Bais Yaakov Valley v. Educ. Testing Serv.

• Decision Date: 08 May 2017
• Docket Number: No. 13-CV-4577 (KMK).,13-CV-4577 (KMK).
• Citation: 251 F.Supp.3d 724
• Parties: BAIS YAAKOV OF SPRING VALLEY, on behalf of itself and all others similarly situated, Plaintiff, v. EDUCATIONAL TESTING SERVICE, Defendant.
• Court: U.S. District Court — Southern District of New York

251 F.Supp.3d 724

BAIS YAAKOV OF SPRING VALLEY, on behalf of itself and all others similarly situated, Plaintiff,

v.EDUCATIONAL TESTING SERVICE, Defendant.

No. 13-CV-4577 (KMK).

United States District Court, S.D. New York.

Signed May 8, 2017

Aytan Y. Bellin, Esq., Erik L. Shawn, Esq., Bellin & Associates, White Plains, NY, Counsel for Plaintiff

Roger Furman, Esq., Los Angeles, CA, Counsel for Plaintiff

Andrew S. Kleinfeld, Esq., Brandy H. Ranjan, Esq., J. Todd Kennard, Esq., Michael M. Klotz, Esq., William J. Hine, Esq., Jones Day, New York, NY, Columbus, OH, Counsel for Defendant

OPINION & ORDER

KENNETH M. KARAS, District Judge:

Plaintiff Bais Yaakov ("Plaintiff") brings this class action suit against Defendant Educational Testing Service ("ETS" or "Defendant"), alleging that ETS caused to be sent out over 17,000 unsolicited and solicited fax advertisements for goods and services without the proper opt-out notices in violation of the Telephone Consumer Protection Act (the "TCPA"), 47 U.S.C. § 227, and N.Y. General Business Law ("GBL") § 396–aa. (See Second Am. Compl. (Dkt. No. 79).) There are three Motions pending before the Court: a motion by ETS to allow ETS to deposit $10,500 with the Court in full satisfaction of Plaintiff's individual claims pursuant to Federal Rule of Civil Procedure 67, have the Court enter judgment against ETS, and dismiss the case as moot; a motion by ETS to dismiss the Second Amended Complaint under Rules 8(a) and 12(b)(6); and a motion by Plaintiff to certify a class. This Opinion & Order addresses only the first two Motions. For the reasons to follow, Defendant's Motions are denied.

I. Background

A. Factual Background

For purposes of these Motions, the Court takes as true all factual allegations in the Second Amended Complaint.

Plaintiff is a New York corporation with its principal place of business in Monsey, New York, and ETS is a New York corporation with its principal place of business in Princeton, New Jersey. (See id. ¶¶ 6, 9.) At its place of business in Monsey, Plaintiff receives facsimile transmissions (i.e., faxes) at a number it owns. (See id. ¶ 11.) On or about November 15, 2012, ETS and the other named Defendants, without Plaintiff's express invitation or permission, caused an unsolicited fax advertisement to be sent to Plaintiff's fax machine. (See id. ¶ 12; see also id. Ex. A.) The fax contained an opt-out notice that provided:

If you do not wish to receive faxes from Houghton Mifflin Harcourt in the future, and/or if you would prefer to receive communication via email, please contact your representative. Upon your request, we will remove you from our fax transmissions within 30 days.

(Id. ¶ 14; see also id. Ex. A.) According to Plaintiff, this opt-out notice violated the TCPA in six ways:

(1) it failed to provide a fax number to which the recipient could transmit an opt-out request;

(2) it failed to provide a domestic telephone number to which the recipient could transmit an opt-out request;

(3) it failed to provide a cost-free mechanism through which the recipient could transmit an opt-out request;

(4) it failed to state that a recipient's opt-out request would be effective only if the request identified the fax number to which the request related;

(5) it failed to state that the sender's failure to comply with an opt-out request within 30 days is unlawful; and

(6) it failed to state that an opt-out request would be effective so long as the person opting out did not later provide express invitation or permission to the sender to send further faxes.

(See id. ¶ 15.) The Second Amended Complaint also alleges that the opt-out notice violated GBL § 396–aa for similar reasons. (See id. ¶ 16.)

Plaintiff alleges that ETS and others negligently, willfully, or knowingly arranged to be sent over 17,000 unsolicited or solicited faxes containing the same defective opt-out notice. (See id. ¶¶ 18–20.) Plaintiff brings this Action on behalf of three classes of individuals:

–Class A—all persons who, from July 2, 2009, through the date of the filing of the Second Amended Complaint, received a solicited or unsolicited fax advertisement from ETS and others that contained the defective opt-out notice;

–Class B—all persons who, from July 2, 2009, through the date of the filing of the Second Amended Complaint, received an unsolicited fax advertisement from ETS and others that contained the defective opt-out notice; and

–Class C—all persons who, from July 2, 2010, through the date of the filing of the Second Amended Complaint, received a fax advertisement from ETS and others that contained the defective opt-out notice without having given ETS or others express invitation or permission to do so.

(See id. ¶ 22.)

For relief, Plaintiff seeks an order certifying the proposed classes, a statutory award under the TCPA and GBL § 396–aafor the alleged violations, and an injunction prohibiting Defendants from committing further violations of the TCPA. (See id. at 14–15.)

B. Procedural History

The procedural history of this case is extensive. The original Complaint was filed on July 2, 2013, naming as Defendants Houghton Mifflin Harcourt Publishers, Inc. and Laurel Kaczor. (See Compl. (Dkt. No. 1).) The substance of the allegations in the original Complaint was materially identical to that detailed above. Shortly thereafter, on July 11, 2013, Plaintiff filed a motion to certify the class and stay decision on the motion until discovery was completed. (See Dkt. Nos. 5–9.) Those motions were terminated by the Court for failure to follow the Court's individual practices. (See Dkt. No. 10.) At a subsequent conference, the motions were reinstated, but briefing was stayed pending the Second Circuit's decision in Bank v. Independence Energy Group LLC , 736 F.3d 660 (2d Cir. 2013), which concerned whether state law or federal law controlled when a TCPA class action suit may proceed in federal court. (See Dkt. No. 20.) Plaintiff was permitted to obtain limited discovery, and a number of discovery disputes followed.

On August 13, 2014, Plaintiff sought leave to file a motion to amend the Complaint to add ETS as a Defendant. (See Dkt. No. 44.) Shortly after the Court scheduled a conference to address Plaintiff's proposed Motion, Defendants Houghton Mifflin Harcourt Publishers, Inc. and Laurel Kaczor wrote a letter to the Court seeking leave to file a motion to dismiss the case and to compel arbitration. (See Dkt. No. 47.) After a conference was held, Plaintiff filed an Amended Complaint, with the consent of Houghton Mifflin Harcourt Publishers, Inc. and Laurel Kaczor, to add Houghton Mifflin Harcourt Publishing Company as a Defendant. (See Dkt. No. 55.) At the same time, Houghton Mifflin Harcourt Publishers, Inc., Houghton Mifflin Harcourt Publishing Company, and Kaczor filed a motion to compel arbitration. (See Dkt. No. 56.) The same day, Plaintiff filed a motion to amend its Amended Complaint to add ETS as a Defendant. (See Dkt. No. 59.) Oral argument on the pending motions was held on July 14, 2015, after which the Court granted Plaintiff's motion to amend and granted Defendants' motion to compel arbitration. (See Dkt. No. 78.)

On August 5, 2015, Plaintiff filed the Second Amended Complaint, adding ETS as a Defendant, which remains the operative complaint in this Action. (See Dkt. No. 79.) At the same time it filed a Second Amended Complaint, Plaintiff filed another motion for class certification. (See Dkt. No. 81.) On October 2, 2015, after receiving an extension of its time to respond to the Second Amended Complaint, ETS filed a letter motion seeking leave to file a motion to dismiss the case and also a motion to stay the case pending the Supreme Court's decisions in Campbell–Ewald Co. v. Gomez , ––– U.S. ––––, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016), and Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016). (See Dkt. No. 96.) A few days later, on October 13, 2015, the Parties submitted, and the Court endorsed, a stipulation dismissing the Action against Houghton Mifflin Harcourt Publishers, Inc., Houghton Mifflin Harcourt Publishing Company, and Laurel Kaczor. (See Dkt. No. 99.) On November 13, 2015, the Parties executed a stipulation, endorsed by the Court, staying the case until the Supreme Court's decision in Campbell–Ewald . (Dkt. No. 101.)

On January 25, 2016, the Parties alerted the Court that the Supreme Court had decided Campbell–Ewald . (Dkt. No. 103.) On February 1, 2016, ETS filed its Motion To Dismiss the Second Amended Complaint pursuant to Federal Rules of Civil Procedure 8(a) and 12(b)(6). (See Dkt. No. 106.) Two days later, ETS filed a letter motion requesting leave to file a Motion to allow it to deposit an amount with the Court in full satisfaction of Plaintiff's individual claim, have the Court enter judgment against ETS, and dismiss the case for lack of subject matter jurisdiction. (See Dkt. No. 110.) After a conference was held on March 8, 2016, ETS filed its Motion To Dismiss for lack of jurisdiction on March 18, 2016. (See Dkt. No. 127.) Since briefing on the pending Motions was completed, discovery has continued and the Parties have provided numerous letters with supplemental authority.

II. Discussion

A. Motion To Deposit $10,500, Enter Judgment, and Dismiss for Lack of Jurisdiction

Before the Court is permitted to indulge Defendant's Motion To Dismiss for failure to state a claim, it is obliged, with only limited exception, to determine whether it has jurisdiction over the dispute. See Morrison v. Nat'l Austl. Bank Ltd. , 547 F.3d 167, 170 (2d Cir. 2008) ("Determining the existence of subject matter jurisdiction is a threshold inquiry and a claim is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." (internal quotation marks omitted)), aff'd , 561 U.S. 247, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010) ; cf. In re Facebook, Inc., Initial Public Offering Derivative Litig. , ...