Olney ex rel. Situated v. Progressive Cas. Ins. Co.

• Decision Date: 24 January 2014
• Docket Number: Case No. 3:13–cv–2058–GPC–NLS.
• Citation: 993 F.Supp.2d 1220
• Court: U.S. District Court — Southern District of California
• Parties: Peter OLNEY, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. PROGRESSIVE CASUALTY INSURANCE COMPANY, Defendant.

993 F.Supp.2d 1220

Peter OLNEY, Individually and on Behalf of All Others Similarly Situated, Plaintiff,

v.PROGRESSIVE CASUALTY INSURANCE COMPANY, Defendant.

Case No. 3:13–cv–2058–GPC–NLS.

United States District Court, S.D. California.

Jan. 24, 2014.

Abbas Kazerounian, Kazerounian Law Group, APC, Costa Mesa, CA, Todd M. Friedman, Law Offices of Todd M. Friedman, P.C., Beverly Hills, CA, for Plaintiff.

Meryl C. Maneker, Robert Kenneth Dixon, Vickie E. Turner, Wilson Turner Kosmo LLP, San Diego, CA, James Bradford Odom, Nicholas Griffin Hill, S. Stewart Haskins, II, King & Spalding LLP, Atlanta, GA, for Defendant.

ORDER DENYING DEFENDANT'S MOTIONS TO DISMISS AND STRIKE

GONZALO P. CURIEL, District Judge.

Defendant Progressive Casualty Insurance Company (“Defendant”) moves to dismiss plaintiff Peter Olney's (“Plaintiff”) putative class-action Complaint on multiple grounds pursuant to Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, to strike the class action allegations pursuant to Federal Rule of Civil Procedure 12(f). The Court finds the matter suitable for decision on the papers, without oral argument, pursuant to Civil Local Rule 7.1.d.1. Defendant's motions are DENIED.

BACKGROUND

Plaintiff, a resident of California, sues on behalf of himself and all others similarly situated. Defendant is an Ohio corporation that provides insurance policies with its principal place of business in Ohio.

Plaintiff alleges that, beginning in July 2013, he received, without his consent, numerous “autodialed” telephone calls to his cellular telephone for which he alleges he incurred charges. Plaintiff alleges Defendant used “an ‘automatic telephone dialing system,’ (‘ATDS') ... using an ‘artificial or prerecorded voice’ ... in order to collect an alleged debt from an unknown third party named Danielle.” (ECF No. 1, Compl. ¶ 16.) Plaintiff thus brings two claims under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq., for (1) negligent violations of the TCPA and (2) knowing or willful violations of the TCPA.

Defendant now moves the Court for dismissal on the grounds that Plaintiff lacks statutory standing because: (1) the TCPA allows only the intended recipient of a call to file suit; (2) alternatively, only the subscriber of the phone number can file suit; and (3) calling a debtor does not violate the TCPA, regardless of who answers the phone.

In the alternative, Defendant moves the Court to strike Plaintiff's class action allegations on the grounds that the class is facially uncertifiable because the class definition is overbroad and unascertainable.

DISCUSSION

I. Motion to Dismiss

A. Legal Standard

A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotations, brackets, & citations omitted).

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir.1996). Legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir.1987); W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981). Similarly, “conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir.1998). Courts generally do not look beyond the complaint for additional facts when deciding a Rule 12(b)(6) motion. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003); Parrino v. FHP, Inc., 146 F.3d 699, 705–06 (9th Cir.1998).

B. Analysis

1. Statutory Standing

i. “Called Party” & “Intended Recipient”

Defendant argues Plaintiff lacks standing to assert a violation under the TCPA because only the “called party” has statutory standing to bring suit under the TCPA. Defendant asserts the “called party” is the “intended recipient” of the call. Plaintiff argues in response that standing is not limited to the “called party,” but rather, the TCPA allows “any person or entity” to bring suit.

Defendant relies on several cases that the Court finds either unpersuasive or distinguishable: Cellco P'ship v. Dealers Warranty, LLC, 2010 WL 3946713, at *9 (D.N.J. Oct. 5, 2010) (concluding telecommunications vendors failed to state TCPA claim for calls made to numbers assigned to their employees/subscribers because vendors did not sufficiently allege they had standing; i.e., they did not allege that they—and not their employees/subscribers—were the “intended recipients” of the calls); Cellco P'ship v. Wilcrest Health Care Mgmt. Inc., 2012 WL 1638056, at *7 (D.N.J. May 8, 2012) (same); Leyse v. Bank of Am., 2010 WL 2382400, at *4 (S.D.N.Y. June 14, 2010) (concluding plaintiff had no standing to assert TCPA claim for picking up call intended for plaintiff's roommate who was the telephone subscriber); Kopff v. World Research Grp., LLC, 568 F.Supp.2d 39, 42 (D.D.C.2008) (concluding plaintiff had no standing to assert TCPA claim for intercepting an unsolicited fax advertisement addressed to plaintiff's husband as president of business). The Court finds that Leyse and Kopff are distinguishable for the reasons discussed below. As for the Cellco cases, the Court finds them unpersuasive in their conclusion that “called party” means “intended recipient.” As the Seventh Circuit explained, “The phrase ‘intended recipient’ does not appear anywhere in § 227, so what justification could there be for equating ‘called party’ with ‘intended recipient of the call’?” Soppet v. Enhanced Recovery Co., LLC, 679 F.3d 637, 640–41 (7th Cir.2012).

Furthermore, the “intended recipient” interpretation was recently rejected by another court in this district. See Gutierrez v. Barclays Grp., 2011 WL 579238, at *4–5 (S.D.Cal. Feb. 9, 2011). Defendant contends this Court should decline to follow Gutierrez because the court there was not presented with the statutory construction and public policy arguments Defendant asserts here. Defendant's position is not without merit. Defendant is correct that “statutory language must be read in context and a phrase gathers meaning from the words around it.” Jones v. United States, 527 U.S. 373, 389, 119 S.Ct. 2090, 144 L.Ed.2d 370 (1999). Thus, because section 227(b)(1)(A) uses both the term “recipient” and “called party,” one may conclude that “called party” means something different than “recipient.”

Defendant is also correct, however, in noting that “identical words used in different parts of the same act are intendedto have the same meaning.” Gustafson v. Alloyd Co., 513 U.S. 561, 570, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995). Tellingly, section 227(d) states (in the context of faxes) that a system must “automatically release the called party's line within 5 seconds of the time notification is transmitted to the system that the called party has hung up, to allow the called party's line to be used to make or receive other calls.” 47 U.S.C. § 227(d) (emphasis added). The only logical interpretation of “called party” as used in this section is the “actual recipient.” Because section 227(d) unambiguously uses “called party” to mean the actual recipient, “called party” should carry the same meaning in other provisions. See Breslow v. Wells Fargo Bank, N.A., 857 F.Supp.2d 1316, 1321 (S.D.Fla.2012) (“The use of ‘called party’ to unambiguously refer to the actual recipient in another section of the TCPA is compelling evidence that the term carries the same meaning in other provisions.”).

Defendant further argues that public policy supports the limitation of standing to only the intended recipient. Defendant is concerned that a business could be liable anytime it calls an individual with a prerecorded message if someone other than the intended recipient answers. Defendant warns that, “if the called party is not the intended recipient, then a debtor could both avoid a debt and confer a TCPA claim by simply handing his cell phone to a person sitting next to him and permitting that person to answer the phone.” (Def. Memo at 8.) Although this concern has some validity, the TCPA was intended to protect individuals from receiving unsolicited calls and to deter callers from using automatic dialing systems and prerecorded messages in an unregulated fashion. Adopting Defendant's position would shift responsibility from a business making automatic and prerecorded calls to individuals receiving them. The Court feels that the stronger public policy to be served by the TCPA is protecting individuals from such calls.

Other courts have also rejected Defendant's public policy argument. See, e.g., Breslow, 857 F.Supp.2d at 1321–22 (“If a ‘called party’ ... is the intended recipient, ... consumers who acquire new cellular phone numbers and wish to avoid unwanted calls bear the responsibility of determining whether or not a prior owner of the number ever gave consent to any lending institutions to be called. If the ‘called party’ is the actual recipient, ... companies who make automated calls bear the responsibility of regularly checking the accuracy of their account records or placing intermittent live verification calls.... [I]t seems to the Court that entities like [the defendant] ... are in a much better position to bear this responsibility than are individuals.”).

Finally, as Plaintiff points out, Defendant's position that...