Cantu v. DiabetesHelpNow.com, LLC
Filing
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MEMORANDUM AND ORDER denying 21 Motion for Default Judgment. Case terminated on 7/13/15.(Signed by Judge Hilda G Tagle) Parties notified.(mperez, 1)
IN THE UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
BROWNSVILLE DIVISION
HECTOR CANTU,
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§
Plaintiff,
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§
v.
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PLATINUM MARKETING GROUP, LLC §
d/b/a DIABETESHELPNOW.COM, LLC, §
§
§
Defendant.
§
CIVIL NO. 1:14-CV-71
MEMORANDUM AND ORDER
The Court has before it Plaintiff Hector Cantu’s (“Cantu”) motion for entry of
default judgment.
Dkt. No. 21.
After considering the motion, the attached
declarations, and the record in this civil action, the Court dismisses this case
without prejudice because Plaintiff has not carried his burden to show that this
Court has personal jurisdiction over the out-of-state defendant.
Procedural
I. Procedural History
In his amended complaint, Cantu alleges that beginning in February 2013,
Platinum Marketing Group LLC d/b/a/ DiatebetesHelpNow.com, LLC (“Platinum”)
called his cell phone without his permission in an attempt to sell him its products.
1st Am. Compl. ¶¶ 3–5, Dkt. No. 11 (also alleging that Cantu “never provided his
cellular telephone number” to Platinum).
Cantu allegedly spoke with a live
representative when he received the first call and asked that person to stop calling
him. Id. ¶ 6. Despite his request, he states that he continued to receive automated
calls from “Diabetes Help Now” offering him a meter to monitor blood sugar levels.
Id. ¶¶ 7, 8.
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Cantu sued for money damages under the Telephone Consumer Protection
Act of 1991 (“TCPA”), as amended, 47 U.S.C. § 227 (2012).
Id. ¶¶ 10–15. He
pleaded that he resides in Brownsville, Texas and named DiabetesHelpNow.com,
LLC a/k/a Welco, LLC d/b/a Welco Health as the defendant in his original
complaint, Dkt. No. 1 ¶¶ 1, 2, but he substituted Platinum, which he alleges is
organized under Florida law, as the defendant in his amended complaint, 1st Am.
Compl. ¶ 2.
This Court granted Cantu’s request for entry of default against
Platinum on December 23, 2014, finding that Cantu presented prima facie evidence
that he properly served Platinum in accordance with Florida law and Federal Rule
of Civil Procedure 4(h)(1)(A). Order 2–4, Dec. 23, 2014, Dkt. No. 17.
Cantu attached two declarations to his motion for default judgment. In the
first, Jenny DeFrancisco (“DeFrancisco”), Cantu’s attorney-in-charge, states: “I am
informed and believe that Defendant is not an infant or incompetent person.” Dkt.
No. 21-2 ¶ 7; see also id. ¶ 8 (stating that Platinum cannot serve in the military
because it is a limited liability corporation).
The second sets forth Cantu’s
testimony based on his personal knowledge and recollection. Cantu Decl. ¶ 1 Dkt.
1,
No. 21-3 (stating that Cantu could “competently testify to the matters set forth
herein from personal knowledge [if called as a witness]. Most of the facts testified to
herein are taken from my personal recollection of the incidents discussed.”). Cantu
states that he had no business relationship with Platinum, never gave Platinum his
cell phone number, and never agreed to be called by Platinum.
Id. ¶¶ 6–7.
According to his declaration, Cantu “received around 80 calls from Defendant after
[he] had requested that all calls to me cease.” Id. ¶ 9.
II. Legal Standard
This Court has entered default against Platinum, not a default judgment.
Order 4, Dec. 23, 2014, Dkt. No. 17 (entering default). Though the two steps have
similar names, entry of default precedes entry of a default judgment. N.Y. Life Ins.
Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996) (emphasis in original) (citing Fed. R.
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Civ. P. 55(a) to explain that “[a] default occurs when a defendant has failed to plead
or otherwise respond to the complaint within the time required by the Federal
Rules,” the clerk enters default after the plaintiff submits appropriate proof of
default, and “[a]fter defendant's default has been entered, plaintiff may apply for a
judgment based on such default”); see also Fed. R. Civ. P. 55(a). Once default is
entered, the plaintiff may move for default judgment.
When a plaintiff moves for entry of a default judgment, a federal district
court may “conduct hearings or make referrals―preserving any federal statutory
right to a jury trial—when, to enter or effectuate judgment, it needs to[, among
other things,] determine the amount of damages.” Fed. R. Civ. P. 55(b)(2)(C). The
federal rules do not favor default judgments, and a district court resorts to “a
drastic remedy” when it enters a default judgment. Lewis v. Lynn, 236 F.3d 766,
767 (5th Cir. 2001) (per curiam) (quoting Sun Bank of Ocala v. Pelican Homestead
and Savings Ass'n, 874 F.2d 274, 276 (5th Cir. 1989)). The policy disfavoring a
default judgment, however “is counterbalanced by considerations of social goals,
justice and expediency, a weighing process that lies largely within the domain of the
trial judge's discretion.” Safdar v. AFW, Inc., 279 F.R.D. 426, 431 (S.D. Tex. 2012)
(quoting Rogers v. Hartford Life & Accident Ins. Co., 167 F.3d 933, 936 (5th Cir.
1999)).
As a consequence of the entry of default, “the plaintiff's well-pleaded factual
allegations are taken as true, except regarding damages.” Jackson v. FIE Corp.,
302 F.3d 515, 525 (5th Cir. 2002) (quoting United States v. Shipco Gen., Inc., 814
F.2d 1011, 1014 (5th Cir. 1987)).
The defaulting defendant, however, does not
admit legal conclusions or “facts that are not well-pleaded.” Gines v. D.R. Horton,
Inc., 867 F. Supp. 2d 824, 829 (M.D. La. 2012) (quoting Nishimatsu Const. Co., Ltd.
v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). Therefore, a defendant
in default can still challenge “the sufficiency of the complaint and its allegations to
support the judgment,” id. (quoting Tyco Fire & Sec., LLC v. Alcocer, 218 F. App’x
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860, 863 (11th Cir. 2007)); “the validity of service of process . . . [; and] the court’s
exercise of personal jurisdiction.” Id. (quoting Tyco Fire & Sec., 218 F. App’x at 864).
III.
SubjectSubject-Matter Jurisdiction
This Court, as it must, raises briefly the question of its jurisdiction over this
case’s subject matter. See Gene and Gene LLC v. BioPay LLC, 541 F.3d 318, 324–
25 (5th Cir. 2008) (raising subject-matter jurisdiction in TCPA case sua sponte
because federal court “may consider subject-matter jurisdiction at any point,
including for the first time on appeal”). Cantu cites neither the federal diversityjurisdiction statute, 28 U.S.C. § 1332(a), nor the federal-question statute, id. § 1331
in his amended complaint.
See 1st Am. Compl. ¶ 1 (alleging under heading
“Jurisdiction” that “[t]his action arises out of Defendant's repeated violations of the
[TCPA]”).
The memorandum of law accompanying Cantu’s motion for default
judgment states, without elaboration or citation, that “[t]his Court has subject
matter jurisdiction over Plaintiff’s claims as Plaintiff resides in Brownsville, Texas.”
Mem. Supp. Mot. For Default J. 2, Dkt. No. 21-1. Nevertheless, the U.S. Supreme
Court held in Mims v. Arrow Financial Services, LLC, 132 S. Ct. 740 (2012) that
federal district courts have federal-question jurisdiction, concurrent with state
courts, over private TCPA enforcement actions like this one. Based on Mims, the
Court concludes that it has subject-matter jurisdiction in this case.
IV. Personal Jurisdiction
The Due Process Clause of the Fourteenth Amendment prevents a state from
binding a non-resident to a judgment rendered by one of its courts absent “certain
minimum contacts . . . such that the maintenance of the suit does not offend
‘traditional notions of fair play and substantial justice.’” Walden v. Fiore, 134 S.Ct.
1115, 1121 (2014) (internal quotation marks in original) (quoting Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945)). “Federal courts ordinarily follow state law
in determining the bounds of their jurisdiction over persons.” Id. (quoting Daimler
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AG v. Bauman, 134 S.Ct. 746, 753 (2014)).
“Because Texas's long-arm statute
reaches to the constitutional limits, the question [this Court] must resolve is
whether exercising personal jurisdiction over the defendant offends due process.”
Vanderbilt Mortg. and Fin., Inc. v. Flores, 692 F.3d 358, 375 n.14 (5th Cir. 2012)
(quoting Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010)); accord.
Companion Prop. & Cas. Ins. Co., 723 F.3d at 559 (citation omitted). In the context
of the requisite minimum contacts, “[p]ersonal jurisdiction may be ‘specific’ or
‘general.’” Companion Prop. & Cas. Ins. Co., 723 F.3d at 559; accord. Walden, 134
S. Ct. at 1122 n6. (discussing specific and general jurisdiction). To show that this
court has general jurisdiction, Cantu must demonstrate that Platinum’s “contacts
are ‘continuous and systematic,’ so that the exercise of jurisdiction is proper
irrespective of the claim's relationship to the defendant's contact with the forum.”
Id. (quoting Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 438 (1952)); see
also Walden, 134 S. Ct. at 1122 n.6 (discussing doctrines of general and specific
jurisdiction). To decide if Plaintiffs have made a prima facie showing of specific
personal jurisdiction, this Court asks: “(1) whether the defendant has minimum
contacts with the forum state, i.e., whether it purposely directed its activities
toward the forum state or purposefully availed itself of the privileges of conducting
activities there; (2) whether the plaintiff's cause of action arises out of or results
from the defendant's forum-related contacts; and (3) whether the exercise of
personal jurisdiction is fair and reasonable.” Vanderbilt Mortg. and Fin., Inc., 694
F.3d at 375 (quoting McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009)).
Cantu’s argument that this Court has specific personal jurisdiction rests on
two allegations: (1) he is a Texas resident, see 1st Am. Compl. ¶ 1; Cantu Decl. ¶ 2,
and (2) Platinum knew that Cantu resides in Texas when it called him because “the
phone number at which it reached Plaintiff has a Texas area code of 956,” Mem.
Supp. Mot. For Default J. 3. Cantu supplies no citation to support the second of
these allegations, however, see id., and he does not specify the area code of his cell
phone in his amended complaint or declaration. Thus, the Court has no competent
evidence establishing the area code of Cantu’s cell phone number before it.
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Nonetheless, based on DeFrancisco’s representation, the Court will assume, for
purposes of the instant motion only, that the number Platinum called when it
reached Cantu’s cell phone was assigned to the 956 area code. See Fed. R. Civ. P.
11(b)(3). Arguing that these facts give rise to minimum contacts with Texas, Cantu
analogizes calling a cell phone number in an area code associated with Texas to
placing a letter in the mail addressed to a Texas resident and knowingly initiating a
garnishment action directed at a Texas resident. See Harris v. Lathrop & Gage.
LLP, No. H-12-919, 2012 WL 2958280, at *3―*4 (S.D. Tex. July 19, 2012) (holding
two letters sent by law firm to Texas address gave rise to specific jurisdiction over
claims based on contents of letters); Bray v Cadle Co., No. 4:09-CV-663, 2010 WL
4053794, at *11–*12 (S.D. Tex., Oct. 14, 2010) (finding prima facie case of
purposeful availment where plaintiff asserted debt-collection claims and alleged
defendant in Ohio initiated or approved initiation of garnishment action knowing
plaintiff lived in Texas).
Despite the analogy Cantu proposes, the Court cannot find that Platinum
purposefully availed itself of the protections of Texas law on this record. Cantu
cites no evidence showing that Platinum knew that a call to a cell phone number
having an area code associated with Texas was as likely to reach a Texas resident
as a letter sent to a Texas address or a garnishment action directed at a Texas
resident would be. Mem. Supp. Mot. For Default J. 3; see also Bray, 2010 WL
4053794, at *12 (reasoning that defendants “knew that by initiating the
garnishment action (from Ohio or wherever else they might have been), the
garnishment and injury to Plaintiff was going to occur in the State of Texas”).
Federal district courts have divided over the precise question presented here:
whether contacting a cell phone number in an area code associated with a state,
without more, proves purposeful availment when the call gives rise to an alleged
TCPA claim. Contrast, e.g., Luna v. Shac, LLC, No. C14-00607 HRL, 2014 WL
3421514, at *3–*4 (N.D. Cal. July 14, 2014) (collecting cases) (holding that, “where
Shac intentionally sent text messages directly to cell phones with California based
area codes, which conduct allegedly violated the TCPA and gave rise to this action,
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Shac expressly aimed its conduct at California”) with Sojka v. Loyalty Media LLC,
No. 14-CV-770, 2015 WL 2444506, at *3 (N.D. Ill. May 15, 2015) (holding that text
messages directed at cell phone numbers in Illinois area code did not demonstrate
purposeful availment).
Mindful that “we live in a very mobile society,” United States v. Torres, 573
F. Supp. 2d 925, 939 (W.D. Tex. 2008) (citing Kiow Tribe of Okla. v. Mfg. Techs.,
Inc. 532 U.S. 751, 758 (1998)), the Court determines that showing that a TCPA
defendant called a phone number in an area code associated with the plaintiff’s
alleged state of residence does not, by itself, establish minimum contacts with that
state. The law of personal jurisdiction responds flexibly to social and technological
developments. See, e.g., Shaffer v. Heitner, 433 U.S. 186, 202 (1977) (“The advent
of automobiles, with the concomitant increase in the incidence of individuals
causing injury in States where they were not subject to in personam actions under
Pennoyer, required further moderation of the territorial limits on jurisdictional
power.”).
As of 2014, “a significant majority of American adults,” more than ninety
percent of them, own cell phones, Riley v. California, 134 S. Ct. 2473, 2484, 2490
(2014) (citations omitted). Many cell phones could “just as easily be called cameras,
video players, rolodexes, calendars, tape recorders, libraries, diaries, albums,
televisions, maps, or newspapers,” and their varied uses would still not be
exhaustively cataloged. Id. at 2489. Given those varied uses, the majority of smart
phone users do not easily part with their phone and the data it contains. See id at
2490. (citing a recent poll in which “three-quarters of smart phone users report[ed]
being within five feet of their phones most of the time, with 12% admitting that
they even use their phones in the shower”); see also United States v. Jones, 132 S.
Ct. 945, 955–56 (2014) (Sotomayor, J., concurring) (discussing importance of cell
phones in modern life and suggesting that reconsideration of Fourth Amendment
doctrine may be warranted). As a result of the changes wrought by pervasive use of
cell phones, courts dismissing TCPA claims for lack of personal jurisdiction have
implicitly or explicitly “recognize[d] that a cell phone prefix, unlike a landline, is not
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dispositive of the residence, domicile or location of the cell phone owner” Sojka,
2015 WL 2444506, at *3. Indeed, the cases show that, increasingly, people keep
their cell number as they move from state to state, untethering the number’s area
code from its owner’s state of residence. See id; Cunningham v. Carribean Cruise
Line, Inc., No. 3:14-CV-01040, 2015 WL 475271, at *6 (M.D. Tenn. Feb. 4, 2015)
(holding defendant did not purposefully avail itself of protections of Tennessee law
by calling cell phone number associated with North Carolina area code where record
showed that plaintiff was a Tennessee resident who obtained cell phone in
Tennessee); Michaels v. Micamp Merchant Servs., No. 13-191E, 2013 WL 5970340,
at *3 (W.D. Pa. Nov. 8, 2013) (finding no specific personal jurisdiction in TCPA case
where plaintiff resided in Pennsylvania and had cell phone number with Florida
area code because record contained no evidence of conduct aimed at Pennsylvania).
Aside from Cantu’s representation that his cell phone number is associated
with Texas, the record includes no evidence showing that Platinum knew that
Cantu was a Texas resident.1
See Cantu Decl. ¶ 8 (stating that Cantu told
representative that he was not interested and asked that calls cease but not
alleging that he told representative that he was a Texas resident). Because the
representation that Platinum called a cell phone number in an area code associated
with Texas when it reached Cantu does not, in and of itself, establish Platinum’s
purposeful availment of the benefits and protections of Texas law, the record does
not allow this Court to exercise personal jurisdiction over Platinum. See Sojka,
2015 WL 2444506, at *3; Cunningham, 2015 WL 475271, at *6; Michaels, 2013 WL
5970340, at *3.
V. Conclusion
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Cantu’s declaration confirms that Platinum called his cell phone. Cantu Decl. ¶¶ 4, 7. Therefore,
this case does not involve a call to a landline or a record that does not disclose what kind of phone
the plaintiff has. See Abramson v. Caribbean Cruise Line, Inc., 2014 WL 2938626, at *2, *9 (W.D.
Pa. June 30, 2014) (holding that “it can be said that Defendant CCL ‘expressly aimed their conduct
at Pennsylvania’ because the number [called] was associated with the State of Pennsylvania” by area
code but not stating whether plaintiff had a cell phone or landline (citing Marten v. Godwin, 499
F.3d 290, 296 (3d Cir. 2007))).
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For the foregoing reasons, the Court determines that the record is presently
insufficient to conclude that it has personal jurisdiction over Platinum.
Accordingly, the Court DENIES Cantu’s motion for default judgment, Dkt. No. 21,
and dismisses this case without prejudice for lack of personal jurisdiction.
It is so ORDERED.
SIGNED this 13th day of July, 2015.
___________________________________
Hilda Tagle
Senior United States District Judge
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