Opinion
3:21-cv-00425
08-16-2021
BRENNAN LANDY, Plaintiff, v. NATURAL POWER SOURCES, LLC d/b/a SUNTUITY, Defendant.
MEMORANDUM AND ORDER GRANTING MOTION TO DISMISS AND ALLOWING PLAINTIFF TO AMEND COMPLAINT
PETER G. SHERIDAN, U.S.D.J.
I. Introduction
This matter comes before the Court on Defendant Natural Power Sources, LLC d/b/a Suntuity's (“Suntuity” or “Defendant”) motion to dismiss Brennan Landy's (“Plaintiff” or “Landy”) class action complaint under the Telephone Consumer Protection Act (“TCPA”), 42 U.S.C. § 227. (ECF No. 7.) The Court heard oral argument on July 20, 2021. For the reasons that follow, Defendant's motion to dismiss is granted without prejudice.
II. Background
On or around October 29, 2020, Landy received a call on his cell phone from an unknown caller who solicited him to purchase green energy products. (Compl. ¶¶ 18-20, ECF No. 1.) Landy heard a pause and click before an operator came on the line, which allegedly indicates the use of an automatic telephone dialing system (“ATDS”). (Compl. ¶ 19.)
Then, Landy was transferred to an operator named Steve who identified himself as working for U.S. Home Solar. (Compl. ¶ 21.) Landy alleges he heard a beep - but not a pause or click - before being connected with Steve. (Id.) Steve also solicited Landy to purchase green energy products. (Id.)
After speaking with Steve, Landy alleged he was transferred via a “warm transfer” to a third operator named Evelyn, from Suntuity, who solicited Landy to purchase Suntuity's solar energy products. (Compl. ¶¶ 7, 22.) Landy does not allege that he heard a pause and click before being connected to Evelyn. After the call with Evelyn concluded, Landy received a follow-up email from Brendan McGrane, another Suntuity representative, who solicited Suntuity's products. (Compl. ¶ 23.)
Neither Plaintiff nor Defendant defines this term. Its significance will be discussed in Section V.C.
Landy claims he never consented to the initial call and, therefore, it was made in violation of the TCPA. (Compl. ¶¶ 24-26). He alleges Suntuity is vicariously liable for that violation because it “knew about the calls, received the benefits of the calls, directed the calls to be placed, and ratified the calls.” (Compl. ¶ 16).
Landy asserts that he and the proposed class members sustained injuries in the form of aggravation, nuisance, invasion of privacy, monies paid to the wireless caller for the receipt of unwanted calls, interference with the use and enjoyment of their phones, depletion of battery life, and wear and tear on their phones. (Compl. ¶¶ 27, 42.) He defines the proposed class as follows:
No Consent Class: All persons in the United States who (1) from the date four years prior to the filing of this Complaint through the date notice is sent to the Class; (2) received at least one call from Defendant, or a third person acting on behalf of Defendant; (3) on the person's cellular telephone; (4) for the purpose of selling Defendant's solar products and services; (5) using the same equipment that was used to call the Plaintiffs; and (6) for whom Defendant claims it obtained prior express written consent in the same manner as Defendant claims it obtained prior express written consent to call the Plaintiffs.(Compl. ¶ 29.) Landy alleges that his claims are typical of the class members, he can adequately represent the class, there are common questions of law and fact, Defendant's conduct is common to all class members, and the class members are too numerous to be individually joined. (Compl. ¶¶ 31-35.)
Landy timely filed his complaint on January 8, 2021. See 28 U.S.C. § 1658; Weitzner v. Sanofi Pasteur Inc., 909 F.3d 604, 608 (3d Cir. 2018). He seeks an injunction against further unauthorized calls, as well as statutory damages and attorneys' fees for class members under the TCPA's private right of action provision, 47 U.S.C. § 227(b)(3)(B). (Compl. ¶¶ 28, 42.)
III. Jurisdiction & Venue
This Court has original jurisdiction over this matter pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332, “because each of the alleged Classes consists of over 100 persons, there is minimal diversity, and the claims of the class members when aggregated together exceeds $5 million.” (Compl. ¶ 5.) Venue is proper under 28 U.S.C. § 1391(b) because Suntuity's headquarters are in New Jersey. (Compl. ¶ 7.)
IV. Legal Standard
Under Fed.R.Civ.P. 8(a)(2), a complaint “requires only a short and plain statement of the claim showing that the pleader is entitled to relief.” A motion to dismiss asserts a “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). To survive a motion to dismiss, the complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220 (3d. Cir. 2011) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). This standard requires showing more than just the possibility that the defendant acted unlawfully. Id.
In reviewing a motion to dismiss, the Court “accept[s] as true all allegations in the plaintiff's complaint as well as all reasonable inferences that can be drawn from them, and we construe them in a light most favorable to the non-movant.” Monroe v. Beard, 536 F.3d 198, 205 (3d. Cir. 2008). The court should disregard legal conclusions and “recitals of the elements of a cause of action, supported by mere conclusory statements.” Santiago v. Warminster Township, 629 F.3d 121, 128 (3d. Cir. 2010) (quoting Iqbal, 556 U.S. at 678).
The Third Circuit set forth a three-part test for determining whether or not a complaint may survive a motion to dismiss for failure to state a claim:
First, the court must “tak[e] note of the elements a plaintiff must plead to state a claim.” Second, the court should identify allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth.” Finally, “where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.”Id. at 130 (alteration in original) (quoting Iqbal, 556 U.S. at 675, 679).
V. Discussion
A. TCPA Claim
“To assert a claim under the TCPA's autodialer provision, 47 U.S.C. § 227(b)(1)(A)(iii), a plaintiff must show that the defendant: (1) called her cell phone; (2) using an automatic telephone dialing system (“ATDS”); (3) without her prior express consent.” Valdes v. Century 21 Real Estate, LLC, No. CV 2:19-05411, 2019 WL 5388162, at *2 (D.N.J. Oct. 22, 2019). Pursuant to the TCPA's restrictions on use of automated telephone equipment:
(1) Prohibitions. It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States-
(A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice- [. . .]
(iii) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call, unless such call is made solely to collect a debt owed to or guaranteed by the United States.U.S.C. § 227(b)(1)(A)(iii).
Landy alleges that he was called on his cell phone without his consent. (Compl. ¶¶ 10-11.) The identity of the initial caller is unknown. (Compl. ¶ 18-20.) However, Landy alleges that because he was eventually transferred to Suntuity, the previous callers acted on Suntuity's behalf and at its direction, thereby establishing vicarious liability. (Compl. ¶ 16.)
1. Direct Liability
Courts have held that under the TCPA, 47 U.S.C. § 277(b)(1)(A)(iii), liability is imposed on the party that places the call or text. See Klein v. Just Energy Grp., Inc., No. CV 14-1050, 2016 WL 3539137, at *8 (W.D. Pa. June 29, 2016) (citing Melito v. Am. Eagle Outfitters, Inc., Civ. Act. Nos. 14-02240, 15-39, and 15-2370, 2015 WL 7736547, at *4 (S.D.N.Y. Nov. 30, 2015)). Here, Landy does not allege that Suntuity placed the initial call to Landy; he only alleges the initial caller used an ATDS to call him without his consent. Once that call was initiated, he was transferred to U.S. Home Solar and Suntuity. Therefore, Landy can only pursue a TCPA claim against Suntuity on a vicarious liability theory.
2. Vicarious Liability
An entity cannot be held liable under the TCPA “merely because they stand to benefit from the call.” Id. at *8; In re Dish Network, LLC, 28 FCC Rcd. 6574, 6593 (F.C.C. 2013). Instead, a defendant that is not the initial caller can be held vicariously liable under the TCPA based on common law agency principles. Klein v. Com. Energy, Inc., 256 F.Supp.3d 563, 584 (W.D. Pa. 2017). Vicarious liability can be established through actual authority, apparent authority, or ratification. Cunningham v. Cap. Advance Sols., LLC, Civil Action No. 17-13050 (FLW), 2018 U.S. Dist. LEXIS 197590, at *6 (D.N.J. Nov. 20, 2018). The following subsections will discuss each of those theories.
i. Actual Authority
Landy does not allege facts that establish an agency theory through actual authority. “An agent acts with actual authority when, at the time of taking action that has legal consequences for the principal, the agent reasonably believes, in accordance with the principal's manifestations to the agent, that the principal wishes the agent so to act.” Cunningham 2018 WL 6061405, at *17 (quoting Covington v. Int'l Ass'n of Approved Basketball Offs., 710 F.3d 114, 120 (3d Cir. 2013)).
A plaintiff sufficiently pleads actual authority when the allegations establish that the defendant consented to or directed the agent to act on its behalf. Cunningham, 2018 WL 6061405, at *18. In Cunningham, the plaintiff alleged that, pursuant to a contract, Capital Advance Solutions, LLC (“Capital”), placed telemarketing calls on behalf of the bank defendants and received a commission for each successful loan solicitation. Id. at *7. Further, Capital allegedly facilitated the submission of loan applications to the bank defendants, as acknowledged in the approval and rejection letters the defendants sent to loan applicants. Id. Based on those allegations, the court could “reasonably infer that the Bank Defendants exercised a certain level of control over, or, at a minimum, were aware of, Capital's telemarketing efforts.” Id.
Landy does not allege any facts that establish the initial caller had actual authority to make telemarketing calls on Suntuity's behalf. Unlike Cunningham, in which the plaintiff alleged specific facts indicating the defendants directed or consented to solicitation via Capital, Landy simply alleges that because he was transferred to Suntuity, the initial caller was acting at Suntuity's direction. He does not plead facts to support his argument that Suntuity authorized the initial caller, directed them, or was aware of their conduct. As such, the complaint does not sufficiently allege an actual authority relationship between Suntuity and the initial caller.
ii. Apparent Authority
Landy does not allege enough facts to establish vicarious liability under apparent authority. “[A]pparent authority arises in those situations where the principal causes persons with whom the agent deals to reasonably believe that the agent has authority despite the absence of an actual agency relationship.” Cunningham, 2018 WL 6061405, at *6 (quoting Covington, 710 F.3d at 120). In a declaratory ruling, the Federal Communications Commission stated that:
Apparent authority may be supported by evidence that the seller allows the outside sales entity access to information and systems that normally would be within the seller's exclusive control, including: access to detailed information regarding the nature and pricing of the seller's products and services or to the seller's customer information. The ability by the outside sales entity to enter consumer information into the seller's sales or customer systems, as well as the authority to use the seller's trade name, trademark and service mark may also be relevant. It may also be persuasive that the seller approved, wrote, or reviewed the outside entity's telemarketing scripts.
In re Dish Network, LLC, 28 F.C.C. Rcd. at 6593.
A plaintiff sufficiently pleads apparent authority “when a third party reasonably believes that the . . . agent had authority to act on behalf of the principal and that belief can be traced to the principal's own manifestations.” Valdes, 2019 WL 5388162 at *4 (omission in original) (quoting In re Fresh & Process Potatoes Antitrust Litig., 834 F.Supp.2d 1141, 1167-68 (D. Idaho 2011)). In Valdes, the plaintiff alleged that defendant Century 21 was “heavily involved in realtors' unsolicited calls, ” including directing and training realtors on how to make solicitation calls and what to say. Id. Further, the defendant allegedly told callers “to identify themselves as calling on behalf of Century 21, to offer the Century 21 pledge, ” and it “facilitated realtors' access to lead lists and autodialers.” Id. Those allegations were sufficient for the court to hold that a third party could reasonably believe that the realtors had authority to act on behalf of Century 21, thereby establishing apparent authority. Id.
Unlike the plaintiff in Valdes, Landy does not plead any facts that indicate Suntuity's conduct led him to reasonably believe the initial caller had authority to act on Suntuity's behalf. He merely alleges that, because he was transferred to Suntuity and was solicited to buy green energy products, Suntuity must have directed the initial call and known about the initial caller's TCPA violation. Landy's complaint, however, does not assert facts that suggest the initial caller had any relationship with Suntuity, or that would lead a reasonable person to believe the initial caller had authority to act on Suntuity's behalf.
Further, Landy's allegation that Suntuity sent a follow-up email to solicit its products does not support an apparent authority theory. In Smith v. Vision Solar, the plaintiffs received telemarketing calls from an Exchange Energy representative, who attempted to sell solar products and stated that Vision Solar would contact them to follow up. Smith v. Vision Solar LLC, No. CV 20-2185, 2020 WL 7230975, at *1-2 (E.D. Pa. Dec. 8, 2020). After the initial call from Exchange Energy, Vision Solar called at least one plaintiff to follow up about the solar products. Id. Apparent authority was established because the plaintiff alleged that the “purported principal followed-up with the plaintiff after she provided information to the telemarketer, thereby demonstrating that the principal knew of and benefited from the marketing calls.” Id. at *3. By contrast, Landy does not allege that the initial caller referenced Suntuity, told him to expect contact from Suntuity, or otherwise indicated a relationship with Suntuity.
Iii. Ratification
Finally, Landy does not plead facts that support an agency theory based on ratification.
(1) Ratification is the affirmance of a prior act done by another, whereby the act is given effect as if done by an agent acting with actual authority.
(2) A person ratifies an act by
(a) manifesting assent that the act shall affect the person's legal relations, or
(b) conduct that justifies a reasonable assumption that the person so consents.
Restatement (Third) Of Agency § 4.01 (2006).
A plaintiff must plead facts that indicate the defendant consented to the initial caller making calls on the defendant's behalf. Just Energy, 2016 WL 3539137, at *12. In Just Energy, the plaintiff alleged that the defendant ratified telemarketing and debt collection calls made by Collectcents employees, who identified themselves as “Just Energy” during the phone calls. Id. at *4, 12. The court rejected the plaintiff's argument that the defendant consented to Collectcents' conduct simply because it might have received a benefit from the calls. Id. At *12. Because the plaintiff's allegation was based on speculation that the defendants could be receiving a benefit, and there was no evidence of defendant's affirmance, assent, or consent, the facts pleaded were insufficient to support a ratification theory. Id.
Similarly, Landy's complaint does not include facts that show Suntuity manifested assent to the initial caller calling on its behalf. Like the plaintiff in Just Energy, Landy speculates that because he was eventually transferred to Suntuity and solicited to buy green energy products, Suntuity must have assented to and received a benefit from the prior callers' actions. Such speculative allegations are insufficient to allege an agency relationship based on ratification.
In sum, Landy's complaint does not allege enough facts to indicate that there was an agency relationship between the initial caller and Suntuity. As such, he has failed to allege that Suntuity can be held vicariously liable for the initial caller's TCPA violations.
B. ATDS
To support a claim under the TCPA, the plaintiff must demonstrate the nonconsensual call was made using an ATDS. See 47 U.S.C § 227(b)(1)(A)(iii). The TCPA defines an ATDS as “equipment which has the capacity - (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1). In the Third Circuit, pleading that there was a brief pause or silence before the operator speaks is sufficient to allege the use of an ATDS. Hazan v. Wells Fargo Home Mortg., No. CV1810228 (MAS/TJB), 2020 WL 919183, at *3 (D.N.J. Feb. 26, 2020). Thus, Landy's allegation that he heard a pause before the operator of the initial call came on the line is sufficient to allege that an ATDS was used. (See Compl. ¶ 19.)
C. Consent
To allege a violation under the TCPA, the call must be made without the called party's prior express consent. 47 U.S.C. § 227(b)(1)(A); Valdes, 2019 WL 5388162 at *2. Suntuity argues that, because Landy admitted he was transferred to Evelyn via a “warm transfer, ” he consented to speak to Suntuity. However, neither party defines the term “warm transfer.” A warm transfer occurs when the first operator stays on the line with the called party during a transfer until the second operator answers. See, e.g., Reeves v. Nuvox Commc'ns, No. C.A.6:08-4031(HMH/WMC), 2009 WL 4016617, at *5 (D.S.C. Nov. 18, 2009), aff'd sub nom. Reeves v. Nuvox Commc'ns, Inc., 384 Fed.Appx. 255 (4th Cir. 2010); Tate v. Washington Mut., No. 02 C 5853, 2004 WL 1794924, at *1 (N.D. Ill. Aug. 10, 2004). That definition does not imply that the called party consented to speak to either operator.
VI. Conclusion
Because Landy does not provide enough facts to plausibly allege a claim against Suntuity under the TCPA, Defendant's motion to dismiss shall be granted without prejudice. Landy shall have 30 days to file an amended complaint if he wishes to do so. Defendant may move to dismiss the amended complaint in accordance with the timeframes set forth in the Federal Rules of Civil Procedure.
ORDER
THIS MATTER having come before the Court on a motion to dismiss filed by Defendant Natural Power Sources, LLC d/b/a Suntuity (ECF No. 7); and the Court having carefully reviewed and taken into consideration the submissions of the parties, as well as the arguments and exhibits therein presented; and for good cause shown; and for all of the foregoing reasons, IT IS on this 16th day of August, 2021, ORDERED that Defendants' motion to dismiss is granted without prejudice, and it is further
ORDERED that Landy will have 30 days to file an amended complaint.