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Cunningham v. Rapid Response Monitoring Services, Inc.

United States District Court, M.D. Tennessee, Nashville Division

April 26, 2017




         Before the Court is a Report and Recommendation of the Magistrate Judge (“R&R”) (Doc. No. 81) making the following recommendations:

1. The motion to dismiss (Doc. No. 58) filed by Defendants Rapid Response Monitoring Services, Inc. and Russell MacDonnell (“RRMS Defendants”) should be granted because Plaintiff Craig Cunningham lacks Article III standing to pursue his claims;
2. If Cunningham is held to have standing, Cunningham's request for leave to conduct limited discovery on the issue of personal jurisdiction with regard to David Roman, John Coursey, and John Keith (“Individual Defendants”) (Doc. No. 78) should be denied on the merits because Cunningham has failed to show any persuasive basis upon which he should be permitted to conduct additional discovery to support his twice-amended complaint, and Individual Defendants' Motion to Dismiss (Doc. No. 70) should be granted; and
3. To the extent that the RRMS Defendants request an award of attorney's fees in their favor (Doc. No. 59 at 24-25), such a request should be denied at this time as premature.

         Plaintiff has filed Objections (Doc. No. 84) and Amended Objections (Doc. No. 85). The Court has reviewed the R&R and the parties' briefs and has conducted a de novo review of the record. Insofar as Plaintiff's objections pertain to Recommendations 2 and 3, they are OVERRULED and the Magistrate Judge's Recommendations are ADOPTED. For the reasons discussed below, the Court DECLINES TO ADOPT Recommendation 1 and the RRMS Defendants' Motion to Dismiss will be GRANTED in part and DENIED in part. Individual Defendants' Motion to Dismiss will be GRANTED. Count II will be dismissed as to all parties, and Counts I and III will be dismissed as applied to Russell MacDonnell, David Roman, John Coursey, and John Keith. Count I will also be dismissed insofar as it relies on a theory of apparent authority against RRMS Defendants. Cunningham's request to conduct discovery on the question of personal jurisdiction (Doc. No. 78) will be DENIED.

         I. BACKGROUND

         Cunningham is a Davidson County resident who claims to have received at least twenty-eight phone calls, sometimes only one or two seconds apart, from callers purporting to be conducting a “safety survey” but in fact marketing home security systems and related services. (Doc. No. 57 at ¶¶ 1, 13, 27.) Cunningham participated in one of those calls-he says, for the purpose of ascertaining the identity of the party responsible-and found that it consisted of a prerecorded message instructing him to press ‘1' to speak to an agent about the survey. (Id. at ¶¶ 13- 14.) The marketing effort turned out to be in support of a deal pursuant to which the recipient would accept the installation of a “free” home security system by Security Systems Inc. d/b/a Safeguard America (“Safeguard America”) and would agree to pay ongoing fees for monitoring services to be provided by Rapid Response Monitoring Services, Inc. (“RRMS”). (Id. at ¶¶ 35- 43.)

         Cunningham indicated to follow-up callers that he was interested in the offer, and he met with the installer, but the Complaint is somewhat unclear with regard to whether he ever actually received the system. (Id. at ¶¶ 20-22.) In his Amended Objections, Cunningham states that he did not receive the system and that his dealings with the Safeguard America were in the furtherance of his research to support this case. (Doc. No. 85 at ¶¶ 15-17.) This Court's docket shows that Cunningham is a serial plaintiff in cases involving unsolicited telemarketing. See, e.g., Cunningham v. Newport Mktg., LLC, No. 3:14-cv-02400; Cunningham v. Park Lane Digital Media, No. 3:15-cv-00467; Cunningham v. Trilegiant Corp., No. 3:15-cv-00989; Cunningham v. Ignite Capital, LLC, No. 3:15-cv-00894; Cunningham v. Endless Access LLC, No. 3:15-cv-00178; Cunningham v. The Altitude Grp., LLC, No. 3:15-cv-00929.[1]

         Cunningham identified a number of potential defendants related to the security system marketing scheme and filed this pro se action. Safeguard America. and Homeland Security, LLC, are corporations whose representatives allegedly spoke to Plaintiff on the telephone. (Doc. No. 57 at ¶¶ 2, 6, 30.) RRMS allegedly provides the alarm monitoring service used in the alarm systems installed by Safeguard and Homeland. (Id. at ¶¶ 4, 42-43.) Cunningham also named various individual defendants based on their status as officers and/or managers of those entities. Counts I and II respectively assert claims under 47 U.S.C. § 227(b) and 47 U.S.C. § 227(c)(5) of the Telephone Consumer Protection Act (“TCPA”). (Doc. No. 57 at ¶¶ 81-84.) Count III alleges civil conspiracy to violate the TCPA (Id. at ¶¶ 85-86.) Both the RRMS Defendants and the Individual Defendants have filed motions asking the Court to dismiss Cunningham's claims. (Doc. No. 58; Doc. No. 70.) Cunningham, in response to those motions, seeks discovery regarding personal jurisdiction over the Individual Defendants. (Doc. No. 78.) The R&R recommends that no discovery be granted and the case be dismissed because Cunningham lacks standing to bring his claims.

         II. ANALYSIS

         A. Standard of Review

         Pending before the Court are motions to dismiss pursuant to Rule 12(b)(1), Rule 12(b)(2), and Rule 12(b)(6).

         Rule 12(b)(1) governs dismissal for lack of subject matter jurisdiction. “Rule 12(b)(1) motions to dismiss . . . generally come in two varieties: a facial attack or a factual attack.” Gentek Bldg. Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007). “When reviewing a facial attack, a district court takes the allegations in the complaint as true, which is a similar safeguard employed under 12(b)(6) motions to dismiss.” Id. “When considering a factual attack upon the court's jurisdiction, the court may weigh the evidence, and no presumption of truth applies to the plaintiff's factual allegations.” Hickam v. Segars, 905 F.Supp.2d 835, 838 (M.D. Tenn. 2012) (citing Gentek, 491 F.3d at 330). “In its review, the district court has wide discretion to allow affidavits, documents, and even a limited evidentiary hearing to resolve jurisdictional facts.” Gentek, 491 F.3d at 330.

         Rule 12(b)(2) governs dismissal for lack of personal jurisdiction. When a district court rules on a motion to dismiss under Rule 12(b)(2) without conducting an evidentiary hearing, the court must consider the pleadings and affidavits in a light most favorable to the plaintiff. Beydoun v. Wataniya Rests. Holding, Q.S.C., 768 F.3d 499, 504 (6th Cir. 2014) (citing CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996)). To defeat the Rule 12(b)(2) motion, the nonmoving party “need only make a prima facie showing of jurisdiction.” Id. at 504 (quoting CompuServe, 89 F.3d at 1262). “[A] court disposing of a 12(b)(2) motion does not weigh the controverting assertions of the party seeking dismissal, . . . because we want to prevent nonresident defendants from regularly avoiding personal jurisdiction simply by filing an affidavit denying all jurisdictional facts.” CompuServe, 89 F.3d at 1262 (internal quotation and emphasis omitted). “Dismissal in this procedural posture is proper only if all the specific facts which the plaintiff . . . alleges collectively fail to state a prima facie case for jurisdiction.” Id.

         Rule 12(b)(6) governs dismissal for failure to state a claim upon which relief can be granted. Rule 12(b)(6) requires the Court to take all the factual allegations in the complaint as true. Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009). To survive 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. Id. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Id. at 679.

         B. Standing

         “Where, as here, a case is at the pleading stage, the plaintiff must ‘clearly . . . allege facts demonstrating' each element” required to establish standing. Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (quoting Warth v. Seldin, 422 U.S. 490, 518 (1975)). “To satisfy Article III's standing requirements, a plaintiff must show: ‘(1) [he] has suffered an ‘injury-in-fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.'” Soehnlen v. Fleet Owners Ins. Fund, 844 F.3d 576, 581 (6th Cir. 2016) (quoting Loren v. Blue Cross & Blue Shield of Mich., 505 F.3d 598, 606-07 (6th Cir. 2007)). The Supreme Court has recently emphasized that the requirement that an injury-in-fact be “concrete and particularized” encompasses two distinct requirements. Spokeo, 136 S.Ct. at 1548. “For an injury to be ‘particularized, ' it ‘must affect the plaintiff in a personal and individual way.'” Id. (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 n.1 (1992)). “A ‘concrete' injury, ” on the other hand, “must be ‘de facto'; that is, it must actually exist.” Id. Unless an alleged injury satisfies both requirements, it cannot give rise to standing under Article III.

         The injuries associated with unwanted marketing calls may be comparatively slight, but they are both real and well documented. Unwanted telemarketing can be a “nuisance” and “an intrusive invasion of privacy.” Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 372 (2012) (quoting TCPA, 105 Stat. 2394, note following 47 U.S.C. § 227). Abusive telemarketing can also “waste the recipients' time” and may even in some cases “impede the free flow of commerce.” Am. Copper & Brass, Inc. v. Lake City Indus. Prod., Inc., 757 F.3d 540, 544 (6th Cir. 2014) (citing Ira Holtzman, C.P.A. v. Turza, 728 F.3d 682, 684 (7th Cir. 2013)). Such intangible harms were no strangers to the courts even before Congress chose to address them- “[a]ctions to remedy defendants' invasions of privacy, intrusion upon seclusion, and nuisance have long been heard by American courts, and the right of privacy is recognized by most states.” Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1043 (9th Cir. 2017) (citing Restatement (Second) of Torts § 652(B)).

         In 1991, Congress, in part due to the interstate character of much telemarketing, elected to combat certain particularly unwelcome telemarketing practices by adopting the TCPA.[2] 47 U.S.C. § 227. The TCPA provides for enforcement both by state governments, 47 U.S.C. § 227(g)(1), and private individuals who are the targets of certain prohibited practices, 47 U.S.C. § 227(b), (c)(5). Congress's conclusion that the harms addressed by the TCPA were sufficient to support a private cause of action guides this Court's standing analysis but is not conclusive: although a plaintiff cannot “automatically satisf[y] the injury-in-fact requirement” merely because “a statute grants [him] a statutory right and purports to authorize [him] to sue to vindicate that right, ” “the judgment of Congress play[s an] important role[ ]” in evaluating whether the injury underlying a statutory cause of action is sufficiently concrete. Spokeo, 139 S.Ct. at 1549. That role is especially pronounced where a harm is concrete but not wholly tangible, “because Congress is well positioned to identify intangible harms that meet minimum Article III requirements.” Id.

         The TCPA was “[p]assed in response to ‘[v]oluminous consumer complaints about abuses of telephone technology-for example, computerized calls dispatched to private homes.'” Sandusky Wellness Ctr., LLC v. Medco Health Sols., Inc., 788 F.3d 218, 221 (6th Cir. 2015) (quoting Mims, 565 U.S. at 370-71). A Senate sponsor of the TCPA expressed the public's discontent with unsolicited telemarketing as follows: “Computerized calls are the scourge of modern civilization. They wake us up in the morning; they interrupt our dinner at night; they force the sick and elderly out of bed; they hound us until we want to rip the telephone right out of the wall.” Mims, 565 U.S. at 752 (quoting 137 Cong. Rec. 30, 821-22 (1991)). Hyperbolic though the Senator's comments may be, they highlight Congress's ability, as a body directly accountable to voters, to hear and heed public cries about what injuries are real ...

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