Kerr v. Zacks Investment Research, Inc. et al

MOTION to Dismiss for Failure to State a Claim

S.D. Cal.June 2, 2017

SMRH:483072877.2 -1- NOTICE OF MOTION AND MOTION TO DISMISS 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 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership Including Professional Corporations SHANNON Z. PETERSEN, Cal. Bar No. 211426 spetersen@sheppardmullin.com LISA S. YUN, Cal. Bar No. 280812 lyun@sheppardmullin.com 12275 El Camino Real, Suite 200 San Diego, CA 92130-2006 Telephone: 858.720.8900 Facsimile: 858.509.3691 BURKE, WARREN, MACKAY & SERRITELLA, P.C. DANIELLE J. GOULD pro hac vice dgould@burkelaw.com SARA YOUN CHOH pro hac vice schoh@burkelaw.com JOSHUA J. CAUHORN, pro hac vice jcauhorn@burkelaw.com 330 North Wabash Avenue, 22nd Floor Chicago, Illinois 60611 Telephone: 312.840.7000 Facsimile: 312.840.7900 Attorneys for Defendant ZACKS INVESTMENT RESEARCH, INC. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA JOHN KERR, individually and on behalf of all others similarly situated, Plaintiffs, v. ZACKS INVESTMENT RESEARCH, INC., an Illinois corporation, and DOES 1 through 50, inclusive, Defendants. Case No. 16-cv-1352 GPC (BLM) CLASS ACTION DEFENDANT ZACKS INVESTMENT RESEARCH, INC.'S NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT PURSUANT TO RULE 12(b)(6) Date: August 11, 2017 Time: 1:3 p.m. Courtroom 2D (2nd Floor - Schwartz) Hon. Gonzalo P. Curiel Case 3:16-cv-01352-GPC-BLM Document 81 Filed 06/02/17 PageID.1401 Page 1 of 3 SMRH:483072877.2 -2- NOTICE OF MOTION AND MOTION TO DISMISS 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 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 TO THE HONORABLE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on August 11, 2017, at 1:30 p.m., in Courtroom 2D of the United States District Court for the Southern District of California, located at 221 West Broadway, San Diego, California 92101, Defendant Zacks Investment Research, Inc. (“ZIR”) will and hereby does move to dismiss the Plaintiffs’ Second Amended Complaint [Dkt. 65] pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. As set forth in the accompanying Memorandum of Points and Authorities, there is good cause for the relief requested. The Second Amended Complaint (“SAC”) fails to state a claim for violations of the TCPA (Count I) because Plaintiffs fail to sufficiently allege that the alleged calls to their cell phones were made using an automatic telephone dialing system. The SAC also fails to state a claim for violation of the California Invasion of Privacy Act (Counts II and III) because Plaintiff John Kerr does not allege that ZIR recorded or assisted in the recording of any calls to his cell phone, because the claim is insufficiently pled with respect to Plaintiffs Li, Barnard, and Curtis, and because even if Plaintiffs' allegations are true, the provisions of the California Invasion of Privacy Act on which they rely are inapplicable to their plead facts. This Motion is based upon this Notice of Motion and Motion to Dismiss, the Memorandum of Points and Authorities, the pleadings, records, and papers on file in this action, and such further evidence and argument as the Court may allow. Case 3:16-cv-01352-GPC-BLM Document 81 Filed 06/02/17 PageID.1402 Page 2 of 3 SMRH:483072877.2 -3- NOTICE OF MOTION AND MOTION TO DISMISS 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 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 Dated: June 2, 2017 BURKE, WARREN, MACKAY & SERRITELLA, P.C. By /s/ Danielle J. Gould DANIELLE J. GOULD Attorneys for Defendant ZACKS INVESTMENT RESEARCH, INC. Email: dgould@burkelaw.com Case 3:16-cv-01352-GPC-BLM Document 81 Filed 06/02/17 PageID.1403 Page 3 of 3 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 Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership Including Professional Corporations SHANNON Z. PETERSEN, Cal. Bar No. 211426 spetersen@sheppardmullin.com LISA S. YUN, Cal. Bar No. 280812 lyun@sheppardmullin.com 12275 El Camino Real, Suite 200 San Diego, California 92130-2006 Telephone: 858.720.8900 Facsimile: 858.509.3691 BURKE, WARREN, MACKAY & SERRITELLA, P.C. DANIELLE J. GOULD, pro hac vice dgould@burkelaw.com SARA YOUN CHOH, pro hac vice schoh@burkelaw.com JOSHUA J. CAUHORN, pro hac vice jcauhorn@burkelaw.com 330 North Wabash Avenue, 22nd Floor Chicago, Illinois 60611 Telephone: 312.840.7000 Facsimile: 312.840.7900 Attorneys for Defendant ZACKS INVESTMENT RESEARCH, INC. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA JOHN KERR, individually and on behalf of all others similarly situated, Plaintiff, v. ZACKS INVESTMENT RESEARCH, INC., an Illinois corporation; and DOES 1 through 50, inclusive, Defendants. Case No. 16-cv-1352 GPC BLM MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS SECOND AMENDED COMPLAINT PURSUANT TO RULE 12(b)(6) Date: Time: Courtroom 2D (2nd Floor - Schwartz) Suite 2190 Hon. Gonzalo P. Curiel Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1404 Page 1 of 23 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- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS TABLE OF CONTENTS Page I. INTRODUCTION ............................................................................................. 1 II. BACKGROUND ............................................................................................... 2 A. Procedural History .................................................................................. 2 B. Allegations by Plaintiff Kerr in the SAC ................................................ 3 C. Allegations by Plaintiffs Li, Barnard, and Curtis in the SAC ................ 4 III. LEGAL STANDARD ....................................................................................... 4 IV. ARGUMENT .................................................................................................... 5 A. PLAINTIFFS FAIL TO STATE A CLAIM FOR VIOLATIONS OF THE TCPA (COUNT I). ................................................................... 5 1. Count I Fails with Respect to Kerr Because His Own Allegations – Albeit Threadbare – Belie That Any Defendant Used an ATDS. ........................................................... 6 2. Count I Fails with Respect to Li, Barnard and Curtis Because They Do Not Sufficiently Plead Any Facts Regarding the Content or Context of the Telephone Calls. ......... 7 B. PLAINTIFF KERR FAILS TO STATE A CLAIM FOR VIOLATIONS OF THE CALIFORNIA INVASION OF PRIVACY ACT AGAINST ZIR (COUNT II). ...................................... 9 1. Count II Fails Because Kerr Alleges No Facts to Support His Claim That the February 2, 2016 Call Was Recorded. ........ 10 2. Count II Fails Because Kerr Pleads No Facts Supporting that ZIR Assisted or Even Knew That The Other Defendants Recorded the February 2, 2016 Call. ....................... 11 3. The CIPA Does Not Apply To Kerr’s Plead Facts. .................... 12 C. PLAINTIFFS LI, BARNARD, AND CURTIS FAIL TO STATE A CLAIM FOR VIOLATIONS OF THE CALIFORNIA INVASION OF PRIVACY ACT AGAINST ZIR (COUNT III). ........ 15 1. Count III Fails Because Li, Barnard and Curtis Allege No Facts to Support Their Claim That the Alleged Undated Calls Were Recorded. ................................................................. 15 2. Count III Fails Because Li, Barnard and Curtis Allege No Facts to Support Their Claim That the Alleged Recorded Calls Were Made Within CIPA’s One-Year Statute of Limitations. ................................................................................. 16 V. CONCLUSION ............................................................................................... 17 Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1405 Page 2 of 23 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 -ii- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS TABLE OF AUTHORITIES Page Cases ACA Int’l v. FCC Case No. 15-1211 ................................................................................................... 8 Ades v. Omni Hotels Mgm't Corp. 46 F. Supp. 3d 999 (C.D. Cal. 2014) .................................................................... 14 Ashcroft v. Iqbal 556 U.S. 662 (2009) ......................................................................................... 4, 17 Banks v. Green Tree Servicing, LLC No. 14-cv-2825, 2015 WL 1058124 (N.D. Ill. Mar. 5, 2015) ................................ 6 Bell Atlantic Corp. v. Twombly 550 U.S. 544 (2007) ............................................................................................. 16 Duguid v. Facebook, Inc. Case No. 15-cv-00985-JST, 2017 WL 635117, at *4 (N.D. Cal. Feb. 16, 2017) ............................................................................................................. 7, 8 In re Facebook Internet Tracking Litig. 140 F. Supp. 3d 922 (N.D. Cal. 2015) .................................................................. 16 Giovanniello v. ALM Media, LLC 726 F. 3d 106 (2d Cir. 2013) ................................................................................ 17 Gragg v. Orange Cab Co., Inc. 942 F. Supp. 2d 1111 (W.D. Wash. 2013) ......................................................... 6, 7 Huricks v. Shopkick, Inc. No. C-14-2464 MMC, 2014 WL 3725344 (N.D. Cal. July 24, 2014) ................... 5 Johansen v. Vivant, Inc. No. 12 C 7159, 2012 WL 6590551 (N.D. Ill. Dec. 18, 2012) ................................ 6 Jones v. FMA Alliance Ltd. 978 F. Supp. 2d 84 (D. Mass. 2013) ....................................................................... 6 Kane v. Delong No. CV 13-05021-KAW, 2014 WL 894587 (N.D. Cal. Mar. 4, 2014) ............................................................................................................... 10, 15 Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1406 Page 3 of 23 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 -iii- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS Kimmel v. Goland 793 P.2d 524 (Cal. 1990) ........................................................................................ 9 Kmety v. Bank of America, Inc. No. 10cv1910-LAB (RBB), 2011 WL 4566441 (S.D. Cal. Sept. 30, 2011) ..................................................................................................................... 17 Lal v. Capital One Fin. Corp. No. 16-cv-06674-BLF (N.D. Cal.) (Notice of Appeal filed May 12, 2017 [Dkt. 67]) ..................................................................................................... 14 Maghan v. Quicken Loans Inc. 94 F. Supp. 3d 1141 (C.D. Cal 2015) ................................................................... 14 McKenna v. WhisperText No. 5:14-cv-00424-PSG, 2014 WL 4905629 (N.D. Cal. Sept. 29, 2014) ....................................................................................................................... 5 Meyer v. Portfolio Recovery Assocs., LLC 707 F.3d 1036 (9th Cir. 2012) ................................................................................ 5 Montalti v. Catanzariti 191 Cal. App. 3d 96 (1987) .................................................................................. 17 NEI Contracting and Eng’g, Inc. v. Hanson Aggregates Pac. S’west, Inc. No. 3:12-cv-01685-BAS(JLB), 2015 WL 1346110 (S.D. Cal. Mar. 24, 2015) ............................................................................................................... 14 Robertson v. Dean Witter Reynolds, Inc. 749 F.2d 530 (9th Cir. 1984) .................................................................................. 4 Starr v. Baca 652 F.3d 1202 (9th Cir. 2011), cert. denied, 132 S. Ct. 2101 ................................ 5 Sunbelt Rentals, Inc. v. Victor 43 F. Supp. 3d 1026 (N.D. Cal. 2014) .................................................................. 16 Vartanian v. VW Credit, Inc. No. 2:11-cv-10776-SVW-RZ, 2012 WL 12326334 (C.D. Cal. Feb. 22, 2012) ......................................................................................................... 11, 16 Vera v. O’Keefe 791 F. Supp. 2d 959 (S.D. Cal. 2011) .................................................................. 11 Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1407 Page 4 of 23 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 -iv- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS Warden v. Kahn 99 Cal. App. 3d 805 (Cal. Ct. App. 1979) .............................................................. 9 Wynn v. Nat’l Broadcasting Co. 234 F. Supp. 2d 1067 (C.D. Cal. 2002) .................................................................. 7 Young v. Hilton Worldwide, Inc. 565 Fed. Appx. 595 (9th Cir. 2014) ......................................................... 12, 13, 14 Young v. Hilton Worldwide, Inc. No. 2:12-cv-01788-R-PJW, 2014 WL 3434117 (C.D. Cal. Jul. 11, 2014) ..................................................................................................................... 14 Statutes 28 U.S.C. § 1658(a) ................................................................................................... 17 47 U.S.C. § 227(a)(1) .............................................................................................. 5, 8 47 U.S.C. § 227(b)(1) .................................................................................................. 5 47 U.S.C. § 227, et seq. ..................................................................... 1, 2, 3, 4, 5, 6, 17 Cal. C.C.P. § 340 ................................................................................................. 15, 17 Cal. Penal Code § 31 ................................................................................................. 11 Cal. Penal Code § 630, et seq. ........................... 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 16, 17 Cal. Penal Code § 632 ......................................................................................... 12, 13 Cal. Penal Code § 632.7 ...................................................................... 9, 12, 13, 14, 15 Cal. Penal Code § 632.7(a) .................................................................................... 9, 13 Other Authorities Fed. R. Civ. P. 10(c) .................................................................................................. 15 Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1408 Page 5 of 23 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 -1- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS I. INTRODUCTION In his original Complaint, Plaintiff John Kerr alleged direct liability claims against defendant Zacks Investment Research, Inc. (“ZIR”) pursuant to the Telephone Consumer Protection Act (“TCPA”) under 47 U.S.C. § 227, et seq. and California Penal Code § 630, et seq. (“CIPA”). In the First Amended Complaint (“FAC”), Kerr changed his theory to one of vicarious liability, adding four new defendants – National Marketing Resources, LLC, Paradigm Direct, LLC, Paradigm Direct Marketing, LLC (collectively referred to as “NMR”) and Response North, LLC (“Response North”) – and three new plaintiffs – Edward Li, Tim Barnard and Kenneth Curtis. With the Second Amended Complaint (“SAC”), Plaintiffs add Zacks Investment Management, Inc. (“ZIM”) as a defendant. Specifically, Kerr alleges that an outbound sales call was made to his cellular telephone using an automatic telephone dialing system (“ATDS”) without his prior express written consent in violation of the TCPA, and that the telephone call was recorded in violation of the CIPA. After learning that ZIR did not make the outbound call at issue, Kerr now alleges that ZIR is vicariously liable under the TCPA for the outbound call alleged to have been made by Response North or NMR. Kerr’s TCPA claim fails for pleading deficiencies, specifically that he alleges on information and belief that Response North (or NMR) called him using an ATDS even though his own allegations (e.g., that he only received one phone call from a live representative) tend to negate the claim that Response North used an ATDS. While Kerr also alleges a CIPA claim against ZIR, he specifically alleges that someone other than ZIR recorded the telephone call and otherwise alleges no facts to support that ZIR in any way assisted with the recording of any call. Moreover, even if Kerr pled such facts, the CIPA provision upon which Kerr relies is inapplicable as a matter of law. These pleading deficiencies subject Kerr’s claims against ZIR to dismissal. Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1409 Page 6 of 23 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 -2- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS The SAC also continues the allegations by Plaintiffs Li, Barnard and Curtis, each living somewhere in San Diego County, who all allege to have been called by ZIR and/or ZIM at some time in the past four years. These are the only “facts” alleged by these Plaintiffs. Otherwise, in an attempt to state a claim under the TCPA, these Plaintiffs allege, without reference to a specific telephone call, that one or maybe more telephone calls were made by someone associated with ZIR and/or ZIM to them on their cellular phones using an ATDS sometime in the last four years and without their express written consent. As with Kerr, these Plaintiffs’ allegations, based on information and belief that ZIR used an ATDS to call them (if it made any calls), are insufficiently pled. These Plaintiffs also assert claims pursuant to the CIPA, alleging on information and belief that if ZIR made any phone calls, it also recorded the calls to them without requisite notice and consent. Li, Barnard, and Curtis’ allegations on this point are entirely speculative and seem to be thrown in with the TCPA claim just in case any call might have been recorded. Moreover, the limitations period for a claim under the CIPA is one year, yet Li, Barnard, and Curtis simply allege that ZIR might have called them sometime within the limitations period for a TCPA claim, which is four years. That these Plaintiffs fail to reference any call within CIPA’s limitations period is fatal to their CIPA claims. Furthermore, as with Kerr, the alleged calls do not fall under the cited CIPA provisions in the first place. For these reasons, this Court should dismiss the SAC in its entirety. II. BACKGROUND A. Procedural History On May 6, 2016, Kerr filed a complaint in San Diego Superior Court alleging violations of the TCPA and CIPA [Dkt. 1-2], which ZIR removed to this Court on June 3, 2016. [Dkt. 1.] On September 1, 2016, Kerr moved for leave to file the FAC, which the Court granted on September 29, 2016. [Dkts. 19, 23.] The FAC added Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1410 Page 7 of 23 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 -3- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS defendants NMR and Response North. [Dkt. 24 at ¶¶ 6-8, 10.] The FAC also added Plaintiffs – Li, Barnard and Curtis – each seeking to assert separate claims against ZIR under the TCPA and CIPA. [Id. at ¶¶ 2-4, 49-53, 60-63.] In the FAC, Plaintiffs purported to act on behalf of three putative classes: (1) the “TCPA Class;” (2) the “Paradigm Privacy Class;” and (3) the “Zacks Privacy Class.” [Id. at ¶¶ 40-43.] After NMR, Response North and ZIR filed Motions to Dismiss the FAC [Dkts. 31, 35, 38] and NMR and ZIR filed Motions to Stay [Dkts. 30, 39], which Response North joined [Dkt. 43], on November 2, 2016, the parties filed their Joint Motion to Stay Case Pending Mediation. [Dkt. 50.] This Court granted the parties’ Joint Motion to Stay that same day [Dkt. 51] and extended the stay twice upon the parties’ Joint Motions. [Dkts. 53, 54, 58, 59.] Mediation did not settle the case. [Dkt. 60.] The parties filed their Joint Motion for Leave for Plaintiffs to File a Second Amended Complaint on April 21, 2017, which this Court granted that same day. [Dkts. 63-64.] After Plaintiffs filed the SAC on April 27, 2017 [Dkt. 65], which added ZIM as a Defendant, all other Defendants moved to withdraw their pending motions. [Dkt. 68.] This Court granted the Defendants’ Motion to Withdraw, granting them until June 2, 2017 to respond to the SAC.1 [Dkt. 69.] B. Allegations by Plaintiff Kerr in the SAC Kerr alleges that on or about December 15, 2015, he saw a television commercial that advertised a book published by ZIR. [Dkt. 65 at ¶ 16.] Kerr called a toll-free telephone number that appeared on the commercial and placed an order for the book. [Id.] Kerr alleges that on or about February 2, 2016, NMR or Response North initiated a call to his cell phone. [Id. at ¶¶ 18-23.] Although ZIR did not make the call, Kerr concludes that NMR or Response North acted as an agent of ZIR or pursuant to the apparent authority of ZIR, and/or that ZIR ratified the actions of 1 ZIM waived service of summons of the SAC. [Dkt. 67.] Accordingly, it has until June 27, 2017 to respond to the SAC. Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1411 Page 8 of 23 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 -4- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS NMR or Response North. [Dkt. 65 at ¶¶ 23-24.] Kerr further alleges that this telephone call was also recorded by the caller (NMR or Response North) but, again, does not allege that ZIR recorded or assisted in any recording of this telephone call. [Id. at ¶ 39.] C. Allegations by Plaintiffs Li, Barnard, and Curtis in the SAC With respect to Plaintiffs, Li, Barnard, and Curtis, the SAC provides only their names and identifies them as living in San Diego County. [Id. at ¶¶ 2-4.] Li, Barnard and Curtis otherwise allege on information and belief and in a conclusory manner: (1) that each received “one or more telephone [advertising/marketing] calls on his cellular telephone from ZIM or on behalf of ZIM [sic]” [id. at ¶¶ 25-27]; (2) made via an ATDS [id. at ¶ 30]; and (3) which was recorded by ZIR and/or ZIM and/or an entity “acting on behalf of one or both of them” without obtaining their consent [id. at ¶ 40]. Plaintiffs allege that ZIR and ZIM are different entities [id. at ¶¶ 5, 11], and the allegations against them are made in the alternative [e.g., id., ¶¶ 40, 62-64]. In addition to the conclusory allegations made on information and belief, Li, Barnard, and Curtis allege they did not provide the requisite consent to be called on their cellular phones. [Id. at ¶ 37.] Li, Barnard, and Curtis assert claims against ZIR (in the alternative to ZIM) under the TCPA and CIPA. [Id., Count I, III.] III. LEGAL STANDARD “A complaint may be dismissed as a matter of law for one of two reasons: (1) lack of a cognizable legal theory or (2) insufficient facts under a cognizable legal claim.” Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984) (citing 2A J. MOORE, MOORE’S FEDERAL PRACTICE ¶ 12.08 at 2271 (2d ed. 1982)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “[B]are assertions…amount[ing] to nothing more than a formulaic recitation of the elements” of a claim are “not entitled to be assumed true.” Id. at 681 (internal Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1412 Page 9 of 23 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 -5- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS quotations and citations omitted). “[T]o be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011), cert. denied, 132 S. Ct. 2101, 182 L.E.2d 882 (2012). Additionally, “the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Id. IV. ARGUMENT A. PLAINTIFFS FAIL TO STATE A CLAIM FOR VIOLATIONS OF THE TCPA (COUNT I). “The three elements of a TCPA claim are: (1) the defendant called a cellular telephone; (2) using an automatic telephone dialing system; (3) without the recipient’s prior express consent.” Meyer v. Portfolio Recovery Assocs., LLC, 707 F.3d 1036, 1043 (9th Cir. 2012) (citing 47 U.S.C. § 227(b)(1)). An ATDS is “equipment that has the capacity – (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1). Simply stating that a defendant used an ATDS or quoting or paraphrasing the definition of ATDS is insufficient to state a claim for relief under the TCPA. See, e.g., Huricks v. Shopkick, Inc., No. C-14-2464 MMC, 2014 WL 3725344, at *2 (N.D. Cal. July 24, 2014) (“Plaintiffs fail to cite any authority holding that simply quoting or paraphrasing the statutory definition of an ATDS suffices to state a claim, and, indeed, the cases on which plaintiffs rely expressly hold that such conclusory allegations are insufficient.”); McKenna v. WhisperText, No. 5:14-cv-00424-PSG, 2014 WL 4905629, at *2 (N.D. Cal. Sept. Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1413 Page 10 of 23 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 -6- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS 29, 2014) (“claim that a defendant used an ATDS must be more than just conclusory”). Plaintiffs allege on information and belief that the calls purportedly made to their cellular telephones – of which only Kerr cites to a specific call – were made using an ATDS. Their conclusory allegation does little more than paraphrase and cite to the statutory definition of an ATDS. [Dkt. 65 at ¶¶ 30-31.] However, such bare allegations on information and belief are insufficient to state a claim under the TCPA. See, e.g., Jones v. FMA Alliance Ltd., 978 F. Supp. 2d 84, 87 (D. Mass. 2013) (finding allegation on information and belief that defendant used ATDS was insufficient to state TCPA claim); Banks v. Green Tree Servicing, LLC, No. 14-cv- 2825, 2015 WL 1058124, at *5 (N.D. Ill. Mar. 5, 2015) (dismissing TCPA claim because plaintiff failed to allege facts indicating why she believed defendant used an ATDS). Rather, well-pled allegations regarding the use of an ATDS include at least some allegations as to the content of the message, the context in which it was received, and the existence of similar messages to raise an inference that an ATDS was used. See Gragg v. Orange Cab Co., Inc., 942 F. Supp. 2d 1111, 1114 (W.D. Wash. 2013); Johansen v. Vivant, Inc., No. 12 C 7159, 2012 WL 6590551, at *3 (N.D. Ill. Dec. 18, 2012) (requiring a plaintiff to plead facts about the context and content of the calls is not unduly burdensome as it only requires him to plead facts easily available to him on the basis of personal knowledge and experience). For this reason alone, Count I should be dismissed for failure to state a claim. 1. Count I Fails with Respect to Kerr Because His Own Allegations – Albeit Threadbare – Belie That Any Defendant Used an ATDS. Kerr improperly relies on unsupported allegations made on information and belief, paraphrasing the statutory definition of an ATDS and the citing to the general use of ATDS equipment in the telemarketing industry to support his “belief” that an ATDS was used to make the February 2, 2016 call to him. [Dkt. 65 at ¶¶ 28-29, 31.] Furthermore, while Kerr alleges some facts regarding the context and content of the Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1414 Page 11 of 23 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 -7- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS call made to his cellular telephone, these facts tend to support the inference that the call was a personal or individual response through human agency rather than an automated interaction. See Gragg, 942 F. Supp. 2d at 1114 (“The Court disagrees insofar as these facts support the inference that the [communication] was a ‘personal and individual’ response through ‘human agency.’”). For example, Kerr pleads that he placed an order for a book published by ZIR, and he only alleges one subsequent call made by a live sales representative. [Dkt. 65 at ¶¶ 16-17.] Furthermore, the allegation regarding the job posting for the position of “telemarketing manger” at ZIR does not support the inference that an ATDS was used when Kerr does not allege that ZIR made any call to him, but instead that the outbound call was made by NMR or Response North. [See Id. at ¶¶ 18, 31.] Because Kerr’s own plead facts support the opposite of his conclusory allegations, his claims under Count I should be dismissed. See Duguid v. Facebook, Inc., Case No. 15-cv-00985-JST, 2017 WL 635117, at *4 (N.D. Cal. Feb. 16, 2017) (dismissing TCPA claim with prejudice because plaintiff’s allegations did not support an inference that text messages were received by ATDS), appeal docketed, No. 17-15320 (9th Cir. Feb. 23, 2017). 2. Count I Fails with Respect to Li, Barnard and Curtis Because They Do Not Sufficiently Plead Any Facts Regarding the Content or Context of the Telephone Calls. On the other hand, Li, Barnard, and Curtis plead zero facts regarding the context or the content of the calls made to them. These Plaintiffs fail even to settle on who they allege made such calls, alleging in one place that ZIM made the calls [Dkt. 65 at ¶¶ 25-27; 37], then alleging later that ZIR and/or ZIM placed the calls. [Id. at ¶¶ 40; 62-64.] Further, their allegation that the use of ATDS equipment is “common” in the “telemarketing industry” is wholly conclusory, and they allege no facts supporting their claimed belief that ZIR used an ATDS was used to make the calls to their cell phones. [Id. at ¶ 28] See Wynn v. Nat’l Broadcasting Co., 234 F. Supp. 2d 1067, 1095-96 (C.D. Cal. 2002) (finding plaintiffs’ allegations of industry- Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1415 Page 12 of 23 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- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS wide practice of age discrimination unsupported by facts were solely the subjective belief of plaintiffs and insufficient to support a claim under the ADEA that an unlawful discriminatory practice actually existed). Also irrelevant is their allegation that a job posting for the position of “telemarketing manager” (printed as of May 3, 2016), [Dkt. 65-5], requires an understanding of “automated dialing technology” [Dkt. 65 at ¶ 29], because understanding technology and using technology are not one and the same. This job description does not state that ZIR ever used an ATDS, [Dkt. 65-5], and it certainly does not support that ZIR used an ATDS to make any calls to the cell phones of Li, Barnard, and Curtis, the times and dates of which these Plaintiffs fail to allege. Moreover, given that the job description was printed in May 2016, and Li, Barnard, and Curtis make no allegation as to when any calls were made to them except that they were made sometime within the last four years [Dkt. 65 at ¶¶ 25-27], no basis exists for these Plaintiffs to rely on the job description to argue support for the conclusory allegation that ZIR made any call to them using an ATDS. Accordingly, Count I should be dismissed because Plaintiffs have not sufficiently alleged that an ATDS was used to make the calls to their cellular telephones.2 See Duguid, 2017 WL 635117, at *4. 2 ZIR has also concurrently filed its Motion to Stay Proceedings pending a case currently before the United States Court of Appeals for the D.C. Circuit, ACA Int’l v. FCC, Case No. 15-1211. In that case, a number of petitioners challenge the Federal Communications Commission's overbroad definition of an ATDS. As further outlined in the Motion to Stay Proceedings, the outcome of ACA Int’l may have a potentially dispositive impact on this case given that Response North and ZIR do not use equipment with the present capacity to dial random or sequential telephone numbers. See 47 U.S.C. § 227(a)(1). Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1416 Page 13 of 23 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 -9- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS B. PLAINTIFF KERR FAILS TO STATE A CLAIM FOR VIOLATIONS OF THE CALIFORNIA INVASION OF PRIVACY ACT AGAINST ZIR (COUNT II). Section 632.7 of the California Penal Code makes it a crime to “intercept[] or receive[] and intentionally record[], or assist[] in the interception or reception and intentional recordation of, a communication transmitted between two cellular radio telephones [or] a cellular radio telephone and a landline telephone.” CAL. PENAL CODE § 632.7(a) (West 2017). However, civil liability under CIPA can only be imposed on the “person who committed the violation[.]” CAL. PENAL CODE § 637.2(a) (West 2017); see also Warden v. Kahn, 99 Cal. App. 3d 805, 815 (Cal. Ct. App. 1979) (CIPA provides civil damages only against the person who committed the violation); Kimmel v. Goland, 793 P.2d 524, 530 n.9 (Cal. 1990) (same). First, Kerr’s threadbare recitations of CIPA’s elements are wholly speculative, lacking any connection to properly plead facts. Second, even if Kerr’s alleged facts support a CIPA claim against NMR and/or Response North as the alleged caller [Dkt. 65 at ¶¶ 18, 39, 56], civil liability cannot be imposed on ZIR because Kerr has not alleged any recording by ZIR of any call involving Kerr, and Kerr otherwise makes no allegation that ZIR somehow assisted in or controlled the alleged recording of these calls. [Dkt. 65 at ¶ 39, 56, 58.] Third, even if Kerr’s alleged facts show that ZIR somehow participated in a recording of a phone call with Kerr, which they do not, Kerr’s allegations do not support a cause of action under CIPA as a matter of law because Section 632.7 of CIPA only prevents recordings of telephone calls by third parties who intercept and receive wireless cellular phone signals and does not restrict the parties to a call from recording those calls. Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1417 Page 14 of 23 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 -10- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS 1. Count II Fails Because Kerr Alleges No Facts to Support His Claim That the February 2, 2016 Call Was Recorded. Kerr’s allegations that any call was recorded, and/or that if recorded, it was done without Kerr’s knowledge and consent, are highly speculative, conclusory and otherwise fail to plead the requisite intent by ZIR or any of the other Defendants. Kerr alleges on information and belief that NMR or Response North recorded the February 2, 2016 call without notifying Kerr that the communications were being recorded and without obtaining Kerr’s consent. [Dkt. 65 at ¶ 39.] These allegations appear to be nothing more than Kerr’s speculation set forth in a pleading to see what might stick.3 Indeed, Plaintiffs’ “information and belief” appears to be based on Plaintiff’s counsel’s experience in other litigation against necessarily different parties under CIPA. [Id. at ¶ 56.] Plaintiffs, however, are only permitted to plead factual allegations based upon information and belief if they have information leading them to believe that the allegations are true. Kane v. Delong, No. CV 13- 05021-KAW, 2014 WL 894587, at *4 (N.D. Cal. Mar. 4, 2014). Here, Plaintiffs’ counsel’s unidentified experience in other litigation regarding the telephone recording practices of different companies does nothing to provide a basis as to the telephone recording practices of the Defendants in this case. Finally, Kerr makes no allegation of the requisite intent. Thus, even if this Court were to accept Kerr’s allegation that recording practices of other companies (apparently known to Plaintiffs’ counsel, but not identified in the SAC) provide a sufficient foundation for Kerr’s allegations here, his claim still fails because a plaintiff’s unsupported allegations that a defendant “had a policy or practice of recording telephone conversations” is insufficient to plead an intentional recording 3 In his FAC, Kerr asserted a claim against Defendants based on the allegedly improper recording of the inbound call where Kerr ordered the book. [Dkt. 24 at ¶ 38.] Kerr, however, has abandoned that claim after being provided with a copy of the recording of that call by NMR, which makes clear that Kerr was warned that the call would be recorded. [Dkt. 30-1 at 5.] Kerr, of course, knew that he had received this notice, but chose to allege no notice had been provided anyway. Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1418 Page 15 of 23 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 -11- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS under CIPA. See Vartanian v. VW Credit, Inc., No. 2:11-cv-10776-SVW-RZ, 2012 WL 12326334, at *2 (C.D. Cal. Feb. 22, 2012). Kerr’s generic allegations are insufficient to plead an intentional recording under CIPA, and, therefore, this Court should dismiss Count II. 2. Count II Fails Because Kerr Pleads No Facts Supporting that ZIR Assisted or Even Knew That The Other Defendants Recorded the February 2, 2016 Call. Even if this Court assumes that the February 2, 2016 call was recorded by NMR or Response North, Kerr pleads not one fact supporting that ZIR assisted or even knew that NMR or Response North would be recording the call. [See generally Dkt. 65.] Kerr alleges that ZIR did not make the telephone call to his cellular phone. [Id. at ¶ 39.] Thus, Kerr can only rely on a theory that ZIR advised or encouraged a violation of CIPA. He fails to allege facts supporting such a theory. Kerr fails to plead that ZIR even knew about any other Defendant’s recording of phone calls, let alone that ZIR advised or encouraged such recording. [See generally Id.] Kerr’s allegations regarding the “Strategic Partnership” between ZIR and NMR do not save his claims. [Id. at ¶¶ 21, 58.] As an initial matter, a business relationship between NMR and ZIR does nothing to establish a connection between Response North and ZIR, particularly related to any call recording practices of Response North. Furthermore, one company is not criminally liable for another company’s recording of a telephone call based solely on the fact that those companies are doing business together. California Penal Code Section 31 has been applied to CIPA – a criminal statute – and defines “principals” as: All persons concerned in the commission of a crime, whether it be a felony or misdemeanor, and whether they directly commit the act constituting the offense, or aid and abet in its commission, or not being present have advised and encouraged its commission, … are principals in any crime so committed. CAL. PENAL CODE § 31 (emphasis added); see also Vera v. O’Keefe, 791 F. Supp. 2d 959, 963-65 (S.D. Cal. 2011) (applying Section 31 definition of principal to CIPA Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1419 Page 16 of 23 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 -12- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS claim and finding that plaintiff could bring CIPA claim against one of two investigative journalists who carried out secret video and audio taping of conversation because non-recording journalist was a principal who was present during in the recording and aided and abetted in the commission of the crime). Kerr has not alleged that ZIR somehow assisted in a criminal act or in any way advised or encouraged NMR or Response North to intentionally record calls with Kerr without Kerr’s knowledge. In fact, Kerr makes no allegation that ZIR had any part in the telephone calling or recording procedures of NMR or Response North. Certainly, the Letter of Intent attached to the SAC in no way suggests that ZIR contracted to assist with NMR’s calling and recording procedures (or those of any other company), nor that ZIR in any way controlled the calling or recording procedures of any company. [Dkt. 65-3.] There are simply no allegations that ZIR had anything to do with the mechanics of the call to Kerr (and more importantly, the alleged recording of said calls) and, therefore, Kerr lacks any basis to claim that ZIR engaged in the intentional recording of any call to Kerr, that ZIR assisted in the intentional recording of any such call, that ZIR aided and abetted in the intentional recording of any such call, or that ZIR advised and encouraged the intentional recording of any such call. [Dkt. 65 at ¶¶ 21, 58.] Accordingly, Kerr’s failure to plead any advising or encouragement of a CIPA violation by ZIR is fatal to Count II, and it should be dismissed. 3. The CIPA Does Not Apply To Kerr’s Plead Facts. Recently, courts have re-examined the application of Section 632.7 of CIPA, most notably in Judge Motz’s dissent in Young v. Hilton Worldwide, Inc., 565 Fed. Appx. 595, 597 (9th Cir. 2014). Section 632 of CIPA, which the California legislature passed before common use of cellular phones, initially applied only to “confidential” landline communications. Id. (J. Motz, dissenting). Accordingly, Section 632 contained – as it does today – a “service-observing” exception, which, according to CIPA’s legislative history, excepted companies’ “justifiable and Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1420 Page 17 of 23 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 -13- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS regulated use of devices for overhearing employees’ business conversations.” Young, 565 Fed. Appx. at 597; see also CAL. PENAL CODE § 632(e)(2) (West 2017).4 By 1992, cellular phones had come into common use, and “[t]he California legislature recognized that one of the inherent risks of cellular phone use was that third parties could gain access to cellular phone calls because these calls utilized the public airwaves.” Id. at 598. Taking this into account, the legislature passed Section 632.7 of CIPA, prohibiting the recording of “cellular radio telephone” calls, “regardless of whether they were confidential, by ‘every person who, without the consent of all parties to a communication, intercepts or receives and intentionally records…a communication.’” Id. Accordingly, Judge Motz reasoned that [t]he apparent purpose of § 632.7 supports limiting its reach to third parties who unintentionally receive the communication. The advent of cellular technology introduced a risk that did not exist with respect to landlines: that third persons, not parties to the communication, would be able to obtain access to the communication. It was entirely reasonable for the California legislature to address this risk by enacting legislation that prohibited the recording of a conversation overheard, intentionally or inadvertently, by a third person. Young, 565 Fed. Appx. at 599. On remand, which the majority on the Ninth Circuit Young court ordered on other grounds, the district court judge adopted Judge Motz’s reasoning, granting defendants’ motion for judgment on the pleadings: Section 632.5, 632.6, and 632.7 restrict third-party interception of cellular and cordless telephonic radio transmissions. The statutory scheme makes it clear that these sections refer to the actual interception or reception of these radio signals by third parties and do not restrict the parties to a call from recording those calls… 4 “The California legislature deemed the recording of such calls to be an essential and justifiable business practice in contrast to the ‘clandestine wiretapping and eavesdropping’ targeted by § 632.” Young, 565 Fed. Appx. at 597. And, even Plaintiffs acknowledge the usefulness and reasonableness of “service-observing” calls. [Dkt. 65 at ¶ 56.] Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1421 Page 18 of 23 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 -14- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS Young v. Hilton Worldwide, Inc., No. 2:12-cv-01788-R-PJW, 2014 WL 3434117, at *1 (C.D. Cal. Jul. 11, 2014) (emphasis in original). Such logic comports with the fact that CIPA is a criminal statute, and, given the expansive reading Plaintiffs seem to desire, would have the effect of “criminaliz[ing] conduct on the basis of the type of telephone a caller chooses to use.” Young, 565 Fed. Appx at 599 (emphasis in original). Such an effect, along with the fact that such conduct would yield $5,000 in statutory damages per each communication made, flies in the face of common sense and does not comport with the legislative intent and historical context behind Section 632.7 of CIPA. Id. at 600.5 Here, Kerr alleges that Response North (or NMR) was the intended party on the February 2, 2016 telephone call because Kerr alleges that it (or NMR) made the call to him. [Dkt. 65 at ¶ 17.] There is no allegation that ZIR was any part of Response North’s or NMR’s recording of this call (if recorded), nor that ZIR, in any way, intercepted, received or itself recorded the call. Accordingly, under the logic of the Young district court decision and Judge Motz’s reasoning, Section 632.7 has no application in this case, and Count II should be dismissed. It is far more logical and in alignment with the California legislature’s stated intent behind CIPA that only third-parties who intentionally intercept or receive, and then record, cellular telephone radio signals be subject to a $5,000 per violation fine. 5 Some district courts have rejected this argument. See, e.g., Maghan v. Quicken Loans Inc., 94 F. Supp. 3d 1141, 1148 (C.D. Cal 2015); Ades v. Omni Hotels Mgm't Corp., 46 F. Supp. 3d 999, 1007 (C.D. Cal. 2014); NEI Contracting and Eng’g, Inc. v. Hanson Aggregates Pac. S’west, Inc., No. 3:12-cv-01685- BAS(JLB), 2015 WL 1346110, at *5-*6 (S.D. Cal. Mar. 24, 2015). At least one of these district court orders has been appealed, but has not yet been considered by the 9th Circuit. See Lal v. Capital One Fin. Corp., No. 16-cv-06674-BLF (N.D. Cal.) (Notice of Appeal filed May 12, 2017 [Dkt. 67]). Thus, Judge Motz’s reasoning is ripe for consideration. Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1422 Page 19 of 23 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 -15- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS C. PLAINTIFFS LI, BARNARD, AND CURTIS FAIL TO STATE A CLAIM FOR VIOLATIONS OF THE CALIFORNIA INVASION OF PRIVACY ACT AGAINST ZIR (COUNT III). For the same reasons as Count II, Count III should also be dismissed for failure to state a claim.6 Notably, Li, Barnard and Curtis, just like Kerr, fail to allege any facts whatsoever that ZIR recorded phone calls received by them or that it advised or encouraged anyone to record such phone calls. [Dkt. 65 at ¶¶ 25-27, 40, 62.] Such facts are particularly necessary here to determine whether their claims fall under CIPA’s narrow, one-year statute of limitations. CAL. C.C.P. § 340. Further, just as with Count II, CIPA Section 632.7 was never intended to penalize recordation of phone calls by anyone but third-parties who intercepted or received cellular radio telephone signals. [See Section IV.B.3, supra.] 1. Count III Fails Because Li, Barnard and Curtis Allege No Facts to Support Their Claim That the Alleged Undated Calls Were Recorded. Li, Barnard and Curtis’ allegations in Count III are even more egregious than that of Kerr’s in Count II. Li, Barnard and Curtis have not alleged any plausible factual basis for their claim that their calls were recorded by ZIR (or ZIM, for that matter). Like Kerr, these Plaintiffs allege on “information and belief” that their calls were recorded, and, even worse than Kerr’s allegations in Count II, these Plaintiffs fail to identify any information that would lend support to their conclusory allegations of recording, particularly given that they fail to reference any specific calls. [Dkt. 65 at ¶¶ 25-27, 40, 62]; see also Kane, 2014 WL 894587, at *4. First, Li, Barnard and Curtis allege that it can be inferred that any outbound calls to them, which they allege were sales calls by a live person, were recorded because inbound calls to the customer support number or ZIR and/or ZIM are answered by an automated system that provides a pre-recorded notification that 6 Accordingly, ZIR’s arguments as to Count II as stated in Section IV.B are adopted by reference also as to Count III pursuant to Fed. R. Civ. P. 10(c). Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1423 Page 20 of 23 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 -16- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS “Your call may be recorded for quality assurance.” [Dkt. 65 at ¶ 62.] However, the existence of such a disclaimer with respect to inbound customer service calls does not mean that any outbound sales calls would be recorded. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (“Factual allegations must be enough to raise a right to relief above the speculative level….”). To the contrary, the fact that ZIR provided a recording notification for inbound calls suggests that it would do the same for outbound sales calls if, in fact, it might record those calls. Second, Li, Barnard, and Curtis also rely on the unidentified experience of Plaintiffs’ counsel in litigation addressing the practices of other companies as a basis to make allegations about ZIR’s practices. As discussed above, these highly generalized and wholly speculative allegations are insufficient to “nudge” their CIPA claims “across the line from conceivable to plausible” and accordingly, should be dismissed. See Section IV.B.1, supra; see also In re Facebook Internet Tracking Litig., 140 F. Supp. 3d 922, 937 (N.D. Cal. 2015) (dismissing CIPA claim because it comprised of a list of named plaintiffs coupled with the same generalized facts for each one); Vartanian, 2012 WL 12326334, at *2 (generic allegations of defendants’ policies and procedures of recording phone calls insufficient to allege intentional recording in violation of CIPA); Sunbelt Rentals, Inc. v. Victor, 43 F. Supp. 3d 1026, 1036 (N.D. Cal. 2014) (CIPA claim based on conclusory allegations that defendant accessed, intercepted, monitored, stored, and used plaintiff’s private electronic data and electronic communications was insufficient to state claim). For these reasons, this Court should dismiss Count III. 2. Count III Fails Because Li, Barnard and Curtis Allege No Facts to Support Their Claim That the Alleged Recorded Calls Were Made Within CIPA’s One-Year Statute of Limitations. Li, Barnard, and Curtis allege no facts about the time, date, or number of calls purportedly recorded, yet seek statutory damages of $5,000 per recorded communication. [Dkt. 65 at ¶ 64.] Instead, these Plaintiffs make bare-bones Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1424 Page 21 of 23 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 -17- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS allegations that an unspecified number of calls were made within the limitations period for a TCPA claim, which is four years. [Dkt. 65 at ¶ 25-27.] See 28 U.S.C. §1658(a); Giovanniello v. ALM Media, LLC, 726 F. 3d 106, 115 (2d Cir. 2013). However, the statute of limitations under CIPA is one year. CAL. C.C.P. § 340; Montalti v. Catanzariti, 191 Cal. App. 3d 96, 98 (1987). Thus, it is speculative not only whether one or more calls was even made within the one year statute of limitations period for a claim under CIPA, but also whether any call was recorded in the applicable time period given that the SAC merely alleges phone calls were made to Li, Barnard, and Curtis sometime within the last four years. [Dkt. 65 at ¶¶ 25-27.] See Kmety v. Bank of America, Inc., No. 10cv1910-LAB (RBB), 2011 WL 4566441, at *1 (S.D. Cal. Sept. 30, 2011) (when considering whether running of statute of limitations is apparent on face of complaint, court should consider whether complaint adequately pleads facts to show that tolling is available and could render the claim timely). Plaintiffs should know generally when the calls at issue allegedly occurred, and, at a minimum, have a good faith basis to plead whether such calls occurred within the one year limitations period applicable to the CIPA. Plaintiffs should not, however, be allowed to circumvent dismissal (and avoid a limitations defense) by alleging “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” See Ashcroft, 556 U.S. at 678. For this additional reason, this Court should dismiss Count III. V. CONCLUSION For the forgoing reasons, Defendant Zacks Investment Research, Inc. respectfully requests that the Court dismiss all of the claims asserted against it in Plaintiffs’ Second Amended Complaint. Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1425 Page 22 of 23 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 -18- Case No. 16-cv-1352 GPC BLM SMRH:483072932.2 MEMORANDUM OF POINTS AND AUTHORITIES ISO DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS Dated: June 2, 2017 BURKE, WARREN, MACKAY & SERRITELLA, P.C. By /s/ Danielle J. Gould DANIELLE J. GOULD Attorneys for Defendant ZACKS INVESTMENT RESEARCH, INC. Email: dgould@burkelaw.com Case 3:16-cv-01352-GPC-BLM Document 81-1 Filed 06/02/17 PageID.1426 Page 23 of 23 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 Case No. 16-cv-1352 GPC BLM SMRH:477933209.2 PROOF OF SERVICE SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership Including Professional Corporations SHANNON Z. PETERSEN, Cal. Bar No. 211426 petersen@sheppardmullin.com LISA S. YUN, Cal. Bar No. 280812 lyun@sheppardmullin.com 12275 El Camino Real, Suite 200 San Diego, California 92130-2006 Telephone: 858.720.8900 Facsimile: 858.509.3691 BURKE, WARREN, MACKAY & SERRITELLA, P.C. DANIELLE J. GOULD, admitted pro hac vice dgould@burkelaw.com SARA YOUN CHOH, admitted pro hac vice schoh@burkelaw.com 330 North Wabash Avenue, 21st Floor Chicago, Illinois 60611 Telephone: 312.840.7000 Facsimile: 312.840.7900 Attorneys for Defendant ZACKS INVESTMENT RESEARCH, INC. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA JOHN KERR, individually and on behalf of all others similarly situated, Plaintiff, v. ZACKS INVESTMENT RESEARCH, INC., an Illinois corporation; and DOES 1 through 50, inclusive, Defendants. Case No. 16-cv-1352 GPC BLM PROOF OF SERVICE Date: August 11, 2017 Time; 8:30 a.m. Hon. Gonzalo P. Curiel Courtroom 2D (2nd Floor - Schwartz) Suite 2190 Magistrate Judge Barbara L. Major 11th Floor (Carter/Keep), Suite 1110 Case 3:16-cv-01352-GPC-BLM Document 81-2 Filed 06/02/17 PageID.1427 Page 1 of 3 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 -1- Case No. 16-cv-1352 GPC BLM SMRH:477933209.2 PROOF OF SERVICE John Kerr v. Zacks Investment Research, Inc. U.S.D.C., Southern District of California, Case No. 16-cv-01352-GPC-BLM PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of San Diego, State of California. My business address is 501 West Broadway, 19th Floor, San Diego, CA 92101-3598. On June 2, 2017, I served true copies of the following document(s) described as DEFENDANT ZACKS INVESTMENT RESEARCH, INC.'S NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT PURSUANT TO RULE 12(b)(6) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT ZACKS INVESTMENT RESEARCH, INC.’S MOTION TO DISMISS SECOND AMENDED COMPLAINT PURSUANT TO RULE 12(b)(6) on the interested parties in this action as follows: James T. Hannink, Esq. Zach P. Dostart, Esq. Dostart Hannink & Coveney LLP 4180 La Jolla Village Dr., Suite 530 La Jolla, CA 92037-1474 Tel 858-623-4200; Fax 858-623-4299 jhannink@sdlaw.com; zdostart@sdlaw.com Attorneys for Plaintiff John Kerr Danielle J. Gould, Esq. Sara Youn Choh, Esq. Joshua J. Cauhorn, Esq. Burke, Warren, MacKay & Serritella, P.C. 330 N. Wabash Ave., Suite 2100 Chicago, IL 60611 Tel 312-840-7000 dgould@burkelaw.com; schoh@burkelaw.com; jcauhorn@burkelaw.com Pro Hac Vice Counsel for Defendant Zacks Investment Research, Inc. Blair R. Jackson, Esq. Invictus Law, P.L.L.C. 360 S Technology Court, Ste 200 Lindon, UT 84602 Tel 801-854-9212; Fax 801-415-9340 blair@invictuspc.com Attorneys for Defendant Response North, LLC (Doe 4) Case 3:16-cv-01352-GPC-BLM Document 81-2 Filed 06/02/17 PageID.1428 Page 2 of 3 Case 3:16-cv-01352-GPC-BLM Document 81-2 Filed 06/02/17 PageID.1429 Page 3 of 3