Accounting Outsourcing v. Verizon Wireless

• Decision Date: 05 August 2004
• Docket Number: No. CIV.A. 03-198-D-M3.,No. CIV.A. 03-468-D-M3.,No. CIV.A. 03-358-D-M3.,No. CIV.A. 03-208-D-M3.,No. CIV.A. 03-173-D-M3.,No. CIV.A. 03-169-D-M3.,No. CIV.A. 03-421-D-M3.,No. CIV.A. 03-161-D-M3.,No. CIV.A. 03-406-D-M3.,CIV.A. 03-161-D-M3.,CIV.A. 03-169-D-M3.,CIV.A. 03-173-D-M3.,CIV.A. 03-198-D-M3.,CIV.A. 03-208-D-M3.,CIV.A. 03-358-D-M3.,CIV.A. 03-406-D-M3.,CIV.A. 03-421-D-M3.,CIV.A. 03-468-D-M3.
• Citation: 329 F.Supp.2d 789
• Parties: ACCOUNTING OUTSOURCING, LLC, et al., Plaintiff, United States of America, Intervenor State of Louisiana, Intervenor v. VERIZON WIRELESS PERSONAL COMMUNICATIONS, L.P.
• Court: U.S. District Court — Middle District of Louisiana

329 F.Supp.2d 789

ACCOUNTING OUTSOURCING, LLC, et al., Plaintiff, United States of America, Intervenor State of Louisiana, Intervenor v. VERIZON WIRELESS PERSONAL COMMUNICATIONS, L.P.

No. CIV.A. 03-161-D-M3.

No. CIV.A. 03-169-D-M3.

No. CIV.A. 03-173-D-M3.

No. CIV.A. 03-198-D-M3.

No. CIV.A. 03-208-D-M3.

No. CIV.A. 03-358-D-M3.

No. CIV.A. 03-406-D-M3.

No. CIV.A. 03-421-D-M3.

No. CIV.A. 03-468-D-M3.

United States District Court, M.D. Louisiana.

August 5, 2004.

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John P. Wolff, III, Keogh, Cox & Wilson, LTD, Keith D. Jones, Philip Bohrer, Bohrer Law Firm, Christopher K. Jones, Keogh, Cox & Wilson, Baton Rouge, LA, for Plaintiff.

Dean D. Hunt, Baker & Hostetler, Houston, TX, Michael W. McKay, Michael D. Lutgring, McKay, Williamson, Lutgring & Cochran, Baton Rouge, LA, Mary McCrory Hamilton, Voorhies & Labbe', Lafayette, LA, Elizabeth Haecker Ryan, Montgomery, Barnett, Brown, Read, Hammond & Mintz, New Orleans, LA, for Defendant.

Keith D. Jones, Philip Bohrer, Bohrer Law Firm, Gary P. Koederitz, Stephen Todd Hoover, Hoover Law Firm, Baton Rouge, LA, for Consolidated Plaintiffs.

Brett P. Furr, Elisabeth Quinn Zelden, Brandon Kelly Black, Taylor, Porter, Brooks & Phillips, Stephen Paul Strohschein, Dan E. West, McGlinchey Stafford PLLC, Scott Cameron Barney, Keith Christian Armstrong, Chaffe, McCall, Phillips, Toler & Sarpy, Kirk A. Patrick, III, Heather A. Cross, Holly Jeanne Quick, Donohue Patrick PLLC, Martin E. Golden, Kantrow, Spaht, Weaver & Blitzer, Charles S. McCowan, Jr., Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, Baton Rouge, LA, George J. Krueger, Franklin C. Love, Blank Rome, LLP, Philadelphia, PA, Alex J. Peragine, Peragine & Lea, LLC, Covington, LA, Gerald A. Melchiode, Scott James Bradley, Galloway, Johnson, Tompkins, Burr & Smith, John Francis Olinde, Chaffe, McCall, Phillips, Toler & Sarpy, Robin B. Cheatham Michael Needham Mire, Adams & Reese, LLP, Peter Newton Freiberg, Jones, Verras & Freiberg, LLC, Richard E. Sarver, Barrasso Usdin Kupperman, Freeman & Sarver LLC, New Orleans, LA, Joseph C. Chautin, III, Mark Allen Balkin, Hardy, Carey & Chautin, LLP, Metairie, LA, James H. Ferrick, III, Bryan Cave LLP, St. Louis, MO, for Consolidated Defendants.

Computers Across America, Inc., Canoga Park, CA, pro se.

John Joseph, Gaupp, United States Attorney's Office, Baton Rouge, LA, for Intervenor-Plaintiff.

RULING ON MOTION TO DISMISS

BRADY, District Judge.

This action is before the court on consolidated Defendants' Motion to Dismiss (doc. 150). Consolidated Plaintiffs have filed an opposition memorandum. Additionally, because the constitutionality of a federal and a state statute are at issue, the United States and the State of Louisiana have intervened and filed their own opposition memoranda. This court's subject matter jurisdiction is based upon 28 U.S.C. § 1332.

The named Plaintiffs are suing on behalf of themselves and proposed classes of Louisiana residents who allege they received unsolicited fax advertisements from Verizon Wireless Personal Communications, L.P.; Kappa Publishing Group, Inc.; Kable Fulfillment Services of Ohio, Inc.; Satellink Paging of Georgia L.L.C.; Satellink Communications, Inc.; Computers Across America, Inc.; Rawlings Insurance Services, Inc.; Holiday Management Group, Inc.; Textron Financial Corporation; Perry Johnson, Inc.; Protus IP Solutions, Inc.; Clear Channel Communications, Inc. d/b/a Lite Rock 96.1 The River; Bridge 21, Inc.; Monroe Systems For Business, Inc.; and Everycontractor.com (collectively, "Defendants") in violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, and Louisiana's Unsolicited Telefacsimile Messages Act ("UTMA"), La. R.S. 51:1745 et seq. Plaintiffs seek statutory penalties in the amount of $500 per fax, injunctive relief, and treble damages for willful violations of the TCPA. Plaintiffs additionally seek statutory penalties between $200 and $500 per fax, costs, and attorneys' fees for violations of the UTMA.

On January 5, 2004, the Magistrate Judge granted the parties' Joint Motion for a Case Management Order, keeping these putative class actions consolidated through this court's decision on the dispositive motions and any appeal therefrom.¹ The Case Management Order provided that this court address the common legal issues involved in each action.² These issues include whether Plaintiffs have a private right of action under the TCPA; whether it is proper to bring a TCPA or an UTMA claim as a class action; and, significantly, whether the TCPA or the UTMA violates the Due Process Clause, the First Amendment, or the Fourteenth Amendment of the United States Constitution. Defendants ask this court to dismiss all claims pursuant to Fed.R.Civ.P. 12(b)(6) and 12(c).

For the following reasons, this court finds that Plaintiffs have a private right of action under the TCPA and that, in federal court, class actions are proper under both the TCPA and the UTMA. This court also holds that the civil damages provisions of the TCPA and the UTMA do not violate due process. Additionally, this court finds that the TCPA's regulation of commercial speech does not violate the First Amendment.³ Furthermore, the TCPA and the UTMA do not unconstitutionally impose strict liability for their civil damages provisions.⁴ Finally, this court refuses to consider the hypothetical FCC interpretation of the TCPA which is the subject of Defendants' equal protection challenge.

Scope of Review for Motion to Dismiss and for Motion for Judgment on the Pleadings

Fed.R.Civ.P. 12(b)(6) provides that a motion to dismiss for failure to state a claim may be granted when the complaint fails to state a legally cognizable claim. As set forth by the United States Supreme Court, "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."⁵ In deciding whether to grant a motion to dismiss for failure to state a claim, a district court must accept the facts of the complaint as true and resolve all ambiguities or doubts regarding the sufficiency of the claim in favor of the plaintiff.⁶ The complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of her claim which would entitle her to relief.⁷

Fed.R.Civ.P. 12(c) provides, in pertinent part, that "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." The motion is designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts.⁸ The court may consider as part of the pleadings any documents referred to in the plaintiff's complaint that are central to the plaintiff's claims.⁹ "[T]he central issue is whether, in the light most favorable to the plaintiff, the complaint states a valid claim for relief."¹⁰

Analysis

I Whether a Private Right of Action Exists

Defendants argue that this action should be dismissed because the TCPA requires a state to pass an enabling statute before a plaintiff is able to bring a private action for damages in that state. Plaintiffs, however, maintain that, under the TCPA, a plaintiff may bring a private right of action in a state absent state legislation prohibiting it. The basis for the parties' argument is the statutory section within the TCPA which authorizes a private right of action. The section states,

Private Right of Action. "A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State(A) an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation, (B) an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or (C) both such actions."¹¹

To date, six federal Circuit Courts of Appeals have interpreted this statutory provision when considering whether state courts have exclusive jurisdiction over private causes of action under the TCPA.¹² While these courts interpreted the same statutory provision quoted above, the courts were primarily focused on Congress's meaning of the word "may," not the meaning of the "if otherwise permitted" clause which is crucial to the issue here.¹³ Nevertheless, the language from some of these Circuit Court cases, as well as the opinions from ten state appellate courts, indicate three emerging interpretations of the TCPA's "if otherwise permitted" language.¹⁴ These interpretations have been described as the "opt-in," "opt-out," and "acknowledgment" approaches to the issue.¹⁵ For the reasons which follow, this court adopts an "acknowledgment" approach.

A. The "Opt-In" Approach

To date, only one state appellate court has specifically adopted the "opt-in" approach. In Autoflex Leasing, Inc. v. Manufacturers Auto Leasing, Inc., the Texas Court of Appeals interpreted the "if otherwise permitted" clause to mean that TCPA damage claims cannot be asserted in a state court unless that state has expressly permitted the claims by state legislation.¹⁶ In doing so, the Autoflex court stated that it based its holding on the "plain and ordinary" meaning of the statute "in order to give effect to the legislature's intent."¹⁷ The Autoflex court was one of the first state courts in the country to interpret this clause.¹⁸ Unfortunately, the Autoflex court neither explained how a "plain and ordinary" reading of the statute mandated an "opt-in" approach, nor correctly interpreted federal case law on which it relied.¹⁹ Therefore, this court does not find Autoflex at all persuasive. Moreover, requiring states to "opt-in" before they could hear...