Johnson v. Palmer Admin. Servs.

• Decision Date: 20 October 2022
• Docket Number: 6:22-CV-00121-JCB-KNM
• Parties: FERRELL JOHNSON, Plaintiff, v. PALMER ADMINISTRATIVE SERVICES, INC., et al. Defendants.
• Court: U.S. District Court — Eastern District of Texas

FERRELL JOHNSON, Plaintiff, v. PALMER ADMINISTRATIVE SERVICES, INC., et al. Defendants.

No. 6:22-CV-00121-JCB-KNM

United States District Court, E.D. Texas, Tyler Division

October 20, 2022

REPORT & RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

K NICOLE MITCHELL UNITED STATES MAGISTRATE JUDGE

Before the Court is Defendant Palmer Administrative Services Inc.'s (“Palmer”) Motion to Dismiss Plaintiff's First Amended Complaint pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6) (Doc. No. 8) Plaintiff's (“Johnson” or “Plaintiff”) Response (Doc. No. 10), Palmer's Reply (Doc. No. 11), and Supplemental Briefings (Doc. Nos. 15, 16) as ordered by the Court (Doc. No. 14). Having considered the parties' arguments and the relevant law, the Court RECOMMENDS Palmer's Motion to Dismiss (Doc. No. 8) be GRANTED-IN-PART and DENIED-IN-PART.

Background

Defendant Palmer sells extended vehicle service contracts.^[1] Plaintiff asserts that he and the Class members received numerous artificial prerecorded voice messages on their cellular phones.^[2]Plaintiff alleges that he received phone calls that played artificial or prerecorded voice messages advising him that his car warranty was going to expire.^[3] Plaintiff alleges following the prompts that connected him to a live representative where he was solicited for Defendants' vehicle service contracts.^[4] At that point, Plaintiff alleges he then purchased a vehicle service contract from Palmer and Vehicle Services.^[5]

On April 4, 2022, Johnson filed a Complaint against Defendants Palmer and Vehicle Services (“Vehicle Services”) alleging violations of the Telephone Consumer Protection Act (“TCPA”) and TCPA regulations.^[6] On May 16, 2022, Johnson filed a First Amended Class Action Complaint as the named Plaintiff against Palmer, Vehicle Services, and an unknown Defendant John Doe (“John Doe”) on behalf of all persons injured by the Defendants' alleged violations under the TCPA, TCPA regulations, and the Texas Business and Commerce Code (“TBCC”).^[7] Plaintiff alleges the following six causes of action: (1) violation of 47 U.S.C. § 227(b) of the TCPA on behalf of the TCPA class; (2) violation of 47 CFR § 64.1200(d)(1) on behalf of the DNC class for failure to maintain written telemarketing policy; (3) violation of 47 CFR § 64.1200(d)(2) on behalf of the DNC class for failure to train telemarketing personnel; (4) violation of 47 CFR § 64.1200(d)(4) on behalf of the DNC class for failure to provide identifying information; (5) violation of TBCC § 305.053 on behalf of the TX class; and (6) violation of TBCC § 302.101 on behalf of the TX class for failure to obtain Texas registration certificate.^[8]

According to Plaintiff, he received a letter from Vehicle Services^[9] along with a Vehicle Services Agreement from Palmer^[10] in the mail following his purchase with the live representative.^[11] Thus, Plaintiff asserts that “there is evidence of an agency relationship that justifies imputing the contacts of the agent, Vehicle Services, to the principal, Palmer.”^[12] Plaintiff has attempted to serve Defendant Vehicle Services but has been unable to locate the state registration or the state registered agent and has not received a response.^[13] Further, Plaintiff states that the address for Vehicle Services taken from the Palmer Service Agreement Plaintiff recieved is a UPS Store in Michigan.^[14] Plaintiff also asserts that Vehicle Services is “merely a shell company with an endless history of complaints.”^[15] To that end, Plaintiff attaches evidence from the Federal Trade Commission (“FTC”) noting “thousands of customer complaints against Vehicle Services.”^[16] Plaintiff states that “Palmer cannot simply ignore Vehicle Services' illegal robocalling and argue that it is not the principal.”^[17]

According to Palmer,

[Palmer] is engaged primarily in the business of handling claims by policy holders and customer service for policy holders. Palmer does not market or sell the contracts it administers, and the companies that do [] do so through its affiliate N.C. W.C., Inc. to whom Palmer has contractually authorized the right to enter into commercial arrangements under which the third-parties are authorized to sell Palmer-administered contracts.^[18]

Further, Palmer states that it “has no role in the operations of any third-party telemarketing company authorized to sell products Palmer administers,”^[19] and that “[a]ny allegation by Plaintiff that a telemarketing call associated with a Palmer product was made ‘on behalf of' or with ‘implied, actual, or apparent authority' of Palmer is mistaken because Palmer does not confer that authority on telemarketing companies and does [sic] not control (or have the right to control) those companies' telemarketing practices”^[20]

Legal Standard

12(b)(2) Standard

Federal Rule of Civil Procedure 12(b)(2) requires a court to dismiss a claim if the court lacks personal jurisdiction over the defendant. After a non-resident defendant files a motion to dismiss for lack of personal jurisdiction, it is the plaintiff's burden to establish that in personam jurisdiction exists. Lahman v. Nationwide Provider Sols., No. 4:17-CV-00305, 2018 U.S. Dist. LEXIS 101757, at *4 (E.D. Tex. June 19, 2018) (Mazzant, J.) (citing Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990) (citing WNS, Inc. v. Farrow, 884 F.2d 200, 202 (5th Cir. 1989))). “To satisfy that burden, the party seeking to invoke the court's jurisdiction must ‘present sufficient facts as to make out only a prima facie case supporting jurisdiction,' if a court rules on a motion without an evidentiary hearing.” Id. (quoting Int'l Truck & Engine Corp. v. Quintana, 259 F.Supp.2d 553, 557 (N.D. Tex. 2003)); WNS, Inc., 884 F.2d at 203.

A court conducts a two-step inquiry when a defendant challenges personal jurisdiction: (1) ‘[f]irst, absent a controlling federal statute regarding service of process, the court must determine whether the forum state's long-arm statute confers personal jurisdiction over the defendant;' and (2) ‘second, the court establishes whether the exercise of jurisdiction is consistent with due process under the United States Constitution.'

Lander v. Laroque, No. 4:18-CV-00811-ALM-CAN, 2019 U.S. Dist. LEXIS 212460, at *5-6 (E.D. Tex. 2019) (citing Ham v. La Cienega Music Co., 4 F.3d 413, 415 (5th Cir. 1993)). Because the Texas long-arm statute extends to the limits of federal due process, the normally two-step determination of personal jurisdiction folds into one analysis. Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008). Thus, the court must consider whether the exercise of jurisdiction is consistent with the guarantee of due process under the Constitution. The requirements of constitutional due process protect a person from being subject to a forum with which he or she has no meaningful “contacts, ties, or relations.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). Consequently, a plaintiff must demonstrate that a nonresident defendant has “purposefully availed itself” of forum-state benefits through “establishing minimum contacts with the forum state.” Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 431 (5th Cir. 2014) (quoting Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999)). It must have been foreseeable to the defendant that its “conduct and connection with the forum state are such that [it] should reasonably anticipate being haled into court there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Personal jurisdiction may be general-meaning the defendant's business contacts with the forum state are “continuous and systematic”-or specific-meaning that the claims arose out of or related to the defendant's contacts with the forum state. Luv N' care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415, 414 n.9, 414 n.8 (1984)).

General personal jurisdiction exists when a defendant's contacts with the forum state are “so ‘continuous and systematic' as to render them essentially at home in the forum state.” Lander, 2019 U.S. Dist. LEXIS 212460, at *6 (citing Lahman, 2018 U.S. Dist. LEXIS 101757, at *5 (quoting Daimler AG v. Bauman, 571 U.S. 117, 127 (2014))). When a defendant's contacts with the forum state are less extensive than that required for a court to exercise general jurisdiction, the court may still exercise specific jurisdiction where a “nonresident defendant has purposefully directed its activities at the forum state and the litigation results from alleged injuries that arise out of or relate to those activities.” Choice Healthcare, Inc. v. Kaiser Found. Health Plan, 615 F.3d 364, 367 (5th Cir. 2010) (quoting Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 243 (5th Cir. 2008)).

The specific personal jurisdiction inquiry is conducted through a three-step analysis:

(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.

Monkton Ins. Servs., Ltd., 768 F.3d at 433. “Establishing a defendant's minimum contacts with the forum state requires contacts that are more than ‘random, fortuitous, or attenuated, or of the unilateral activity of another party or third person.'” Lander, 2019 U.S. Dist. LEXIS 212460, at *11 (quoting Burger King Corp., 471 U.S. at 475).

12(b)(6) Standard

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