Couser v. Pre-Paid Legal Services, Inc.

REPLY to Response to Motion re MOTION to Dismiss for Failure to State a Claim in Plaintiff's First Amended Class Action Complaint

S.D. Cal.September 23, 2013

MICHAEL L. TURRILL (SBN 185263) PAUL A. RIGALI (SBN 262948) ARENT FOX LLP 555 West Fifth Street, 48th Floor Los Angeles, CA 90013-1065 Telephone: 213.629.7400 Facsimile: 213.629.7401 Email: michael.turrill@arentfox.com paul.rigali@arentfox.com CARRIE COUSER, Plaintiff, v. PRE-PAID LEGAL SERVICES, INC. d/b/a LEGAL SHIELD, et al., Defendants. Case No. 3:12- CV-2575 LAB (WVG) Assigned to Hon. Larry A. Burns REPLY IN SUPPORT OF CALLFIRE, INC.'S MOTION TO DISMISS FIRST AMENDED CLASS ACTION COMPLAINT FOR DAMAGES Date: September 30 2013 Time: 11:30 a.m. Courtroom: 14A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT Fox LLP ATTORNEYS AT Lww Los ANGELES Michael B. Hazzard (Admitted Pro Hac Vice) Adam Bowser (Admitted Pro Hac Vice) ARENT FOX LLP 1717 K Street NW Washington, DC 20036 Telephone: 202.857.6000 Facsimile: 202.857.6395 Email: michae.hazzard@arentfox.com adam.bowser@arentfox.com Attorneys for Defendant CAW- IRE, INC. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 1 of 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. II. III. IV. V. TABLE OF CONTENTS 1 3 6 9 12 INTRODUCTION AND SUMMARY OF THE ARGUMENT REQUIRING PLAINTIFF TO PUT CALLFIRE ON NOTICE OF THE ALLEGATIONS SPECIFIC TO CALLFIRE IS NOT A HEIGHTENED PLEADING STANDARD CALLFIRE'S TERMS OF SERVICE ARE PROPERLY BEFORE THE COURT IF THE COURT DECLINES TO DISMISS THE AMENDED COMPLAINT, THE COURT SHOULD REFER THE MATTER TO THE FCC CONCLUSION ARENT FOX LLP ATTORNEYS AT LAW Los ANGELES REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 2 of 20 TABLE OF AUTHORITIES Page(s) FEDERAL CASES All American Semiconductor, Inc. v. Peoplesoft, USA, Inc., CIV No. 07-12963-BKC-LMI, 2010 WL 2854153, at 10 (S.D. Fla. July 20, 2010) 5 Beyard v. Caddo Parish Comm'n, CIV No. 06-2296, 2007 WL 1741970 (W.D. La. Apr. 27, 2007) 5 Broam v. Bogan, 320 F.3d 1023 (9th Cir. 2003) 3 Fed. Power Comm'n v. Louisiana Power & Light Co., 406 U.S. 621 (1972) 11 Garcia v. Seterus, Inc., CIV No. 12-2049-LJO-SAB, 2013 WL 1281565 (E.D. Cal. Mar. 27, 2013) 5 Glauser v. Twilio, Inc., CIV No. 11-2584 PJH, 2012 WL 259426 (N.D. Cal. Jan. 27, 2012) 11, 12 Hart v. Comcast of Alameda, CIV No. 07-6350 PJH, 2008 WL 2610787 (N.D. Cal. June 25, 2008) 11 In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act (TCPA) of 1991, Docket No. 02-278, FCC 03-153 10 In re Sony Gaming Networks and Customer Data Security Breach Litigation, 903 F. Supp. 2d 942 (S.D. Cal. 2012) 8 Petrovic v. Princess Cruise Lines, LTD., CIV No. 12-21588, 2012 WL 3026368 (S.D. Fla. July 20, 2012) 5 Riehle v. Bank of America, N.A., CIV No. 13-251-PHX-NVW, 2013 WL 1694442 (D. Ariz. Apr. 18, 2013) 5 Sancom, Inc. v. AT&T Corp., 696 F. Supp. 2d 1030 (D.S.D. 2010) 10 Thomas v. McBride, 9 F.3d 1549, 1993 WL 570467 (7th Cir. Nov. 16, 1993) 11 FEDERAL STATUTES 42 U.S.C. 1981, 1983 5 RULES Fed. R. Civil Rule 7.1 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT Fox LLP ATTORNEYS AT LAW Los ANGELES REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 3 of 20 1 2 3 4 5 6 7 Fed. R. Civ. P. 8(a)(2) 5 Fed. R. Civ. P. 12(b)(6) 1, 3, 8, 12 Fed. R. Rule 8 2, 5 Fed. R. Rule 11 6 REGULATIONS 47 C.F.R. § 1.2(a) 9 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 111 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) ARENT Fox LLP ATTORNEYS AT LAW LOS ANGELES Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 4 of 20 Defendant CallFire, Inc. ("CallFire"), through counsel and pursuant to Fed. R. Civ. P. 12(b)(6), Local Civil Rule 7.1 and the doctrine of primary jurisdiction, respectfully files this Reply in Support of its Motion to Dismiss the First Amended Class Action Complaint for Damages (ECF No. 28). I. INTRODUCTION AND SUMMARY OF THE ARGUMENT CallFire demonstrated that Plaintiff's Amended Complaint (ECF No. 25) should be dismissed as to CallFire because Plaintiff's allegations concerning CallFire fail to plausibly state a claim that CallFire made any calls to Plaintiff, let alone made calls in violation of the Telephone Consumer Protection Act ("TCPA"). Mem.1 at 5-10. The only allegations Plaintiff lodged specifically as to CallFire are that CallFire: • Provides voice and text connectivity to over 100,000 businesses (Am. Compl. ¶ 16 (emphasis added)); and • Is a company that advertises and engages in text messaging through the use of automated dialers and prerecorded messages, and was an agent of Legal Shield and Frick at all relevant times. Am. Compl. ¶ 18 (emphasis added). CallFire established that its passive provision of "connectivity" alleged by Plaintiff is exactly the function that common carriers and fax broadcasters provide, and such entities are exempt from TCPA liability when they "merely provid[e] the network over which a subscriber" sends its messages. Mem. at 8-9 (citing In the Matter of Rules and Regulations Implementing the TCPA of 1991, 7 FCC Rcd. 8752, 8779-80 (1992) (quoting 2 FCC Rcd. at 2820)). Neither the Federal Communications Commission ("FCC") nor the courts have held that a passive software provider's provision of connectivity is subject to TCPA liability simply by Memorandum of Points and Authorities in Support of Defendant CallFire, Inc.'s Motion to Dismiss First Amended Class Action Complaint for Damages (ECF No. 28-1). - 1 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT Fox LLP ATTORNEYS AT LAW LOS ANGELES Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 5 of 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 virtue of its customers' use of its software, and thus Plaintiff fails to state a claim. Id. at 5-10. CallFire also showed that Plaintiffs allegation that CallFire "advertises and engages in text messaging" is facially irrelevant to Plaintiffs case, which concerns prerecorded voice calls allegedly sent to Plaintiff. Id. at 7 n.8. Indeed, in her Opposition,2 Plaintiff concedes that "this case centers on Defendant's [sic] phone calls to Plaintiffs cellular phone." Opp. at 14:22-23 (emphasis in original); see also Am. Compl. ¶ 26 (alleging that "at the express instruction and guidance of Legal Shield, through Legal Shield's employee and representative, Frick," Plaintiff received calls "using an 'artificial or prerecorded voice."). Thus, even taking this allegation as true, Plaintiff fails to state a plausible claim that CallFire made the voice calls to Plaintiff at issue in this case. Alternatively, CallFire demonstrated that if the Court declines to dismiss the claim against CallFire entirely, it should refer the case to the FCC under the primary jurisdiction doctrine. Mem. at 11-16. As the expert agency with the responsibility for implementing and enforcing the TCPA, the FCC should have an opportunity in the first instance to address Plaintiff's attempt to expand liability under the TCPA far beyond its intended scope to include software providers like CallFire. Plaintiff admits that she never alleges that CallFire had any influence on the prerecorded messages that she allegedly received. See Opp. at 10:7-9 ("CALLFIRE is correct to claim that Plaintiff did not allege" that CallFire had any "influence on the prerecorded messages" allegedly received by Plaintiff). Nevertheless, through her Opposition, Plaintiff attempts to rewrite her allegations to make it appear that she alleged that it was CallFire itself making these calls all along, rather than her scattershot approach of accusing the "Defendants" collectively, a practice which fails to satisfy the requirements of Rule 8. Mem. at 5 (citing Fed. R. Civ. P. 2 Plaintiff's Opposition to Defendant CallFire's, Inc.'s Motion to Dismiss Amended Complaint (ECF No. 34). ARENT Fox LLP ArreltNhys AT LAW LOS ANGELES - 2 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 6 of 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8(a)(2)). The Court, however, should disregard Plaintiff's revisionist reading of her already Amended Complaint. See Broam v. Bogan, 320 F.3d 1023, 1034 (9th Cir. 2003) ("In determining the propriety of a Rule 12(b)(6) dismissal, a court may not look beyond the complaint to a plaintiffs moving papers"). Further, Plaintiff asserts throughout her Opposition that CallFire impermissibly contradicts her allegations against CallFire, without ever detailing exactly how CallFire explaining its provision of connectivity contradicts her threadbare allegations. Instead, CallFire properly included material with its Motion so that the Court can consider whether CallFire's provision of connectivity can violate the TCPA (it cannot), and to provide the necessary context for CallFire's alternative request to refer the issues relating to CallFire to the FCC. Thus, even if the Court were to consider Plaintiff's revisionist reading of her Amended Complaint and the inapposite legal authority relied upon by Plaintiff, for the reasons discussed below, Plaintiff fails to demonstrate that her claims should not be dismissed, or alternatively, that this case should not be referred to the FCC. II. REQUIRING PLAINTIFF TO PUT CALLFIRE ON NOTICE OF THE ALLEGATIONS SPECIFIC TO CALLFIRE IS NOT A HEIGHTENED PLEADING STANDARD CallFire demonstrated that the only relevant3 allegation directed against the service that CallFire provides - its provision of "connectivity" through its self- service and web-based software platform - is insufficient to establish that CallFire "makes" any calls in violation of the TCPA. Mem. at 5-6. CallFire further established that Plaintiff's practice of lumping all of the Defendants together fails to satisfy Plaintiff's obligation to put CallFire on notice as to exactly what CallFire is alleged to have done that gave rise to Plaintiff's claims. Id. at 5-6. 3 Again, Plaintiff's allegation that CallFire "engages in text messaging through the use of automated dialers and prerecorded messages," Am. Compl. ¶ 18, is entirely irrelevant to this action because Plaintiff alleges she received prerecorded voice calls, not prerecorded text messages. ARENT FOX LLP ATTORNEYS AT LAW Los ANGELES - 3 - REPLY ISO OF MOTION TO DISMISS; CASE NO, 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 7 of 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT Fox LLP ATTORNEYS AT LAW Los ANGELES Plaintiff argues that CallFire seeks to impose a heightened pleading standard on Plaintiff, but that in any event, she "sufficiently identifies CALLFIRE as a party who made automated and prerecorded calls to Plaintiff." Opp. at 9. Plaintiff's allegation, however, is that "at the express instruction and guidance of Legal Shield, through Legal Shield's employee and representative, Frick, Defendants began contacting Plaintiff" and CallFire's provision of "connectivity" enabled this to happen. Am. Compl. ¶ 16, 26 (emphasis added). The only plausible reading of Plaintiff's Amended Complaint is that Defendant Legal Shield gave express instructions to its employee and representative, Defendant Frick, to make calls to Plaintiff, and that Defendant Frick made these calls on behalf of Defendant Legal Shield using the connectivity that CallFire's software platform enables. As CallFire has already established, the TCPA does not impose liability on an entity simply because it provides a connection to the public switched telephone network. Mem. at 6-7. If that were the case, Plaintiff's wireless carrier would be equally liable to Plaintiff for delivering the calls at issue to her.4 Nowhere in her Amended Complaint does Plaintiff even intimate that CallFire itself initiated any calls to Plaintiff, which she concedes is a necessary element of her claims. Opp. at 2:20-28 (citing 47 U.S.C. § 227(b)(1)(A)(iii)). Indeed, Plaintiff admits that she never alleges that CallFire had any influence on the prerecorded messages that she allegedly received. See Opp. at 10:7-9. It is therefore absurd for Plaintiff to assert that "because the FAC refers to each defendant as a whole (i.e., `Defendants')" CallFire is incorrect that "the FAC simply lumps 'all of the defendants together.'" Id. at 10:1-2. Lodging allegations 4 Plaintiff argues that because "CALLFIRE's business is allegedly one that offers greater connectivity between businesses and consumers, the reasonable inference is that CALLFIRE made the alleged calls." Opp. at 6:24-26. Plaintiff's wireless provider also offers greater connectivity between businesses and consumers, and it would be equally as unreasonable to infer that CallFire or Plaintiff's wireless carrier made the calls at issue here. Providing a connection in no way implies initiating content through such connection. Plaintiff's argument is comparable to stating that because road construction crews provide a connection between point A and point B, they can be liable if someone commits a traffic offense on the roads they constructed. - 4 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 8 of 20 against the "Defendants" collectively necessarily "lumps 'all of the defendants together.' Plaintiff's suggestion that lumping defendants together is only impermissible in the context of claims involving state action or arising under "42 U.S.C. 1981, 1983, or RICO" is also false. Id. at 9:20-23. The requirements of Rule 8 "to provide a short and plain statement of the claim" as it applies to each defendant pertains to all claims and complaints. Fed. R. Civ. P. 8(a)(2). Indeed, CallFire relied upon Garcia v. Seterus, Inc., CIV No. 12-2049-LJO-SAB, 2013 WL 1281565 (E.D. Cal. Mar. 27, 2013), which concerned a foreclosure action and a claim to quiet title, and not a claim involving state action that Plaintiff asserts requires a heightened pleadings standard. Id. at *2. There the court dismissed the complaint because it "lumps defendants and others together and fails to distinguish adequately claims and alleged wrongs among defendants." Id. at *5. Plaintiff's complaint here makes the same fatal mistake. Similarly, in another foreclosure action, the court dismissed the complaint because a "plaintiff may not collectively accuse multiple defendants of committing misdeeds through the expedience of the title 'Defendants.' Such group pleading is not allowed." Riehle v. Bank of America, N.A., CIV No. 13- 251-PHX-NVW, 2013 WL 1694442, at *2 (D. Ariz. Apr. 18, 2013) (emphasis added); see also Petrovic v. Princess Cruise Lines, LTD., CIV No. 12-21588, 2012 WL 3026368, *3 (S.D. Fla. July 20, 2012) (dismissing negligence action because "a complaint that lumps all the defendants together in each claim and provides no factual basis to distinguish their conduct fails to satisfy Rule 8.") (citation and internal quotations omitted) (emphasis added); All American Semiconductor, Inc. v. Peoplesoft, USA, Inc., CIV No. 07-12963-BKC-LMI, 2010 WL 2854153, * at 10 (S.D. Fla. July 20, 2010) (dismissing bankruptcy action because of the "undifferentiated allegations that lump all the defendants together."); Beyard v. Caddo Parish Comm'n, CIV No. 06-2296, 2007 WL 1741970, at *4 (W.D. La. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT Fox LLP ATTORNEYS AT LAW Los ANGELES - 5 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 9 of 20 Apr. 27, 2007) ("Plaintiff s conclusory and generic allegations that lump all defendants in one group are insufficient"). CallFire is therefore not seeking to impose a heightened pleading standard on Plaintiff, but simply asking the Court to enforce the standards of pleading as they currently exist. This case has been pending for nearly a year and Plaintiff has already conducted discovery against Legal Shield. See ECF No. 21-1 at 3 ("In light of recent discovery responses, Plaintiff has determined that the operative Complaint in this case needs to be modified"). The only relevant modifications Plaintiff made to her Complaint, however, involved making "Defendant" plural and to add CallFire to the case because it allegedly "provides voice and text connectivity to over 100,000 businesses." Am. Compl. ¶ 16. Plaintiff, however, has accused all of the Defendants of negligently sending telephone calls to Plaintiff, and in the alternative, of willfully violating the TCPA. CallFire, and the Court, should not have to guess what specific actions CallFire allegedly took that were negligent or willful. It is Plaintiff's obligation to provide such notice to CallFire and the Court.' Because Plaintiff fails to allege any facts related to CallFire that would give rise to a TCPA violation as against CallFire, and because Plaintiff indiscriminately lumps all of the Defendants together, the Amended Complaint should be dismissed. III. CALLFIRE'S TERMS OF SERVICE ARE PROPERLY BEFORE THE COURT Plaintiff argues that after putting CallFire's relationship with the other Defendants and its service in general at issue, she should be able to hide behind her insufficient allegations and the Court should refuse to consider CallFire's Terms of 5 CallFire believes that the only allegation Plaintiff could lodge against CallFire on an individual basis, and within the bounds of Rule 11, is that CallFire's self-service software platform does provide connectivity to the telephone network. Amendment of Plaintiff's already Amended Complaint would therefore be futile for the reasons CallFire has already articulated. Mem. 5-10. The Court should therefore dismiss CallFire from this case with prejudice. - 6 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT FOX LLP ATTORNEYS AT LAW Los ANGELES Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 10 of 20 Service and the declaration summarizing and authenticating the same. Opp. at 13:3-15. Plaintiff's argument fails for three reasons. First, Plaintiff alleges that CallFire is the agent6 of the other Defendants by virtue of their alleged use of CallFire's provision of connectivity, Am. Compl. 16, 18, and thus Plaintiff herself put CallFire's Terms of Service at issue. As explained in the Declaration of Jagannathan Thinakaran in Support of Motion to Dismiss (ECF No. 28-2), "[e]very customer that utilizes CallFire's software platform to send voice broadcasts is required to agree to CallFire's Terms of Service before initiating any voice broadcasts." Thinakaran Decl. ¶ 7. Thus, CallFire's authenticated Terms of Service expressly govern the relationship between CallFire and all of its customers when they use CallFire's software platform, including the alleged use by the other Defendants. CallFire's Terms of Service are therefore necessarily relevant to this action, and notably Plaintiff does not, because she cannot, dispute the authenticity of CallFire's Terms of Service. CallFire's Terms of Service are therefore "'integral' to the complaint, and [the Court] can consider [their] terms in deciding" CallFire's Motion to Dismiss "without converting the proceeding to one for summary judgment." Int'l Audiotext Network, Inc. AT&T, 62 F.3d 69, 72 (2d Cir. 1995). 6 Plaintiff's argument that the FCC's Dish Network Order "actually supports Plaintiff's allegations of vicarious liability on the part of Defendant CALLFIRE" completely misreads this decision (and hornbook law). Opp. at 15:3-18. There the FCC held that the seller on whose behalf calls are made can be directly liable under the TCPA if it provides "comprehensive instructions as to the timing and the manner of the call," or the seller can be vicariously liable for its agent's acts under traditional common law agency principles. Dish Network Order, ¶¶ 27, 34. Here, Plaintiff does not, because she cannot, allege that CallFire was the seller on whose behalf calls were being made. Instead, she alleges that Defendant Legal Shield provided "express instruction and guidance" to Defendant Frick to make the calls at issue. Am. Compl. ¶ 16. Taking Plaintiff's allegations as true, Defendant Legal Shield would be directly liable for any TCPA violations because it was the principal expressly directing its agent Frick to make these calls through CallFire's software platform. Plaintiff's "respondeat inferior" theory of liability turns vicarious liability on its head by apparently arguing that a principal's agent's agent can be vicariously liable for following the express instructions of the principal. See Restatement (Third) of Agency § 7.01 cmt d (explaining that "there is no principal [sic] of `respondeat inferior"). - 7 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT FOX LLP ATTORNEYS AT LAW LOS ANGELES Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 11 of 20 Second, CallFire's Terms of Service is publicly available, Mem. at 2 n.3, and the Court can take judicial notice of a company's publicly available Terms of Service. See In re Google, Inc. Privacy Policy Litigation, CIV No. 12-01382-PSG, 2012 WL 6738343, at *4 (N.D. Cal. Dec. 28, 2012) (taking judicial notice of Google's Terms of Service and ruling that a district court can consider such terms "if the contract's authenticity is not contested and the complaint necessarily relies on that contract"); see also In re Sony Gaming Networks and Customer Data Security Breach Litigation, 903 F. Supp. 2d 942, 954 (S.D. Cal. 2012) (taking judicial notice of Sony's publicly available terms of service because their authenticity was not questioned and they were relevant to the case). Further, the Court "need not accept as true allegations that contradict matters that are ... subject to judicial notice." In re Google, 2012 WL 6738343, at *3. In any event, contrary to Plaintiff's conclusory assertions, CallFire's Terms of Service do not contradict any allegations contained in the Amended Complaint lodged against CallFire. See, e.g., Opp. at 16:3-14. As stated above, the only relevant allegation against CallFire is that its service provides "connectivity," and CallFire's Terms of Service simply explain how and under what conditions that connectivity is provided through CallFire's software platform. Indeed, Plaintiff cannot simultaneously admit that she never alleged that CallFire "provided a list of telephone numbers, the content of the prerecorded messages, or any other influence on the prerecorded messages allegedly sent by the other Defendants," Mem. at 7:20-8:2; Opp. at 5-9, but then assert that CallFire's Terms of Service somehow contradict her allegations. Plaintiff's argument to the contrary is pure makeweight. Finally, CallFire's alternative request to have the issues related to CallFire referred to the FCC was made pursuant to the primary jurisdiction doctrine, and not Rule 12(b)(6). There is no prohibition against including additional material not explicitly referenced in a complaint to provide context for the Court to properly consider a motion for primary jurisdiction referral, and Plaintiff certainly cites no 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT Fox LLP ATTORNEYS AT LAW LOS ANGEI.ES - 8 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 12 of 20 case law holding otherwise. Accordingly, the Court can consider CallFire's Terms of Service and the declaration summarizing and authenticating the same because (1) Plaintiff herself put at issue the terms and conditions under which CallFire provides connectivity through its software platform; (2) CallFire's Terms of Service are susceptible to judicial notice; or (3) they are relevant to the Court's consideration of CallFire's alternative request for a primary jurisdiction referral. IV. IF THE COURT DECLINES TO DISMISS THE AMENDED COMPLAINT, THE COURT SHOULD REFER THE MATTER TO THE FCC If the Court declines to dismiss Plaintiff's Amended Complaint as against CallFire, CallFire demonstrated that the Court should refer this matter to the FCC because it satisfies the requirements to invoke the primary jurisdiction doctrine: "(1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration." Mem. at 11-16 (citing Syntek Semiconductor Co., Ltd. V. Microchip Tech. Inc., 307 F.3d 775, 781 (9th Cir. 2002)). Plaintiff erroneously argues that any ruling by the FCC issued pursuant to the Court's referral of the issues related to CallFire could only be applied prospectively. Opp. at 17:4-9. Plaintiff makes this argument by misleading the Court as to the nature of FCC's 2012 TCPA Order,7 asserting that it was a declaratory ruling, which the FCC issues in order to terminate a controversy or to remove uncertainty. See 47 C.F.R. § 1.2(a). But the 2012 TCPA Order was a Report and Order issued after a Notice of Proposed Rulemaking was released in order to change the rules, not interpret existing rules. See 2012 TCPA Order, ¶ 16. 7 In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 27 FCC Rcd. 1830 ("2012 TCPA Order") - 9 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT FOX LLP ATTORNEYS AT LAW Los ANGELES Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 13 of 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Although Plaintiff is correct that the FCC's regulations will require "prior express written consent," as defined by the FCC, for certain types of autodialed or prerecorded messages beginning on October 16, 2013, Id. ¶ 18, the prospective nature of these rules was a function of the rules being new.8 Plaintiff thus misconstrues the basis of CallFire's request for a primary jurisdiction referral. CallFire would not ask the FCC to create a new exemption for intermediate software providers to apply prospectively. Rather, consistent with Congressional intent and the FCC's prior decisions, CallFire would seek a determination that it does not "make" calls under existing law simply by virtue of providing connectivity through its software. Despite the seemingly plain language of the TCPA, a primary jurisdiction referral is entirely appropriate. See Sancom, Inc. v. AT&T Corp., 696 F. Supp. 2d 1030, 1037-38 (D.S.D. 2010) (referring issues to FCC to obtain expert guidance on terms such as "customer" and "subscribe" found in telephone company's tariff and the Communications Act). Here, the FCC indisputably has jurisdiction and expertise over the TCPA and was tasked by Congress to implement and enforce uniform, nationwide regulations. See, e.g., Report and Order, In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act (TCPA) of 1991, Docket No. 02-278, FCC 03-153, ¶ 83 (June 26, 2003) ("we believe that it was the clear intent of Congress generally to promote a uniform regulatory scheme under which telemarketers would not be subject to multiple, conflicting regulations."). But through her Amended Complaint, Plaintiff is asking the Court to apply a novel application of the TCPA and expand liability beyond anything that the FCC has currently addressed. By analogy, under Plaintiff's legal theory, a company such as Microsoft could be liable for CAN-SPAM Act violations simply because its customers could use its Outlook software to send spam. CallFire is aware of no decision, and 8 The FCC could not, consistent with the Administrative Procedure Act, do anything but implement a rule change prospectively. ARENT FOX LLP ATTORNEYS AT LAW LOS ANGELES - 10 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 14 of 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff certainly cites none, where a court found that an intermediary software provider "makes" a text message call under the TCPA when it does not control the content, timing, or direction of the messages its customers send, just as Microsoft cannot be deemed to be "sending" Outlook users' emails. Indeed, Plaintiff completely ignores the similarity of the only TCPA decision involving a software provider qua software provider's liability under the TCPA. See Glauser v. Twilio, Inc., CIV No. 11-2584 PJH, 2012 WL 259426 (N.D. Cal. Jan. 27, 2012). Of course, the court in Twilio found it necessary to defer to the FCC's "recognized expertise" on the precise issue CallFire seeks to refer to the FCC here, i.e., "the applicability of any 'common carrier' exemption" to an intermediate software provider under the TCPA. Id. at *2. Plaintiff provides no grounds to reach a different result here except to say that the Court should close its eyes as to how CallFire provides connectivity through its software platform. As discussed above, however, the Court can rely on CallFire's Terms of Service, which explain how CallFire's services operate, when considering CallFire's alternative request for a primary jurisdiction referral. Plaintiff also makes unsubstantiated allegations that she would be prejudiced by any delay that results if this case were referred to the FCC. Opp. at 18. The mere passage of time, however, does not suffice as a legal basis for declining to invoke the primary jurisdiction doctrine. Nor does the mere passage of time, without more, prejudice plaintiff.9 As the Supreme Court explained, courts are "obliged to defer" to an agency where the "issue brought before a court is in the process of litigation through procedures originating in the [agency]." Fed. Power Comm 'n v. Louisiana Power & Light Co., 406 U.S. 621, 647 (1972); see also Hart v. Comcast of Alameda, CIV No. 07-6350 PJH, 2008 WL 2610787, at *2 (N.D. Cal. 9 See Thomas v. McBride, 9 F.3d 1549, 1993 WL 570467, at *3 (7th Cir. Nov. 16, 1993) (noting insufficiency of petitioner's "unsubstantiated allegations of prejudice"). Plaintiff fails to explain how issuing subpoenas to CallFire would be any more expensive or time consuming than issuing discovery requests to a party. ARENT Fox LLP ATTORNEYS AT LAW Los ANGELES - 11 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 15 of 20 June 25, 2008) (holding the FCC had primary jurisdiction because two petitions had been filed on the precise issue before the court, and the FCC announced it would seek public comment). The FCC is now actively considering the precise issue of whether a software provider can be liable for "making" a call under the TCPA, both pursuant to the Club Texting Petition previously detailed by CallFire, Mem. at 13-15, and the recent Twilio referral. Plaintiff submits no compelling reason why the Court should waste its own resources deciding an issue within the FCC's area of expertise and which it is currently addressing, simply to risk issuing a conflicting ruling on a statute that requires "uniform interpretation." Boyes, 199 F.3d at 1265. Accordingly, to the extent the Court does not dismiss the claims against CallFire pursuant to Rule 12(b)(6), the Court should refer the matter to the FCC. V. CONCLUSION For the foregoing reasons, CallFire respectfully requests this Court to grant its motion to dismiss the claims alleged against CallFire in Plaintiff's Amended Complaint with prejudice. In the alternative, the Court should stay the entire case or dismiss the claims against CallFire without prejudice and refer the issues related to CallFire to the FCC. Dated: September 23, 2013 Respectfully submitted, ARENT FOX LLP By: /s/ Michael L. Turrill MICHAEL L. TURRILL PAUL A. RIGALI Attorneys for Defendant CAW, IRE, INC. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT Fox LLP ATTORNEYS AT LAW LOS ANGELES - 12 - REPLY ISO OF MOTION TO DISMISS; CASE NO. 3:12- CV-2575 LAB (WVG) Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 16 of 20 COUSER v. PRE-PAID LEGAL SERVICES, INC., et al. USDC, Southern District of California Case No. 12 CV 2575 LAB (WVG) CERTIFICATE OF SERVICE I am a citizen of the United States. My business address is Arent Fox LLP, 555 West Fifth Street, 48th Floor, Los Angeles, California 90013-1065. I am employed in the County of Los Angeles, where this service occurs. I am over the age of 18 years, and not a party to the within cause. On the date set forth below, according to ordinary business practice, I served the foregoing document(s) described as: "REPLY IN SUPPORT OF CALLFIRE, INC.'S MOTION TO DISMISS FIRST AMENDED CLASS ACTION COMPLAINT FOR DAMAGES" 111 (BY CM/ECF) I hereby certify that on this date, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to tie e-mail addresses denoted on the Electronic Mail notice list, and I hereby certify that I have mailed the foregoing document or paper via the United States Postal Service to the non-CM/ECF participants (if any) indicated on the Manual Notice list. O (BY FAX) I transmitted via facsimile, from facsimile number 213.629.7401, the document(s) to the person(s) on the attached service list at the fax number(s) set forth therein, on this date before 5:00 p.m. A statement that this transmission was reported as complete and properly issued by the sending fax machine without error is attached to this Proof of Service. O (BY E-MAIL) On this date, I personally transmitted the foregoing document(s) via electronic mail to the e-mail address(es) of the person(s) on the attached service list. O (BY MAIL) I am readily familiar with my employer's business practice for collection and processing of correspondence for mailing with the U.S. Postal Service, and that practice is that correspondence is deposited with the U.S. Postal Service the same day as the day of collection in the ordinary course of business. On this date, I placed the document(s) in envelopes addressed to the person(s) on the attached service list and sealed and placed the envelopes for collection and mailing following ordinary business practices. O (BY PERSONAL SERVICE) On this date, I delivered by hand envelope(s) containing the document(s) to the persons(s) on the attached service list. O (BY OVERNIGHT DELIVERY) On this date, I placed the documents in envelope(s) addressed to the person(s) on the attached service list, and caused those envelopes to be delivered to an overnight delivery carrier, with delivery fees provided for, for next- business-day delivery to whom it is to be served. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE ARENT Fox LLP ATTORNEYS AT LAW Los ANGELES RPP/613481.1 Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 17 of 20 CERTIFICATE OF SERVICE -2 RPP/613481.1 1 2 (Federal) I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. 3 4 Executed on September 23, 2013 at Los Angeles, California. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT Fox LLP ATTORNEYS AT LAW Los ANGELES Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 18 of 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CO USER v. PRE-PAID LEGAL SERVICES, INC., et al. USDC, Southern District of California Case No. 12 CV 2575 LAB (WVG) SERVICE LIST Attorneys for Plaintiff Carrie Couser Individually and on behalf of all other similarly situated Abbas Kazerounian Kazerounian Law Group, APC 245 Fischer Avenue Suite D1 Costa Mesa, CA 92626 Tel: (800) 400-6808 Fax: (800) 520-5523 Email: ak@kaz1g.com Joshua Swigart Hyde & Swigart 2221 Camino Del Rio South Suite 101 San Diego, CA 92108 Tel: (619) 233-7770 Fax: (619) 297-1022 Email: josh@westcoastlitigation.com Todd M. Friedman Law Offices of Todd M. Friedman, P.C. 369 South Doheny Drive Suite 415 Beverly Hills, CA 90211 Tel: (877) 206-4741 Fax: (866) 633-0228 Email: tfnedman@AttomeysForConsumers.com Matthew Michael Loker Kazerouni Law Group, APC 2700 North Main Street Suite 1000 Santa Ana, CA 92705 Tel: (800)400-6808 Fax: (800)520-5523 Email: ml@kaz1g.com Robert Lyman Hyde Hyde & Swigart 2221 Camino Del Rio South Suite 101 San Diego, CA 92108 Tel: (619)233-7770 Fax: (619)297-1022 Email: bob@westcoastlitigation.com ARENT Fox LLP ATTORNEYS AT LAW Los ANGELES RPP/613481.1 CERTIFICATE OF SERVICE -3 Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 19 of 20 Attorneys for Defendant Pre-Paid Legal Services, Inc. doing business as Legal Shield Shannon Z Petersen Sheppard Mullin Richter and Hampton 501 West Broadway Suite 1900 San Diego, CA 92101-3598 Tel: (619)338-6500 Fax: (619)234-3815 Email: spetersen@sheppardmullin.com Thomas B. Snyder Crowe & Dunlevy 20 North Broadway 18th Floor Oklahoma City, OK 93102 Tel: (405)234-3254 Fax: (405)239-6651 Email: thomas.snyder@crowedunlevy.com Timila S. Rother (Admitted Pro Hac Vice) Crowe & Dunlevy, PC 20 North Broadway Suite 1800 Oklahoma City, OK 73102-8273 Tel: (405)235-7757 Email: timila.rother@crowedunlevy.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENT FOX LLP ATTORNEYS AT LAW Los ANGELES RPP/613481.1 CERTIFICATE OF SERVICE 4 Case 3:12-cv-02575-LAB-WVG Document 38 Filed 09/23/13 Page 20 of 20