J. MICHELLE CHILDS, District Judge.
Plaintiff Career Counseling, Inc. ("Plaintiff"), brings an action on behalf of itself and all others similarly situated, as a result of receiving "unsolicited facsimiles"
In its Complaint, Plaintiff alleges that Defendants sent at least two (2) "unsolicited facsimile advertisements" ("fax advertisements") between June 2015 and December 2015, which violated the TCPA. (ECF No. 1 at 1-2 ¶ 2, 4 ¶ 12.)
Defendants move for summary judgment on the basis that Amsterdam only sent Plaintiff "solicited" fax advertisements with Plaintiff's prior express invitation or permission.
On December 28, 2015, Plaintiff filed its Complaint. (ECF No. 1.) On March 23, 2016, the case was reassigned to the undersigned. (ECF No. 23.) On May 16, 2017, Defendants filed a Motion for Summary Judgment. (ECF No. 69.) On June 23, 2017, Plaintiff responded (ECF No. 81), and on June 30, 2017, Defendant replied (ECF No. 85). On August 23, 2017, the court granted the Parties' Consent Motion for Leave to Supplement Defendants' Motion for Summary Judgment and Opposition to Plaintiff's Motion for Class Certification (ECF No. 88).
On November 2, 2017, a hearing was scheduled in regard to Plaintiff's Motion for Class Certification (ECF No. 68) and Defendants' Motion for Summary Judgment (ECF No. 69). (ECF No. 96.) On November 16, 2017, the court granted Defendants' Second Unopposed Motion for Leave to Supplement Defendants' Motion for Summary Judgment and Opposition to Plaintiff's Motion for Class Certification (ECF No. 99). (ECF No. 100.) The same day, Defendants filed a Second Supplemental Response to Defendants' Motion for Summary Judgment and Opposition to Plaintiff's Motion for Class Certification (ECF No. 102), to which Plaintiff replied (ECF No. 103.)
On November 27, 2017, Plaintiff filed an Unopposed Motion for Leave to File Response to Defendants' Second Supplement to Defendants' Motion for Summary Judgment and Opposition to Plaintiff's Motion for Class Certification. (ECF No. 104.) On November 28, 2017, the court granted this Motion (ECF No. 105), and Plaintiff filed its Response (ECF No. 106). On December 1, 2017, there was a hearing regarding Plaintiff's Motion for Class Certification (ECF No. 68) and Defendants' Motion for Summary Judgment (ECF No. 69). (ECF No. 109.)
On March 27, 2018, Defendants filed a Third Motion for Leave to Supplement Defendants' Motion for Summary Judgment and Opposition to Plaintiff's Motion for Class Certification. (ECF No. 112.) On the same day, the court granted Defendants' Motion (ECF No. 112), and due to the complexity and amount of supplemental information filed by the parties, the court also denied without prejudice Plaintiff's Motion for Class Certification (ECF No. 68) and Defendants' Motion for Summary Judgment (ECF No. 69). (ECF No. 113.) The court directed the parties to refile their respective motions and to consolidate any supplemental caselaw or arguments in the parties' respective memorandums of law within fourteen (14) days of the court filing its Order. (Id.) On April 10, 2018, Defendant filed its Second Motion for Summary Judgment. (ECF No. 116.) On April 24, 2018, Plaintiff responded to Defendants' Motion (ECF No. 116). (ECF No. 120.)
The court has jurisdiction pursuant to 28 U.S.C. § 1331 because Plaintiff brings its claim pursuant to the Telephone Consumer Protection Act, 47 U.S.C. § 227(b)(1)(C). (See ECF No. 1 at 3 ¶ 6.)
Summary judgment should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).
In ruling on a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 124 (4th Cir. 1990) (citing Pignons S.A. De Mecanique v. Polaroid Corp., 657 F.2d 482, 486 (1st Cir. 1981)). The non-moving party may not oppose a motion for summary judgment with mere allegations or denials of the movant's pleading, but instead must "set forth specific facts" demonstrating a genuine issue for trial. Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322, 324 (1986); Anderson, 477 U.S. at 252. All that is required is that "sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." Anderson, 477 U.S. at 249 (citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253 (1968)). "Mere unsupported speculation . . . is not enough to defeat a summary judgment motion." Ennis v. Nat'l Ass'n of Bus. & Educ. Radio, Inc., 53 F.3d 55, 62 (4th Cir. 1995). "[T]he burden [to show no genuine issue of material fact] on the moving party may be discharged by `showing'—that is, pointing out to the district court—that there is an absence of evidence to support the non-moving party's case." Celotex Corp., 477 U.S. at 325.
A party cannot create a disputed issue of material fact simply by contradicting [his or] her own testimony. See Halperin v. Abacus Technology Corp., 128 F.3d 191, 198 (4th Cir. 1997) ("[i]t is well established that `a genuine issue of material fact is not created where the only issue of fact is to determine which of the two conflicting versions of [a party's] testimony is correct.'") (quoting Barwick v. Celotex Corp., 736 F.2d 946, 960 (4th Cir. 1984)), holding on other grounds limited by Baird v. Rose, 192 F.3d 462 (4th Cir. 1999); Johnson v. Bryant, No. CA 0:11-537-JFA-PJG, 2012 WL 2935254, at *2 (D.S.C. July 19, 2012) (same).
"Voluminous consumer complaints about abuses of telephone technology—for example, computerized calls dispatched to private homes—prompted Congress to pass the TCPA." Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 370-71 (2012). "Congress determined that federal legislation was needed because telemarketers, by operating interstate, were escaping state-law prohibitions on intrusive nuisance calls. The Act bans certain practices invasive of privacy and directs the Federal Communications Commission ("FCC or Commission") to prescribe implementing regulations." Id.
The JFPA's amendment to the TCPA had three purposes:
S. Rep. No. 109-76, at 1 (2005).
At issue in this case is (1) whether Plaintiff gave Defendants prior invitation or permission to send it faxes, (2) whether the parties had an EBR, (3) whether there were compliant opt-out notices on Defendants' faxes, and (4) whether Taylor is a "sender" under the TCPA.
To prevail on a TCPA claim pursuant to 47 U.S.C. § 227(b)(1)(C) (the receipt of unsolicited fax advertisements), a plaintiff must establish that "(1) the defendant used a telephone facsimile machine, a computer, or other device to send one or more faxes to the plaintiffs facsimile machine [defendant was a sender]
It is undisputed that Amsterdam sent Plaintiff at least two faxes (ECF No. 116-1 at 4; ECF No. 120 at 3),
"Prior express invitation or permission may be given by oral or written means, including electronic methods." Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991; Junk Fax Prevention Act of 2005, 71 Fed. Reg. 25,967, 25,972 (2006) ("2006 FCC Rule").
Plaintiff disputes that it gave Defendants permission to send it faxes, and seeks to prove that "Defendants cannot demonstrate the absence of a genuine issue of material fact that they obtained Plaintiff's `prior express invitation or permission' to send Plaintiff fax advertisements." (ECF No. 120 at 1, 19-26.) Plaintiff directs the court to its account profile (ECF No. 85-1 at 2) which demonstrates that it did not give Defendants prior express invitation or permission, and also directs the court to Defendants' conflicting employee testimony (ECF No. 81-1 at 17:7-23; ECF No. 120 at 7-8 (p. 60:25-62:4)) regarding the interpretation of Plaintiff's account profile. (ECF No. 120 at 5-6.)
Defendants contend that Plaintiff solicited each of the faxes because Plaintiff made previous purchases from Amsterdam in 2005 and 2015; and in making those purchases, "[Plaintiff] voluntarily provided its fax number and gave prior express invitation and permission to receive fax advertisements." (ECF No. 116-1 at 16.) Defendants direct the court to Plaintiff's admission that Virginia McCuen ("McCuen"), a retired employee and Plaintiff's part owner, voluntarily gave Amsterdam Plaintiff's fax number among other contact information, and did not opt-out of receiving further faxes while completing Plaintiff's June 12, 2015 purchase. (ECF No. 69-3 at 3 (Request Nos. 3, 5, 8); ECF No. 116-1 at 3-5.)
There is a genuine dispute as to the material fact of whether Plaintiff gave Defendants its prior express invitation or permission to be sent fax advertisements.
Plaintiff admitted that McCuen did not "request to opt-out of receiving future facsimiles from Amsterdam [while making a purchase on June 12, 2015]." (ECF No. 69-3 at 3 (Request No. 8).) Defendants would have the court infer that Plaintiff's admission that McCuen did not opt-out of receiving future faxes, indicates that McCuen opted-in to receiving future faxes. However, the fact that McCuen did not opt-out of receiving future faxes, does not mean that she took an affirmative action to opt in to receiving future faxes.
Amsterdam asserts that it requires all of its customer service representatives to obtain permission to send fax advertisements to customers through the recitation of a prewritten script. (ECF No. 116-1 at 3-4.) When a customer calls Amsterdam to order a product, customer service representatives read the script, and as part of the script they first ask for the customer's fax number and email address, and if the customer provides his or her number and email address then the representative can ask for permission to send "special offers" to the customer in the future.
On Amsterdam's Customer Information Display Form, there are flags next to different modes of communication which denote whether Amsterdam can use that mode of communication to contact a customer. (ECF No. 81-1 at 17:7-23; ECF No. 85-1 at 2.) On October 26, 2016, Jason Moreau ("Moreau"), Amsterdam's Director of e-commerce, testified that a "Y" next to a mode of communication means "yes," and an "N" means "no." (ECF No. 120-2 at 7-8 (pp. 60:25-61:1).) Moreau testified that "N" next to the word "fax" indicates that Amsterdam can send faxes to a party, because the flags are "do not" or "opt-out" flags, meaning that a "yes" answer (marked with a "Y") denotes that a customer opted-out of receiving advertisements via that mode of communication. (ECF No. 120-2 at 7-8 (pp. 61:17-62:4)). Moreau also testified that David Wachowiak ("Wachowiak") could provide insight as to how customer service representatives input information into the computer, and whether a party gave permission to be sent faxes. (Id. at 10 (pp. 105:7-106:25); ECF No. 120 at 4.)
On February 28, 2017, Defendants' Rule 30(b)(6) witness Wachowiak testified, in regard to Plaintiff's Customer Information Display Form, that "if the flag was marked yes [or with a "Y"], that meant the customer agreed to receive advertisements by fax." (ECF No. 81-1 at 17:7-23.) On April 6, 2018, Defendants filed a Declaration by Wachowiak declaring that he misspoke about the meaning of the flags located on the Customer Information Display Form during his February 28, 2017 deposition. (ECF No. 116-3 at 2-5.) Wachowiak declares that an "N" next to the word "fax" indicates that a person has not opted out of receiving faxes. (ECF No. 116-3 at 3 ¶ 9.) Wachowiak also declares that on October 26, 2016, he provided deposition testimony in this case and testified that an "N" next to the word fax indicates that "the customer has not opted out of receiving faxes[.]" (Id. at 1-2 ¶ 4.)
Moreau's testimony and Wachowiak's testimony at his February 28, 2017 30(b)(6) deposition are contradictory, thereby, creating a genuine dispute as to how to interpret a customer's response on the Customer Information Display Form and further as to whether Plaintiff actually gave prior express permission or invitation to Defendants. However, it seems that Defendants attempted to eliminate this dispute by providing Wachowiak's April 6, 2018 Declaration (ECF No. 116-3 at 2-5) and October 26, 2016 deposition testimony (ECF No. 116-3 at 7:1-6).
Plaintiff asserts that Wachowiak's Declaration (ECF No. 116-3 at 2-5) is subject to the sham affidavit doctrine. See Cooper v. Smithfield Packing Co., Inc., No. 7:13-CV-00145-F, 2016 WL 7031555, at *6 (E.D.N.C. Dec. 1, 2016) ("[t]he `sham affidavit doctrine' provides that the court, when considering a motion for summary judgment, may disregard an affidavit contradicting the affiant's prior testimony if it appears the affidavit was filed in an attempt to manufacture an issue of fact."). Wachowiak's Declaration opposes his February 28, 2017 deposition testimony (ECF No. 81-1 at 17:7-23) and supports his October 26, 2016 deposition testimony (116-3 at 7:1-6). The court notes that Defendants did not provide Wachowiak's deposition until over a year later and did not provide evidence of Wachowiak's October 26, 2016 deposition in support of its original Motion for Summary Judgment (ECF No. 69). Defendants' attempt to cure the dispute as to what "N" and "Y" mean by filing Wachowiak's October 26, 2016 deposition testimony (ECF No. 116-3 at 7) and April 6, 2018 Declaration (ECF No. 116-3 at 2-5) does not cure the contradictions between the testimony of Wachowiak and Moreau. Instead, the contradictory testimony adds more confusion as to the true meaning of "N" and "Y" and thus must be resolved by the trier of fact.
Wachowiak's Declaration contradicts his February 28, 2017 deposition pursuant to Rule 30(b)(6) and thus is subject to the sham affidavit doctrine. (ECF Nos. 116-3 at 2-5, 7.) For this reason, the court disregards Wachowiak's Declaration (ECF No. 116-3 at 2-5). See Cooper, 2016 WL 7031555, at *6.
Defendants have failed to carry their burden of proof in establishing that Plaintiff gave Amsterdam a prior express invitation or prior express permission to send faxes. Defendants provided Plaintiff's Customer Information Display Form which undisputedly shows an "N" next to the word "Fax." Defendants then provided conflicting testimony regarding the meaning of "N" from two different witnesses, Wachowiak and Moreau. (ECF No. 81-1 at 17:7-23; ECF No. 81-2 at 7 (p. 61:1).) Defendants cannot arbitrarily choose what deposition testimony the court should consider.
Defendants assert that Ms. McCuen did not opt out of receiving further facsimiles while ordering products from Amsterdam, but as stated above, "not opting-out" is not the same as "opting-in." Additionally, Wachowiak testified that Amsterdam does not have any documents showing that Plaintiff gave permission to receive advertisements by fax, and was not aware of any documents that show that any of the parties receiving the faxes at issue gave permission to Amsterdam to send faxes to the parties. (ECF No. 81-1 at 21:23-22:13.)
Plaintiff does not have the burden to prove that it did not give permission, it is Defendants' burden to show that Plaintiff did give permission. The court must draw all reasonable inferences in favor of Plaintiff as the non-moving party, and in doing so the court finds that there is a genuine dispute as to the material fact of whether Plaintiff gave Defendants prior express invitation or permission to send fax advertisements.
Even if Plaintiff received unsolicited faxes from Defendants, the TCPA has an exception for senders who have an EBR with the recipient. See 47 U.S.C. § 227(b)(1)(C)(i). An EBR is defined as, "a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a business or residential subscriber with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the business or residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party." 47 C.F.R. § 64.1200(f)(6). The FCC has the right to place a limit on the duration of an EBR,
The EBR exception is also known as the "safe harbor" exception, and a sender is within the statutory safe harbor and can send unsolicited faxes to a party if it (1) has an established business relationship with the recipient as defined by the statute, (2) has obtained the fax recipient's fax number by the recipient voluntarily giving it to either the sender or voluntarily giving it to a third party knowing that it will be publicly distributed, and (3) the unsolicited advertisement contains a compliant opt-out notice. 47 U.S.C. § 227(b)(1)(C).
A compliant opt-out notice includes several components, including the requirement that the notice must contain language that states that the "failure to comply, within the shortest reasonable time, as determined by the [Federal Communications] Commission, . . . is unlawful." 47 U.S.C. § 227 (b)(2)(D)(ii). The FCC has determined that the shortest reasonable time is thirty (30) days.
Plaintiff maintains that regardless of whether it has an EBR with Amsterdam, Amsterdam's opt-out notice does not comply with FCC regulations, therefore, that defense is not available. (ECF No. 120 at 26-29.) Plaintiff also maintains that the FCC has ruled that full compliance with the regulations regarding opt-out notices is required. (Id. at 28.)
Defendants posit that Amsterdam has an EBR with Plaintiff and the faxes it sent included an opt-out notice, therefore, even if the faxes were unsolicited Plaintiff cannot establish that Defendants violated the TCPA. (ECF No. 116-1 at 18-22.) Defendants admit that Amsterdam did not include reference to the "[thirty] (30)-day compliance period to honor an opt-out request," but Plaintiff was not damaged by this factor because Plaintiff never contacted Amsterdam to request the faxes to stop. (Id. at 20.) Defendants also posit that the opt-out notice substantially complied with TCPA requirements and that the absence of some technical language should not result in liability. (Id. at 21-22.)
It is undisputed that Plaintiff and Amsterdam have an EBR, evidenced by Plaintiff's Customer Information Display Form (ECF No. 85-1 at 2), and Plaintiff's admission that it made a purchase from Amsterdam (ECF No. 69-3 at 2 (Request No. 3)). Plaintiff also admits that Plaintiff voluntarily provided Amsterdam with its fax number when Virginia McCuen made a purchase on June 12, 2015. (ECF No. 69-3 at 3 (Request No. 5).) The ultimate dispute as to the applicability of the EBR defense is whether the opt-out notice on the faxes is statutorily compliant.
In 2014, the FCC made a ruling that "full compliance" with the TCPA's statutory opt-out provisions was required for the opt-out provisions included in both solicited and unsolicited faxes. Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 29 F.C.C. Rcd. 13998, 14013 ¶ 33 (2014) (hereinafter "2014 FCC Order"). Bais Yaakov of Spring Valley, et al. v. FCC, et al. vacated this Order's requirement that solicited faxes have an opt-out notice, but the requirement for unsolicited faxes to have a compliant opt-out notice still remains.
Whether a party has fully complied with the statutory opt-out provisions can be a question of fact or law, depending on which particular element is absent or in dispute. See Davies v. W.W. Grainger, Inc., No. 13-CV-03546, 2016 WL 6833902, at *4 (N.D. Ill. Nov. 21, 2016) ("It is this Court's position that the question of whether the opt-out notice is clear and conspicuous is a mixed question of law and fact."); Drug Reform Coordination Network, 106 F. Supp. 3d at 16 ("[The optout notice] did not state, however, that [the defendant] must honor an opt-out within 30 days and that the failure to do so would be unlawful. Accordingly, even if [the defendant] could demonstrate that it had an `existing business relationship' with [the plaintiff], its noncompliance with the TCPA's strict notice requirements disqualifies it from the safe harbor.").
The Brodsky court's holdings are not precedential in this court, however, the court finds its analysis regarding Defendants' admission persuasive. In this case, Defendants admit that Amsterdam's opt-out notice did not state that "failure to comply within thirty (30) days of the request is unlawful." (ECF No. 69-1 at 14.) Therefore, Defendants have admitted that the faxes' opt-out notices are insufficient as a matter of law. Because of this admission, the court does not need to inquire further into the propriety of the EBR exception for unsolicited faxes because the exception would not be applicable in this case.
The unsolicited fax provisions of the TCPA only apply to "senders" of faxes, and the parties dispute whether Taylor, Amsterdam's parent company (ECF No. 81-1 at 24:3-5; ECF No. 120 at 8), is liable as a sender under the provisions of the TCPA. "The term sender for purposes of [the sending of unsolicited faxes]. . . means the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement." 47 C.F.R. § 64.1200(f)(10). "[FCC] rules generally establish that the party on whose behalf a solicitation is made bears ultimate responsibility for any violations." See In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 10 F.C.C. Rcd. 12391, 12397 (1995).
Plaintiff asserts that "record evidence demonstrates that Taylor was the financial beneficiary of the fax advertising and is a "sender" under the TCPA." (ECF No. 120 at 30-31.) Plaintiff directs the court to Wachowiak's testimony that Amsterdam consulted Taylor regarding "the need for opt out language on fax advertisements several years ago," and that "[Amsterdam's] profits are Taylor's profits." (Id. at 31, 33); (see also ECF No. 81-1 at 20:20-21:19, 24:6-10.) Plaintiff also asserts that the court should apply the plain meaning of "sender" because "if the language of a statute or regulation has a plain and ordinary meaning, courts need look no further and should apply the regulation as it is written." Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, 883 F.3d 459, 467 (4th Cir. 2018) (quoting Gilbert v. Residential Funding LLC, 678 F.3d 271, 276 (4th Cir. 2012)); (see also ECF No. 120 at 32).
Defendants maintain that Taylor "does not approve" any marketing strategies with Amsterdam, nor does it have a "marketing agreement" with Amsterdam, or have "knowledge or involvement" in what is sent by Amsterdam; stating that "[t]he alleged unsolicited faxes were sent by, and for the benefit of Amsterdam." (ECF No. 116-1 at 24.) Defendants also maintain that Taylor is not a "sender nor a seller,"
The court notes that several of Defendants' assertions regard the sufficiency of Plaintiff's allegations, however, at the summary judgment stage of litigation Plaintiff cannot rely on its pleadings, but must put forth "specific" facts demonstrating that there is a genuine issue for trial. See Celotex, 477 U.S. at 324; Fed. R. Civ. P. 56(c)(1). Therefore, Defendants' assertions regarding the sufficiency of Plaintiff's pleadings are a nullity.
Wachowiak testified that Taylor shares in the profits of Amsterdam and Taylor approved the use of the "opt-out" language placed on the faxes. (ECF No. 81-1 at 24:6-10; 26:19-27:21.)
For the reasons stated above, Defendants' Second Motion for Summary Judgment (ECF No. 116) is
47 C.F.R. § 64.1200(a)(4)(iii)
