Hodgin v. UTC Fire & Sec. Ams. Corp.

• Decision Date: 14 March 2018
• Docket Number: No. 17-1222,17-1222
• Citation: 885 F.3d 243
• Court: U.S. Court of Appeals — Fourth Circuit
• Parties: Janet HODGIN; Michael Hodgin, individually and on behalf of all others similarly situated; Dianna Mey, individually and on behalf of a class of all persons and entities similarly situated; Philip Charvat, individually and on behalf of a class of all persons and entities similarly situated, Plaintiffs–Appellants, and James G. Hough, individually and on behalf of all others similarly situated; Kerry O'Shea, on behalf of himself, and all others similarly situated; George Cain, Individually and On Behalf of All Others Similarly Situated; Merrill Primack; Stewart McCaw; Nicholas Shreders, on behalf of plaintiff and a class; Jonathan Mraunac; Vincent Brizgys ; Craig Cunningham ; Kenneth Moser ; Bill Garcia ; Bryan Anthony Reo; Anthony Cherter; Bruce Rorty ; Edith Bowler; Kenneth Clark; James Giles; Jason Bennett; Sandra Fairley; Scott Dolemba, on behalf of plaintiff and a class; Allen Beaver; Dakota Dalton; Diane Elder ; Michelle Wakeley; Keith Finklea; Todd C. Bank; Newton Vaughn, an individual; Stewart N. Abramson; Lawrence Tarizzo, individually and on behalf of all others similarly situated; Darren R. Newhart; Brandon Frazer; Yvette Corralez–Estrada–Diaz; John Geraci ; Shane Meyers; Matthew Barger; Jeffery Wagy, Plaintiffs, v. UTC FIRE & SECURITY AMERICAS CORP., INC. ; Honeywell International, Incorporated, Defendants–Appellees, and Versatile Marketing Solutions, Inc., d/b/a VMS Alarms, d/b/a VMS Alliance Security, d/b/a Alliance Home Protection; Lisa Haddad, d/b/a CCA Services LLC, d/b/a Alarmillinois.com, d/b/a Alarmindiana.com; Does 1–10; Home Security Solutions, Inc; John and Jane Does 1–10; Brian Fabiano; Ryan J. Newcomer; Does 1–25; 2 GIG Technology; Jasjit, a/k/a Jay Gotra; Secure 1 Systems ; Mike Mavarro; UTC Fire and America's Corporation; Kathy McDonald, a/k/a Kathy Mardaresco; The Altitude Group, LLC, d/b/a Core Home Security; Kevin Brody; Tran Consulting Group, LLC ; United Technologies Corporation; Monitronics International, Inc.; Alliance Security, Inc., d/b/a AH Security, Inc, formerly doing business as Versatile Marketing Solutions, Inc., d/b/a VMS Alarms; Alliance Security LLC, a Delaware limited liability company; ISI Alarms NC Inc., a North Carolina corporation; Kevin Klink; Jayson Waller; Jasjit Gotra, a/k/a Jay Gotra, individually and as an Officer of Versatile Marketing Solutions, Inc.; Alliance Security; Jasjit Gotra, individually and as an officer of Versatile Marketing Solutions, Inc.; Versatile Marketing Solutions, Inc., d/b/a VMS Alarms, d/b/a VMS, d/b/a Alliance Security, d/b/a Alliance Home Protection, a California corporation, Defendants, Compliancepoint, Inc., Party–in–Interest, Chamber of Commerce of the United States of America; National Association of Manufacturers ; Security Industry Association, Amici Supporting Appellees.

885 F.3d 243

Janet HODGIN; Michael Hodgin, individually and on behalf of all others similarly situated; Dianna Mey, individually and on behalf of a class of all persons and entities similarly situated; Philip Charvat, individually and on behalf of a class of all persons and entities similarly situated, Plaintiffs–Appellants,andJames G. Hough, individually and on behalf of all others similarly situated; Kerry O'Shea, on behalf of himself, and all others similarly situated; George Cain, Individually and On Behalf of All Others Similarly Situated; Merrill Primack; Stewart McCaw; Nicholas Shreders, on behalf of plaintiff and a class; Jonathan Mraunac; Vincent Brizgys ; Craig Cunningham ; Kenneth Moser ; Bill Garcia ; Bryan Anthony Reo; Anthony Cherter; Bruce Rorty ; Edith Bowler; Kenneth Clark; James Giles; Jason Bennett; Sandra Fairley; Scott Dolemba, on behalf of plaintiff and a class; Allen Beaver; Dakota Dalton; Diane Elder ; Michelle Wakeley; Keith Finklea; Todd C. Bank; Newton Vaughn, an individual; Stewart N. Abramson; Lawrence Tarizzo, individually and on behalf of all others similarly situated; Darren R. Newhart; Brandon Frazer; Yvette Corralez–Estrada–Diaz; John Geraci ; Shane Meyers; Matthew Barger; Jeffery Wagy, Plaintiffs,

v. UTC FIRE & SECURITY AMERICAS CORP., INC. ; Honeywell International, Incorporated, Defendants–Appellees,andVersatile Marketing Solutions, Inc., d/b/a VMS Alarms, d/b/a VMS Alliance Security, d/b/a Alliance Home Protection; Lisa Haddad, d/b/a CCA Services LLC, d/b/a Alarmillinois.com, d/b/a Alarmindiana.com; Does 1–10; Home Security Solutions, Inc; John and Jane Does 1–10; Brian Fabiano; Ryan J. Newcomer; Does 1–25; 2 GIG Technology; Jasjit, a/k/a Jay Gotra; Secure 1 Systems ; Mike Mavarro; UTC Fire and America's Corporation; Kathy McDonald, a/k/a Kathy Mardaresco; The Altitude Group, LLC, d/b/a Core Home Security; Kevin Brody; Tran Consulting Group, LLC ; United Technologies Corporation; Monitronics International, Inc.; Alliance Security, Inc., d/b/a AH Security, Inc, formerly doing business as Versatile Marketing Solutions, Inc., d/b/a VMS Alarms; Alliance Security LLC, a Delaware limited liability company; ISI Alarms NC Inc., a North Carolina corporation; Kevin Klink; Jayson Waller; Jasjit Gotra, a/k/a Jay Gotra, individually and as an Officer of Versatile Marketing Solutions, Inc.; Alliance Security; Jasjit Gotra, individually and as an officer of Versatile Marketing Solutions, Inc.; Versatile Marketing Solutions, Inc., d/b/a VMS Alarms, d/b/a VMS, d/b/a Alliance Security, d/b/a Alliance Home Protection, a California corporation, Defendants,Compliancepoint, Inc., Party–in–Interest,Chamber of Commerce of the United States of America; National Association of Manufacturers ; Security Industry Association, Amici Supporting Appellees.

No. 17-1222

United States Court of Appeals, Fourth Circuit.

Argued: January 24, 2018

Decided: March 14, 2018

ARGUED: Ryan McCune Donovan, BAILEY & GLASSER, LLP, Charleston, West Virginia, for Appellants. Rebecca J. Wahlquist, SNELL & WILMER, LLP, Los Angeles, California, for Appellee UTC Fire & Security Americas Corp., Inc. Lauri Anne Mazzuchetti, KELLEY DRYE & WARREN, LLP, Parsippany, New Jersey, for Appellee Honeywell International, Incorporated. ON BRIEF: John W. Barrett, Jonathan R. Marshall, J. Zak Ritchie, BAILEY & GLASSER LLP, Charleston, West Virginia; Beth E. Terrell, TERRELL MARSHALL LAW GROUP, PLLC, Seattle, Washington, for Appellants. Glenn T. Graham, KELLEY DRYE & WARREN LLP, Parsippany, New Jersey, for Appellee Honeywell International, Incorporated. Gordon H. Copland, STEPTOE & JOHNSON PLLC, Bridgeport, West Virginia, for Appellee UTC Fire & Security Americas Corp., Inc. Kate Comerford Todd, Steven P. Lehotsky, UNITED STATES CHAMBER LITIGATION CENTER, Washington, D.C.; Thomas R. McCarthy, Bryan K. Weir, CONSOVOY MCCARTHY PARK PLLC, Arlington, Virginia, for Amici Curiae.

Before DUNCAN, KEENAN, and, DIAZ, Circuit Judges.

Affirmed by published opinion. Judge Duncan wrote the opinion, in which Judges Keenan and Diaz joined.

DUNCAN, Circuit Judge:

Plaintiffs–Appellants sued UTC Fire & Security Americas Corporation, Inc., and Honeywell International, Inc., under the Telephone Consumer Protection Act (the "TCPA"), 47 U.S.C. § 227. Although Plaintiffs did not allege that UTC and Honeywell directly violated the TCPA, they claimed that both companies were vicariously liable for illegal calls made by telemarketers promoting UTC and Honeywell products. UTC and Honeywell separately moved for summary judgment before the end of discovery. Plaintiffs opposed the motions and moved, under Federal Rule of Civil Procedure 56(d), to postpone the district court's ruling until discovery closed. The district court denied Plaintiffs' Rule 56(d) motion and granted UTC and Honeywell summary judgment.

We affirm the district court's denial of the Rule 56(d) motion because Plaintiffs failed to show that they did not have an opportunity to discover specific evidence that was essential to their opposition to summary judgment. We also affirm the court's grant of summary judgment because Plaintiffs failed to proffer more than a scintilla of evidence to support the conclusion that UTC and Honeywell were vicariously liable for the telemarketers' alleged TCPA violations.

I.

Because the facts pertaining to UTC and Honeywell are different, we discuss them separately. We begin with UTC.

A.

During the relevant period, UTC manufactured home-security systems. It sold the systems to distributors, which resold them to approximately 28,000 retailers. Once UTC sold systems to a distributor, the distributor took full title to the product. Accordingly, UTC did not receive any direct proceeds from a product's resale to a retailer or consumer.

Versatile Marketing Solutions, Inc., ("VMS") was one of the retailers that purchased UTC's home-security systems from a distributor. VMS sold the systems directly to consumers as part of a security package that included a subscription to monitoring services. It used telemarketing to sell these packages.

VMS did not have a direct purchasing relationship with UTC; it only purchased systems from UTC's distributors. However, VMS had a contractual relationship with UTC that allowed VMS to use UTC's trademarks in limited ways. The contractual relationship began in 2010 when UTC acquired GE Security, Inc., which had entered into a "dealer agreement" with VMS the previous year. UTC continued to honor the agreement after the acquisition.

The dealer agreement permitted VMS to hold itself out as an "Authorized GE Security Dealer." J.A. 802. However, the agreement prohibited VMS from using the GE Security trademark in "its corporate or business name, or within its telephone greeting, letterhead, stationary, identification badges, telemarketing scripts or direct marketing material, or promotional items." J.A. 802. The agreement also stated that the parties did not intend "to create an employment, agency, franchise or other relationship." J.A. 800. Additionally, the contract required VMS to comply with all applicable laws and regulations. Finally, the agreement entitled VMS to rebates if it purchased a minimum amount of GE Security products each year.

In 2011, UTC began to receive complaints about VMS's telemarketing practices. On August 24, 2011, for example, an individual complained that VMS had called his residence selling GE Security products even though his number was listed on the national Do–Not–Call Registry. And, in November 2011, UTC received at least two complaints stating that VMS was using robocalls to sell GE Security products.

UTC had a system for responding to complaints about its authorized dealers. This process involved contacting the complainant to explain that UTC was a manufacturer that sold exclusively to distributors and never marketed its products directly to consumers and that none of the retailers that sold UTC products were authorized to hold themselves out as representatives of UTC or GE Security. Then, UTC would ask the complainant for identifying information about the telemarketer. If the complainant provided sufficient information to identify which authorized dealer made the relevant call, UTC would relay the complaint to that dealer and take appropriate remedial action.

UTC followed this process when it received complaints about VMS, following-up with complainants and informing VMS of the grievances lodged against the telemarketer. UTC also required the head of VMS to attend an ethics presentation during which UTC reminded authorized dealers that they were prohibited from representing themselves as UTC's or GE Security's agents and were contractually obligated to comply with all applicable telemarketing laws. Finally, UTC terminated VMS's dealer agreement in April 2012 because it determined that VMS's misconduct was damaging UTC's reputation and UTC was in any event likely to lose VMS's business to a competitor.

B.

Like UTC, Honeywell manufactured hardware for home-security systems. Through a wholly-owned subsidiary called ADI Global Distribution, Honeywell sold its security products to thousands of retailers, which in turn resold them to consumers. Some, but not all, of these retailers had "sales agreements" with Honeywell that entitled them to purchase products from ADI at a favorable rate, guaranteed them a minimum supply of products every month, and allowed them to use Honeywell's logo for limited purposes.

ISI Alarms NC, Inc., was a retailer. It purchased Honeywell products from ADI and resold them to consumers as part of a security package that included a subscription to monitoring services. ISI used telemarketing to sell these packages.

From 2005 to 2012, ISI purchased Honeywell products without a sales agreement. During this time, Honeywell received several complaints that ISI was making aggressive telemarketing calls in which its employees represented themselves as Honeywell agents. The complaints cited to by Plaintiffs, however, did not...