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Braver v. Northstar Alarm Services, LLC

United States District Court, W.D. Oklahoma

July 16, 2019

ROBERT H. BRAVER, for himself and all individuals similarly situated, Plaintiff,
v.
NORTHSTAR ALARM SERVICES, LLC, et al., Defendants.

          ORDER

          STEPHEN P. FRIOT UNITED STATES DISTRICT JUDGE.

         I. Introduction

         In this action, Robert H. Braver alleges, for himself and on behalf of the class the court has certified under Rule 23, that Yodel Technologies, LLC, initiated telemarketing calls on behalf of NorthStar Alarm Services, LLC, in a manner which violated the Telephone Consumer Protection Act (TCPA) and regulations implemented thereunder.

         Braver appears on his own behalf and on behalf of the class with respect to count one, and appears on his own behalf with respect to count three.[1] Yodel is a company which allegedly provides telemarketing services to its clients. Defendants describe Yodel's business as “qualifying leads” (prospects) for its clients.[2]NorthStar is (or was) one of Yodel's clients. NorthStar provides residential security and home automation systems to consumers.

         Cross-motions for summary judgment are before the court.

         Braver moves for summary judgment on his own behalf and on behalf of the class.[3] He seeks summary judgment against both defendants “for their violations of the TCPA.”[4] Braver's motion, however, presents no developed argument with respect to count three. NorthStar filed a response brief.[5] Braver filed a reply brief.[6]

         NorthStar moves for summary judgment on counts one and three.[7] Braver has responded[8] and NorthStar has replied.[9]

         Yodel moves to join NorthStar's motion for summary judgment. Doc. no. 123. No. party responded to Yodel's motion, which is broadly construed as a motion seeking leave to join in all of NorthStar's motion papers currently before the court, specifically, NorthStar's motion for summary judgment, NorthStar's reply brief, and NorthStar's brief in response to Braver's motion for summary judgment. The court construes Yodel's motion in this manner because the arguments made by NorthStar in all of these papers overlap and because it appears this was Yodel's intent. The court is confident, for example, that Yodel did not intend to confess Braver's motion for summary judgment by failing to respond to it.

         For the reasons stated in this order, Braver's motion for summary judgment will be granted on count one and otherwise denied. NorthStar's motion for summary judgment, joined in by Yodel, will be granted on count three and otherwise denied.

         II. The Claims

         The court previously dismissed any direct liability claims alleged against NorthStar, ruling that any potential liability on NorthStar's part must be based on its alleged vicarious liability for Yodel's acts.[10] At this stage, Braver argues that Yodel has direct liability on both of the remaining counts and that NorthStar has vicarious liability on those counts.

         Count One.

         Count one alleges that defendants violated the TCPA, specifically 47 U.S.C. § 227(b)(1)(B), and the Federal Communications Commission's implementing regulation at 47 C.F.R. § 64.1200(a)(3).

         Section 227(b)(1)(B) provides that it shall be unlawful for any person within the United States:

to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party….[11]

         Regulation 47 C.F.R. § 64.1200(a)(3) limits the application of §227(b)(1)(B) to telemarketing calls and requires prior express written consent of the called party, providing as follows.

No person or entity may…[i]nitiate any telephone call to any residential line using an artificial or prerecorded voice to deliver a message without the prior express written consent of the called party, unless the call…is not made for a commercial purpose; [or] [i]s made for a commercial purpose but does not include or introduce an advertisement or constitute telemarketing….

47 C.F.R. § 64.1200(a)(3)(ii), (iii).

         Braver contends that defendants violated these provisions by making telemarketing calls on the residential phone lines of Braver and the class, using soundboard technology to deliver prerecorded messages to persons with whom defendants had no prior relationship and from whom prior consent had not been obtained.

         Count Three.

         Count three alleges that defendants violated 47 C.F.R. § 64.1200(d), which provides as follows.

No person or entity shall initiate any call for telemarketing purposes to a residential telephone subscriber unless such person or entity has instituted procedures for maintaining a list of persons who request not to receive telemarketing calls made by or on behalf of that person or entity. The procedures instituted must meet the following minimum standards:
(1) Written policy. Persons or entities making calls for telemarketing purposes must have a written policy, available upon demand, for maintaining a do-not-call list. …
(4) Identification of sellers and telemarketers. 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. The telephone number provided may not be a 900 number or any other number for which charges exceed local or long distance transmission charges.

         Braver contends that defendants violated this regulation in two ways: by initiating calls without first having implemented an effective written policy meeting the regulatory standards, and by failing to provide the called party (Braver) with the required identifying information.

         III. Standards

         Under Rule 56, Fed. R. Civ. P., summary judgment shall be granted if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). A genuine issue of material fact exists when “there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In determining whether a genuine issue of a material fact exists, the evidence is to be taken in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). All reasonable inferences to be drawn from the undisputed facts are to be determined in a light most favorable to the non-movant. United States v. Agri Services, Inc., 81 F.3d 1002, 1005 (10th Cir. 1996). Once the moving party has met its burden, the opposing party must come forward with specific evidence, not mere allegations or denials, demonstrating that there is a genuine issue for trial. Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir. 1983). A scintilla of evidence is not sufficient to defeat a motion for summary judgment; there must be sufficient evidence on which a jury could reasonably find for the non-moving party. Manders v. State of Oklahoma ex rel. Dept. of Mental Health, 875 F.2d 263, 265 (10th Cir. 1989), superseded by statute on different issue, quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986).

         Facts set forth in the statement of the material facts of the movant may be deemed admitted for the purpose of summary judgment unless specifically controverted by the nonmovant using the procedures set forth in the court's local rules. LCvR56.1(e). Those procedures require the nonmovant to cite evidentiary material in support of its position. Id. Accordingly, this order sometimes characterizes a fact as undisputed although the nonmovant purports to dispute it. The court only does so if it has found, based on its review of the record, that the nonmovant did not carry its burden to raise a genuine dispute.

         IV. Background Facts

         There is no dispute about the following matters. (Additional facts are stated elsewhere in this order.)

         Yodel's Soundboard Technology.

         Yodel's automated predictive dialer initiated the calls in question in this action.[12] A computer dialed the telephone number, detected whether it was answered by a potential customer and, if so, transferred[13] the connected call to a soundboard agent who was trained to play prerecorded wav files (audio files) to deliver messages to the called party by pressing buttons.[14]

         The soundboard software (referred to by Yodel as “the Yodel Dialer”)[15]required Yodel's soundboard agents, located in a call center in India, [16] to follow a script which instructed them to press buttons in a certain order thereby delivering prerecorded audio clips to the called party.[17]

         After answering the initial call, the first thing a called person (i.e. a lead or a prospect) heard was a prerecorded voice stating: “Hello this is [Amy ], [18] I a m s ec u ri t y advisor, can you hear me okay?”[19] During the course of the telemarketing campaign, there was some variation in how a lead was provided to NorthStar (some leads were handed off as a “warm transfer, ” meaning with the called person still on the line, and some leads were called back by NorthStar), but every initial call began with the soundboard agent (Yodel's agent) playing the first recording.[20]

         The Class.

On October 15, 2018, the court certified the following class and subclass.[21]
Class: All persons in the Red Dot Data marketing list for whom Yodel's records reflect a telephone call regarding Northstar's home security systems that lasted more than 30 seconds, that was handled by an agent who applied status code 20 or 50 to the call, and that resulted in the normal clearing disposition.
Subclass:
All persons in the Red Dot Data marketing list for whom Yodel's records reflect a telephone call regarding Northstar's home security systems that lasted more than 30 seconds, that was handled by an agent who applied status code 50 to the call, and that resulted in the normal clearing disposition.
Excluded from the class are:
Any persons whose contact information is associated with either an IP address or website URL in the Red Dot Data marketing list.

         Braver's expert analyzed call records and identified 239, 630 persons who meet the class definition and 47, 398 persons who meet the subclass definition. In doing so, he removed any call records where there was any possibility that no prerecorded message played. As a result of this approach, the total set of 78 million call records was narrowed to 252, 765 calls at issue for the class.[22]

         Calls to Braver.[23]

         On August 26, 2016, Braver received a telephone call on his residential phone number. The call used the soundboard system. In that call, the soundboard agent pressed buttons which delivered prerecorded voice messages and thus could not answer Mr. Braver's basic questions about who was calling or why Braver's telephone number had been dialed. Prior to receiving the call, Braver had no relationship with NorthStar. Like the other class members, Braver is in the Red Dot Data marketing list which Red Dot Data sold to Yodel.

Matters Expressly Conceded by Defendants.[24]
Defendants concede Yodel initiated the calls to plaintiff and to the class.
Defendants concede Yodel did not obtain consent from the called parties prior to initiating calls to plaintiff and the class.
Defendants concede that the calls constituted telemarketing under the TCPA.
Defendants concede that at least some of the telephone numbers called were residential numbers.

         V. Count One

         Given these concessions, defendants raise just two issues with respect to count one. Defendants argue that the calls initiated by Yodel to generate leads as part of the NorthStar telemarketing campaign are not calls which “deliver a message” within the meaning of §227(b)(1)(B). This issue is addressed in Part A, below. Defendants also argue that NorthStar is not vicariously liable for Yodel's material acts. This issue is addressed in Part B, below.

         A. Calls Delivered “a Message” Within the Meaning of §227(b)(1)(B).

         As previously stated, §227(b)(1)(B) provides that it shall be unlawful:

to initiate any [telemarketing] telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party.

         Defendants contend that §227(b)(1)(B)'s use of the singular in the phrase “to deliver a message, ” shows the statute does not regulate, and was not intended to regulate, interactive exchanges of information which defendants contend do not deliver “a message” but instead deliver messages - plural. Defendants argue: “Put simply: while soundboard technology may use audio clips containing ‘artificial or prerecorded voices,' those clips do not ‘deliver a message.' Thus, these calls do not contravene the TCPA's prohibition on using prerecorded voices to deliver a message.”[25]

         Title 1 U.S.C. § 1 provides that “In determining the meaning of any Act of Congress, unless the context indicates otherwise…words importing the singular include and apply to several persons, parties, or things….”[26] Nothing about the context of §227(b)(1)(B) suggests a different result here.[27]

         Defendants argue that if Congress had intended § 227(b)(1)(B) to apply to calls which delivered multiple messages, Congress knew how to so provide. Defendants cite restrictions against making “any call…using any automatic telephone dialing system or an artificial or prerecorded voice” (to a patient room of a hospital) per 47 U.S.C. §227(b)(1)(A)(ii). Defendants also cite the TCPA's creation of a private right of action under §227(c)(5) for persons who receive “more than one telephone call within any 12-month period by or on behalf of the same entity” in violation of regulations prescribed under that subsection. These arguments are unpersuasive given the plain language and meaning of § 227(b)(1)(B), together with the principle of statutory construction embodied in 1 U.S.C. § 1.

         The court also rejects defendants' argument that the statute's use of the singular shows it was not intended to regulate a soundboard system that involves human interaction. Defendants argue that phrases in the statute such as “initiate any telephone call” and “deliver a message” imply no human interaction in the message- delivery system. As further support, defendants' response brief cites[28] In re TCPA of 1991, 7 FCC Red 2736 (June 25, 1992), which states: “The legislative history of the TCPA also reflects the premise that auto dialer generated calls are more intrusive to the privacy concerns of the called party than live solicitations.”[29] Defendants also cite legislative history in their own moving brief.[30]

         The court notes the statements of congressional purpose relied on by defendants. This legislative history, however, does not limit the plain language of §227(b)(1)(B), which says nothing about any requirement that there be no human interaction for §227(b)(1)(B) to apply. Even more fundamentally, the language of §227(b)(1)(B) is clear, and there is no reason to resort to legislative history to determine its meaning. See, Edwards v. Valdez, 789 F.2d 1477, 1481 (10th Cir. 1986) (“When the meaning of a statute is clear, it is both unnecessary and improper to resort to legislative history to divine congressional intent”).

         Defendants argue that their interpretation of § 227(b)(1)(B) avoids conflict with other provisions of the TCPA. For example, they note that 47 U.S.C. §227(d)(3)(A) requires callers to include certain identifying information at the beginning of all prerecorded messages.[31] They argue that if soundboard technology is considered to be the delivery of a prerecorded message, then under § 227(d)(3)(A), call recipients would be required to listen to the same identification information before each and every audio clip played during a call, an obviously absurd result. The court rejects this argument as a basis for construing § 227(b)(1)(B). Congress is entitled to some flexibility of language so long at its meaning is clear.

         Defendants' other arguments are also unpersuasive. Defendants argue that their interpretation of §227(b)(1)(B) avoids a conflict with the Federal Trade Commission's Telemarketing Sales Rule's call-abandonment provisions. Braver responds by arguing that defendants misstate the rule. Regardless, this court is not required to ignore the plain meaning of §227(b)(1)(B) to avoid bumping up against an FTC rule not in dispute in this action. Defendants argue that if §277(b)(1)(B) is construed to apply to calls that involve human interaction and prerecorded messages, then the statute will apply whenever a prerecorded message is used in an otherwise live call so that common prerecorded messages (such as “this call may be monitored, ” hold music or hold messages) will violate § 227(b)(1)(B) when played during these otherwise live calls. Section 227(b)(1)(B), however, applies only to telemarketing calls, a fact which largely answers this argument. Similarly, defendants argue that if §227(b)(1)(B) is construed as Braver contends, the statute will preclude telemarketing calls placed by a disabled person who uses a voice generator as an “artificial voice.” This action involves a “prerecorded voice, ” not an “artificial voice.” Moreover, the bigger point with respect to all of these types of arguments is that they are too remote from the facts of this case to be persuasive.

         After careful consideration, the court rejects defendants' argument that the calls initiated by Yodel did not deliver a message within the meaning of §227(b)(1)(B).[32] This conclusion -- together with the matters which have been expressly conceded by the defendants (Yodel initiated the calls to plaintiff and the class, consent was not obtained, the calls constituted telemarketing calls, and at least some of the telephone numbers called were residential numbers) -- means that liability has been established on the part of Yodel with respect to count one. There is no genuine issue with respect to the fact that Yodel initiated telephone calls to residential telephone lines using a prerecorded voice to deliver a message without the prior express consent of the called party. With respect to the claims alleged against Yodel in count one, Braver and the class are entitled to summary judgment in their favor.

         NorthStar's potential liability on count one depends on vicarious liability, addressed next.

         B. NorthStar Is Vicariously ...


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