period may not exceed thirty days from the date of such
request. If such requests are recorded or maintained by a
party other than the person or entity on whose behalf the
telemarketing call is made, the person or entity on whose
behalf the telemarketing call is made will be liable for
any failures to honor the do-not-call request. A person or
entity making a call for telemarketing purposes must
obtain a consumer’s prior express permission to share or
forward the consumer’s request not to be called to a party
other than the person or entity on whose behalf a
telemarketing call is made or an affiliated entity. . . .
(6) Maintenance of do-not-call lists. A person or entity
making calls for telemarketing purposes must maintain a
record of a consumer's request not to receive further
telemarketing calls. A do-not-call request must be
honored for 5 years from the time the request is made.
This regulation was promulgated under the Telephone Consumer Protection Act, 47
U.S.C. § 227, et seq., which explicitly requires the Federal Communication Commission
to issue these regulations, and explicitly provides for a private right of action for violation
of such regulations. Having cited and followed valid authority, the plaintiffs adequately
pleaded an “internal do-not-call” claim. Accordingly, I will not grant the defendant’s
motion to dismiss based on this claim.
F. Attorneys’ Fees
Finally, the defendant argues that the Telephone Consumer Protection Act does
not provide for an award of attorneys’ fees, and thus there is no basis for a departure from
the American Rule. It asks that I dismiss the plaintiffs’ claim for attorneys’ fees.

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In Paragraph 101 of the amended complaint, the plaintiffs allege that they are
entitled to recover reasonable attorney fees. They cite no authority for such an allegation,
and there apparently is no authority under the Telephone Consumer Protection Act for
such an award. See Smith v. Microsoft Corp., 297 F.R.D. 464, 469 (S.D. Cal. 2014)
(“The TCPA, unlike many consumer protection statutes, does not provide for attorney’s
fees...”); Haley v. Hughes Network Sys., LLC, No. 12-cv-01079, 2013 U.S. Dist. LEXIS
157104 (W.D.N.Y. Nov. 1, 2013) (“The TCPA makes no provision for attorney’s fees or
costs”); Klein v. Vision Lab Telecomm., Inc., 399 F. Supp. 2d 528, 542 (S.D.N.Y. 2005);
J.C. Corp. Mgmt., Inc. v. Res. Bank, 2005 U.S. Dist. LEXIS 33433 (E.D. Mo. Sept. 12,
2005) (“The TCPA does not provide for the recovery of attorney’s fees...”); Gold Seal
Termite & Pest Control Co. v. DirecTV, Inc., No. 03-cv-00367, 2003 U.S. Dist. LEXIS
11205 (S.D. Ind. June 10, 2003) (“There is no provision [in the TCPA] that provides for
shifting of attorneys’ fees or costs...”).
In their response, the plaintiffs argue that they may ultimately be entitled to
attorneys’ fees under several different statutes and rules, and whether such an award
should be made in the future should not be evaluated at this time. At this stage of the
litigation, however, there is no conduct on the defendant’s part which could be construed
as potentially triggering one of those statutes or rules now or in the future. Accordingly, I
will grant the defendant’s motion to dismiss the claim for attorneys’ fees. Of course, as
in any action, the plaintiffs may file a motion for attorneys’ fees at the end of the
litigation, should they feel they have a claim under the Federal Rules of Civil Procedure.
An appropriate Order follows.
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