Mey v. Pinnacle Security LLC
Filing
34
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S 26 Motion for Summary Judgment and DENYING PLAINTIFF'S 24 Motion to Extend and Enlarge Discovery as MOOT. This action is DISMISSED and STRICKEN from the active docket of this Court. Clerk directed to enter judgment. Signed by Senior Judge Frederick P. Stamp, Jr on 9/12/12. (cc)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
DIANA MEY, individually and on behalf
of all persons and entities similarly
situated,
Plaintiffs,
v.
Civil Action No. 5:11CV47
(STAMP)
PINNACLE SECURITY, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
AND DENYING AS MOOT PLAINTIFF’S MOTION
TO EXTEND AND ENLARGE DISCOVERY
I.
Background
On January 10, 2011, the named plaintiff in the above-styled
civil action (“Mey”) received an allegedly unsolicited, automated
telephone call on a cell phone that she owned and was being used by
her
son
(“the
advertisement
(“Pinnacle”)
Call”).
for
the
goods
and
The
Call
was
defendant,
services,
allegedly
Pinnacle
and
failed
an
automated
Security,
to
LLC’s
identify
the
business, individual or other entity responsible for the initiation
of the Call.
The named plaintiff claims that the Call also failed
to include a phone number of the entity on whose behalf the Call
was made.
As a result of the Call, Mey filed this putative class action
in the Circuit Court of Ohio County, West Virginia, alleging
violations of the Telephone Consumer Protection Act, 47 U.S.C.
§ 227 (“TCPA” or “The Act”), and seeking injunctive and monetary
relief.
Mey claims that the Call violated the TCPA’s prohibition
against unsolicited, automated sales phone calls, and alleges that
Pinnacle is liable under the Act because, even if Pinnacle did not
directly place the Call, it was made on Pinnacle’s behalf.
The
complaint also raises class allegations that assert that Pinnacle
has engaged in widespread advertising via unsolicited prerecorded
telemarketing calls throughout the United States such as the one
received by the cell phone belonging to Mey.
Pinnacle then removed this case to this Court, citing federal
jurisdiction under both 28 U.S.C. §§ 1331 and 1332.
Pinnacle
asserted
that
the
TCPA
supported
Specifically,
federal
question
jurisdiction, and that diversity jurisdiction is supported both by
the named parties to this action and by the Class Action Fairness
Act of 2005, Pub. L. 109-2, 119 Stat, 4 (2005) (codified throughout
28 U.S.C.).
Following removal, this Court directed the parties to
engage in limited merits discovery prior to engaging in any class
certification related discovery.
This Court also directed the
parties to file any motions relating to that limited merits
discovery at the close of that discovery period.
Following this
limited merits discovery period, Pinnacle filed a motion for
summary judgment and Mey filed a motion to extend and enlarge
discovery.
Both of these motions are now fully briefed and ripe
for disposition by this Court.
For the reasons that follow,
2
Pinnacle’s motion for summary judgment is granted and Mey’s motion
to extend and enlarge discovery is denied as moot.
II.
Applicable Law
Under Rule 56(c) of the Federal Rules of Civil Procedure,
A party asserting that a fact cannot be or is genuinely
disputed must support the assertion by:
(A) citing to particular parts of materials in the
record, including depositions, documents, electronically
stored
information,
affidavits
or
declarations,
stipulations . . . admissions, interrogatory answers, or
other materials; or
(B) showing that the materials cited do not
establish the absence or presence of a genuine dispute,
or that an adverse party cannot produce admissible
evidence to support the fact.
Fed. R. Civ. P. 56(c).
The party seeking summary judgment bears
the initial burden of showing the absence of any genuine issues of
material fact.
(1986).
See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
“The burden then shifts to the nonmoving party to come
forward with facts sufficient to create a triable issue of fact.”
Temkin v. Frederick County Comm’rs, 945 F.2d 716, 718 (4th Cir.
1991), cert. denied, 502 U.S. 1095 (1992) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). However, as the
United States Supreme Court noted in Anderson, “Rule 56(e) itself
provides that a party opposing a properly supported motion for
summary judgment may not rest upon the mere allegations or denials
of his pleading, but . . . must set forth specific facts showing
that there is a genuine issue for trial.”
Id. at 256.
“The
inquiry performed is the threshold inquiry of determining whether
3
there is the need for a trial -- whether, in other words, there are
any genuine factual issues that properly can be resolved only by a
finder of fact because they may reasonably be resolved in favor of
either party.”
Id. at 250; see also Charbonnages de France v.
Smith, 597 F.2d 406, 414 (4th Cir. 1979) (Summary judgment “should
be granted only in those cases where it is perfectly clear that no
issue of fact is involved and inquiry into the facts is not
desirable to clarify the application of the law.” (citing Stevens
v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir. 1950))).
In Celotex, the Court stated that “the plain language of Rule
56(c) mandates the entry of summary judgment, after adequate time
for discovery and upon motion, against a party who fails to make a
showing
sufficient
to
establish
the
existence
of
an
element
essential to that party’s case, and on which that party will bear
the burden of proof at trial.”
Celotex, 477 U.S. at 322.
Summary
judgment is not appropriate until after the non-moving party has
had sufficient opportunity for discovery.
See Oksanen v. Page
Mem’l Hosp., 912 F.2d 73, 78 (4th Cir. 1990), cert. denied, 502
U.S. 1074 (1992). In reviewing the supported underlying facts, all
inferences must be viewed in the light most favorable to the party
opposing the motion.
See Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986).
4
III.
The
TCPA
was
enacted
Discussion
in
1991
to
regulate
the
growing
telemarketing industry in the United States. The Act prohibits the
placement of prerecorded telemarketing calls to telephone numbers
that have not approved of or acquiesced in the receipt of such
calls.
The Act provides two types of private rights of action for
violation of the TCPA.
First, 47 U.S.C. § 227(b)(3) provides for
a right of action “based upon a violation of [subsection (b) of the
TCPA]” for injunctive and/or monetary relief.
Secondly, 47 U.S.C.
§ 227(c)(5) provides a private right of action to those who have
“received more than one telephone call within any 12-month period
by or on behalf of the same entity in violation of the regulations
prescribed under [subsection (c)].”
Mey concedes that she only received a single call allegedly
placed on behalf of Pinnacle, and is, therefore, not eligible to
bring a claim under § 227(c)(5).
Accordingly, this case must be
construed as filed pursuant to § 227(b)(3).
She further concedes
that, because the Call was placed to a cellular telephone, if the
Call
violated
the
TCPA,
it
violated
§
227(b)(1)(A)(iii).
Additionally, for purposes of the motion for summary judgment only,
Pinnacle concedes that the Call was made to the cell phone under
Mey’s name.
The parties also agree that the Call which is the
subject of Mey’s complaint was placed not by Pinnacle directly, but
they disagree as to whether the Call may have been placed by a lead
5
generator on behalf of Pinnacle.
Accordingly, if liability is to
be assessed against Pinnacle, it must be based upon a theory of
liability which would impose liability upon Pinnacle for the call
placed by a third party.
It is on the basis of these facts that
Pinnacle asserts that summary judgment in its favor is appropriate
because, as a matter of law, § 227(b)(3) does not specifically
provide for “on behalf of” liability.
As stated above, Mey agrees that for the Call to violate the
TCPA, it must have violated § 227(b)(1)(A)(iii).
That statutory
section provides that it is a violation of the TCPA “for any person
. . . to make any call . . . using any automatic telephone dialing
system or an artificial or prerecorded voice -- to any telephone
number assigned to a . . . cellular telephone service . . . .”
Further, as quoted above, § 227(b)(3) provides a private right of
action “for the violation of” § 227(b)(1)(A)(iii).
maintains
that,
based
upon
the
plain
language
of
Pinnacle
subsection
(b)(1)(A)(iii), only those that actually place the unlawful call
can be held liable
there for.
It also asserts that this is
strengthened by the fact that § 227(b)(3) simply provides for
liability for “the violation of” subsection (b), while § 227(c)(5)
specifically provides for a private right of action for unlawful
calls “by or on behalf of” an entity.
Pinnacle argues that the
difference in language between the two grants of a private right of
action must be given effect.
6
Mey acknowledges the differences in the language of the two
right of action sections as discussed above, but asserts that
§ 225(b)(3) nonetheless provides for “on behalf of” liability,
because to find otherwise would be to frustrate Congress’s purpose
behind the TCPA.
She maintains that the purpose of the Act was to
put an end to these types of calls, without specific regard to the
entity placing such calls, and that a finding that § 227(b)(3) does
not provide for “on behalf of” liability would allow companies to
avoid liability simply by hiding behind contracted third parties.
Such an option, claims plaintiff Mey, would not put an end to the
calls
sought
to
be
prohibited
by
the
Act.
Mey
also
cites
statements by the FCC which assert that the TCPA creates strict “on
behalf of” liability generally. She urges this Court to give these
statements the controlling weight mandated by Chevron U.S.A. Inc.
v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).
However, this Court does not believe that the FCC statements
noted by Mey are entitled to Chevron deference.
Not only are the
quoted statements not part of a regulation issued by the FCC, as
Mey also outlines in her response to Pinnacle’s motion for summary
judgment, the FCC has not actually issued a defined position on
strict “on behalf of” liability under § 227(b)(3).
The Commission
is apparently currently in the process of reconsidering the extent
of such liability under subsection (b). In the Spring of 2011, the
FCC released a public notice requesting comment on the issue of
7
strict “on behalf of” liability under § 227(b)(3), and this Court
has not received information that a ruling has yet been issued on
the matter.
26 FCC Rcd 5040.
The United States Court of Appeals
for the Fourth Circuit has asserted that Chevron deference applies
to “final agency actions,” but is not appropriately applied to
“public
comments”
or
“non-final
agency
actions.”
Stone
v.
Instrumentation Lab Co., 591 F.3d 239, 245-46 (4th Cir. 2009). The
FCC quotes which Mey cites amount to just that; agency comments not
entitled to preclusive effect.
Further, this Court cannot ignore the obvious difference in
language between § 277(c)(5) and § 227(b)(3).
With regard to the
right of action created under subsection (c), Congress specifically
provided for strict “on behalf of” liability, but in creating a
right of action for violations of subsection (b), it notably made
no
mention
of
such
strict
liability.
In
interpreting
such
statutory construction, the United States Supreme Court has clearly
held that “[w]here Congress includes particular language in one
section of a statute but omits it in another section of the same
Act, it is generally presumed that Congress acts intentionally and
purposely in the disparate inclusion or exclusion.”
United States, 464 U.S. 16, 23 (1983).
Russello v.
Mey has not provided
controlling case law to support her assertion that this presumption
does not apply under the TCPA, and as above explained, has also
failed to provide sufficient evidence of the FCC’s position on the
8
issue which would convince this Court that this presumption should
be disregarded in this case.
Accordingly, this Court finds that
the TCPA does not provide strict “on behalf of” liability under
§ 277(b)(3).
See also Thomas v. Taco Bell Corp., 2012 U.S. Dist.
LEXIS 107097, No. SACV 09-01097-CJC (Cent. D. Calif. June 25, 2012)
(finding
that
no
“on
behalf
of”
liability
exists
under
§ 277(b)(3)).
However, Mey also asserts that, if strict liability is not
provided for by the Act, she may still successfully prove liability
through general tort joint venture or agency liability principles.
In response to this argument, Pinnacle maintains that, because
private actions under the TCPA are statutorily created, only
actions specifically created by the Act can be maintained.
The
TCPA does not provide for vicarious liability, so such liability
cannot be asserted.
However, this argument overlooks the United
States Supreme Court’s position on the use of common law vicarious
liability in conjunction with a statutorily created tort right of
action.
In Meyer v. Holley, 537 U.S. 280, 285 (2003), the Court
found that “when Congress creates a tort action, it legislates
against a legal background of ordinary tort-related vicarious
liability
rules
and
consequently
incorporate those rules.”
intends
its
legislation
to
It is with this position in mind that
this Court finds, because the TCPA does not explicitly foreclose
9
vicarious liability, such a theory of liability is available under
the Act.
Pinnacle argues that this finding is “absurd” in the face of
a finding that the TCPA does not provide for strict “on behalf of”
liability.
This Court disagrees.
The “on behalf of” liability
provided for by the TCPA in § 227(c)(5) is a strict liability
theory that requires no connection to the wrongdoing on the part of
the defendant outside of a showing that a call was made on its
behalf.
However, under relevant case law, in order to prove
vicarious liability under agency law, more of a connection to the
caller must be shown.
In order to prevail under this theory, Mey
must show that the actual caller “acted as an agent” of Pinnacle,
“that [Pinnacle] controlled or had the right to control them and,
more specifically, the manner and means of the [solicitation]
campaign they conducted.”
Thomas, 2012 U.S. Dist. LEXIS 107097 at
*13; see also Hooters of Augusta, Inc. v. Nicholson, 537 S.E.2d
468, 472 (Ga. Ct. App. 2000) (TCPA subsection (b) violations of an
independent contractor may only lead to liability if defendant
controlled had right to control “means, method and manner of
executing the work.”).
This finding is also in line with the purpose behind the TCPA.
Mey asserts throughout her response to the motion for summary
judgment that a finding that “on behalf of” liability is not
provided
for
by
§
227(b)(3)
would
10
result
in
the
ability
of
companies to hide behind entities that they hire to place unlawful
calls, and avoid liability.
However, if vicarious liability is
available under subsection (b), entities would not be permitted to
so hide.
While strict liability does not attach, but rather must
be premised upon some control over the calling entity, entities
with the ability to control whether calls on their behalf are made
within the confines of the law or violate the Act will still be
held liable for calls made on their behalf.
This being said, this Court finds that in this case, Mey has
failed
to
create
an
issue
of
material
fact
with
regard
to
Pinnacle’s ability to control the manner and means of the calls
made on its behalf.
Pinnacle has presented evidence, by way of an
affidavit, that calls that it makes directly are only placed by
live agents.
However, it admits that it purchases leads from
outside vendors, and that at the time of the Call, it utilized four
“outside companies” to provide sales leads.
These companies
included the entity believed to have placed the call, Elivate
Media, LLC.
Evidence provided by Pinnacle also makes clear that
Pinnacle has little to no control over the means or manner by which
these companies generate sales leads for Pinnacle. An affidavit by
Pinnacle’s
manager
of
lead
generation
asserts
that
he
was
“informed” that these lead generators utilize prerecorded calls and
that the lead generators “warrant to Pinnacle that they are fully
compliant with all state and federal laws.”
11
ECF No. 26 Ex. 2 *2.
Further,
a
second
affidavit
by
Pinnacle’s
manager
of
lead
generation asserts that, after receiving complaints regarding the
number from which the Call was placed, he endeavored to find out
whether any of the lead generators used that number, and sent
correspondence asking the lead generators if they used the number
which generated the Call or if they ever called Mey’s number.
No. 26 Ex. 3; see also ECF No. 32 Ex. 4.
ECF
The evidence presented
suggests that Pinnacle does not even have access to the records
and/or the calls made by its lead generators, let alone control
over the same.
Further, Mey has provided evidence which suggests
that the lead generators used directly by Pinnacle also outsource
lead generation for Pinnacle to third parties with which Pinnacle
has no relationship.
ECF No. 32 Ex. 4.
These statements strongly
indicate that Pinnacle plays a passive role in its interaction with
lead generators. Ms. Mey has presented no evidence to suggest that
Pinnacle has control over the means and manner by which its lead
generators place calls on its behalf.
Mey also asserts that more discovery is necessary in order to
allow her to create a genuine issue of material fact with regard to
the relationship between Pinnacle and the entity which placed the
Call.
This Court finds that the preliminary discovery period
provided
ample
opportunity
regarding this relationship.
to
determine
the
necessary
facts
In the order of this Court which set
the schedule and scope of the limited merits discovery to be
12
conducted prior to the filing of this motion for summary judgment,
this
Court
specifically
included
in
that
discovery
“the
relationship, if any, between the holder of the telephone number
[from which the Call was placed] and the defendant.
ECF No. 18 *2.
Pursuant to this order, all information regarding the extent of
this relationship was within the scope of initial discovery, and
thus should have been uncovered.
Accordingly, Mey has had a full
opportunity to provide this Court with a genuine issue of material
fact with regard to the availability of vicarious liability between
Pinnacle and the suspected caller.
Mey has failed to create such
an issue, and thus her complaint must be, and is, dismissed.
As a
result, Mey’s motion to extend and enlarge discovery is denied as
moot.
IV.
Conclusion
For the reasons stated above, Pinnacle Security LLC’s motion
for summary judgment is GRANTED.
Accordingly, Diana Mey’s motion
to extend and enlarge discovery is DENIED AS MOOT.
It is further
ORDERED that this civil action be DISMISSED and STRICKEN from the
active docket of this Court.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein. Pursuant to Federal
Rule of Civil Procedure 58, the Clerk is DIRECTED to enter judgment
for defendant Pinnacle Security, LLC in this matter.
13
DATED:
September 12, 2012
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
14
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?