Opinion
CV 05-6348 RSWL (Ex).
May 9, 2006
ORDER
Currently before this Court are (1) Defendants Vision Lab Telecommunications, Inc., Amin El-Gazzar, Uwe Hinderer, Thomas Wawra, and Pasquale Giordano's Motion to Dismiss Plaintiff's Third Amended Complaint under FRCP 12(b)(6); and (2) Motion for More Definite Statement under FRCP 12(e); and (3) Defendants Amin El-Gazzar, Uwe Hinderer, Thomas Wawra, and Pasquale Giordano's Motion to Dismiss for lack of personal jurisdiction; and (4) Venali, Inc., and VL.Net Technologies, Inc.'s Joinder in Defendants' Motion to Dismiss the Third Amended Complaint.
Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Central District Local Rule 7-15, the motions were taken under submission on April 4, 2006. Having considered all of the papers submitted on the matters, THE COURT NOW FINDS AND RULES AS FOLLOWS:
As a preliminary matter, Defendants Venali, Inc., and VL.Net Technologies, Inc.'s Motion for Joinder in Defendants' Motion to Dismiss the Third Amended Complaint is GRANTED.
Regarding, Defendants' Motion to Dismiss for lack of personal jurisdiction, this Court continues the motion allowing for limited discovery and requires the parties submit additional briefing. This Court finds that general jurisdiction does not exist, but a question remains whether Individual Defendants are subject to this Court's specific jurisdiction.
Plaintiff's Third Amended Complaint makes it difficult to distinguish between the alleged conduct of the Corporate Defendants and the Individual Defendants. There is no delineation as to what behavior is specifically alleged as to the Individual Defendants. Nor is there a distinction amongst the Individual Defendants as to what conduct subjects each of them to personal jurisdiction in this forum.
Therefore, this Court GRANTS Plaintiff's request to conduct limited discovery on the question of personal jurisdiction over the Individual Defendants. Plaintiff is given 90 days of limited discovery from the date of this Order.
This Court continues Defendants Amin El-Gazzar, Uwe Hinderer, Thomas Wawra, and Pasquale Giordano's Motions to Dismiss for lack of personal jurisdiction and for a more definite statement and requires the parties submit additional briefing for a hearing set on September 11, 2006.
As to Defendants Vision Lab Telecommunications, Inc., Amin El-Gazzar, Uwe Hinderer, Thomas Wawra, and Pasquale Giordano's (1) Motion to Dismiss Plaintiff's Third Amended Complaint under FRCP 12(b)(6) and (2) Motion for More Definite Statement under FRCP 12(e), this Court GRANTS IN PART and DENIES IN PART.
Regarding Plaintiff's claims for violations of the Telephone Consumer Protection Act (the "TCPA") 47 U.S.C. § 227(b)(2)(C), this Court DENIES Defendants' Motion to Dismiss.
This Court finds that Plaintiff has standing to bring claims pursuant to Section 227(b)(3), since Plaintiff alleges it has suffered injury due to the violations. This Court also finds that Plaintiff has standing to bring claims assigned to it by its customers.
This Court finds that the TCPA is silent as to whether claims arising under it are assignable. But, where there is a federal question which cannot be answered by federal statutes alone, common law may be used to fill the gaps. D'Oench, Duhme Co. v. FDIC, 315 U.S. 447, 469-72 (1942).
Here, purely personal tort causes of action are not assignable in California. Murphy v. Allstate Ins. Co., 17 Cal. 3d 937, 941 (1976). However, torts affecting property are assignable. Auslen v. Thompson, 38 Cal. App. 2d 204, 214 (1940). A Colorado has held that the TCPA is "designed to protect privacy interests." US Fax Law Center, Inc. v. iHire, Inc., 362 F. Supp. 2d 1248, 1252 (D.C. Colo. 2005); see also, Martinez v. Green, 131 P.3d 492 (Ariz.Ct.App. Apr. 6, 2006).
But, this Court finds that an examination of the statute's legislative history shows that the purpose of the TCPA is not solely to protect privacy. Rather, when Congress enacted section 227, privacy was not the only interest it sought to protect.
Congress enacted the TCPA as a supplement to state efforts to regulate telemarketing activities. This nonconsensual telemarketing activity was viewed by Congress as an invasion of privacy, an impediment to interstate commerce, and a disruption to essential public safety services.Chair King, Inc. v. Houston Cellular Corp., 131 F.3d 507, 513 (5th Cir. 1997).
This Court also finds that when the TCPA was amended to include the Junk Fax Prevention Act in July, 2005, Congressman Markey stated at the hearing that:
Every time someone junk faxes you, it is your paper that is coming out of the machine. You are paying for that paper. Your machine is tied up. It is just absolutely one of the most irritating things to people, to have to pay for someone else coming into your home or your business when you do not want them there. It is essentially a tax which is paid by the recipient of something that they never asked for in the first place.
Hence, this Court finds that the ban on unsolicited faxes in the TCPA addresses both property violations and privacy concerns. As property torts, the clients' claims are assignable to Plaintiff.
While there is some debate among courts, this Court finds that the TCPA is remedial and not penal in nature; and therefore the claims are assignable. See Hooters of Augusta v. American Global Ins. Co., 272 F. Supp. 2d 1365, 1375 (S.D. Ga. 2003) (citing toU.S. v. NEC Corp., 11 F.3d 136, 137 (11th Cir. 1993)); but see,US Fax Law Center, Inc. v. iHire, Inc., 362 F. Supp. 2d 1248, 1252 (D.C. Colo. 2005).
The Georgia court's reasoning is more convincing for several reasons. First, the court looked closely at the lawmakers intent in framing the TCPA. Specifically, it considered the aims of the facsimile provision within the TCPA. Second, the court took into account the lost use of the fax machine in considering the damages, while the Colorado court only assessed the cost of paper. Finally, the Colorado court is the only court to construe the TCPA as a penal statute. See Jemiola v. XYZ Corp., 802 N.E.2d 745 (Ohio 2003) (finding the TCPA is remedial); Western Rim Inv. Advisors, Inc. v. Gulf Ins. Co., 269 F. Supp. 2d 836 (N.D. Tex. 2003) (finding TCPA is not penal).
In determining whether a statute is penal or remedial, the Ninth Circuit looks to whether the wrong sought to be redressed is a wrong to the public or a wrong to the individual. Rivera v. Anaya, 726 F. 2d 564, 567 (9th Cir. 1984). Along with the reasoning articulated in Hooters of Augusta v. American Global Ins. Co., the Ninth Circuit's test favors a finding that the TCPA is remedial.
The wrongs sought to be redressed by the TCPA are wrongs to the individual including property damage. First, the TCPA remedies the shifting of advertising costs passed onto the consumer by the sending of "junk faxes" from advertisers. Additionally, the TCPA redresses the invasion of privacy individuals experience when they receive calls or fax solicitations that they did not request or consent to.
Therefore, this Court finds that the TCPA is a remedial statute and claims for its violation are assignable. Hence, this Court DENIES Defendants' Motion to Dismiss Plaintiff's assigned 47 U.S.C. § 227(b)(2)(C) claims brought on behalf of its customers.
Regarding Plaintiff's claims for violations of 47 C.F.R. § 68.318(d), the Ninth Circuit has not determined whether this regulation carries a private right of action. The district courts that have examined this issue are split. See, Adler v. Vision Lab Telecommunications, Inc., 393 F. Supp. 2d 35, 37-39 (D.D.C. 2005) (finding that 47 C.F.R. § 68.318(d) did not provide a private right of action because 47 U.S.C. § 227(b)(3) explicitly stated it was only for regulations prescribed under that subsection, which only addresses unsolicited faxes and not improperly identified faxes); Klein v. Vision Lab Telecommunications, Inc., 399 F. Supp. 2d 528, 538-39 (S.D.N.Y. 2005) (finding no private right of action in 47 C.F.R. § 68.318(d)); but see Yavitch Palmer Co., LPA v. U.S. Four Inc, 2005 WL 3244052, *5 (2005) (reasoning that 47 C.F.R. § 68.318 was promulgated under section 227, generally, and was therefore actionable).
In agreement with Adler and Klein, this Court finds that Congress explicitly added a private right of action for violations of Section 227(b), but did not give a private right of action for violations of Section 227(d). Further, this Court finds that the Junk Fax Prevention Act, which was added to Section 227(b) in 2005, contains extensive notice requirements mandating senders of faxes to identify numbers that recipients can call or contact in order to be placed on a do-not-call list. The Junk Fax Prevention Act specifically addressed notice features, but was silent on requirements for identifying (1) the fax sender; or (2) the actual fax number from which the fax was sent. Had Congress intended to include these identification requirements under Section 227(b), it would have done so.
Instead, all such identification requirements are found in Section 227(d), which was intended to regulate facsimile machines manufactured after December 20, 1992. It requires facsimile machines to mark on the fax the date, time, and identification of the sender and the telephone number from which the fax was sent.
As such, this Court finds that 47 C.F.R. § 68.318(d) was promulgated pursuant to 47 U.S.C. § 227(d)(2), which does not contain a private right of action. Therefore, this Court finds that Congress intended the Federal Communications Commission, and not private citizens, to remedy violations by facsimile manufacturers for failing to comply with the identity requirements found in Section 227(d).
However, even if the Federal Communication Commission promulgated 47 C.F.R. § 68.318(d) pursuant to 47 U.S.C. § 227(b), it can only promulgate regulations within the scope of Congress' legislation. Here, 47 U.S.C. § 227(b) does not require individual facsimile users (1) to provide the specific fax number from which the facsimile transmissions are sent; (2) the identity of the fax sender; and (3) the date and time of the transmission.
47 U.S.C. § 227(b) is silent as to these identification requirements. This section also does not regulate individual facsimile users who disguise or remove such identifying information once the machine leaves the manufacturer. Therefore, this Court cannot infer that Congress intended to give a private right of action to remedy violations not articulated in the statute.
Therefore, as to Plaintiff's claims for violations of 47 C.F.R. § 68.318(d), this Court GRANTS WITH PREJUDICE Defendants' Motion to Dismiss.
Regarding Plaintiff's claims for trespass to chattels, this Court finds that Plaintiff has sufficiently alleged that Defendants knew they were interfering with Plaintiff's equipment by sending the "junk faxes." Therefore, this Court DENIES Defendants' Motion to dismiss the trespass to chattels claim.
Regarding Plaintiff's claims pursuant to California Business Professions Code § 17200 et seq, Plaintiff has sufficiently alleged that Defendants engaged in a number of business practices that are forbidden by law. Plaintiff has alleged injury to itself and has alleged the requisite standing to bring claims under section 17200 et seq. Therefore, this Court DENIES Defendants' Motion to Dismiss as to the Section 17200 claims.
IT IS SO ORDERED.