Larson v. Harman Mgmt. Corp.

• Decision Date: 26 October 2016
• Docket Number: No. 1:16-cv-00219-DAD-SKO,1:16-cv-00219-DAD-SKO
• Parties: CORY LARSON, Plaintiff, v. HARMAN MANAGEMENT CORPORATION and 3SEVENTY, INC., Defendants.
• Court: U.S. District Court — Eastern District of California

CORY LARSON, Plaintiff, v. HARMAN MANAGEMENT CORPORATION and3SEVENTY, INC., Defendants.

No. 1:16-cv-00219-DAD-SKO

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

October 26, 2016

ORDER DENYING DEFENDANTS' MOTION TO DISMISS THE FIRST AMENDED COMPLAINT FOR FAILURE TO STATE A CLAIM AND MOTION TO STRIKE

(Doc. No. 26)

This matter is before the court on defendant Harman Management Corporation ("HMC") and 3Seventy, Inc.'s ("3Seventy") motion to dismiss plaintiff Cory Larson's first amended complaint for failure to state a claim and motion to strike class claims. A hearing on the motions was held on October 6, 2016. Attorney David Bird appeared on behalf of defendant HMC, and attorney Matthew McCullough appeared on behalf of defendant 3Seventy. Attorneys Trinette Kent and Sergei Lemberg appeared on behalf of plaintiff. Having considered the parties' briefs and oral arguments and for the reasons set forth below, the court will deny defendant's motion to dismiss and motion to strike.

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BACKGROUND

Plaintiff commenced this action on February 17, 2016. (Doc. No. 1.) On June 20, 2016, plaintiff filed a first amended complaint, alleging claims under the Telephone Consumer Protection Act ("TCPA") on behalf of a putative class of similarly situated individuals. (Doc. No. 22.) According to plaintiff's first amended complaint, defendants HMC and 3Seventy set out on a telemarketing campaign in 2012 to send coupons to consumers for HMC restaurant food items via automated text messages. (Id. ¶ 19.) In response to defendants' promotional campaign for a free A&W Papa Burger Single, plaintiff texted the word "BURGER" to the number 70626, an SMS short code licensed and operated by defendants. (Id. ¶¶ 21, 23.) Defendants' first message to plaintiff was in response to plaintiff's "BURGER" text message. (Id. ¶ 23.) Unbeknownst to plaintiff, defendants allegedly stored his telephone number and thereafter sent multiple unprompted and uninvited automated text messages related to other A&W Restaurant food items. (Id. ¶¶ 24-25.) Plaintiff continued to receive such messages through February 2016. Plaintiff alleges he received the following message from defendants on November 16, 2014:

A&W: Gobble Up! First 5,000 will receive Reg. Sized Chili Cheese Fries for 99cents! Limit1.Delete@reg.Exp11/30 Valid@particip. A&Ws in UT,CA,CO,WA

TextSTOPtoEnd

(Id. ¶ 27.) Additionally, plaintiff alleges he received the following message from defendants on June 1, 2015:

A&W: Float into A&W for a 99 cent Reg. Sized Root Beer Float! Limit 1. Delete@reg. Exp 6/17. Valid@particip. A&Ws in UT,CA,CO,WA.

TextSTOPtoEnd

(Id.)

Plaintiff alleges that these additional messages were not sent in direct response to his "BURGER" text message and therefore sent without prior express written consent, in violation of the TCPA. (Id. ¶ 28.) Plaintiff alleges, on behalf of a putative class, two claims for violations of the TCPA. (Id. ¶¶ 60-71.)

///// On July 20, 2016, defendant HMC filed the instant motion to dismiss the first amended complaint for failure to state a claim, and moved to strike plaintiff's class definition and claims. (Doc. No. 26.) On July 21, 2016, defendant 3Seventy filed a notice of joinder in HMC's motion. (Doc. No. 27.) On September 22, 2016, plaintiff filed his opposition. (Doc. No. 31.) On September 29, 2016, defendant HMC filed its reply, and defendant 3Seventy filed a joinder to the same. (Doc. Nos. 32-33.)

DEFENDANTS' MOTION TO DISMISS

A. Legal Standard for Motions to Dismiss

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 676 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate toassume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). In ruling on a motion to dismiss brought pursuant to Rule 12(b)(6), the court is permitted to consider material which is properly submitted as part of the complaint, documents that are not physically attached to the complaint if their authenticity is not contested and the plaintiffs' complaint necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).

B. Plaintiff's Claims Under the Telephone Consumer Protection Act

Plaintiff states two claims under the same provision of the TCPA. Both rely on the allegation that defendants violated the TCPA by sending multiple automated text messages to cellular numbers belonging to plaintiff and putative class members without their prior express written consent. (See Doc. No. 22 ¶¶ 61, 67.) In their motion to dismiss, defendants argue that because plaintiff alleges he first initiated contact with defendants by sending a text message with the word "BURGER," he provided prior express consent and therefore cannot state a plausible claim under 47 U.S.C. § 227(b)(1)(A).

a. The TCPA

Congress enacted the TCPA "in response to an increasing number of consumer complaints arising from the increased number of telemarketing calls." Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009) (citing S.Rep. No. 102-178 at 2 (1991), reprinted in 1991 U.S.C.C.A.N. 1968). Relevant to this suit, the TCPA makes it unlawful for any person "to make any call . . . using any automatic telephone dialing system . . . to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service" without "the prior express consent of the called party." 47 U.S.C. § 227(b)(1)(A)(iii). A text message is a "call" within the meaning of the TCPA. Gomez v. Campbell-Ewald Co., 768 F.3d 871, 874 (9th Cir. 2014) (citing Satterfield, 569 F.3d at 954.) Thus, to state a TCPA claim, plaintiff must sufficiently allege that "(1) the defendant called a cellular telephone number; (2) using an automatic telephone dialing system; (3) without therecipient's prior express consent." Meyer v. Portfolio Recovery Associates, LLC, 707 F.3d 1036, 1043 (9th Cir. 2012) (citing 47 U.S.C. § 227(b)).

Defendants primarily argue that plaintiff's claims should be dismissed because he consented to receive the text messages at issue by first sending the "BURGER" message. (Doc. No. 26-1 at 5.) Thus, defendants argue, by providing his telephone number, plaintiff gave prior express consent under the TCPA.

In interpreting the statute, the Federal Communications Commission ("FCC") have on a number of occasions attempted to define the term "prior express consent" within the meaning of the TCPA. In 1992, the FCC adopted the view that

. . . any telephone subscriber that provides his or her telephone number to a business does so with the expectation that the party to whom the number was given will return the call. Hence, any telephone subscriber who releases his or her telephone number has, in effect, given prior express consent to be called by the entity to which the number was released.

Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 7 FCC Rcd. 8752 (1992). In 2012, the FCC revised its position in response to "the volume of consumer complaints we continue to receive concerning unwanted, telemarketing robocalls." Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991 ("2012 TCPA Order"), 27 FCC Rcd. 1830, 1838 (2012) (effective October 16, 2013).¹ Therein, the FCC modified the implementing regulation to the TCPA so that the form of a called party's prior express consent depends on the nature of the telephone call. 47 C.F.R. § 64.1200(a). Any telephone call that "includes or introduces an advertisement or constitutes telemarketing" cannot be made without "the prior express written consent of the called party." 47 C.F.R. § 64.1200(a)(2); see also 2012 2012TCPA Order, 27 FCC Rcd. at 1838-44. All other calls made with an automatic telephone dialing system require only "the prior express consent of the called party." 47 C.F.R. § 64.1200(a)(1).

Defendant HMC's motion therefore appears to turn on two points of dispute: (1) whether defendants' text messages constitute an advertisement or telemarketing, and if so, (2) whether plaintiff's initial "BURGER" message constitutes prior...