Rosenberg v. LoanDepot.com LLC

United States District Court

District of Massachusetts

)

Douglas E. Rosenberg, )

)

Plaintiff, )

)

v. ) Civil Action No.

) 19-10661-NMG

LoanDepot.com LLC and Ascendant )

Marketing Group LLC, )

)

Defendants. )

MEMORANDUM & ORDER

GORTON, J.

This is a putative class action which purports to arise

from a violation of the Telephone Consumer Protection Act

(“TCPA”), 47 U.S.C. § 227. Plaintiff Douglas Rosenberg

(“plaintiff” or “Rosenberg”) alleges that LoanDepot.com, LLC

(“Loan Depot”) and Ascendant Marketing, LLC (“Ascendant

Marketing” or “Ascendant”) (collectively “defendants”) made

repeated automated telemarketing calls to his cell phone in

violation of the TCPA.

Pending before the Court are five motions: (1) Loan Depot’s

motion to stay, (2) Loan Depot’s motion to strike the class

allegations, (3) the motion of Loan Depot and Ascendant to

dismiss on grounds that the TCPA is unconstitutional and

inseverable and that Rosenberg has failed to state a claim, and

(4) two motions, one by each defendant, to dismiss non-

Massachusetts putative class members for lack of personal

jurisdiction under Rule 12(b)(2).

For the following reasons, the Court will deny all pending

motions.

I. Background

A. Factual Background

Plaintiff Rosenberg is a Massachusetts resident who owns a

cell phone with a “508” area code. He alleges that his cell

phone is his only telephone, he uses it for residential purposes

and he registered the number on the National Do-Not-Call

Registry and the Massachusetts Do-Not-Call List in 2003.

Defendant Loan Depot is a California limited liability

company and a non-bank consumer lender. Ascendant Marketing is

a Texas limited liability company and provides marketing

services. Loan Depot allegedly contracted with Ascendant

Marketing to generate business through telemarketing services.

In 2018, Rosenberg alleges that he received a number of

phone calls, both from Loan Depot and from Ascendant Marketing

advertising Loan Depot’s services. Plaintiff alleges that at

least two of those calls were made from non-working or “spoofed”

numbers, which he contends is indicative of the fact that the

calls were made from an Automatic Telephone Dialing System

(“ATDS”) in violation of the TCPA. He seeks to certify

nationwide classes of (1) consumers who were called by

defendants via an automated dialing system in violation of the

TCPA’s automated calling provision (“the ATDS class”) and (2)

persons who were called by the defendants more than once in a

12-month period in violation of the TCPA’s Do-Not-Call provision

(“the DNC class”).

B. Procedural History

In April, 2019, Rosenberg filed a complaint against Loan

Depot and a John Doe Corporation as the representative of a

proposed nationwide class. Loan Depot responded with two

motions to dismiss, a motion to strike the class and a motion to

stay the case. In June, 2019, Rosenberg filed an amended

complaint which added Ascendant Marketing as a defendant and set

forth allegations supporting the ATDS class and DNC class.

In response to the amended complaint, the parties

stipulated that the initial motions to dismiss and to strike the

class were moot. Loan Depot subsequently filed renewed motions

seeking the same relief. Both defendants also filed motions to

dismiss the non-Massachusetts putative class members.

C. The TCPA

In 1991, Congress enacted the TCPA as a response to the

proliferation of intrusive calls from telemarketers. The law

sought to safeguard the public’s interest in personal privacy

and, to that end, prohibits multiple abuses of telephone

technology. Applicable to this litigation are the ATDS and Do

Not Call provisions of the TCPA.

As summarized by the District of Columbia Circuit Court of

Appeals (“D.C. Circuit”), “the TCPA generally makes it unlawful

to call a cell phone using an ATDS.” ACA International v. FCC,

885 F.3d 687, 693 (D.C. Cir. 2018). More specifically, the law

provides in relevant part that it is unlawful:

to make any call (other than a call made for emergency

purposes or made with the prior express consent of the

called party) using any automatic telephone dialing system

... to any telephone number assigned to a ... cellular

telephone service... unless such call is made solely to

collect a debt owed or guaranteed by the United States.

47 U.S.C. § 227(b)(1)(A)(iii).

As is evident from the statutory language, the TCPA

contains three exceptions to the prohibition on telephone calls

made using an ATDS: calls (1) for “emergency purposes,” (2) with

the “prior express consent of the called party” and (3) “made

solely to collect a debt owed to or guaranteed by the United

States” (hereinafter, “the debt-collection exemption”). The

debt-collection exemption was added by Congress in 2015 as part

of a budget bill and is subject to the defendants constitutional

challenge as well as extensive constitutional litigation in

other courts.

The TCPA goes on to define an ATDS as

equipment which 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).

Also relevant to the current litigation, the TCPA and its

implementing regulations prohibit telephone solicitations to

“[a] residential telephone subscriber who has registered his or

her telephone number on the national do-not

call registry ....” 47 C.F.R. § 64.1200(c)(2).

D. The FCC’s Regulatory Orders

Given the expansive and technical nature of the TCPA,

Congress explicitly vested the FCC with rulemaking authority in

order to implement the statute. 47 U.S.C. § 227(b)(2). The FCC

has used that authority to issue regulations defining the TCPA’s

reach including what technology qualifies as an ATDS.

Applicable here, The FCC, in response to changing technology,

issued a series of rulings between 2003 and 2015, which

established that “predictive dialers” (a type of automated

dialing systems) and other similar advanced technology fit the

definition of an ATDS. See Marks v. Crunch San Diego, LLC, 904

F.3d 1041, 1045 (9th Cir. 2018).

In 2015, the FCC issued a ruling reaffirming its position

that predictive dialers constituted an ATDS. However, the 2015

ruling included a new, more expansive definition of an ATDS.

The FCC concluded that an ATDS’ “capacity” included not just a

device’s present capabilities but also its potential

functionalities. See In Re Rules & Regulations Implementing the

Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961, 7974

(2015) (“2015 Order”); Richardson 354 F. Supp. 3d 639 at 644.

E. ACA International and its aftermath

Unsurprisingly, the 2015 Order spurred immediate

litigation as various regulated entities challenged the FCC’s

decision. Those legal challenges resulted in a DC circuit

decision in which the court set aside parts of the 2015 Order,

including the definition of an ATDS, because the FCC “failed to

satisfy the requirement of reasoned decision making.” ACA Int'l

885 F.3d 687 at 703.

Courts are now split on the effect of that decision. The

disagreement turns on whether ACA Int'l overturned just the 2015

FCC interpretation of what constitutes an ATDS or was an

invalidation of all prior FCC interpretations. See Marks, 904

F.3d 1041 at 1049 (holding that the D.C. Circuit “set aside the

FCC's interpretations of the definition of an ATDS in the 2015

order... and any prior FCC rules that were reinstated by that

order.”). But see Gonzalez 371 F. Supp. 3d 26 at 31 (noting that

“other courts have concluded that ACA Int'l only invalidated the

FCC's 2015 ruling, and not the earlier FCC rulings”) (collecting

cases).

At this juncture, the definition of an ATDS is not integral

to the motions pending before the Court. As such, the Court

need not decide the scope of the ACA Int’l decision.

II. Motion for Stay

In May, 2019, Loan Depot moved to stay this action

pending rulings (1) from the FCC redefining an ATDS in light of

ACA Int’l and (2) on a constitutional challenge to the TCPA

pending in the Ninth Circuit. The Ninth Circuit has since ruled

on the TCPA’s constitutionality, rendering any argument for a

stay on those grounds moot. See Gallion v. United States, 772 F.

App'x 604, 605 (9th Cir. 2019) (holding that the “2015 amendment

to the TCPA, which excepts calls made solely to collect a debt

owed to or guaranteed by the United States, is a content-based

speech regulation that fails strict scrutiny, and thus is

incompatible with the First Amendment” but that the offending

provision was severable from the remainder of the statute).

Defendants submit that given the uncertainty surrounding

the scope of the D.C. Circuit’s ACA Int’l decision and the

definition of an ATDS, a stay is warranted under both the

primary jurisdiction doctrine and the court’s inherent power to

manage its docket.

Plaintiff responds that a stay is unwarranted because (1)

he has asserted a claim under the Do-Not-Call provision of the

TCPA which, because it is unrelated to a definition of an ATDS,

would be unaffected by any FCC ruling and (2) the Court is

perfectly capable of defining “ATDS” based on the statutory

text, case law and existing FCC orders.

A. Primary Jurisdiction Doctrine

1. Legal Standard

Primary jurisdiction doctrine is a prudential doctrine

which seeks to “promote accurate decision making and regulatory

consistency in areas of agency expertise.” Ass'n of Int'l Auto.

Mfrs., Inc. v. Comm’r Mass. Dep't of Envtl. Prot., 196 F.3d 302,

304 (1st Cir. 1999). There is, however, “no fixed formula” for

application of the doctrine. United States v. Western Pac. R.R.

Co., 352 U.S. 59, 64, (1956). Instead, courts assess “whether

the reasons for the existence of the doctrine are present and

whether the purposes it serves will be aided by its application

in the particular litigation.” Id. See also PHC, Inc. v.

Pioneer Healthcare, Inc., 75 F.3d 75, 80 (1st Cir. 1996) (noting

that “[t]he primary jurisdiction rubric is less an organized

doctrine than a set of precedents that guide courts . . . .”)

Though there is no fixed formula for application of the

primary jurisdiction doctrine, the First Circuit Court of

Appeals has identified three factors which courts should

consider when determining whether deference to an agency is

warranted. They are:

(1) whether the agency determination lay at the heart of

the task assigned the agency by Congress; (2) whether

agency expertise was required to unravel intricate,

technical facts; and (3) whether, though perhaps not

determinative, the agency determination would materially

aid the court.

New England Legal Found. v. Massachusetts Port Auth., 883 F.2d

157, 172 (1st Cir. 1989) (citing Mashpee Tribe v. New Seabury

Corp., 592 F.2d 575, 580-81 (1st Cir. 1979))

These factors, however, must be balanced against the delay

inherent in granting a stay and the need to adjudicate disputes

expeditiously. See Ass'n of Int'l Auto. Mfrs., Inc., 196 F.3d

at 305. Given the inherent expense and delay in waiting for an

agency, courts should be loath to invoke the doctrine. See

Alpharma, Inc., v. Pennfield Oil Co., 411 F.3d 934, 938 (8th

Cir. 2005). See also Columbia Gas Transmission Corp. v. Allied

Chem. Corp., 652 F.2d 503, 519 n.15 (5th Cir. 1981)(noting that

“courts should be reluctant to invoke the doctrine of primary

jurisdiction, which often, but not always, results in added

expense and delay to the litigants.”)

2. Application

Although enlightened FCC guidance might prove useful, the

Court is unwilling to stay the instant case for an underminate

period. The FCC has begun the process of notice and comment

rulemaking, yet robust agency rulemaking is a protracted process

which can take years. Even after the FCC issues a final rule it

will likely be subject to legal challenge, resulting in further

motions to stay. If the Court were to grant Loan Depot’s motion

it would result in an indefinite stay which mitigates against

application of the primary jurisdiction doctrine. See Grogan v.

Aaron's Inc., No. 1:18-CV-2821-AT, 2018 WL 6040195, at *8 (N.D.

Ga. Oct. 26, 2018).

Moreover, plaintiff alleges that defendants have violated

two distinct provisions of the TCPA. An FCC ruling on what

constitutes an ATDS will not affect plaintiffs claim that

defendants have also violated the Do-Not-Call provision of the

TCPA. The fact that plaintiff has also asserted two separate

theories of liability further weighs against staying the case.

See Pieterson v. Wells Fargo Bank, N.A., No. 17-CV-02306-EDL,

2018 WL 3241069, at *4 (N.D. Cal. July 2, 2018) (noting in a

similar circumstance that “[s]taying the case when an

alternative theory of liability can move forward would unduly

postpone adjudication of Plaintiffs' claims.”). See also Wright

v. eXP Realty, LLC, No. 618CV1851ORL40TBS, 2019 WL 2411312, at

*4 (M.D. Fla. June 7, 2019) (collecting cases).

This Court is capable of applying existing law and

regulatory framework to determine the definition of an ATDS and

to resolve this dispute without updated FCC guidance. There

exists an extensive body of applicable TCPA caselaw from which

this Court can gain insight.

After careful consideration of the parties’ arguments and

the purpose of the primary jurisdiction doctrine, this Court

finds that a stay is unwarranted.

B. The Court’s Inherent Powers

In the alternative, defendants ask the court to stay the

case using its inherent authority. The Court has the power to

“control the disposition of the causes on its docket with

economy of time and effort for itself, for counsel, and for

litigants”. Landis v. N. Am. Co., 299 U.S. 248, 254 (1936).

There is, however, “a heavy burden on the party requesting a

stay.” Taunton Gardens Co. v. Hills, 557 F.2d 877, 879 (1st

Cir. 1977).

This Court declines to exercise its inherent power for the

same reasons it found a stay unwarranted under the primary

jurisdiction doctrine.

In conclusion, this Court joins the majority of district

courts which have considered whether to stay similar proceedings

in the wake of ACA Int’l and have declined to do so. See Peralta

v. Rack Room Shoes, Inc., No. CV 18-3738, 2018 WL 6331798, *8-9

(E.D. La. Dec. 3, 2018)(collecting cases).

III. Motion to Strike Class Allegations

Loan Depot asserts that plaintiff’s putative classes cannot

be certified as a matter of law and therefore this Court should

take the unusual step of striking the class allegations based

solely on the pleadings. Specifically, Loan Deport argues that

(1) consent (whether or not an individual consented to receive

automated calls) is an individualized issue that cannot

predominate across the putative class and (2) any class which

includes consenting individuals would be fatally overbroad.

Rosenberg responds that defendant’s motion to strike the

class is premature and that both putative classes contain common

questions of law and fact which make class certification

plausible. Plaintiff further maintains that consent is not a

valid defense to his claim arising from the TCPA’s DNC provision

and therefore Loan Depot’s motion should be denied.

A. Legal Standard

If it is obvious from the pleadings that an allegation

cannot be certified as a class, a district court may, pursuant

to Fed. R. Civ. P 12(f), strike class allegations. See Manning

v. Bos. Med. Ctr. Corp., 725 F.3d 34, 59 (1st Cir. 2013). Pre-

discovery motions to strike are, however, disfavored and courts

should, “exercise caution when striking class action allegations

based solely on the pleadings.” Id. As a result, allowing such

a motion is uncommon and courts “should typically await the

development of a factual record.” Id. See also Cholakyan v.

Mercedes–Benz USA, LLC, 796 F.Supp.2d 1220, 1245. (C.D.Cal.2011)

(collecting cases).

B. Analysis

The Court finds that the defendant’s motion to strike the

class allegations is premature before plaintiff can develop the

factual record through discovery. Loan Depot’s citation of

consent as a potential affirmative defense is insufficient to

warrant striking the putative class solely on the pleadings.

The motion to strike class allegations will, therefore, be

denied without prejudice.

IV. Motion to Dismiss

Loan Depot has moved to dismiss Rosenberg’s amended

complaint on the grounds that the TCPA is unconstitutional and

the offending provisions are not severable or, in the

alternative, because plaintiff fails to allege facts sufficient

to support a claim for relief.

A. Legal Standard

To survive a motion to dismiss for failure to state a claim

under Fed. R. Civ. P. 12(b)(6), a complaint must contain

“sufficient factual matter” to state a claim for relief that is

actionable as a matter of law and “plausible on its face.”

Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009) (quoting Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is

facially plausible if, after accepting as true all non-

conclusory factual allegations, the court can draw the

reasonable inference that the defendant is liable for the

misconduct alleged. Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d

1, 12 (1st Cir. 2011). A court may not disregard properly pled

factual allegations even if actual proof of those facts is

improbable. Id. Rather, the relevant inquiry focuses on the

reasonableness of the inference of liability that the plaintiff

is asking the court to draw. Id. at 13.

When rendering that determination, a court may not look

beyond the facts alleged in the complaint, documents

incorporated by reference therein and facts susceptible to

judicial notice. Haley v. City of Boston, 657 F.3d 39, 46 (1st

Cir. 2011).

B. The TCPA’s Constitutionality

Loan Depot avers that the plaintiff’s claims must be

dismissed because the statute on which they are based, the TCPA,

is unconstitutional. Defendants contend that the entire TCPA,

in particular the government-debt exception, the emergency call

exception and the healthcare exception, is an unconstitutional

content-based restriction on speech which violates the First

Amendment and Equal Protection Clause. Loan Depot also contends

that (1) the statute is unconstitutionally vague in violation of

the Fifth Amendment Due Process Clause and (2) any

unconstitutional provision cannot be severed and, instead, the

entire statute must be invalidated.

1. The First Amendment

The First Amendment forbids Congress from enacting laws

“abridging the freedom of speech.” U.S. Const. amend. I. When

considering a First Amendment challenge, courts distinguish

between content-based and content-neutral regulations of speech.

A content-based restriction is one that “applies to particular

speech because of the topic discussed or the idea or message

expressed.” Reed v. Town of Gilbert, Ariz., 135 S. Ct. 2218,

2227 (2015). Content-based restrictions “are presumptively

unconstitutional” and subject to strict scrutiny. Id. at 2226.

That is, they “may be justified only if the government proves

that they are narrowly tailored to serve compelling state

interests.” Id.

In contrast, a statue is content-neutral if it “serves

purposes unrelated to the content of expression ... even if it

has an incidental effect on some speakers or messages but not

others.” Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989).

A content-neutral restriction is subject to intermediate

scrutiny, meaning it must be “narrowly tailored to serve a

significant governmental interest.” McCullen v. Coakley, 573

U.S. 464, 486 (2014)).

a. The Government-Backed, Debt-Collection Exception

i. The Government Debt Exception is Content Based

The first step in a First Amendment inquiry is to determine

whether the TCPA is content-neutral and therefore subject to

intermediate scrutiny or content-based and thus subject to

strict scrutiny. The First Circuit has not opined on whether

the TCPA is content-neutral or content based. The Fourth and

Ninth Circuit (and many other district courts that have

considered the issue) have, however, found that the law is

content-based and therefore subject to strict scrutiny. See Am.

Ass'n of Political Consultants, Inc. v. FCC, 923 F.3d 159, 166

(4th Cir. 2019); Duguid v. Facebook, Inc., 926 F.3d 1146, 1153

(9th Cir. 2019); Hand v. ARB KC, LLC, No. 4:19-CV-00108-NKL,

2019 WL 6497432, at *11-12 (W.D. Mo. Dec. 3, 2019) (collecting

district court cases); Perrong v. Liberty Power Corp., No. CV

18-712 (MN), 2019 WL 4751936, at *4 (D. Del. Sept. 30, 2019)

(collecting cases); (hereinafter collectively the “TCPA

precedent”).

This Court agrees with the consensus. The debt-collection

exception is, on its face, content-based. The only way to

determine whether a communication is “to collect a debt owed to

or guaranteed by the United States” is to evaluate its content.

47 U.S.C. § 227(b)(1)(A)(iii). If a call is made solely to

collect a government debt, the caller would not be liable under

the TCPA. If such a call concerns any other topic, the caller

would be in violation of the TCPA. The debt-collection

exception is, therefore, content-based and subject to strict

scrutiny. See Am. Ass'n of Political Consultants, Inc., 923 F.3d

at 166.

ii. The Government Debt Exception does not Survive

Strict Scrutiny

To survive strict scrutiny, the government-debt exception

must be narrowly tailored to further a compelling government

interest. Reed, 135 S. Ct. at 2226. In this case, the

government would have to demonstrate that the TCPA's

“differentiation between [robocalls to collect a debt owed to or

guaranteed by the United States] and other types of [robocalls]”

is narrowly tailored to further a compelling government

interest. Duguid 926 F.3d at 1155. See Am. Ass'n of Political

Consultants, Inc., 923 F.3d at 167.

Contrary to its usual practice and perhaps recognizing the

handwriting on the wall, the government has not chosen to

intervene in this case. Two circuit courts and a number of

district courts, including a different session of this Court,

have already concluded that the government-based debt exception

does not survive strict scrutiny and is therefore

unconstitutional. See TCPA Precedent; Katz v. Liberty Power

Corp., LLC, No. 18-CV-10506-ADB, 2019 WL 4645524, at *7 (D.

Mass. Sept. 24, 2019).

Similar to his brethren (and “sisteren”), this judicial

officer finds that the government-backed debt exception cannot

survive strict scrutiny. In previous TCPA cases, the government

has advanced the interest of protecting personal and residential

privacy, Id., but that proffered justification makes little

sense. Unwanted robocalls to collect government debt are just

as violative of personal privacy as any other unsolicited

robocalls. As noted by the Ninth Circuit, “[p]ermitting callers

to collect government debt thus hinders — not furthers — the

government's asserted interest.” Duguid 926 F.3d at 1155. The

decision of Congress to authorize automated calls to collect

government debt may serve other interests (effective debt

collection is a likely candidate) but privacy cannot be one.

See Am. Ass'n of Political Consultants, 923 F.3d at

168 (“Congress implemented the [TCPA] in order to protect

privacy interests.... The debt-collection exemption, however,

undercuts those privacy protections.”)

Thus, consistently, this Court holds that the government

debt collection exception is unconstitutional because it does

not serve a compelling government interest and is a content-

based restriction on speech. See TCPA precedent.

iii. The Government Debt Exception is Severable

Next, the court addresses the issue of whether the

unconstitutional debt collection exception can be severed from

the TCPA. Other courts that have considered the issue,

including the Fourth and Ninth Circuit, have found the exception

to be severable. See TCPA precedent. Again, this Court agrees.

Severability analysis begins with, and largely turns on

congressional intent. See Regan v. Time, Inc., 468 U.S. 641,

653, (1984)(noting “[w]hether an unconstitutional provision is

severable from the remainder of the statute . . . is largely a

question of legislative intent, but the presumption is in favor

of severability.”); Duguid, 926 F.3d at 1165 (stating

“[c]ongressional intent is the touchstone of severability

analysis.”). When a statue includes a severability clause,

there is a “presumption that Congress did not intend the

validity of the statute in question to depend on the validity of

the constitutionally offensive provision.” Alaska Airlines, Inc.

v. Brock, 480 U.S. 678, 686 (1987).

Notably, Chapter 5 of the Communications Act of 1934, which

encompasses the TCPA, contains an explicit severability

provision. 47 U.S.C. § 608. Further, the history of the TCPA

suggests that the government debt collection exception is

severable. The law was enacted in 1991 and remained unaltered

until the exception was added as an addendum to the 2015 budget

bill. The 2015 amendment is not essential to the TCPA’s overall

statutory scheme and there is no indication that the law cannot

function as intended without it.

Given the severability clause, congressional intent, the

ancillary nature of the provision and, for broadly similar

reasons as discussed by the Fourth and Ninth Circuits, this

Court concludes that the unconstitutional government debt

collection exception in severable. See Duguid, 926 F.3d at

1156–57; American Ass'n of Political Consultants, 923 F.3d at

170–71.

b. The Balance of the TCPA

In addition to their claims that the government-based debt

exception is unconstitutional, defendants assert, with minimal

analysis, that the balance of the TCPA is a content-based

restriction on speech which is subject to strict scrutiny and

unconstitutional.

The weight of authority militates against defendants’

abbreviated argument. See Gomez v. Campbell-Ewald Co., 768 F.3d

871, 876 (9th Cir. 2014), aff'd on other grounds, 136 S. Ct.

663, (2016)(holding, post Reed, that the pre-amendment TCPA was

content-neutral and consistent with the First Amendment); Moser

v. FCC, 46 F.3d 970, 973-74 (9th Cir. 1995) (holding that the

TCPA is a constitutional content-neutral, time, place and manner

restriction); Duguid, 926 F.3d at 1157 (rejecting defendant’s

contention that “the TCPA as a whole is facially

unconstitutional”); Patriotic Veterans, Inc. v. Zoeller, 845

F.3d 303, 304 (7th Cir. 2017) (concluding a state law similar to

the TCPA is constitutional post-Reed); Van Bergen v. Minnesota,

59 F.3d 1541, 1549–56 (8th Cir. 1995); Hand, 2019 WL 6497432, at

*18-19.

At this juncture, defendants have failed to present a

cogent argument to depart from the consensus that the TCPA,

without the debt-collection exception, is a content-neutral time

place and manner restriction consistent with the First

Amendment.

2. The Equal Protection Clause

Defendants also claim that the TCPA violates the Equal

Protection Clause. Loan Depot does not advance cogent arguments

beyond those articulated in their First Amendment challenge.

Because the Court has fully addressed those claims above, it is

unnecessary for it to expound on Loan Depot’s Equal Protection

argument. See Katz 2019 WL 4645524, at *8 n.9; Hand 2019 WL

6497432, at *22; See also Hill v. City of Scranton, 411 F.3d

118, 126 (3d Cir. 2005)(noting that “[i]t is generally

unnecessary to analyze laws which burden the exercise of First

Amendment rights by a class of persons under the equal

protection guarantee, because the substantive guarantees of the

Amendment serve as the strongest protection against the

limitation of these rights.”)(quoting Ronald Rotunda & John

Nowak, 3 Treatise on Constitutional Law: Substance and Procedure

§ 18.40, at 796 (3d ed. 1999).

3. Fifth Amendment Due Process Clause

Finally, defendants argue that the TCPA is

unconstitutionally vague because the ATDS restrictions fail to

provide a person of ordinary intelligence adequate notice of

what constitutes an ATDS.

An indefinite congressional enactment may be

unconstitutional under the Fifth Amendment. As explained by the

Supreme Court, “[i]t is a basic principle of due process that an

enactment is void for vagueness if its prohibitions are not

clearly defined.” Grayned v. City of Rockford, 408 U.S. 104,

108 (1972). A prohibition of overly vague laws, seeks, among

other things, “to ensure that persons of ordinary intelligence

have ‘fair warning’ of what a law prohibits.” Nat'l Org. for

Marriage v. McKee, 649 F.3d 34, 62 (1st Cir. 2011) (quoting

Grayned 408 U.S. at 108-109). In cases which touch upon First

Amendment rights, “an even greater degree of specificity is

required.” Buckley v. Valeo, 424 U.S. 1, 77 (1976).

Although subject to heightened scrutiny in the First

Amendment Context, “not all vagueness rises to the level of

constitutional concern.” Nat'l Org. for Marriage 649 F.3d 34 at

62; see also Ward 491 U.S. 781 (1989)(“[P]erfect clarity and

precise guidance have never been required even of regulations

that restrict expressive activity.”); Ridley v. Mass. Bay

Transp. Auth., 390 F.3d 65, 93 (1st Cir. 2004) (noting “[t]he

mere fact that a regulation requires interpretation does not

make it vague.”)

The definition of an ATDS contained in the TCPA, 47 U.S.C.

§ 227(a)(1), is not unconstitutionally vague. The plain

language of the statute gives notice that if a caller uses a

random or sequential number generator to produce a list and then

makes calls to those numbers, that caller may be in violation of

the statute. From the language of the statute, a person of

ordinary intelligence is reasonably able to determine what kind

of systems are or are not prohibited. See Wilson v. PL Phase

One Operations L.P., No. CV DKC 18-3285, 2019 WL 4735483, at *7

(D. Md. Sept. 27, 2019)(holding that “though technical, the

TCPA's definition of an ATDS is set out in terms that an

ordinary person exercising ordinary common sense can understand

sufficiently and comply with.”); Hand 2019 WL 6497432, at *23.

The Court recognizes that the TCPA is a complex statute

which does require interpretation. That Congress may be guilty

of inartful or opaque drafting, however, does not signify that a

statue is unconstitutionally vague. See United States v.

Powell, 423 U.S. 87, 94 (1975)(noting that just because Congress

“may have chosen clearer and more precise language equally

capable of achieving the end which it sought does not mean that

the statute which it in fact drafted is unconstitutionally

vague.”)

Loan Depot bases their vagueness argument on the fact that

Courts have offered competing definitions of what constitutes an

ATDS under the statute. In particular, defendants cite ACA

Int’l and the disagreement about the scope of the decision as

evidence that the TCPA is unconstitutionally vague.

That argument is unpersuasive. Just because courts have

come to disparate conclusions as to the scope of a statute or

interpret ATDS differently does not render the law

unconstitutionally vague. This is particularly so because the

principal source of confusion following the D.C. Circuit’s

decision in ACA Int’l is in distinguishing which of the FCC

rulings as to the ATDS remains in effect, not the text of the

statute itself. See Barr v. Galvin, 626 F.3d 99, 108 (1st Cir.

2010) (noting “[t]he mere fact that a statute requires

interpretation does not necessarily render it void for

vagueness.”); Henry v. Radius Glob. Sols., LLC, 357 F. Supp. 3d

446, 459 (E.D. Pa. 2019) (noting “[m]ere disagreement amongst

courts over the interpretation of a statute does not render the

statute unconstitutionally vague.”)

Whatever ambiguity exists in the statutory language of the

TCPA, the ATDS provision does not rise to the level of

unconstitutional vagueness.

C. Plaintiff’s Claim for Relief

In addition to their constitutional challenge, defendants

also assert that Rosenberg has failed to state a plausible claim

for relief. Defendants contend that Rosenberg has not: (1)

plausibly alleged the use of an ATDS; (2) alleged that his

cellular phone is a residential line; (3) stated a claim

pursuant to 47 C.F.R. § 64.1200(d)(4) because the regulation

lacks a private right of action or (4) stated a non-conclusory

claim for vicarious liability.

The plaintiff rejoins that: (1) he has plausibly alleged

the use of an ATDS; (2) he has properly pled that his cell phone

is a residential line; (3) 47 C.F.R. § 64.1200(d) was

implemented pursuant to 47 U.S.C. § 227(c) and thus contains a

private right of action; and (4) he has properly pled vicarious

liability.

1. The use of an ATDS

At the outset, it bears mention that claims based on

alleged violations of the TCPA do not require the usual level of

particularity. See Jackson v. Caribbean Cruise Line, Inc. 88 F.

Supp. 3d 129, 139 (E.D.N.Y 2015). In order properly to state a

claim under the TCPA, a plaintiff must plausibly plead that a

defendant made calls using an ATDS without his consent.

District courts have adopted different approaches in evaluating

the sufficiency of a pleading alleging use of an ATDS. Some

courts, recognizing that it is difficult for a plaintiff to

allege precise facts regarding the technical specifications of a

dialing system prior to discovery, have held that a plaintiff

need only allege the use of an ATDS as defined in the statute.

See Hashw v. Dep't Stores Nat'l Bank, 986 F. Supp. 2d 1058, 1061

(D. Minn. 2013); Zeidel v. Nat'l Gas & Elec., LLC, No. 18-CV-

06792, 2019 WL 2161546, at *2 (N.D. Ill. May 17, 2019)

(collecting cases). Others have concluded that, without more, a

bare allegation that an ATDS was used to make the offending call

is insufficient to state a claim. See Kruskall v. Sallie Mae

Serv., Inc., No. 15-CV-11780, 2016 WL 1056973, at *3 (D. Mass.

Mar. 14, 2016)(citing Jones v. FMA All. Ltd., 978 F. Supp. 2d

84, 86 (D. Mass. 2013)).

Given the challenge of pleading specific facts in these

cases, courts adopting the latter approach (including those in

other sessions of this Court) allow a plaintiff to

rely on indirect allegations, such as 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. Jones 978 F. Supp. 2d at 84.

Different kinds of indirect allegations are adequate to

allow a court to make a reasonable inference that the calls

complained about were made using an ATDS. The promotional

content of calls, the fact that they came from “spoofed” numbers

or the timing and volume of such calls can all be sufficient to

state a claim. See e.g., Zeidel v. Nat'l Gas & Elec., LLC, No.

18-CV-06792, 2019 WL 2161546, at *3 (N.D. Ill. May 17,

2019)(finding that allegations of “generic promotional content”

and “different spoofed numbers” sufficient to state a claim);

Jones 978 F. Supp. 2d at 86–87.

This Session agrees with the practice of other sessions of

this Court and finds that a plaintiff must plead more than the

statutory definition of an ATDS to state a claim but may rely on

indirect allegations. Under this standard, Rosenberg has pled

just enough facts to state a claim that Loan Depot and Ascendant

Marketing employed an ATDS. The complaint alleges that at least

one offending call was made from a non-working telephone number

and that the call was made to appear as though it came from a

local Massachusetts area code (so called “spoofing”). He

further states that other people have complained about receiving

similar messages from the same non-working telephone number.

Plaintiff’s complaint avers that these facts are indicative of

defendants’ use of an ATDS. Taking those facts as true and in

the light most favorable to Rosenberg, the Court finds that

these allegations are sufficient to draw a reasonable inference

that Loan Depot and Ascendant Marketing employed the use of an

ATDS.

2. Plaintiff’s use of his Cellular Phone as a Residential

Line

Count Two of plaintiff’s complaint alleges that loan Depot

violated the Do-not-call provisions of 47 C.F.R. § 64.1200(d)

which prohibits calls to “residential line[s]”. Defendants

demur that plaintiff has not properly pled that his cellular

phone is a residential line rather than a business line.

Rosenberg submits that he placed his cellular phone number

on the National Do Not Call registry and that he uses his cell

phone as his residential line. Those allegations are adequate

for the purposes of pleading. In its 2003 Order, the FCC ruled

that cellular numbers that were placed on the DNC registry were

presumed to be residential. In Re Rules & Regulations

Implementing the Tel. Consumer Prot. Act of 1991, 18 F.C.C. Rcd.

14014, 14039 (2003). Construing reasonable allegations in favor

of Rosenberg, he has properly alleged that his cellphone is a

residential line.

3. Private Right of Action pursuant to 47 C.F.R.

§ 64.1200(d)(4)

Loan Depot next asserts that 47 C.F.R. §64.1200(d)(4) does

not contain a private right of action and therefore, plaintiff

cannot maintain his claim under that regulation. Broadly,

§64.1200(d) mandates that telemarketing entities develop and

maintain a do-not-call list. Rosenberg claims that Ascendant

violated subsection (4) of that regulation because it failed to

identify itself when it called him. The regulation, 47 C.F.R.

§64.1200(d)(4), mandates that

A person or entity making a call for telemarketing purposes

must provide the called party with the name of the

individual caller, the name of the person or entity on

whose behalf the call is being made, and a telephone number

or address at which the person or entity may be contacted.

Defendants assert that 47 C.F.R. §64.1200(d)(4) was enacted

pursuant to 47 U.S.C. § 227(d), “technical and procedural

standards”, which does not contain a private right of action.

Plaintiff rejoins that the implementing regulation was

promulgated pursuant to § 227(c), “protection of subscriber

privacy rights”, which does contain a private right of action.

A majority of courts that have addressed the issue (though

not all), including the Sixth Circuit, have held that 47 C.F.R.

§64.1200(d)(4) was promulgated under the authority in § 227(c)

and, therefore, contains a private right of action. See Charvat

v. NMP, Ltd. Liab. Co., 656 F.3d 440, 449 (6th Cir. 2011)

(holding that the do not call provision, § 227(c), was

implemented by §64.1200(d)(4)); Cunningham v. Rapid Response

Monitoring Servs., Inc., 251 F. Supp. 3d 1187, 1200 (M.D. Tenn.

2017)(holding that “the internal do-not-call procedures of 47

C.F.R. § 64.1200(d) fit cleanly under the rubric of 47 U.S.C. §

227(c)'s general mandate to adopt adequate do-not-call

regulations.”); Wagner v. CLC Resorts & Devs., Inc., 32 F. Supp.

3d 1193, 1198 (M.D. Fla. 2014).

The Court agrees with the majority. Overall, §64.1200(d),

like § 227(c), is concerned principally with the protection of

individual privacy rights. The principal purpose of § 227(c) is

to ensure that subscribers “avoid receiving telephone

solicitations to which they object.” The do-not-call

provisions, including §64.1200(d)(4), further that goal and

comport with the statute. The available record indicates that

§64.1200(d) was promulgated under § 227(c) and contains a

private right of action. Defendants’ motion to dismiss on that

ground will, therefore, be denied.

4. Vicarious Liability

In their final argument in support of their motion to

dismiss, defendants assert that Rosenberg’s allegations that

Loan Depot is vicariously liable for telemarketing calls made by

Ascendant are conclusory and therefore must be dismissed.

Plaintiff responds that he has alleged enough facts with

specificity, at this stage, to state a claim.

A party who engages a third-party telemarketer may be held

vicariously liable under federal common law agency principles

for a TCPA violation. See In re Dish Network, LLC 28 F.C.C. Rcd.

6574, 6582 (2013); Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663,

674, 193 L. Ed. 2d 571 (2016) (noting that “the Ninth Circuit

deferred to [The FCC ruling] and we have no cause to question

it.”)

Similar to pleading use of an ATDS, the question of

vicarious liability is a fact intensive inquiry and, as

previously noted, claims based on alleged violations of the TCPA

do not require the usual level of particularity. See Jackson 88

F. Supp. 3d at 139. In order to satisfy the pleading

requirements, however, Rosenberg must plausibly allege that

Ascendant was acting as an agent of Loan Depot, i.e that Loan

Depot exercised control over, ratified or openly authorized

Ascendant’s actions. See Legg v. Voice Media Grp., Inc., 20 F.

Supp. 3d 1370, 1377 (S.D. Fla. 2014) (citing In re Dish Network,

LLC 28 F.C.C. Rcd. at 6574).

A seller may be liable for unauthorized conduct of a

telemarketer if the seller is aware of the unauthorized conduct

of the telemarketer and fails to terminate its services. In re

Dish Network, LLC 28 F.C.C. Rcd. at 6587 n.104.

Specifically, Rosenberg alleges that Loan Depot hired

Ascendant Marketing to conduct telemarketing. He states that

Ascendant placed an automated call to him on November 19, 2018,

and Loan Depot identified itself on that call. He further

alleges that when Loan Depot later contacted him directly, he

complained about the conduct of Ascendant Marketing but later

received an additional telemarketing call. Taken together,

Rosenberg alleges that Ascendant Marketing called him as Loan

Depot’s agent and Loan Depot knew of and therefore ratified

Ascendant’s unauthorized conduct.

Viewing his complaint in the light most favorable,

Rosenberg has stated a claim that Loan Depot is vicariously

liable for Ascendants conduct because (1) Ascendant Marketing

acted with apparent authority and (2) Loan Depot ratified its

conduct.

D. Conclusion

Based on the foregoing, defendants’ motion to dismiss on

constitutional grounds, or in the alternative, for failure to

state a claim, will be denied.

V. Loan Depot and Ascendant’s Motions to Dismiss Non-

Massachusetts Putative Class Members

In their final attempt to dismiss this putative class

action, defendants contend (in separate briefs) that the Supreme

Court’s decision in Bristol-Myers Squibb Co. v. Superior Court

extends beyond mass tort actions to class actions and mandates

that this Court dismiss the non-Massachusetts putative class

members pursuant to Fed. R. Civ. P 12(b)(2). Plaintiffs, and

the Court, disagree.

Bristol-Myers Squibb Co. v. Superior Court of California,

San Francisco Cty. 137 S. Ct. 1773 (2017) (“the BMS case”) was a

mass tort action brought in California state court by a group

consisting of both California and non-California residents who

allegedly suffered injuries from a drug manufactured by BMS.

The California Supreme Court applied a “sliding scale approach

to specific jurisdiction” whereby it exercised specific

jurisdiction over the non-resident plaintiffs. Id. On review,

the United States Supreme Court reversed. It found that there

was no connection between the forum and the non-residents’

specific claims and, therefore, exercise of personal

jurisdiction over them violated the Due Process Clause of the

Fourteenth Amendment. Id. at 1781. Relevant to defendants’

reading of the BMS case, the court did not,

confront the question whether its opinion here would also

apply to a class action in which a plaintiff injured in the

forum State seeks to represent a nationwide class of

plaintiffs, not all of whom were injured there. Id. at 1789

n.4 (Sotomayor, J., dissenting)

A mass tort action is fundamentally distinguishable from a

class action. This Court joins the large majority of district

courts which have held the BMS case inapplicable to class

actions such as the instant case. See e.g., Molock v. Whole

Foods Mkt., Inc., 297 F. Supp. 3d 114, 126 (D.D.C.); Chinese–

Manufactured Drywall Prods. Liability Litig., No. MDL 09-2047,

2017 WL 5971622, at *12–14 (E.D. La. Nov. 30, 2017); Fitzhenry-

Russell v. Dr. Pepper Snapple Grp., Inc., No. 17-CV-00564 NC,

2017 WL 4224723, at *5 (N.D. Cal. Sept. 22, 2017); Cabrera v.

Bayer Healthcare, LLC, No. LACV1708525JAKJPRX, 2019 WL 1146828,

at *7 (C.D. Cal. Mar. 6, 2019)(collecting cases).

As explained in detail in those opinions, the BMS case does

not apply to a putative class action such as the case at bar.

In brief, there are two key differences. First, in a mass tort

action each individual plaintiff is a real party in interest.

In a putative class action, however,

one or more plaintiffs seek to represent the rest of the

similarly situated plaintiffs, and the named plaintiffs are

the only plaintiffs actually named in the complaint.

Molock 297 F. Supp. 3d at 126-27. Second, a class action,

unlike a mass tort case, must meet additional due process

standards for certification under Fed. R. Civ. P. 23. The

familiar requirements of that rule: numerosity, commonality,

typicality, adequacy of representation, predominance and

superiority, “supply due process safeguards not applicable in

the mass tort context.” Id. Given those inherent differences

and the well-reasoned caselaw holding that the BMS case does not

apply in the class action context, this Court similarly declines

to extend the reach of the BMS decision. The Court will

therefore deny the two pending motions to dismiss the complaint

as to non-Massachusetts resident putative class members for lack

of personal jurisdiction.

ORDER

In accordance with the foregoing:

1) the motion of Loan Depot Motion to Stay (Docket No. 10) is

DENIED;

2) the motion of Loan Depot to Strike Plaintiff’s Class

Allegations (Docket No. 23) is DENIED without prejudice;

3) the motion of Loan Depot and Ascendant Marketing Group to

Dismiss (Docket No. 24) is DENIED;

4) the motion of Loan Depot to Dismiss Non-Massachusetts

Putative Class Members (Docket No. 25) is DENIED; and

5) the motion of Ascendant Marketing Group to Dismiss for Lack

of Jurisdiction (Docket No. 48) is DENIED.

So ordered.

/s/ Nathaniel M. Gorton

Nathaniel M. Gorton

United States District Judge

Dated January 24, 2020