Summary
denying motion to dismiss where the plaintiff alleged a seller "maintained at least some right of control" over the conduct of the third-party
Summary of this case from Bradley v. Dentalans.comOpinion
Case No. 1:18-cv-03083
07-01-2020
Mary BILEK, individually and on behalf of others similarly situated, Plaintiff, v. NATIONAL CONGRESS OF EMPLOYERS, INC., et al., Defendants.
Alexander Holmes Burke, Daniel J. Marovitch, Burke Law Offices, LLC, Evanston, IL, for Plaintiff. Josef Mysorewala, Pro Hac Vice, Law Office of Josef M. Mysorewala, PLLC, Miami, FL, Josh M. Kantrow, Steven Patrick Slayden, Thomas M. Wolf, Lewis Brisbois Bisgaard & Smith LLC, Chicago, IL, Matthew S. Oorbeek, Pro Hac Vice, Genova Burns LLC, Newark, NJ, for Defendant National Congress of Employers, Inc. Charles Joseph Messina, Matthew S. Oorbeek, Pro Hac Vice, Peter Francis Berk, Pro Hac Vice, Genova Burns LLC, Newark, NJ, Josh M. Kantrow, Steven Patrick Slayden, Thomas M. Wolf, Lewis Brisbois Bisgaard & Smith LLC, Chicago, IL, for Defendant National Benefit Builders, Inc. Charles Joseph Messina, Pro Hac Vice, Gioia E. Topazio, Pro Hac Vice, Peter Francis Berk, Pro Hac Vice, Genova Burns LLC, Newark, NJ, Josh M. Kantrow, Steven Patrick Slayden, Thomas M. Wolf, Lewis Brisbois Bisgaard & Smith LLC, Chicago, IL, for Defendant AccessOne Consumer Health, Inc. Garry William O'Donnell, Pro Hac Vice, Dariel Jonathan Abrahamy, Pro Hac Vice, Greenspoon Marder LLP, Boca Raton, FL, Timothy A. Hudson, Tabet DiVito Rothstein, Chicago, IL, for Defendant Health Insurance Innovations, Inc.
Alexander Holmes Burke, Daniel J. Marovitch, Burke Law Offices, LLC, Evanston, IL, for Plaintiff.
Josef Mysorewala, Pro Hac Vice, Law Office of Josef M. Mysorewala, PLLC, Miami, FL, Josh M. Kantrow, Steven Patrick Slayden, Thomas M. Wolf, Lewis Brisbois Bisgaard & Smith LLC, Chicago, IL, Matthew S. Oorbeek, Pro Hac Vice, Genova Burns LLC, Newark, NJ, for Defendant National Congress of Employers, Inc.
Charles Joseph Messina, Matthew S. Oorbeek, Pro Hac Vice, Peter Francis Berk, Pro Hac Vice, Genova Burns LLC, Newark, NJ, Josh M. Kantrow, Steven Patrick Slayden, Thomas M. Wolf, Lewis Brisbois Bisgaard & Smith LLC, Chicago, IL, for Defendant National Benefit Builders, Inc.
Charles Joseph Messina, Pro Hac Vice, Gioia E. Topazio, Pro Hac Vice, Peter Francis Berk, Pro Hac Vice, Genova Burns LLC, Newark, NJ, Josh M. Kantrow, Steven Patrick Slayden, Thomas M. Wolf, Lewis Brisbois Bisgaard & Smith LLC, Chicago, IL, for Defendant AccessOne Consumer Health, Inc.
Garry William O'Donnell, Pro Hac Vice, Dariel Jonathan Abrahamy, Pro Hac Vice, Greenspoon Marder LLP, Boca Raton, FL, Timothy A. Hudson, Tabet DiVito Rothstein, Chicago, IL, for Defendant Health Insurance Innovations, Inc.
ORDER
CHARLES RONALD NORGLE, Judge
The Motions to Dismiss Plaintiff's Second Amended Complaint by Defendant Health Insurance Innovations, Inc. [140] and Defendants National Congress of Employers, Inc., National Benefit Builders, Inc., and AccessOne Consumer Health, Inc. [147] are denied. Plaintiff's Motion for Leave to File Surreply [241] is denied as moot. STATEMENT
Plaintiff Mary Bilek's Second Amended Class Action Complaint asserts claims for violations of the Telephone Consumer Protection Act ("TCPA") and the Illinois Automatic Telephone Dialers Act ("IATDA") against Defendants National Congress of Employers, Inc.; National Benefit Builders, Inc.; AccessOne Consumer Health, Inc.; and Health Insurance Innovations, Inc. (collectively, "Defendants"). Dkt. 116 at ¶¶ 114-145. Plaintiff, an Illinois resident, alleges that she received without her consent numerous unlawful robocalls initiated by Rising Eagle Capital Group LLC that played a prerecorded message soliciting sales of health care and lifestyle discount programs under National Congress of Employers' brand that are within National Benefit Builders' network of similar discount programs and ultimately provided by AccessOne. Dkt. 116 at ¶¶ 3, 15, 22, 32, 37-39, 61, 67-72, 75. According to Plaintiffs complaint, Health Insurance Innovations administers the sales of those programs, including by enlisting sales agents like Enrollment Center of America. Dkt. 116 at ¶¶ 7, 43-45, 51. Plaintiff further alleges that sales agents including Enrollment Center of America, in turn, engaged Rising Eagle to initiate the robocalls to generate leads. Dkt. 116 at ¶¶ 3, 10, 61, 75.
Defendants move to dismiss Plaintiff's Second Amended Complaint in two motions—Health Insurance Innovations, Inc. in one, Dkt. 141, and National Congress of Employers, Inc., National Benefit Builders, Inc., and AccessOne Consumer Health, Inc. ("Seller Defendants") in the other, Dkt 148. Defendants argue under Rule 12(b)(2) that the Court has neither general nor specific personal jurisdiction over the Defendants. Dkt. 141 at 4-15; Dkt. 148 at 3-7. According to Defendants, there is no general jurisdiction because the Defendants are not "at home" in Illinois and no specific jurisdiction because Plaintiff fails to sufficiently allege that Defendants are directly or vicariously liable for the allegedly unlawful robocalls Plaintiff received. Further, Defendants claim that the Court lacks personal jurisdiction over Defendants to certify a nationwide class specifically with respect to non-Illinois-resident class members. Dkt. 141 at 15-16; Dkt. 148 at 15.
Additionally, Defendants assert that Plaintiff's complaint should be dismissed under Rule 12(b)(6) for the same reason that Defendants claim the Court has no specific personal jurisdiction: that Plaintiff fails to sufficiently allege that Defendants are directly or vicariously liable for the allegedly unlawful robocalls. Dkt. 141 at 16-17; Dkt. 148 at 7-15. Defendants also argue that Count II should be dismissed because a private right of action under the TCPA is not available for violations of 47 C.F.R. § 64.1200(d). Dkt. 141 at 17-18; Dkt. 148 at 15. Last, Defendants maintain that Plaintiff's claims under the IATDA fail to sufficiently allege that the robocalls Plaintiff received were made using an autodialer. Dkt. 141 at 18-19; Dkt. 148 at 15.
When faced with a motion to dismiss challenging personal jurisdiction under Rule 12(b)(2), the plaintiff "bears the burden of establishing personal jurisdiction, but where, as here, the issue is raised in a motion to dismiss, the plaintiff need only make a prima facie showing of jurisdictional facts." Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012). Because Defendants have not submitted any affidavits or other evidence in support of their argument against personal jurisdiction, the Court accepts as true all well-pleaded facts alleged in the complaint, and views them in the light most favorable to Plaintiff. Purdue Research Foundation v. Sanofi-Svnthelabo, S.A., 338 F.3d 773, 782-83 (7th Cir. 2003).
Similarly, under Rule 12(b)(6), " ‘[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, if accepted as true, to state a claim to relief that is plausible on its face.’ " Toulon v. Continental Cas. Co., 877 F.3d 725, 734 (7th Cir. 2017) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). In deciding the motion to dismiss, the Court accepts "all well-pleaded allegations of the complaint as true and view[s] them in the light most favorable to the plaintiff." Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 934 (7th Cir. 2012). However, legal conclusions and " ‘[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.’ " Toulon, 877 F. 3d at 734 (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ).
The Court first addresses Defendants' argument that the Court lacks personal jurisdiction over Defendants to certify a nationwide class specifically with respect to non-Illinois-resident class members. Mussat v. IOVIA, Inc., 953 F.3d 441 (7th Cir. 2020), decided after Defendants' motions were fully briefed and identified by Plaintiff in a Notice of Controlling Supplemental Authority, Dkt. 231, conclusively resolves this issue, and the Court is bound to follow it. Contrary to Defendants' argument, Mussat holds that personal jurisdiction should be treated the same as subject matter jurisdiction and venue in the Rule 23 class action context: "the named representatives must be able to demonstrate either general or specific personal jurisdiction, but the unnamed class members are not required to do so." Mussat, 953 F. 3d at 447.
The Court's analysis of its personal jurisdiction over Defendants, then, is framed exclusively by reference to Plaintiff. Plaintiff's response to Defendants' motions does not contest Defendants' position that the Court does not have general personal jurisdiction over Defendants. The Court thus turns to whether Defendants are subject to specific personal jurisdiction.
The substance of Defendants' argument that the Court lacks specific personal jurisdiction over Defendants is the same as Defendants' primary argument that Plaintiff failed to sufficiently plead her claims under the TCPA and the IATDA against Defendants. Both arguments contend that Plaintiff fails to plausibly allege that Defendants are directly or vicariously liable for the robocalls Plaintiff allegedly received in Illinois. And, as explained above, both arguments require the Court to accept as true all well-pleaded facts in the complaint and view them in the light most favorable to Plaintiff. Accordingly, the Court's resolution of whether Plaintiff has plausibly pleaded that Defendants are directly or vicariously liable for the allegedly unlawful robocalls is conclusive of both arguments.
Plaintiff asserts that she has plausibly pleaded that Health Insurance Innovations is directly liable for the robocalls that she received and that all Defendants are vicariously liable for the robocalls by implied actual authority, apparent authority, and ratification. Indeed, beyond direct liability, "[a]n entity may be held vicariously liable for violations of the TCPA ‘under a broad range of agency principles, including not only formal agency, but also principles of apparent authority and ratification.’ " Aranda v. Caribbean Cruise Line, Inc., 179 F. Supp. 3d 817, 831 (N.D. Ill. 2016) (quoting In re Joint Petition filed by Dish Network, LLC, 28 F.C.C.R. 6574, 6582 ¶ 28 (2013) ). "Formal agency" in this context means actual authority, which may be express or implied. Id.
On the issue of implied actual authority, Plaintiff argues that Enrollment Center of America had implied actual authority from Health Insurance Innovations to engage Rising Eagle to make the robocalls. Similarly, Plaintiff claims that Health Insurance Innovations had implied actual authority from the Seller Defendants to coordinate sales agents' solicitation of sales of the Seller Defendants' products, including through the use of telemarketing lead generation.
"While express actual authority is proven through words, implied actual authority is established through circumstantial evidence." Bridgeview Health Care Center, Ltd. v. Clark, 816 F.3d 935, 939 (7th Cir. 2016). In reply, Defendants argue that Plaintiff has failed to allege that any of them had a direct control over Rising Eagle. However, the Court finds Defendants' argument on that point misplaced because Plaintiff does not necessarily need to allege that Defendants had direct control over Rising Eagle to establish vicarious liability. Rather, an agent may appoint a subagent if the agent has actual or apparent authority from the principal to do so. Aranda, 179 F. Supp. 3d at 832 (citing Restatement (Third) of Agency § 3.15(2) (2006) ).
The Court finds that Plaintiff has sufficiently pleaded a plausible claim of vicarious liability through a chain of agent and subagent relationships based on a theory of implied actual authority. To begin, Plaintiff alleges that Health Insurance Innovations has authority from the Seller Defendants to administer the sales and solicitation of sales of the Seller Defendants' products, including through at least one Program Manager Agreement. Dkt. 116 at ¶¶ 43-44. Plaintiff further alleges that Health Insurance Innovations administers those sales and solicitations of sales by engaging sales agents like Enrollment Center of America, again with the Seller Defendants' authorization. Dkt. 116 at ¶¶ 7, 45, 52-54. Plaintiff also alleges that the Seller Defendants maintained at least some right of control over Health Insurance Innovations conduct. Dkt. 116 at ¶¶ 8, 43, 44, 49-55. As such, the Court finds that Plaintiff has sufficiently pleaded a plausible agency relationship between the Seller Defendants and Health Insurance Innovations, and that Health Insurance Innovations had at least implied actual authority to engage sales agents and to authorize those sales agents to use telemarketing efforts to solicit sales of the Seller Defendants' products.
Further, the Court finds that Plaintiff has plausibly alleged an agency relationship between Health Insurance Innovations and the sales agents it engages including Enrollment Center of America. Plaintiff alleges that Health Insurance Innovations provides scripts and pricing information to sales agents, and also advances the cost of sales agents' telemarketing efforts in exchange for a security interest in the sales agent's business. Dkt. 116 at ¶ 9-11, 46-47, 55. Thus, Health Insurance Innovations' sales agents had at least implied actual authority to engage in telemarketing efforts to solicit sales of the Seller Defendants' products as an agent of Health Insurance Innovations and a subagent of the Seller Defendants.
Finally, the Court finds that Plaintiff has plausibly alleged an agency relationship between Health Insurance Innovations' sales agents, including Enrollment Center of America, and Rising Eagle, the initiator of the alleged robocalls. As Plaintiff alleges, Health Insurance Innovations' sales agents, including Enrollment Center of America, retained Rising Eagle to perform the telemarketing efforts that Health Insurance Innovations authorized Enrollment Center of America to engage in. Dkt. 116 at ¶¶ 3, 10, 61, 75.
As such, the Court finds that Plaintiff has established a prima facie showing of the Court's specific personal jurisdiction over Defendants and pleaded a plausible claim of Defendants' vicarious liability for the alleged unlawful robocalls that Plaintiff received through a chain of agency relationships based on implied actual authority. The Court therefore need not address the parties' arguments regarding whether Plaintiff has sufficiently pleaded plausible claims of Health Insurance Innovations' direct liability or Defendants' vicarious liability through apparent authority or ratification. As such, Plaintiff's recently filed Motion for Leave to File Surreply, Dkt. 241, to address Defendants' arguments regarding the requirements to plead ratification is denied as moot. Of course, as discovery progresses, these issues of Defendants' direct or vicarious liability may be revisited on summary judgment.
The Court next addresses Defendants' arguments that a private right of action under the TCPA does not apply to Plaintiff's claim in Count II for violations of 47 C.F.R. § 64.1200(d). Plaintiff alleges that Defendants violated section 64.1200(d) by failing to stop calling her after requesting as much, failing to include the name of the party on whose behalf the call was made at the beginning of the call, and accepting business from a telemarketer that did not have a written do-not-call policy. Defendants argue that the FCC promulgated section 64.1200(d) under 47 U.S.C. § 227(d), a part of the TCPA that does not provide a private right of action. Plaintiff, on the other hand, insists that section 64.1200(d) was promulgated under section 47 U.S.C. § 227(c), a part of the TCPA that does provide a private right of action.
Section 64.1200(d) of the FCC's regulations implementing the TCPA prohibits telemarketers from initiating calls to residential telephone subscribers unless the telemarketer "has instituted procedures for maintaining a list of persons who request not to receive telemarketing calls made by or on behalf of" the telemarketer. 47 C.F.R. § 64.1200(d). Section 64.1200(d) specifically requires telemarketers to: (1) have a written policy for maintaining a do-not-call list; (2) train personnel on the existence and use of the do-not-call list; (3) record and honor do-not-call requests; (4) identify the individual caller and the person or entity on whose behalf the call is being made; (5) apply do-not-call requests to affiliated entities that consumers would reasonably expect the request to apply to; (6) maintain a list of and honor requests not to receive further telemarketing calls; and (7) comply even if the telemarketer is a tax-exempt nonprofit organization. Id.
Section 227(c) required the FCC to promulgate regulations to "protect residential telephone subscribers' privacy rights to avoid receiving telephone solicitations to which they object," including "industry-based or company-specific ‘do not call’ systems." 47 U.S.C. § 227(c)(1). Section 227(c) provides a private right of action to persons who have "received 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 promulgated under that section. 47 U.S.C. § 227(c)(5).
Section 227(d), in pertinent part, required the FCC to "prescribe technical and procedural standards for systems that are used to transmit any artificial or prerecorded voice message via telephone," including a requirement that all artificial or prerecorded telephone messages identify the business, individual, or other entity that initiated the call and the telephone number or address of that business, individual, or other entity. 47 U.S.C. § 227(d)(3).
The Court agrees with Plaintiff that the FCC promulgated section 64.1200(d) pursuant to section 227(c). Taken as a whole, section 64.1200(d) implements section 227(c)'s command to protect the privacy rights of telephone subscribers to avoid receiving telephone solicitations to which they object by requiring telemarketers to maintain and honor do-not-call lists. And while the requirement in section 64.1200(d)(4) is consistent with the section 227(d)'s requirement that the FCC prescribe technical and procedural standards for artificial or prerecorded voice messages, in that they both require telemarketers to identify themselves, section 227(d)(3) is limited to artificial or prerecorded voice systems whereas section 64.1200(d) applies to all telemarketing calls. Thus, Plaintiff has a private right of action for violations of section 64.1200(d) of the FCC's regulations and Defendants motion to dismiss Count II is denied.
Lastly, the Court addresses Defendants' argument that Plaintiff has failed allege with respect to her claims under the IATDA in Counts 111 and IV that the robocalls she received were made using an autodialer. The IATDA defines "autodialer" as "any telephone dialing ... system capable of storing telephone numbers which is programmed to sequentially or randomly access the stored telephone numbers in order to automatically connect a telephone with a recorded message ...." 815 ILCS 305/5. The Court finds that Plaintiff sufficiently alleged that the robocalls she received were made using an autodialer as defined by the AITDA. Specifically, Plaintiff alleges that the robocalls she received were made using equipment that had the capacity to store or produce telephone numbers to be called using a random or sequential number generator and was programmed to dial a large number such phone numbers in a short amount of time without human intervention. Dkt. 116 at ¶¶ 33, 69. Plaintiff also alleges that the robocalls she received employed prerecorded messages that automatically played when the call was answered or sent to voicemail. Dkt. 116 at ¶¶ 34, 70. Further, Plaintiff alleges that the robocalls she received played the same prerecorded message, which was recorded in numerous voicemail messages. Dkt. 116 at ¶¶ 71, 76. Accordingly, the Court denies Defendants' motions to dismiss in their entirety.
IT IS SO ORDERED.