Mey et al v. Honeywell International, Inc. et al

Filing 56

MEMORANDUM OPINION AND ORDER denying Honeywell International, Inc's 12 MOTION to Dismiss. Signed by Judge John T. Copenhaver, Jr. on 3/29/2013. (cc: attys; any unrepresented party) (tmr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
DIANA MEY, individually and on
behalf of a class of all
persons and entities similarly situated,
Plaintiff,
v.

Civil Action No. 2:12-1721

HONEYWELL INTERNATIONAL, INC. and
ISI ALARMS NC, INC.,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending is the motion to dismiss filed July 2, 2012, by
Honeywell International, Inc. ("Honeywell").

I.

At the heart of this action is the appropriate reach and
interpretation of the Telephone Consumer Protection Act of 1991
("TCPA" or "Act"), 47 U.S.C. § 227.

Some background about the Act

is helpful prior to considering the circumstances of this case.
The TCPA was enacted in response to "[v]oluminous consumer
complaints about abuses of telephone technology."

Mims v. Arrow

Financial Services, LLC, 132 S. Ct. 740, 744 (2012).

In Mims, the

Supreme Court summarized Congress' findings on the matter:

In enacting the TCPA, Congress made several findings . .
. . “Unrestricted telemarketing,” Congress determined,
“can be an intrusive invasion of privacy.” TCPA, 105 Stat.
2394, note following 47 U.S.C. § 227 (Congressional
Findings) (internal quotation marks omitted). In
particular, Congress reported, “[m]any consumers are
outraged over the proliferation of intrusive, nuisance
[telemarketing] calls to their homes.” Ibid. (internal
quotation marks omitted). “[A]utomated or prerecorded
telephone calls” made to private residences, Congress
found, were rightly regarded by recipients as “an invasion
of privacy.” Ibid. (internal quotation marks omitted).
Id. at 745.

The unanimous decision in Mims also isolated four

practices that the TCPA was designed to halt:
[T]he TCPA principally outlaws four practices. First, the
Act makes it unlawful to use an automatic telephone dialing
system [("autodialer")] or an artificial or prerecorded
voice message, without the prior express consent of the
called party, to call any . . . cellular telephone, or other
service for which the receiver is charged for the call.
See 47 U.S.C. § 227(b)(1)(A). Second, the TCPA forbids
using artificial or prerecorded voice messages to call
residential telephone lines without prior express
consent. § 227(b)(1)(B). Third, the Act proscribes sending
unsolicited advertisements to fax machines. § 227(b)
(1)(C). Fourth, it bans using automatic telephone dialing
systems to engage two or more of a business' telephone
lines simultaneously. § 227(b)(1)(D).
Id. at 745.
The TCPA is a remedial statute and thus entitled to a broad
construction.

See, e.g., Holmes v. Back Doctors, Ltd., 695 F.

Supp.2d 843, 854 (S.D. Ill. 2010) ("It is true that . . . the TCPA
is a remedial statute.").

As such, it "should be liberally construed

and should be interpreted (when that is possible) in a manner tending
to discourage attempted evasions by wrongdoers."

2

Scarborough v.

Atlantic Coast Line R. Co., 178 F.2d 253, 258 (4th Cir. 1950).
At the same time, a remedial purpose "will not justify reading a
provision 'more broadly than its language and the statutory scheme
reasonably permit.'” Touche Ross & Co. v. Redington, 442 U.S. 560,
578 (1979) (quoting SEC v. Sloan, 436 U.S. 103, 116 (1978)).

With these general principles in mind, the court turns to
the circumstances of this case.

II.

Plaintiff Diana Mey is a West Virginia citizen.
is a citizen of Delaware and New Jersey.

Honeywell

Defendant ISI Alarms NC,

Inc. ("ISI"), is a North Carolina corporation.1

Ms. Mey listed her

residential and mobile telephone numbers in the National Do Not Call
Registry managed by the Federal Trade Commission.

It is undisputed

that she qualifies as a protected party under the Telephone Consumer
Protection Act of 1991 ("TCPA"), 47 U.S.C. § 227.
Honeywell markets and distributes products using a
distribution network of authorized dealers.

It states on that

portion of its website to independent dealers that, "Our success is

1

Secure Home Technologies, Inc. was also originally named in
the complaint. On July 31, 2012, it was voluntarily dismissed.
3

only possible with your success. You are our business." (Compl. ¶
22).

It further states the benefits of independent dealers

"[p]artnering" with Honeywell.

(Id. ¶ 24).

It allows its

authorized dealers to market Honeywell products and services.

It

compensates authorized dealers through a structure of commission
payments based upon the amount of product and services sold.
Respecting the relationship between Honeywell and its
dealers, it is alleged that Honeywell is engaged in a partnership
and contractual association with its authorized dealers to carry out
a single business enterprise for profit.

This partnership or joint

venture includes the combination of the participants' property,
money, effects, skill, and knowledge.

During the partnership or

joint venture Honeywell delegated marketing authority to its
authorized dealers.

Consequently, it either knew or should have

known that its authorized dealers were engaged in illegal
telemarketing.

Irrespective of that fact, once it obtained actual

knowledge of the unlawful practices, it failed to take the steps
necessary to halt the misconduct.
From March 7 through April 25, 2012, Ms. Mey received at
least 18 telemarketing calls "from or on behalf of Honeywell and its
authorized dealers, including . . . ISI."

(Id. ¶ 35).

These calls

included those placed to Ms. Mey's residential phone line, her mobile
phone line, and to a mobile phone line owned by her but used as well
4

by her son.
Registry.

All of the lines appeared on the National Do Not Call
The calls were accomplished by live telemarketers and

"automatic telephone dialing system[s] [('autodialer')]" delivering
a prerecorded message.2

During several of the calls, Ms. Mey learned

that ISI was the caller, while other calls were placed by different
unidentified Honeywell dealers.

On more than one occasion a

telemarketer identified him or herself as a Honeywell representative
or that of "ISI Honeywell."

(Id. ¶ 40).

The calls were made for Honeywell's benefit and on its
behalf.

Ms. Mey also asserts that Honeywell is legally responsible

for the violations inasmuch as the calls were made by Honeywell's
agents or by third-parties engaged in a joint venture with it.
Other consumers have complained about Honeywell's
telemarketing practices.

The Federal Trade Commission has recorded

over 300 consumer complaints relating to prerecorded telemarketing
calls conducted by Honeywell's authorized dealers on behalf of
Honeywell.
On April 30, 2012, Ms. Mey instituted a putative class
action against Honeywell and ISI in the Circuit Court of Kanawha

2

An autodialer is defined by the TCPA as equipment used "to store
or produce telephone numbers to be called, using a random or
sequential number generator . . . [that then is used] to dial
such numbers." 47 U.S.C. 227(a)(1)(A) and (B).
5

County.

Her complaint asserts three TCPA claims as follows: (1)

soliciting by telephone, or having others do so on their behalves,
Ms. Mey's numbers listed on the National Do Not Call Registry, in
violation of 47 U.S.C. § 227(c) and 47 C.F.R. § 64.1200(c)(2) (Count
One), (2) using prerecorded or autodialer calls to contact, or having
others do so on their behalves, nonconsenting residential telephone
users, in violation of 47 U.S.C. § 227(b)(1)(B) and 47 C.F.R. §
64.1200(a)(2)(Count Two), and (3) initiating telemarketing calls to
mobile phones, or having others do so on their behalves, by use of
an ("autodialer") or prerecorded voice, in violation of 47 U.S.C.
§ 227(b)(i) and 47 C.F.R. § 64.1200(a)(1)(iii) (Count Three).3

Ms.

Mey seeks injunctive relief barring future TCPA violations, along
with statutory damages of $500 for each negligent violation of the
TCPA and $1,500 for each knowing violation.
On July 2, 2012, Honeywell moved to dismiss.

It asserts

that section 227 does not create liability for a person or entity
who did not initiate or make the telephone call at issue, and the
Federal Communications Act, in which the TCPA is found, does not
create vicarious or agency liability for entities who do not use the
telephone.

3

Count Four is simply a request for injunctive relief to halt
alleged future TCPA violations.
6

II.

A.

Governing Standard

Federal Rule of Civil Procedure 8(a)(2) requires that a
pleader provide “a short and plain statement of the claim showing
. . . entitle[ment] to relief.”

Fed. R. Civ. P. 8(a)(2); Erickson

v. Pardus, 127 S. Ct. 2197, 2200 (2007).

Rule 12(b)(6)

correspondingly permits a defendant to challenge a complaint when
it “fail[s] to state a claim upon which relief can be granted . .
. .”

Fed. R. Civ. P. 12(b)(6).
The required “short and plain statement” must provide

“‘fair notice of what the . . . claim is and the grounds upon which
it rests.’”

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007)

(quoting Conley v. Gibson, 355 U.S. 41, 47 (1957), overruled on other
grounds, Twombly, 550 U.S. at 563); see also Anderson v. Sara Lee
Corp., 508 F.3d 181, 188 (4th Cir. 2007).

In order to survive a

motion to dismiss, “a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’”

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949

(2009) (quoting Twombly, 550 U.S. at 570); see also Monroe v. City
of Charlottesville, 579 F.3d 380, 386 (4th Cir. 2009).

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Application of the Rule 12(b)(6) standard requires that
the court “‘accept as true all of the factual allegations contained
in the complaint . . . .’”

Erickson, 127 S. Ct. at 2200 (quoting

Twombly, 127 S. Ct. at 1965); see also South Carolina Dept. Of Health
And Environmental Control v. Commerce and Industry Ins. Co., 372 F.3d
245, 255 (4th Cir. 2004) (quoting Franks v. Ross, 313 F.3d 184, 192
(4th Cir. 2002)).

The court must also “draw[] all reasonable . .

. inferences from th[e] facts in the plaintiff's favor . . . .”
Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).

B.

Analysis

The statutory and regulatory language supporting each of
Ms. Mey's claims appears below:
Count One: 47 U.S.C. § 227(c)4

and 47 C.F.R. § 64.1200(c)(2)

47 U.S.C. § 227(c)(5): A person who has 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 this subsection may . . . [bring an
appropriate action(s), PROVIDED that] . . . [i]t shall be
an affirmative defense in any action brought under this
paragraph that the defendant has established and
implemented, with due care, reasonable practices and

4

It is presumed that counsel wished to reference section
227(c)(5), which is the TCPA provision authorizing a private
right of action. The balance of the subsection addresses
rulemaking proceedings, creation of the National Do Not Call
Registry, regulatory authority, and other administrative
measures.
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procedures to effectively prevent telephone solicitations
in violation of the regulations prescribed under this
subsection. If the court finds that the defendant
willfully or knowingly violated the regulations
prescribed under this subsection, the court may, in its
discretion, increase the amount of the award to an amount
equal to not more than 3 times the amount available under
subparagraph (B) of this paragraph. (emphasis added).
47 C.F.R. § 64.1200(c)(2): No person or entity shall
initiate any telephone solicitation to . . . [a]
residential telephone subscriber who has registered his
or her telephone number on the national do-not-call
registry of persons who do not wish to receive telephone
solicitations that is maintained by the Federal
Government. . . . Any person or entity making telephone
solicitations (or on whose behalf telephone solicitations
are made) will not be liable for violating this requirement
if [it can demonstrate the violation was an error, along
with other requirements]. (emphasis added)
Count Two: 47 U.S.C. § 227(b)(1)(B) and 47 C.F.R. § 64.1200(a)(2)
47 U.S.C. § 227(b)(1)(B): It shall be unlawful for any
person within the United States . . . 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 C.F.R. § 64.1200(a)(2): No person or entity may . .
. [i]nitiate, or cause to be initiated, any telephone call
that includes or introduces an advertisement or
constitutes telemarketing, using an . . . [autodialer] or
an artificial or prerecorded voice . . . . (emphasis
added).
Count Three: 47 U.S.C. § 227(b)(i)5 and 47 C.F.R. §
64.1200(a)(1)(iii)

5

Code section 227(b) does not contain a subdivision (i). It
appears Ms. Mey intended to reference Code section 227(b)(1)
(A)(iii).
9

47 U.S.C. § 227(b)(1)(A)(iii): It shall be unlawful for
any person within the United States . . . to make any call
. . . using any . . . [autodialer] or an artificial or
prerecorded voice . . . to any telephone number assigned
to a . . . cellular telephone service. . . or any service
for which the called party is charged for the call . . .
.
47 C.F.R. § 64.1200(a)(1)(iii): No person or entity may
. . . initiate any telephone call . . . using an . . .
[autodialer] or an artificial or prerecorded voice . . .
[t]o any telephone number assigned to a . . . cellular
telephone service . . . or any service for which the called
party is charged for the call.
It appears that some of the statutory and regulatory
provisions above contemplate third-party, or "on behalf of,"
liability for commercial entities that retain telemarketers to
advertise their products or services.

Apart from the statutory

language, however, such remote liability is not uncommon.
In Meyer v. Holley, 537 U.S. 280 (2003), the Supreme Court
addressed whether a provision of The Fair Housing Act, which forbids
racial discrimination in the sale or rental of a dwelling, imposes
personal liability without fault upon an officer or owner of a
residential real estate corporation for the unlawful activity of the
corporation's employee or agent.

The Fair Housing Act, like the

TCPA, said nothing respecting the matter of vicarious liability.
Answering the question presented in the affirmative, Justice Breyer
observed as follows for the unanimous Court:
This Court has noted that an action brought for
compensation by a victim of housing discrimination is, in
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effect, a tort action. And the Court has assumed that, when
Congress creates a tort action, it legislates against a
legal background of ordinary tort-related vicarious
liability rules and consequently intends its legislation
to incorporate those rules. . . .
It is well established that traditional vicarious
liability rules ordinarily make principals or employers
vicariously liable for acts of their agents or employees
in the scope of their authority or employment.
Id. at 285 (emphasis added) (citations omitted).
There is district court authority for applying the rule
in Meyer to the TCPA setting.

See, e.g., Thomas v. Taco Bell Corp.,

879 F. Supp.2d 1079, 1084 (C.D. Cal. 2012) ("Absent a clear expression
of Congressional intent to apply another standard, the Court must
presume that Congress intended to apply the traditional standards
of vicarious liability with which it is presumed to be familiar,
including the alter ego and agency doctrines"); Accounting
Outsourcing, LLC. v. Verizon Wireless Personal Communications, L.P.,
329 F. Supp.2d 789, 806 (M.D. La. 2004)("According to the Supreme
Court in Meyer v. Holley, congressional tort actions implicitly
include the doctrine of vicarious liability, whereby employers are
liable for the acts of their agents and employees. In Meyer, the
Supreme Court applied the doctrine of vicarious liability to the Fair
Housing Act, despite the Congress's silence on the subject.

In this

case, Congress did not explicitly apply the doctrine of vicarious
liability to the TCPA.

Nevertheless, given the Supreme Court's

11

ruling in Meyer, this court finds that persons of common intelligence
would know that the TCPA applies to advertisers.").
According to the well-settled legal background in
existence at the time of the TCPA's enactment, an agency relationship
arises within a partnership or joint venture:
With respect to the power of one joint venturer to bind
the others, a joint venture generally creates a mutual
agency similar to that which prevails in a partnership .
. . . " Unlike cotenants, there is a confidential and
fiducial relationship between co-adventurers. Each member
acts individually and as agent for other members within
the general scope of the enterprise. Being closely akin
to a partnership, the law of partnership and principal and
agent underlies the conduct of the venture, and governs
the rights and liabilities of co-adventurers, and of third
parties as well."
12 Richard A. Lord, Williston on Contracts § 35:75 (4th ed. elec.
2012) (footnotes omitted) (citation omitted); see also 46 Am. Jur.
2d Joint Ventures § 34 ("The law of partnership and of principal and
agent underlies the conduct of a coadventurer and governs the rights
and liabilities of coadventurers and third parties as well. In
accordance with the general rule that each member of a joint venture
is deemed to be the agent of the other when acting in furtherance
of the common objective, coventurers are agents of each other as to
third parties for all acts within the scope of the enterprise if the
joint venturer has authority to act.") (footnotes omitted); 14 Lee
S. Kreindler et al., N.Y. Prac., New York Law of Torts § 9:1("It is
a basic principle of tort law that a principal is vicariously liable

12

for the torts of its agents committed in the course or scope of the
agency or employment. Similarly, principles of vicarious liability
may be invoked to hold a general partner or joint venturer liable
for torts committed by other general partners or joint venturers.")
(footnotes omitted).
These familiar rules of vicarious liability, along with
the analysis found in Meyer, are significant here.

Ms. Mey asserts

that Honeywell allows its authorized dealers to market Honeywell
products and services.

She also claims that authorized dealer

compensation includes a structure of commission payments based upon
the amount of products and services sold.

Respecting the business

relationship between Honeywell and the authorized dealers, she notes
that there exists either a partnership or a contractual association
to carry out a single business enterprise for profit.

The asserted

business combination includes the combination of the participants'
property, money, effects, skill, and knowledge, with the specific
delegation by Honeywell of its marketing authority to its authorized
dealers.

There are other allegations to similar effect, noting

Honeywell's statement to its authorized dealers that its "success
is only possible with . . . [the authorized dealers'] success" and
that the authorized dealers are Honeywell's "business."
22).

13

(Compl. ¶

Apart from vicarious liability, however, it appears that
Ms. Mey alleges that Honeywell is directly at fault.

As noted, from

March 7 through April 25 2012, Ms. Mey received at least 18
telemarketing calls "from or on behalf of Honeywell and its
authorized dealers, including ISI."

(Id. ¶ 35).

On more than one

occasion, a telemarketer identified him or herself as a Honeywell
representative or that of "ISI Honeywell."

(Id. ¶ 40).

Under these circumstances, the court concludes that Ms.
Mey has minimally alleged a plausible claim against Honeywell.

It

is, accordingly, ORDERED that Honeywell's motion to dismiss be, and
it hereby is, denied.

The Clerk is requested to transmit this written opinion
and order to counsel of record and to any unrepresented parties.
DATED:

March 29, 2013

John T. Copenhaver, Jr.
United States District Judge

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