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Lucas v. Telemarketer Calling From (407) 476-5680

United States District Court, S.D. Ohio, Western Division

June 5, 2017


          Stephanie K. Bowman Magistrate Judge.



         This case, which has been stayed since August 5, 2014 (Doc. 120), is currently before the Court regarding the United States magistrate judge's report and recommendation (Doc. 91) evaluating Defendants' motion to dismiss (Doc. 70).

         I. BACKGROUND

         This case has a long and complex procedural history which is essential to evaluating the issues presently before the Court. The following excerpt from the Court's previous Order holding in abeyance the magistrate judge's report and recommendation outlines the proceedings to that point:

It is essential to understand who the current Defendants are in this litigation and their alleged relationship to one another. The Accuardi Defendants consist of three corporate entities and three individuals. Plaintiff describes International Telephone Company (“ITC”) as a “shell company” organized in the country of Belize that does business in the United States under the name Pacific Telecom Communications Group (Third Amended Complaint (“TAC”), Doc. 59 ¶¶ 1, 45). Pacific Telecom Communications Group (“PacTel”) is a “competitive local exchange carrier” (“CLEC”) that is registered with The Public Utilities Commission of Ohio and currently licensed in other states, including Montana and Washington (TAC, Doc. 59 ¶¶ 28, 81; Doc. 70 at 3). As a CLEC, PacTel serves as an alternative to the providers that were incumbent as of the date of the enactment of the Telecommunications Act of 1996, once known as the “Baby Bells.” See Ohio Admin. Code 4901:1-7-01(C). In other words, PacTel competes with other “local” telephone companies for a consumer's residential landline subscription. Telephone Management Corporation, Inc. (“TMC”) supplies telephone numbers to its various telemarketer clients from which they make solicitation calls, and, as part of the package, provides to them a “Caller ID Name Management Service” (“CNAM-MS”).[1] Telemarketers are required to display a telephone number and name under the Federal Trade Commission's Telephone Sales Rule, see 16 C.F.R. § 310.4(a)(8)[2]; subscription to a CNAM-MS such as TMC is apparently one method to achieve compliance. Plaintiff alleges that PacTel has assigned “thousands of telephone numbers” within its control to ITC (see, e.g., TAC, Doc. 59 ¶¶ 2, 19, 30, 47, 69). In turn, ITC has “reassigned” them to (that is, permitted them to be used by) telemarketing companies such as Capital Solutions Group, S.A. (organized in Panama), All In One Service AIOS, LLC (a named Defendant) and Edwin Adquilen Valbuena Jr., a Philippine business owner doing business with ITC as VICIdial (also a named Defendant) (TAC, Doc. 59 ¶¶ 19, 30, 35, 37-38).[3]
Each time a provider “queries” a CNAM-MS database to retrieve caller ID information so that it can be displayed on a residential landline as required, it pays a business such as TMC a “dip” fee (TAC, Doc. 59 ¶¶ 2-3, 10, 52; Doc. 70 at 3). TMC then shares a portion of that fee with the client that made the telemarketing call (TAC, Doc. 59 at 55). Dip fees are financed by the revenue collected from consumers via payment of their monthly residential telephone bills (TAC, Doc. 59 ¶ 11).
We turn now to the identity, and ostensible connection between, the individual Defendants. Fred Accuardi is alleged to run ITC and be a director of PacTel and president of TMC (TAC, Doc. 59 ¶¶ 43, 93). According to Plaintiff, he has commingled his personal finances with those of ITC and TMC (TAC, Doc. 59 ¶88). Mr. Accuardi's son, F. Antone Accuardi, is legal counsel to all three entities (TAC, Doc. 59 ¶ 46). Steve Hamilton is listed as the only officer of PacTel, serving as its president, secretary, treasurer and sole director (TAC, Doc. 59 ¶ 84).
Plaintiff claims that the conduct of all Defendants, including the Accuardi Defendants, constituted violations of the federal Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, as well as the Ohio Telemarketing Act, the Ohio Telephone Solicitation Act, and the Ohio Consumer Sales Protection Act (“OCSPA”). He also sues under the common law tort theories of invasion of privacy, negligence and nuisance, and in this regard, maintains that individual Defendants Fred Accuardi, F. Antone Accuardi and Steve Hamilton are personally liable for the corporate actions of their alter egos, namely ITC and TMC in the case of the Messrs. Accuardi, and PacTel in the case of Mr. Hamilton.
The Accuardi Defendants filed a motion to dismiss all claims against them (see Doc. 70). After briefing (see Docs. 77, 80, 86), Magistrate Judge Stephanie K. Bowman issued a Report and Recommendation on March 20, 2014 (Doc. 91). Relevant to the issue at hand are those portions of her report-that we now condense-with regard to Plaintiff's claims under two provisions of the TCPA. The first makes it unlawful for a person 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 U.S.C. § 227(b)(1)(B) (emphasis added). Under the second, by virtue of subsequent regulations, telemarketers also are prohibited from making live calls to residential telephone numbers placed on the national do-not-call registry (see 47 C.F.R. § 64.1200(c)(2)), and any person who has “received more than one telephone call within any 12-month period by or on behalf of the same entity” may, in this circuit, bring suit in the district court under the auspices of federal question jurisdiction. See 42 U.S.C. § 227(c)(5) (emphasis added); Charvat v. NMP, LLC, 656 F.3d 440, 446 (6th Cir. 2011) (citing Charvat v. EchoStar Satellite, LLC, 630 F.3d 459, 465 (6th Cir. 2010)). Plaintiff urges the Court to hold the corporate entities “vicariously and/or contributorily” liable on the theory that they “assisted and facilitated” the third-party telemarketers who “initiate[ed]” the improper calls to his landline. (See TAC, Doc. 59 at ¶¶ 61, 65, 67.) The Accuardi Defendants seek dismissal on the basis of In re Dish Network, LLC, 28 FCC Rcd. 6574, 2013 WL 1934349 (May 9, 2013) (“FCC 13-54”), a Declaratory Ruling that addressed whether sellers could be held liable for calls made by third-party telemarketers. Although the term “initiate” is not defined in the statute itself or in the agency's rules, the Federal Communications Commission (“FCC”) rejected an interpretation that would have equated mere involvement with “initiat[ion.]” Id. ¶ 26. To this end, it noted “a clear distinction” between a call made by a seller itself and one made by a telemarketer on that seller's behalf. That said, however, the FCC recognized that a seller and a telemarketer are sometimes one in the same, and that, in certain instances, a seller can exert so much control over a telemarketer as to make any distinction dissolve. Id. ¶ 27. But the FCC agreed that inclusion of the phrase “on behalf of” (appearing-but not defined-in Section 227(c)(5)) allowed for a seller to be held vicariously liable under traditional agency tenets, including “not only formal agency, but also principles of apparent authority and ratification.” Id. ¶ 28.[4]
Against this backdrop, the Accuardi Defendants posit that they cannot be held vicariously liable because Plaintiff has not alleged a formal agency relationship between them and the telemarketers or pled a theory of either apparent authority or ratification. To the contrary, they highlight Plaintiff's premise that they turned a “blind eye” of sorts by consciously avoiding knowledge that the telephone numbers they assign are being used for illegal telemarketing (see TAC, Doc. 59 ¶ 2). The Magistrate Judge agrees that FCC 13-54 establishes a standard of vicarious liability “incompatible” with Plaintiff's theory of his case (Doc. 91 at 13). She rejected Plaintiff's reliance on what might appropriately be termed dicta, including but not limited to the FCC's remark that “it may well be that the Commission could ultimately decide that ‘on behalf of' liability goes beyond agency principles[]” (Id. (quoting FCC 13- 54 at ¶ 32)). She also rejected his policy arguments, among them that a failure to expand liability to the Accuardi Defendants, and those like them, will serve only to encourage illegal telemarketing through a scheme of shared revenue, with said revenue increasing with every call made (id. at 14)). Accordingly, she has recommended that the Accuardi Defendants' motion to dismiss for failure to state a claim on a theory of vicarious liability be granted. However, the Magistrate Judge reads paragraph 34 (in conjunction with paragraphs 22 and 32) of the Third Amended Complaint to be an allegation of direct liability against TMC itself as the originator of two calls (from 508-475-1352 and 508-475-1394) received by Plaintiff. In this purported circumstance, TMC “initiated” and hence stands in the shoes of a telemarketer, thus exposing it to liability for the prerecorded message left on Plaintiff's answering machine under Section 227(b)(1)(B). Therefore, the Magistrate Judge recommends that this particular TCPA claim against TMC (and Defendant Fred Accuardi) remain (Doc. 91 at 18, 33, 34). Defendants Fred Accuardi and TMC and Plaintiff have filed objections to the Report and Recommendation (see Docs. 96 and 97, respectively). Further, Plaintiff has filed a memorandum in opposition to Defendants Fred Accuardi and TMC's objection (Doc. 102), to which they have replied (Doc. 103).[5]
While the March 20, 2014 Report and Recommendation was pending before this Court, specifically on June 18, 2014, Plaintiff filed a notice with the Clerk advising that he had filed with the FCC a “Petition for Expedited Declaratory Ruling” asking the Commission to hold that “a person is vicariously or contributorily liable if that person provides substantial assistance or support to any seller or telemarketer when that person knows or consciously avoids knowing that the seller or telemarketer is engaged in any act or practice that violates 47 U.S.C. § 227(b) or (c)[]” (see Docs. 114 & 114-1 at i). He concomitantly filed the instant motion to stay (Doc. 115)[.]

(Doc 120, at 1-9)[6].

         On August 5, 2014, the Court granted Plaintiff's motion to stay and ordered that the magistrate judge's report and recommendations be held in abeyance pending the resolution of Plaintiff's petition to the FCC. (Doc. 120). The Court found that the question posed by Plaintiff's petition, while not requiring the technical expertise of the FCC, was an issue of both first impression and wide-reaching consequence. (Id. at 11). Accordingly, the Court determined that referral to the FCC under the ...

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