Cellco P'ship v. Wilcrest Health Care Mgmt. Inc.
| Decision Date | 08 May 2012 |
| Docket Number | CIVIL ACTION NO. 09-3534 (MLC) |
| Parties | CELLCO PARTNERSHIP, d/b/a VERIZON WIRELESS, et al., Plaintiffs, v. WILCREST HEALTH CARE MANAGEMENT INC., d/b/a "FAMILY CARE, INC.," et al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
Plaintiffs, Cellco Partnership d/b/a Verizon Wireless ("Verizon") and OnStar, LLC ("OnStar") (collectively, "Plaintiffs"), commenced this action against defendants, Wilcrest Health Care Management Inc., d/b/a "Family Care, Inc." ("Wilcrest"), Family Care, Inc., Association Health Care Management, Inc. ("AHCM"), Beech Healthcare, Inc. ("Beech"), AKXKA Plan Healthcare Inc. ("AKXKA"), Sweetwater Healthcare Inc. ("Sweetwater"), and Nationwide Media, Inc. ("Nationwide"), alleging violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227. (Dkt. entry no. 94, 2d Am. Compl. at ¶¶ 70-77.) OnStar also asserts a claim for violation of the Telemarketing and Consumer Fraud and Abuse Prevention Act ("TCFAPA"), 15 U.S.C. §§ 6101-6108, and the Federal Trade Commission ("FTC") regulations implementing the TCFAPA, 16 C.F.R.§ 310.4. (Id. at ¶¶ 79-86.) Federal question jurisdiction exists pursuant to 28 U.S.C. § 1331. See Mims v. Arrow Fin. Servs., LLC, 132 S.Ct. 740, 745 (2012) ().
Defendants AHCM and Family Care, Inc. (the "Family Care Defendants") now move to dismiss the Second Amended Complaint insofar as it is asserted against them for failure to state a claim upon which relief can be granted, for lack of standing, or pursuant to the Court's inherent powers; or for judgment on the pleadings; or alternatively for summary judgment, in the event the Court considers the matters outside the pleadings presented by the Family Care Defendants in conjunction with their motion. (Dkt. entry no. 100, Mot. Dismiss & Family Care Br. at 5-13.) Defendants Wilcrest, Beech, AKXKA, and Sweetwater (the "Retail Defendants") move separately to dismiss the Second Amended Complaint insofar as asserted against them on the same bases asserted by the Family Care Defendants. (Dkt. entry no. 101, Mot. Dismiss & Retail Defs. Br. at 7-9.) Both the Family Care Defendants and the Retail Defendants contend that the plaintiffs are not "consumers" for purposes of the TCPA or TCFAPA, and also that the Second Amended Complaint alleges that all the telephone calls at issue were made by a non-party to the action, and theSecond Amended Complaint therefore must be dismissed because the TCPA does not permit "on behalf of" liability in the absence of a contractual or agency relationship between the moving defendants and the non-party. (Family Care Br. at 12-13; Retail Defs. Br. at 9.) It appears that non-served, non-movant defendant Nationwide "conducted Defendants' telemarketing campaign through the services of C1F, Inc. ("C1F"), which dialed the calls." (Dkt. entry no. 105, Pls. Opp'n Br. at 7; 2d Am. Compl. at ¶¶ 24-25.) The Family Care Defendants contend that joinder of C1F and Nationwide is required by Federal Rule of Civil Procedure ("Rule") 19. (Family Care Br. at 13.)
The Court decides the separate motions on the submissions of the parties, without oral argument, pursuant to Local Civil Rule 78.1(b). The Court will decline the defendants' invitations to convert the separate motions to ones for summary judgment under Rule 12(d), based on Plaintiffs' representation that discovery has been stayed and is yet incomplete, and also because the Court resolves the separate motions as facial challenges to the Court's subject matter jurisdiction for lack of standing, pursuant to Rule 12(b)(1). (Dkt. entry no. 105, Pls. Opp'n Br. at 12.) See Fed.R.Civ.P. 56(d). For the reasons stated herein, the separate motions will be granted. In addition, the Second Amended Complaint insofar as it is asserted against Nationwide will be dismissed pursuant to Rule 4(m).
The Second Amended Complaint asserts that the Family Care Defendants and the Retail Defendants are "affiliated entities" engaged in the business of marketing and selling discount health care plans. (2d Am. Compl. at ¶¶ 11-12, 18.) Plaintiffs allege that the Retail Defendants have common ownership; defendant Family Care, Inc., was created to hold the "Family Care" trade names and logos; and defendant AHCM is at "at the top" of a "multi-level marketing structure." (Id. at ¶¶ 18-20.) Plaintiffs characterize the Retail Defendants as the "marketing arm or alter ego of AHCM." (Id. at ¶ 29.) The Retail Defendants allegedly retained the services of Nationwide to generate sales leads, which in turn "devised telemarketing campaigns" for the Retail Defendants and engaged C1F "to place telemarketing calls on behalf of" AHCM and the Retail Defendants. (Id. at ¶¶ 24-25.) C1F, which has not been named a defendant in this action, dialed the calls using automatic dialing software licensed to it by NetDotSolutions, Inc. ("NetDotSolutions"), which is also not a party to this action. (2d Am. Compl. at ¶ 26.)
Plaintiffs allege that the NetDotSolutions platform "allowed C1F to conceal its identity and the identities of the Family Care Entities on whose behalf it was calling by causing a telephone number known as an 'ANI' (automated numerical identifier) to be displayed on the recipient's caller ID instead of the Family CareEntities' actual telephone numbers." (Id. at ¶ 26.)1 The telemarketing campaign allegedly used an autodialer and a prerecorded voice to place unsolicited calls to cellular phones in which the recipient was instructed to press "1" if he or she was interested in purchasing discount health care plans (the "'press 1' telemarketing calls"). (Id. at ¶¶ 22, 27.) If the recipient pressed "1," he or she would be transferred to a live person. (Id. at ¶ 27.) Plaintiffs allege that these "press 1" telemarketing calls included "literally hundreds of thousands of calls to either (i) Verizon Wireless subscribers on their wireless phones, including calls made to employee concession accounts, or (ii) OnStar cellular equipment embedded in the automobiles of OnStar's subscribers." (Id. at ¶ 30.)
Plaintiffs assert, with respect to Verizon, that "Concession Accounts are cellular service accounts that are owned and paid for by Verizon . . . [that it] either uses itself or makes available to certain of its employees for the purpose of conducting Verizon Wireless business," though "[s]ome of the Concession Accounts are issued to employees for their own use." (Id. at ¶¶ 31, 33.) Verizon monitors employees' Concession Account activity so it may "question any unusual or excessiveusage that could indicate noncompliance with company policy" directing that Concession Accounts be used primarily for Verizon's business purposes. (Id. at ¶¶ 34-35.)
Beginning on or before May 25, 2009, Verizon customers and employees began receiving the "press 1" telemarketing calls from the numbers 240-556-9958 and 781-331-9341. (Id. at ¶¶ 41-42.) Plaintiffs allege that between May 25, 2009, and June 24, 2009, Verizon Concession Accounts received 2,312 such calls, which Plaintiffs assert "have been conclusively associated with the Family Care Entities by analysis of calling records produced by NetDotSolutions and other evidence." (Id. at ¶¶ 46-48.)2 Verizon seeks to recover statutory damages of $500 for each "press 1" telemarketing call that was placed to a Concession Account between May 25, 2009 and June 24, 2009, or $1,156,000.00, subject to trebling for knowing and willful violation of the TCPA. (Id. at ¶¶ 75-76.) See 47 U.S.C. § 227(b)(3).
OnStar "provides a variety of services to OnStar subscribers using data or voice transmissions through the OnStar equipment embedded in the subscriber's vehicle." (2d Am. Compl. at ¶ 59.)The services include the ability to make and receive phone calls in the vehicle, either by purchasing prepaid minutes or linking the equipment to an existing Verizon plan. (Id.) In order to provide such services, "the OnStar equipment embedded in a vehicle must accept every call to that vehicle, regardless of whether the vehicle is being operated or is occupied and regardless of whether the subscriber has purchased phone minutes and is able to receive telephone calls using the equipment." (Id. at ¶ 60.)
OnStar alleges that in instances where a subscriber (1) does not have minutes available, (2) is not operating the vehicle, or (3) does not answer the call, "OnStar is charged and pays for the use of the wireless cellular network based on the call answered by the OnStar equipment." (Id. at ¶¶ 62-63.) OnStar represents that these scenarios comprise "[t]he vast majority of calls made to OnStar equipment," causing OnStar to incur wireless charges for all such calls. (Id. at ¶ 64.) OnStar alleges that it has identified approximately 107,000 calls as having been made by Defendants to OnStar equipment for which OnStar paid wireless charges. (Id. at ¶ 65.) OnStar thus alleges that it has been damaged "in that it has had to pay for calls that it is required to answer because of its unique operating system." (Id. at ¶ 68.)
OnStar seeks statutory damages of $500 per telemarketing call for which it was required to pay wireless charges, and further seeks to treble its damages award as a result of the allegedly knowing and willful violation of the TCPA. (Id. at ¶ 77.) See 47 U.S.C. § 227(b)(3). OnStar also seeks to recover against Defendants pursuant to the TCFAPA on the basis that Defendants "prevent[ed] the actual telephone number and name of the telemarketer from appearing on a customer's caller ID when they receive Telemarketing Calls and/or they have caused such calls to be made on their behalf," alleging that OnStar has suffered in...
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