HUDSON v. PALM BEACH TAN, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

)

ALEX HUDSON, )

on behalf of himself and all others )

similarly situated, )

)

Plaintiff, )

)

v. ) 1:23CV486(WO) (JEP)

)

PALM BEACH TAN, INC., )

)

Defendant. )

ORDER AND RECOMMENDATION

OF UNITED STATES MAGISTRATE JUDGE

This matter is before the Court on Defendant’s Motion to Dismiss [Doc. #16] for

failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).

As telates to Defendant’s Motion to Dismiss, the allegations in the Complaint are

straightforward. According to the Complaint, Plaintiff uses his cell phone as a residential

telephone. (Compl. [Doc. #14] §{] 13-16.)! Despite placing his cell phone number on the

national Do-Not-Call registry, Plaintiff recetved repeated text-message solicitations from

Defendant on behalf of Defendant’s tanning salon business. (Compl. { 1-3, 9, 14, 17-18, 25.)

Defendant continued sending text messages to Plaintiffs cell phone despite Plaintiffs

repeated objections and requests that Defendant stop. (Compl. ff] 1-3, 19-23.) Plaintiff alleges

1 Citations to “Compl” or references to the Complaint refer to the Amended Complaint [Doc. #14], the

operative complaint for Defendant’s Motion to Dismiss.

that he suffered damages from these text messages under the federal Telephone Consumer

Protection Act (hereinafter “['CPA”). (Compl. § 26.)

Asa result, Plaintiff brought this lawsuit seeking damages and seeking to certify a class

of similarly-situated plaintiffs. Defendant now moves to dismiss on the ground that Plaintiffs

claims that he received text messages to his cell phone are not actionable under the TCPA.

For the reasons that follow, the Court will recommend that Defendant’s Motion to

Dismiss be denied at this time, without prejudice to further consideration of the issues on

subsequent dispositive motions.

LEGAL STANDARD

Defendant moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6),

contending that Plaintiff has failed to state a claim upon which relief can be granted. “To

sutvive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as

true, to ‘state a claim to relief that is plausible on its face.”’ Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009) (quoting Bell Atl. Corp. v. Twombly, 500 U.S. 544, 570 (2007)). This standard

does not require “detailed factual allegations,” but it demands more than “an unadorned, the-

defendant-unlawfully-harmed-me accusation.” Id. A claim is facially plausible when the

plaintiff provides enough factual content to enable the court to reasonably infer that the

defendant is liable for the misconduct alleged. Id. “The plausibility standard is not akin to a

‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has

acted unlawfully.” Id. In this way, Rule 12(b)(6) protects against meritless litigation by

requiting sufficient factual allegations “to raise a right to relief above the speculative level” so

as to “nudge[ | the[] claims across the line from conceivable to plausible.” ‘Twombly, 500 U.S.

at 555, 570; see Iqbal, 556 U.S. at 680. The Court must accept as true all of the factual

allegations contained in a complaint, but is not bound to accept legal conclusions. Iqbal, 556

US. at 678; Langford v. Joyner, 62 F.4th 122, 124 (4th Cir. 2023). Thus, “when there ate well-

pleaded factual allegations, a court should assume their veracity and then determine whether

they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.

I. DISCUSSION

As is relevant to the Complaint and the issues raised by Defendant in its Motion to

Dismiss, Congress by statute and the FCC by regulation have prohibited two related but

distinct telemarketing practices: (1) making telephone solicitations to residential telephone

subscribers who have indicated that they do not wish to receive such solicitations by placing

their telephone numbers in a national Do-Not-Call registry and (2) making telephone

solicitations to residential telephone subscribers who have indicated that they do not wish to

teceive such solicitations by directly requesting the telemarketer to no longer send the

solicitations.

“Congtess enacted the Telephone Consumer Protection Act (I'CPA) to prevent

abusive telephone marketing practices.” Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 648

(4th Cir. 2019). As one part of this effort, “the T'CPA prohibits calls to numbers on the

national Do-Not-Call registry.” Id.; see also 47 U.S.C. § 227(¢)(1)-(4) Gn order “to protect

tesidential telephone subscribers’ privacy tights to avoid receiving telephone solicitations to

which they object,” the TCPA directed the FCC to formulate regulations that eventually

resulted in, among other things, the national Do-Not-Call registry).

Within the federal government’s web of indecipherable acronyms and byzantine

programs, the Do-Not-Call registry stands out as a model of clarity. It means

what it says. If a person wishes to no longer receive telephone solicitations, he

can add his number to the list. The TCPA then restricts the telephone

solicitations that can be made to that number.

Krakauer, 925 F.3d at 649.

The TCPA grants a private tight of action to any person who receives “more than one

telephone call within any 12-month period by or on behalf of the same entity” in violation of

the FCC’s regulations. 47 U.S.C. § 227(c)(5). These regulations, in turn, prohibit any person

ot entity from initiating “any telephone solicitation” to a “residential telephone subscriber who

has registered his or het telephone number on the national do-not-call registry of persons who

do not wish to receive telephone solicitations that is maintained by the Federal Government.”

47 CER. § 64.1200(c)(2). A telephone solicitation “means the initiation of a telephone call or

message for the purpose of encouraging the purchase or rental of, or investment in, property,

goods, ot setvices, which is transmitted to any person.” 47 U.S.C. § 227(a)(4); accord 47 C.F.R.

§ 64.1200(£) (15).

These regulations also requite “sellers and telemarketers to maintain an internal do-

not-call list (TDNC list’), that is, a list of persons who request not to receive telemarketing

calls made by or on behalf of that seller.” Krakauer v. Dish Network L.L.C., 311 F.R.D. 384,

387 (M.D.N.C. 2015) (Gnternal quotation marks and brackets omitted) (quoting 47 C.F.R. §

64.1200(d)), aff'd, 925 F.3d 643 (4th Cir. 2019).

No petson ot entity shall initiate .. . any call for telemarketing purposes to a

tesidential telephone subscriber unless such person or entity has instituted

procedures for maintaining a list of persons who request not to recetve such

calls made by or on behalf of that person or entity... .

;

Persons ot entities making such calls (or on whose behalf such calls are made)

must honor a residential subscribet’s do-not-call request within a reasonable

time from the date such request is made. This petiod may not exceed 30 days

from the date of such request. If such requests ate recorded or maintained by

a patty other than the petson or entity on whose behalf the call is made, the

person ot entity on whose behalf the call is made will be liable for any failures

to honor the do-not-call request.

47 C.F.R. § 64.1200(d)(3).

Under the FCC’s regulations, both 47 C.F.R. § 64.1200(0), related to the national Do-

Not-Call registry, and § 64.1200(d)(3), related to internal do-not-call lists, “are applicable to

any person of entity making telephone solicitations or telemarketing calls to wireless telephone

numbers.” 47 C.F.R. 64.1200(e).?

Based on the language of the TCPA and the FCC’s related regulations, Defendant seeks

dismissal largely on three grounds: (1) the subsection of the TCPA allowing for the private

tight of action asserted here applies to residential telephones only, which excludes cellular

telephones like the one on which Plaintiff allegedly received messages; (2) that same subsection

of the TCPA applies to voice calls only, which excludes text messages like the ones Plaintiff

allegedly received; and (3) the TCPA and regulations related to internal do-not-call lists do not

etant a private right of action. The Court will address these arguments in turn.

A. Subsection 227(c) of the TCPA and Cell Phones

Defendant first contends that cell phone ownets cannot be considered “residential

telephone subscribers,” and in support of this contention Defendant cites to a handful of

disttict court opinions that note a split of authority on this issue, particularly Gaker v. Q3M

2 As will be discussed below, effective March 26, 2024, the FCC amended subsection (e). Unless otherwise

indicated, the version of the regulations quoted in this opinion is that which was in effect at the time of the

conduct in this case from 2022 to 2023.

Ins. Sols., No. 3:22-CV-00296-RJC-DSC, 2023 WL 2472649, at *2 (W.D.N.C. Feb. 8, 2023)

(recommendation of dismissal, but without a final determination due to settlement). However,

the Court concludes that dismissal is not warranted at this time on this issue for three reasons.

First, the vast majority of recent cases that have considered this issue, in this Circuit

and others, have found that a cell phone may plausibly be alleged in a complaint to be

tesidential, and thus covered by the TCPA. Compare Tessu v. AdaptHealth, LLC, No. SAG-

23-0364, 2023 WL 5337121, at *3, *5 (D. Md. Aug. 17, 2023) (“This Court therefore joins the

majority of courts throughout the country who have held that cell phones like Tessu’s are

entitled to the T';CPA’s protection as residential telephones.”), Nickson v. Advanced Mktg. &

Processing, Inc., No. DLB 22-2203, 2023 WL 4932879, at *1, *6 n.6 (D. Md. Aug. 2, 2023)

(assuming, without deciding, that a cell phone was residential for purposes of motion to

dismiss in T'CPA case), Davis v. Reliance First Cap., LLC, No. 7:22-CV-00018, 2023 WL

1982354, at *4 n.1 (E.D.N.C. Feb. 13, 2023) (allegation that a plaintiff was the user of a

residential cellular telephone number was sufficient to survive a motion to dismiss under the

TCPA), Boardman v. Green Dot Corp., No. 3:21-CV-00174-FDW-DSC, 2021 WL 3699856,

at *1, *3 (W.D.N.C. Aug. 19, 2021) (denying motion to dismiss and finding that “a cellphone

may plausibly be alleged as residential”), and Fischman v. MediaStratX, LLC, No. 2:20-CV-

83-D, 2021 WL 3559639, at *1, *4, *6-7 (E.D.N.C. Aug. 10, 2021) (denying a defendant’s

motion for judgment on the pleadings in TCPA case involving a cell phone on the Do-Not-

Call registry), with Gaker, 2023 WL 2472649, at *2 (finding TCPA did not apply to cell

phones), and Morgan v. U.S. Xpress, Inc., No. 3:17-cv-00085, 2018 WL 3580775, at *1 (W.D.

Va. July 25, 2018) (holding that for purposes of § 227(b)(1) regarding automated and

prerecorded calls, “the structure and language of the T'CPA demonstrate that calls made to a

cell phone are not calls made to a ‘tesidential telephone line”). See also Chennette_v.

Porch.com, Inc., 50 F.4th 1217, 1225 (9th Cir. 2022) (“The complaint alleges that some of the

plaintiffs have placed their ‘residential’ cell phone numbers on the national do-not-call registry.

At the motion to dismiss stage and based on the particular allegations in the plaintiffs’

complaint, plaintiffs’ phones are presumptively residential for purposes of § 227(¢).”);

Tsolumba v. SelectQuote Ins. Setvs., No. 5:22-cv-00712, 2023 WL 6146644, at *3-5 (N.D.

Ohio Sept. 20, 2023) (finding that the plaintiff, who placed her cell phone number in the Do-

Not-Call registry, sufficiently alleged that she was a residential telephone subscriber under the

TCPA); Patiseau_v. Built USA, LLC, 619 F. Supp. 3d 1203, 1206-07 (M.D. Fla. 2022)

(allegations that plaintiff received text messages to his cell phone despite being on do-not-call

registry stated claim under the T'CP.A); Barton v. Temescal Wellness, LLC, 525 F. Supp. 3d

195, 201-02 (D. Mass. 2021) (“Because Barton has pled that her cell phone number is

registered on the Do Not Call Registty and the Do Not Call Registry is only open to residential

subscribers and keeping in mind that at the motion to dismiss stage all reasonable inferences

ate to be made in her favor, I find that Barton has sufficiently pled that she is a residential

subscriber for the purposes of her mobile phone number to survive the Rule 12(b)(6)

motion.”); Hand v. Beach Ent. KC, LLC, 456 F. Supp. 3d 1099, 1120 (W.D. Mo. 2020) (“A

cell phone user can qualify as a residential telephone subscriber under 47 C.F.R. § 64.1200(¢)

and (d).”).

Second, in Krakauer v. Dish Network, LLC, a prior [CPA class action in this district

that proceeded to final judgment following a jury trial, the certified class included “[ajll persons

throughout the United States whose telephone numbets were listed on the federal Do Not

Call registry for at least 30 days,” and still received telemarketing calls from the Defendant’s

agent during the specified time frame. Plaintiffs Motion for Class Certification at 1, Krakauer,

311 F.R.D. 384 (No. 1:14-CV-333), ECF No. 47. This included both landline and cellular

telephone numbers, and in certifying the class the District Judge noted that Plaintiff would

have to prove that the numbers were used for residential purposes, and that it was an issue of

fact for trial as to whether the wireless calls were to a residential number. Memorandum

Opinion and Order at 24, Krakauer, 311 F.R.D. 384 (No. 1:14-CV-333) (Eagles, C.J.), ECF

No. 111. Notably, the juty instructions then specifically provided that:

This section of the TCPA does not prohibit calls to business or government

numbers, only to residential numbers on the Registry. In determining whether

a number is a tesidential number, you should consider the ordinary English

meaning of that phrase. For example, if the number is for a landline associated

with a home, whether a house, an apattment, a condominium, or any other kind

of dwelling place, or if it is [a] cell phone primarily used for personal calls, similar

to the use of a residential landline, then it would be a residential number.

Final Jury Instructions at 11, Krakauer, 311 F.R.D. 384 (No. 1:14-CV-333) (Eagles, CJ.)

(emphasis added), ECF No. 293. ‘That class and the ultimate judgment were affirmed by the

Fourth Circuit on appeal. Krakauer, 925 F.3d 643. Defendant has not pointed to any basis

to reject that interpretation or create a split of authority within the district at this stage of the

case.

Third, this approach is consistent with the applicable regulatory provisions and FCC

interpretation. In this regard, the statutory language of 47 U.S.C. § 227 does not explicitly

3 Defendant does not challenge that Plaintiff has adequately pleaded use of his cell phone tn a residential

manner, but rather contends that a cell phone categorically cannot be a residential telephone under the statute.

(See Def.’s Br. [Doc. #17] at 5, 10-12; Def.’s Reply Br. [Doc. #19] at 1, 3-7.)

preclude a cell phone from being considered a “residential telephone.” See Cacho v. McCarthy

& Kelly LLP, No. 23-cv-11157 (LJL), 2024 WL 3293628, at *5-9 (S.D.N.Y. July 3, 2024)

(undertaking extensive analysis of the statutory text). Further, the private right of action

created under 47 U.S.C. § 227(c)(5) of the TCPA is premised on a “violation of the regulations

prescribed under this subsection.” As relevant here, subsections (c)(2) and (d) of those

regulations prohibit an entity from calling a person on the national Do-Not-Call registry or on

the entity’s internal do-not-call list, respectively. Those same regulations also unambiguously

state that the tules set forth in these subsections “are applicable to any person or entity making

telephone solicitations ot telemarketing calls to wireless telephone numbers to the extent

described in the Commission’s Report and Order, CG Docket No. 02-278, FCC 03-153,

‘Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991.” 47

C.F.R. § 64.1200(e). These Rules and Regulations make clear that:

[I]t is well-established that wireless subscribers often use their wireless phones

in the same mannet in which they use their residential wireline phones. Indeed,

... thete is a growing number of consumers who no longer maintain wireline

phone setvice, and rely only on theit wireless telephone service. . . .

... [I]t is more consistent with the overall intent of the TCPA to allow wireless

subscribers to benefit from the full range of TCPA protections. As indicated

above, Congress afforded wireless subscribers particular protections in the

context of autodialers and prerecorded calls. In addition, although Congress

expressed concern with residential privacy, it also was concerned with the

nuisance, expense and burden that telephone solicitations place on consumers.

Therefore, we conclude that wireless subscribers may participate in the national

do-not-call list.

In Re Rules & Reguls. Implementing the Tel. Consumer Prot. Act of 1991, 18 F.C.C. Red.

14014, 14038-39 (2003) (internal footnotes omitted); accord Chennette, 50 F.4th at 1223;

Hand, 456 F. Supp. 3d at 1119-20. Thus, the FCC’s relevant regulations—and the TCPA

itself, which directly references those regulations as the basis for liability—make clear that they

apply to any “entity making telephone solicitations or telemarketing calls to wireless telephone

numbers.” 47 C.F.R. § 64.1200(e).4

+ Notably, under the Administrative Orders Review Act (Hobbs Act), the federal courts of appeals have

“exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of” certain

“final orders of the Federal Communication Commission.” 28 U.S.C. § 2342(1); PDR Network, LLC v. Carlton

& Harris Chiropractic, Inc., 588 U.S. 1, 6-8 (2019), on remand, Carlton & Harris Chiropractic, Inc. v. PDR

Network, LLC, 982 F.3d 258 (4th Cir. 2020). As explained in Tessu, 2023 WL 5337121, at *4-5:

[T]he 2003 FCC Order and the process used to enact it suggest that the rules contained therein,

including the pertinent rule at § 64.1200(e), are legislative. The 2003 FCC Order itself specifies that

its purpose is to “adopt new rules to provide consumers with several options for avoiding unwanted

telephone solicitations” and notes Congress’s enactment of “the Do-Not-Call Implementation Act

(Do-Not-Call Act), authorizing the establishment of a national do-not-call registry, and directing this

Commission to issue final rules.”” 2003 FCC Order, 18 F.C.C. Rcd. at 14017. In other words, the

FCC intentionally elucidated and expanded the TCPA’s regulations at Congress’s behest. The FCC

published the new rules in the Code of Federal Regulations, at 47 C.F.R. §§ 64.1200(d) and 64.1200().

The FCC also “explicitly invoked its general legislative authority’ when enacting the 2003 FCC

Order, stating multiple times that it was acting based on Congress’s directives and mandate. 2003

FCC Order, 18 F.C.C. Red. at 14027, 14033. And the FCC used its formal notice and comment

process to enact the rules, seeking comment on the establishment of a national do-not-call list. Id.

at 14026. This Court therefore finds that the 2003 FCC Order and its relevant contents are legislative,

not interpretive. ...

... The Hobbs Act’s exclusive-review provision allows challenges to FCC final orders to be brought

in a court of appeals “within 60 days after” the entry of the order in question, 28 U.S.C. § 2344. In

other words, [defendant] had an opportunity to seek judicial review not at the time of the proposed

rulemaking, but once the 2003 FCC Order had been issued and [defendant] could see what it said.

The limitation on this Court’s jurisdiction by the Hobbs Act makes practical sense. Permitting private

patties to indefinitely challenge FCC rulings that have the force and effect of law would undermine

the established expectations of regulated parties and cause substantial uncertainty. The Hobbs Act

“procedural path created by the command of Congress ‘promotes judicial efficiency, vests an

appellate panel rather than a single district judge with the power of agency review, and allows uniform,

nationwide interpretation of the federal statute by the centralized expert agency created by Congress

to enforce the TCPA.” Mais v. Gulf Coast Collection Bureau, Inc., 768 F.3d 1110, 1119 (11th Cir.

2014) (quoting CE Design, Ltd. v. Prism Bus. Media, Inc., 606 F.3d 443, 450 (7th Cir. 2010)). □□□

hold otherwise merely because the issue has arisen in private litigation would permit an end-run

around the administrative review mandated by the Hobbs Act. Such an end run could result in a

judicial determination of a regulation’s invalidity without participation by the agency and upon a

record not developed by the agency.” Nack v. Walburg, 715 F.3d 680, 686 (8th Cir. 2013).

Given the Hobbs Act’s provisions, this Court lacks jurisdiction to review the 2003 FCC Order. This

Court therefore joins the majority of courts throughout the country who have held that cell phones

like [plaintiff's] are entitled to the TCPA’s protection as residential telephones.

As a result, this Court would lack jurisdiction to consider any challenge to an FCC legislative rule. Defendant

has not addressed the application of the Hobbs Act, even though Defendant ts seeking to challenge this FCC

10

The handful of cases cited by Defendant reaching a contrary result do not provide a

sufficient basis to reject the weight of authority, the prior decision of this Court in Krakauer,

and the analysis of the FCC as reflected in the applicable regulations, to conclude that a cell

phone can never be a residential telephone, as Defendant contends.* Therefore, Defendant’s

Motion to Dismiss on the basis that a cell phone cannot be a residential telephone should be

denied.

regulatory provision. In addition, to the extent that Defendant may be contending that this is stmply an

interpretive rule not precluded by the Hobbs Act, Defendant has not explained that analysis or further

addressed review under Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). Finally, the Court notes that after

the briefing was completed on the present Motion to Dismiss, the Supreme Court issued its decision in Loper

Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024). It is not clear that the decision in Loper Bright would

affect any of the analysis here. However, it would be more efficient and appropriate to further consider any

such issues after an opportunity for the Parties to address and fully brief them. Therefore, the Court

recommends that the Motion to Dismiss be denied without prejudice to further consideration of these issues,

if appropriate, on future dispositive motions.

5 With respect to the statutory language, Defendant argues that because the statute uses the term “residential

telephone” in subsection (b)(1)(B) of the statute and “cellular telephone” in subsection (b)(1)(A) (ti), there is a

pteclusive distinction between the two that necessarily means a cellular or wireless telephone is not, and cannot

be, a residential telephone. (See Def.’s Br. at 11-12; Def.’s Reply Br. at 4-5.) However, it does not appear that

the listing in (b)(1)(A)(iii) of certain telephonic services either mandates or precludes them from being

residential or commercial, as the case may be. If, for example, the T'CP.A’s listing of “cellular telephone” tn

subsection (b)(1)(A) (iii) and “residential telephone” in subsection (b)(1)(B), meant that a residential telephone

could never be a cellular telephone—or vice versa—then neither could a residential telephone ever be a “service

for which the called party is charged for the call”—another type of service listed in subsection (b)(1)(A) (1) but

not (b)(1)(B). The Fourth Circuit has already rejected such a conclusion. Lynn v. Monarch Recovery Mgmt.

Inc., 586 F. App’x 103, 103-04 (4th Cir. 2014) (“We conclude that the call-charged provision’s plain language

encompasses [defendant]’s calls to [plaintiff's home phone].”). If “any service for which the called party is

charged for the call” may statutorily include residential telephones, given the facts of a particular case, then it

appears that the same is true for a “cellular telephone service” which is included in the very same clause of the

statute. See 47 U.S.C. § 227(b)(1) (A) (iit). Moreover, as noted supra, with respect to the provisions of § 227(),

the Hobbs Act would potentially preclude any challenge to an FCC legislative rule, and Defendant would need

to address that provision before the Court could consider these issues further.

11

B. Subsection 227(c) of the TCPA and Text Messages

Defendant next contends that a text message cannot constitute a “telephone call”

under § 227(c)(5) of the TCPA and that Plaintiffs claims must therefore be dismissed.

However, this contention should be rejected at this stage of the case for two reasons.

First, the weight of the case law supports the conclusion that the receipt of text

messages can establish an injury under § 227(c)(5). See, e.g., Hall v. Smosh Dot Com, Inc., 72

F.4th 983, 986 (9th Cir. 2023) (holding that an owner/subscriber of a phone with a number

listed on the Do-Not-Call Registry who receives unsolicited telemarketing texts has standing

under § 227(c)); Chennette, 50 F.4th at 1225 (“The complaint alleges that some of the plaintiffs

have placed their ‘residential’ cell phone numbers on the national do-not-call registry [and then

received text messages]. At the motion to dismiss stage and based on the particular allegations

in the plaintiffs’ complaint, plaintiffs’ phones are presumptively residential for purposes of §

227(c). We therefore conclude that these plaintiffs have standing to sue under § 227(c).”);

Williams v. Myler Disability, LLC, No. 3:20-cv-00275-FDW-DCK, 2020 WL 6693134, at *6

(W.D.N.C. Nov. 12, 2020) (“Reading together other courts’ interpretations of the TCPA and

extending relevant Fourth Circuit precedent related to receipt of calls under the TCPA, the

Court finds Plaintiffs receipt of Defendant’s two unsolicited text messages asking Plaintiff to

call Defendant to apply for disability benefits are the kind of harm the TCPA protects

against.”); Pariseau v. Built USA, LLC, 619 F. Supp. 3d 1203, 1207 (M.D. Fla. 2022) (“[S]everal

persuasive decisions conclude that Section 227(c)(5) confers a claim on a person teceiving

more than one voice call or text message.”); Hall, 72 F.4th at 986 (“We now hold that the

owner and subscriber of a phone with a number listed on the Do-Not-Call Registry has

12

suffered an injury in fact when unsolicited telemarketing calls or texts are sent to the number

in putative violation of the TCPA.” (emphasis added)).

Second, the statutory text and FCC regulations and guidance support the conclusion

that text messages can establish the basis for a claim under § 227(c)(5). By its terms, § 227(c)

protects residential telephone users’ privacy rights “to avoid receiving telephone solicitations

to which they object.” 47 U.S.C. 227(¢)(1). A “telephone solicitation” is defined as “the

initiation of a telephone call or message for the purpose of encouraging the purchase or rental

of, or investment in, property, goods, or services.” 47 U.S.C. 227 (a)(4). Thus, “messages”

ate included in the relevant statutory provisions. See Pepper v. GVG Capital LLC, 677 F.

Supp. 3d 638, 643 (S.D. Tex. June 9, 2023) (““GVG Capital also argues that text messages ate

not actionable under the TCPA provisions at issue.... This argument fails tn the face of the

statutory text, which refers to ‘telephone call[s] or message|s],’ 47 U.S.C. § 227(c), the

applicable regulations, and the decisions of the various courts to consider the issue.’’)°

The FCC has issued regulations and guidance confirming that text messages are

included in the TCPA prohibitions and the private right of action in § 227(c)(5). Effective

6 The Court also notes that the Supreme Court has assumed, and other Circuit courts and district courts in this

Circuit have held, that the term “call” does include text messages, in interpreting another subsection of the

TCPA. In relevant patt, subsection (b) of the TCPA restricts the use of automated telephone equipment and

makes prohibitions on certain “calls.” 47 U.S.C.A. § 227(b). Courts have routinely found that the phrase “call”

in subsection (b) of the statute includes text messages. See Facebook, Inc. v. Duguid, 592 U.S. 395, 400 n.2

(2021) (assuming that the TCPA’s prohibitions extend to text messages); Campbell-Ewald Co. v. Gomez, 577

USS. 153, 156 (2016) (“A text message to a cellular telephone, it is undisputed, qualifies as a ‘call’ within the

compass of § 227(b)(1)(A) (iit).””); Murphy v. DCI Biologicals Orlando, LLC, 797 F.3d 1302, 1305 (11th Cir.

2015) (subsection (b)’s “prohibition against auto dialed calls applies to text message calls as well as voice calls”).

If a text message is a “call” under the statutory language in subsection (b)(1)(A)—which places restrictions on

making “any call” using an automatic telephone dialing system to certain lines, without separately specifying

that it includes text messages—then there is no reason to assume that a text message could not be a call under

subsection (c)(5).

13

March 26, 2024, the FCC amended subsection (e) to confirm that the regulations apply to text

messages sent to wireless telephone numbers, and the regulation now provides that:

The rules set forth in paragraph (c) and (d) of this section ate applicable to any

person of entity making telephone solicitations or telemarketing calls or text

messages to wireless telephone numbers to the extent described in the

Commission’s Report and Order, CG Docket No. 02-278, FCC 03-153, “Rules

and Regulations Implementing the Telephone Consumer Protection Act of

1991.”

47 C.F.R. § 64.1200(e) (2024) (emphasis added); Targeting and Eliminating Unlawful Text

Messages, Implementation of the Telephone Consumer Protection Act of 1991, Advanced

Methods to Target and Eliminate Unlawful Robocalls, 89 Fed. Reg. 5098, 5101, 5104 (Jan. 26,

2024). In summarizing that amendment, the FCC explained that:

The Commission adopts the proposal to codify the National DNC Registry’s

existing protections to text messages. ‘Textets must have the consumet’s prior

express invitation or permission before sending a marketing text to a wireless

number in the DNC Registry. The Commission previously concluded that the

national database should allow for the registration of wireless telephone

numbers and that such action will further the objections of the TCPA and the

Do-Not-Call Act. The Commission’s action is consistent with Federal court

opinions and will both deter illegal texts and make DNC enforcement easiet.

Targeting and Eliminating Unlawful Text Messages, 89 Fed. Reg. at 5099. This is consistent

with prior FCC guidance confirming that the TCPA applies to text messages to the same

extent as it does voice calls. See In re Rules & Reguls. Implementing the Tel. Consumer Prot.

Act of 1991, 30 F.C.C. Red. 7961 (2015) (“Glide raises the issue of whether SMS text messages

ate subject to the same consumer protections under the TCPA as voice calls. We reiterate

that they are.”); see also Reimer v. Kohl’s, Inc., No. 23-CV-597-]PS, 2023 WL 6161780, at *4

(E.D. Wis. Sept. 21, 2023) (“Against this backdrop, the Court is constrained to agree with

Plaintiff that the Notice is a clarification and not a substantive change to the law. . . . Given

14

the landscape of the existing case law, it is wholly clear that the Notice seeks to restate what a

potentially confusing area of the law is and has always been, not to change it.”).

With respect to the FCC guidance, the Court also notes that in a 2003 rules and

regulations report, the FCC “affirm[ed] that under the TCPA, it is unlawful to make any call

using an automatic telephone dialing system or an artificial or prerecorded message to any

witeless telephone numbet” and that “[t]his encompasses both voice calls and text calls to

witeless numbers including, for example, short message service (SMS) calls.” In Re Rules &

Reguls. Implementing the Tel. Consumer Prot. Act of 1991, 18 F.C.C. Red. at 14115 (citing

47 U.S.C. § 227(b)). The fact that the FCC uses “voice,” “text” and “short message service

(SMS)” to modify “calls” itself indicates that voice calls, text calls, and SMS calls are all types

of calls, and thus, necessarily, calls. See In Re Rules & Reguls. Implementing the Tel.

Consumer Prot. Act of 1991, 18 F.C.C. Red. at 14115-16. Subsection 227(c)(5) grants a private

tight of action to a “person who has received more than one telephone call within any 12-

month period.” The statute does not specify that it must be a voice call or a live telephone

solicitation or a live telemarketing call: it simply applies to telephone calls broadly. Because

the FCC recognizes text calls as a type of call, a text message would presumably be a form of

a telephone call under § 227(c)(5).

For all of these reasons, the Court recommends that the Motion to Dismiss be denied

at this time with respect to Defendant’s contention that text messages cannot form the basis

for a claim under § 227(c)(5). ’

7 As previously noted, under the Administrative Orders Review Act (Hobbs Act), the federal courts of appeals

have “exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of”

certain “final orders of the Federal Communication Commission.” 28 U.S.C. § 2342(1). Defendants have not

addressed the application of the Hobbs Act with respect to the FCC guidance and regulations regarding text

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C. Private Right of Action for Internal Do-Not-Call List Violations

Finally, Defendant moves for dismissal of any claim premised on 47 CFR.

§ 64.1200(d)(3)—+elated to internal do-not-call (“IDNC”) lists—on the basis that this

regulation does not fall under the private right of action created by subsection (c)(5) of the

TCPA.

However, the prior litigation in this District in Krakauer supports a finding that the

TCPA creates a private right of action under 47 C.F.R. § 64.1200(d)(3). In Krakauer, the Court

noted that “[t]he TCPA regulations state that if a person makes a request not to receive calls

from a telemarketer, the telemarketer must place that person on its IDNC list and not call that

petson without consent,” and the Court recognized that the statute creates a private right of

action for violation of the regulations, citing 47 C.F.R. § 64.1200(d)(3) for the proposition that

there was “liability for IDNC list violations.” Krakauer, 311 F.R.D. at 389 (internal quotation

matks and brackets omitted). The Court therefore certified two proposed classes: one

involving individuals on the National Do Not Call list, and another involving individuals on

the Defendant’s Internal Do Not Call List. Id. at 387. By the time of trial, the parties agreed

that the classes were largely overlapping and agreed to dismiss the claims involving the Internal

Do Not Call List to simplify the issues for trial. See Second Order Modifying Class Definition

at 2-3, Krakauer, 311 F.R.D. 384 (No. 1:14-CV-333), ECF No. 271. In affirming the ultimate

messages. In addition, as noted above, the FCC clarified the regulation by amendment tn 2024, so the briefing

did not address that amendment. Further, the Parties have not addressed the possible application of the recent

decision of the Supreme Court in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024). In the

citcumstances, it would be more efficient and appropriate to further consider these issues after an opportunity

for the Parties to address and fully brief them. Therefore, the Court recommends that the Motion to Dismiss

be denied without prejudice to further consideration of these issues, if appropriate, on future dispositive

motions.

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Judgment, the Fourth Circuit noted that “[i]Jn addition to the national registry, companies are

also expected to keep individual Do-Not-Call lists, reflecting persons who have ditectly told

the company that they do not wish to receive further solicitations.” Krakauer, 925 F.3d at 649

(citing 47 C.F.R. § 64.1200(d)). In this context, the Fourth Circuit stated clearly that “[t]he

TCPA can be enforced by . . . private citizens,” strongly indicating a private right of action

under 47 C.F.R. § 64.1200(d). See id.

In addition, cases from other districts in this Circuit support this conclusion. See Ford

v. NaturaLawn of Am., Inc., No. 24-354 PJM, 2024 WL 3161762, at *6-7 (D. Md. June 25,

2024) (“This Court concuts with . . . the cases that have found a private right to enforce Section

64.1200(d) under subsection (c) of the TCPA. At bottom, the TCPA permits a telephone

consumer to sue a telemarketer if it can be shown that the consumer received more than one

solicitation (whether by call or by text) within the preceding 12-month period in violation of

the FCC’s regulations governing such communications. 47 U.S.C. § 227(¢)(5). As numerous

coutts have concluded, the regulatory requirement that telemarketers desist from contacting

those consumers who have told the telemarketer to ‘STOP’ contacting them, is rooted in the

TCPA’s directive to the FCC to promulgate tules, including requiting company-specific do-

not-call systems, ‘to protect residential telephone subscribers’ privacy rights.’ 47 U.S.C. §

227(c)(1). . . [Plaintiff] may seek redress by suing [defendant] pursuant to 47 U.S.C. §

227(c)(5).” (internal footnote and citation to record omitted)); Fischman, 2021 WL 3559639,

at *6-7 (E.D.N.C. Aug. 10, 2021) (“[The court holds that the FCC promulgated the relevant

provisions of section 64.1200(d) under 47 U.S.C. § 227(c). Accordingly, Congress explicitly

17

provided a private cause of action for Fischman’s second and third claims, and the court denies

MediaStratX’s motion for a judgment on the pleadings.”).

In light of the prior approach in this District in Krakauer—and the related language in

the Fourth Circuit’s affirmance of that decision and recent cases from elsewhere in this

Circuit—there is clear authority for the conclusion that § 64.1200(d) of the FCC’s regulations

was promulgated under § 227(c) of the TCPA, which grants a private right of action for

violation of the FCC’s regulations. See also Worsham v. Disc. Power, Inc., No. RDB-20-0008,

2022 WL 3100762, at *2 n.2 (D. Md. Aug. 4, 2022) (noting reconsideration of dismissal “in

light of intervening authority recognizing that 47 C.F.R. § 64.1200(d) provides a private right

of action”); Mey v. Castle L. Grp., PC, No. 5:19-CV-185, 2022 WL 3108034, at *3 (N.D.W.

Va. July 5, 2022) (“With respect to the argument that no private cause of action exists for

violations of 47 C.F.R. § 64.1200(d), this Court finds that a private cause of action does in fact

exist.”), aff'd sub nom. Mey v. Phillips, 71 F.4th 203 (4th Cir. 2023); Boardman, 2021 WL

3699856, at *3 (“[I]he Court finds that Plaintiff has a plausible clatm under 47 C-F.R.

§ 64.1200(d).”).

This determination also compotts with the decisions from the majority of courts from

other Circuits that have considered this issue. See Rosenberg v. LoanDepot.com LLC, 435 F.

Supp. 3d 308, 324 (D. Mass. 2020) (“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.”); accord

Hossfeld v. DIRECTV, LLC, No. 2:22-cv-05339-JLS-MAA, 2023 WL 3549742, at *4 (C.D.

Cal. Mar. 31, 2023); see also, e.g., Murray v. Grocery Delivery E-Servs. USA Inc., 55 F.4th

18

340, 347 (1st Cir. 2022) (recognizing an IDNC claim under 47 C.F.R. § 64.1200(d) and 47

US.C. § 227(¢)(5)); Cordoba v. DIRECTV, LLC, 942 F.3d 1259, 1265 (11th Cir. 2019) (same);

Charvat v. NMP, LLC, 656 F.3d 440, 449 (6th Cir. 2011) (same); Newman v. Benefytt Techs.,

Inc., No. 22 C 4845, 2023 WL 5651738, at *3 (N.D. IIL Aug. 31, 2023) (finding a private right

of action under 47 C.F.R. § 64.1200(d)); Hossfeld, 2023 WL 3549742, at *4 (same); Noviello

v. Holloway Funding Grp., No. 3:22-CV-52-BN, 2023 WL 128395, at *7 (N.D. Tex. Jan. 9,

2023) (same); Gill v. Align Tech. Inc., No. 21-CV-631-JPS-JPS, 2022 WL 1540016, at *2 (B.D.

Wis. May 16, 2022) (same); Callier v. Debt Mediators, LLC, No. EP-21-CV-278-DB, 2022 WL

1423622, at *2-3 (W.D. Tex. May 5, 2022) (same); LaGuardia v. Designer Brands Inc., No.

2:20-cv-2311, 2022 WL 1121382, at *2 (S.D. Ohio Apr. 14, 2022) (same); Robison v. 7PN,

LLC, 569 F. Supp. 3d 1175, 1184 (D. Utah 2021) (same); Adam v. CHW Grp., Inc., No. 21-

CV-19-LRR, 2021 WL 7285905, at *8 (N.D. Iowa Sept. 9, 2021) (same); Persichetti v. T-

Mobile USA, Inc., 479 F. Supp. 3d 1333, 1338-39 (N.D. Ga. 2020) (same); Rosenberg, 435 F.

Supp. 3d at 324 (same).

Therefore, Defendant’s Motion to Dismiss on the ground that the TCPA does not

etant a private right of action for violations of internal do-not-call lists under 47 C.F.R.

§ 64.1200(d) should be denied.

Ul. CONCLUSION

IT IS THEREFORE RECOMMENDED that Defendant’s Motion to Dismiss [Doc.

#16] be DENIED.

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IT IS ORDERED that this case is set for an Initial Pretrial Conference on Thursday,

September 26, 2024, at 9:30 a.m. in Winston-Salem, North Carolina.

This, the 12 day of August, 2024.

h □ lal Peake

nited States Magistrate Judge

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