Germantown Copy Center, Inc. v. ComDoc, Inc., No. 8:2010cv02799 - Document 14 (D. Md. 2011)

Court Description: MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 4/1/11. (sat, Chambers)

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Germantown Copy Center, Inc. v. ComDoc, Inc. Doc. 14 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : GERMANTOWN COPY CENTER, INC. : v. : Civil Action No. DKC 10-2799 : COMDOC, INC. : MEMORANDUM OPINION Presently pending and ready for resolution in this Telephone Consumer Protection Act case is a motion to dismiss or, in the alternative, for summary judgment (ECF No. 6) filed by Defendant ComDoc, Inc. ( ComDoc ). As the issues have been fully briefed and no hearing is necessary, the court now rules. See Local Rule 105.6. For the reasons that follow, the motion to dismiss or for summary judgment will be denied. I. Background The Telephone Consumer Protection Act, or TCPA, forbids the sending of unsolicited § 227(b)(1)(C). fax advertisements. See 47 U.S.C. Congress passed the TCPA in an attempt to end the harmful consequences of junk faxes, namely the depletion of the recipient s time, toner, and paper, and occupation of the fax machine and phone line. Res. Bankshares Corp. v. St. Paul Mercury Ins. Co., 407 F.3d 631, 639 (4th Cir. 2005). 8, 2010, Plaintiff Germantown Copy Center, Inc. On October ( Germantown Dockets.Justia.com Copy ), a Maryland corporation, filed this putative Rule 23 class action under the TCPA against ComDoc, an Ohio corporation. Germantown Copy s complaint alleges that ComDoc violated TCPA by sending it an unsolicited advertisement by fax. the (ECF No. 1 ¶ 14). Germantown Copy insists that the advertisement it received, which was also sent to thousands of other consumers, is part of ComDoc s uniform policy and procedure of sending unsolicited advertisements to thousand of consumers over the course of several years. (Id. ¶¶ 14, 19, 20). For each unsolicited fax they received, Germantown Copy and the other class members would be entitled to statutory damages of $500 or the amount of their actual loss, whichever is greater. 10 (citing 47 U.S.C. § 227(b)(3)). (Id. ¶ As a result, the complaint alleges that the matter in controversy exceeds the sum or value of $5,000,000 in the interest and costs. aggregate for the class, exclusive of (Id. ¶ 4). On December 16, 2010, ComDoc filed the present motion to dismiss, arguing that Germantown Copy has not established subject matter jurisdiction and has failed to state a claim under the TCPA. January 7, 2001. thereafter. (ECF No. 6). (ECF NO. 8). (ECF No. 13). 2 Germantown Copy opposed on ComDoc filed a reply shortly II. Analysis A. Subject Matter Jurisdiction ComDoc first moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), as ComDoc believes that the complaint does not establish any basis for subject matter jurisdiction in this case. The complaint alleges both federal question jurisdiction and diversity jurisdiction as sources of subject matter jurisdiction. Although ComDoc is correct that the TCPA does not provide for federal question jurisdiction, Germantown Copy has alleged enough to establish diversity jurisdiction. The complaint asserts that the court has subject matter jurisdiction of the federal claims asserted in this action under 28 U.S.C. § 1331. (ECF No. 1 ¶ 3). As the United States Court of Appeals for the Fourth Circuit and several other courts have now made clear, jurisdiction over private TCPA actions may not be premised on the general federal-question conferred by 28 U.S.C. § 1331. jurisdiction Int l Sci. & Tech. Inst., Inc. v. Inacom Commc ns, Inc., 106 F.3d 1146, 1158 (4th Cir. 1997); see also Boydston v. Asset Acceptance LLC, 496 F.Supp.2d 1101, 1106-07 (N.D.Cal. jurisdiction is 2007) precluded (listing by the cases). explicit Federal language question of the statute, which provides for a private right of action only if otherwise permitted by the laws or rules of court of a State . . . in an appropriate court of that State. 3 47 U.S.C. § 227(b)(3). Evidently, Germantown Copy now concedes this point, as it does not argue for federal question jurisdiction in its opposition. The complaint also alleges, however, that the court has jurisdiction pursuant to 28 U.S.C. § 1332(d)(2)(A), a portion of the Class Action Fairness Act ( CAFA ). (ECF No. 1 ¶ 4). CAFA modified the traditional rules of diversity jurisdiction to provide original diversity, an jurisdiction aggregate for class actions amount-in-controversy with minimal exceeding million, and a class size greater than 100 people. $5 Thus, under CAFA, Germantown Copy would be able to establish jurisdiction in this court if its class action is large enough, even if its own individual claims do not meet the ordinary diversity and amountin-controversy requirements. ComDoc briefly observes that there is disagreement among the courts as to whether diversity jurisdiction exists at all under the TCPA. (ECF No. 6, at 8). Nevertheless, it chooses not to press the argument that the TCPA does not allow for diversity jurisdiction. That was the correct choice, as this court has held that diversity jurisdiction may be used to bring to private actions under the TCPA in federal court. Baltimore- Washington Tel. Co. v. Hot Leads Co., LLC, 584 F.Supp.2d 736, 741 (D.Md. 2008). Although the Fourth Circuit has yet to express its agreement, every circuit court to address the issue 4 has indicated that diversity jurisdiction may be exercised over private TCPA claims. See Gene & Gene LLC v. BioPay LLC, 541 F.3d 318, 324 (5th Cir. 2008); US Fax Law Ctr., Inc. v. iHire, Inc., 476 F.3d 1112, (10th 1116-18 Cir. 2007); Gottlieb v. Carnival Corp., 436 F.3d 335, 337-43 (2d Cir. 2006); Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 450-51 (7th Cir. 2005). ComDoc instead protests that this case does not meet CAFA s $5 million amount-in-controversy complaint s Where allegation the of complaint more requirement, than provides $5 an despite million in the damages. amount-in-controversy, defendants attempting to dismiss shoulder a heavy burden. JTH Tax, Inc. v. Frashier, 624 F.3d 635, 638 (4th Cir. 2010); accord Iguana Co. Ltd. P ship v. Baltimore Ctr. for Performing Arts, Inc., 651 F.Supp. 1348, 1349 (D.Md. 1987) (noting that, because of the heavy burden borne by defendants in seeking dismissal for failure dismissals are to satisfy fairly the jurisdictional rare ). ComDoc has not amount, such carried that burden here. For one, ComDoc s argument skirts the black letter rule that the amount-in-controversy is to be decided from the complaint itself, unless it appears or is in some way shown that the amount faith. stated in the complaint is not claimed in good Choice Hotels Int l, Inc. v. Shiv Hospitality, L.L.C., 5 491 F.3d 171, 176 (4th Cir. 2007) (quotation marks omitted). Consequently, [i]f the plaintiff claims a sum sufficient to satisfy the statutory requirement, a federal court may dismiss only if it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed. 638 (quotation marks omitted). JTH Tax, Inc., 624 F.3d at In this case, the complaint does indeed claim a sum exceeding $5 million in explicit terms. (ECF No. 1 ¶ 4). ComDoc attacks the $5 million allegation by characterizing it as conclusory and self-serving. (ECF No. 6, at 8). Yet attaching such labels to Germantown Copy s sum does not prove that the number is alleged in bad faith or legally certain to be unrecoverable. A plaintiff s allegation that the matter in controversy exceeds the jurisdictional amount requirement, even when it is in cursory form, has been held to be sufficient by a significant number of federal courts. 14AA Charles Alan Wright, et al., Federal Practice and Procedure § 3702 (4th ed. 2011 supp.); see also, e.g., McPhail v. Deere & Co., 529 F.3d 947, 953 (10th Cir. 2008) ( If an in-state plaintiff suing an out-of-state defendant wishes to be in federal court, all the plaintiff needs to do is allege an amount in excess of [the jurisdictional amount] and he will get his way. ) The complaint alleges facts supporting Germantown Copy s claim for more than $5 million. In particular, 6 it avers that ComDoc sent thousands of unsolicited faxes over several years. Unlike some other remedial statutes, such as the Truth in Lending Act, the TCPA contains no damages cap. Thus, it is certainly conceivable at this stage that a $5 million damage award could result from such circumstances, given that each one of these thousands of violations would result in guaranteed damages of $500 or more. ComDoc CAFA s See 47 U.S.C. § 227(b)(3). also argues provisions that because certify TCPA class actions. Germantown several Copy courts have (ECF No. 6, at 9). cannot invoke declined to These courts have determined that one fact issue whether each putative class member transmissions actually consented rendered a class to the action receipt of inappropriate. fax Yet ComDoc s cases do not prove to a legal certainty that a class action will fail here. To be sure, if ComDoc could show that a class action is not viable in this case as a clear legal matter, that finding would prevent Germantown Copy from using CAFA to justify jurisdiction. See, e.g., Holster v. Gatco, Inc., 618 F.3d 214, 216-18 (2nd Cir. 2010) (finding CAFA did not apply to TCPA suit where applicable state law barred such class actions). Yet there is no authority stating that a class action may never be certified under the TCPA. To the contrary, many courts have in fact certified junk fax class actions under the Act. See, e.g., Targin Sign Sys., Inc. v. Preferred Chiropractic Ctr., 7 Ltd., 679 F.Supp.2d 894, 899 (N.D.Ill. 2010); CE Design Ltd v. Cy s Crabhouse N., Inc., 259 F.R.D. 135, 143 (N.D.Ill. 2009); Hinman v. M&M Rental Ctr., 545 F.Supp.2d 802, 808 (N.D.Ill. 2008); Kavu, (W.D.Wash. Inc. v. 2007). Omnipak Thus, it Corp., is 246 F.R.D. anything but 642, a conclusion that class certification will be denied. citations to some denials of class certification 651 foregone ComDoc s do not establish the legal certainty that a class action will fail. Fundamentally, ComDoc s argument is an invitation to make a premature ruling on class certification that is unnecessary and unwarranted under the plain language of CAFA. any class action certification before order. 28 or after U.S.C. § the CAFA applies to entry 1332(d)(8); of a class see also 28 U.S.C. § 1332(d)(1)(B) (defining class action as, in relevant part, any civil action filed under rule 23 of the Federal Rules of Civil Procedure (emphasis added)). Any pronouncement that this was not a class action . . . [would be] in tension with this provision (which effectively treats as provisional class actions those suits visibly framed as such, notwithstanding flaws that may be subject to adjustment or revision before a class can be certified). Coll. of Dental Surgeons of Puerto Rico v. Connecticut Gen. Life Ins. Co., 585 F.3d 33, 40 (1st Cir. 2009). The jurisdictional hook under CAFA is not whether class certification will ultimately prove 8 successful, but rather whether the representative plaintiff intends to seek class certification for a purported class meeting CAFA s requirements. See Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805, 806 (7th Cir. 2010) ( [F]ederal jurisdiction under the Class Action Fairness Act does not depend on certification. ); Vega v. TMobile USA, Inc., 564 F.3d 1256, 1268 (11th Cir. 2009) (finding CAFA reaches classes). That ultimately issue. proposed, class unsuccessful, as opposed to certification is actually may to irrelevant be the certified, difficult, or jurisdictional See, e.g., Gene & Gene LLC, 541 F.3d at 324-25 (finding subject matter jurisdiction pursuant to CAFA in TCPA case while decertifying class action); cf. Brill, 427 F.3d at 448 ( The question is not what damages the plaintiff will recover, but what amount is in controversy between the parties. ); McDonald v. Patton, plaintiffs apparent 240 may on F.2d 424, obtain the face (4th 425 Cir. 1957) federal jurisdiction even of claim the the that (stating when claim requisite amount is subject to a valid defense ). that it to is the Thus, the perceived class certification issues that ComDoc raises are no bar to jurisdiction here. Lastly, ComDoc submits an affidavit from the General Manager of OEM SupplyCo. ( OEM ), the ComDoc subsidiary that purportedly sent the faxes in question. This affidavit avers that OEM had a policy during the relevant time period to only 9 fax information to those permission to do so. that, in light Germantown of [Copy] businesses that (ECF No. 6-1 ¶ 3). this will policy, not be it prior ComDoc then reasons is able granted beyond to dispute cobble that together a sufficient class necessary to establish the requisite amount in controversy. (ECF No. 6, at 9). Here again, ComDoc is confusing jurisdictional issues with issues going to the merits of Germantown Copy s claims. It asks the court to engage in deeper factual analysis, even though determining whether a case belongs in federal court should be done quickly, without an extensive fact-finding inquiry. Spelman v. Genzyme Corp., 251 F.3d 1, 4 (1st Cir. 2001). point bears repeating: The at this phase, the success of Germantown Copy s case is effectively assumed. The only relevant question is whether Germantown Copy and the rest of the putative class would be able to collect all that it asks for as a matter of law. n.1 See, e.g., Griffin v. United States, 590 F.3d 1291, 1292 (Fed. Cir. 2009) ( The amount in controversy for jurisdictional purposes must be ascertained by the requests in the pleadings without consideration of success on the merits. (quotation marks omitted); Travelers Cas. & Sur. Co. of Am., Inc. v. Northwestern Mut. Life Ins. Co., 480 F.3d 499, 501 (7th Cir. 2007) (finding it inappropriate to dismiss claim for failure to meet amount-in-controversy requirement, even where 10 plaintiff s claim was unlikely and required assumption of a giant if ); Miedema v. Maytag Corp., 450 F.3d 1322, 1332 n.9 (11th Cir. 2006) ( [C]ourts cannot look past the complaint to the merits of a defense that has not yet been established. ). For all these reasons, the complaint will not be dismissed for lack of subject matter jurisdiction. B. Summary Judgment ComDoc also moves for dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) or, alternatively, for summary judgment pursuant to Rule 56. Because this portion of ComDoc s motion relies on matters outside the pleadings, the court will construe it as a motion for summary judgment. United States v. Purdue Pharma L.P., 600 F.3d 319, 325-26 (4th Cir. 2010). A court may enter summary judgment only if there is no genuine issue as to any material fact and the moving party is entitled 56(a); to judgment Celotex Corp. as a matter v. Catrett, of 477 law. U.S. See 317, Fed.R.Civ.P. 322 Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008). (1986); Summary judgment is inappropriate if any material factual issue may reasonably be resolved in favor of either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); JKC Holding Co. LLC v. Washington Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001). 11 A party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of [his] pleadings, but rather must set forth specific showing that there is a genuine issue for trial. facts Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (quoting former Fed.R.Civ.P. 56(e)). proof . . . will not suffice to A mere scintilla of prevent summary judgment. Peters v. Jenney, 327 F.3d 307, 314 (4th Cir. 2003). If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted. 249-50. (citations omitted). construe the favorable to facts the that party Liberty Lobby, 477 U.S. at At the same time, the court must are presented opposing the in motion. the light See most Scott v. Harris, 550 U.S. 372, 378 (2007); Emmett, 532 F.3d at 297. ComDoc argues that it is entitled to summary judgment because the TCPA only bars unsolicited advertisements by fax. A fax does not constitute an unsolicited advertisement if it is sent with permission. the recipient s prior express 47 U.S.C. § 227(a)(4) (2003). invitation or According to OEM s General Manager, Germantown Copy consented to the receipt of OEM s advertising faxes on March 3, 2003. ComDoc contends summary judgment is (ECF No. 6-1 ¶ 4). appropriate because Germantown Copy failed to submit any affidavit stating that no consent was given. (ECF No. 13, at 2). 12 Germantown Springer, Copy Operations submitted Manager a of sworn affidavit Germantown from since Copy Harold 2004. That affidavit flatly states that Germantown Copy has not given ComDoc consent to receive advertisements via facsimile. No. 8-1 ¶ 6). It lists nine unsolicited faxes. (ECF (Id. ¶ 7). And Harold notes that, [s]ince 2004 or earlier, [Germantown Copy] has had a policy of refusing to consent to solicitations from advertisers email. to send us advertisements via facsimile or (Id. ¶ 3). That affidavit is further buttressed by the affidavit of Alin Springer, Operations Manager of Germantown Copy from its founding until 2004. Alin confirms that, [s]ince its founding[,] [Germantown Copy] has had a policy of refusing to consent to solicitations from advertisers notes that if someone from ComDoc had send us (ECF No. 8-2 ¶ 3). advertisements via facsimile or email. He called to his business, something he is reasonably certain did not happen, Germantown Copy would facsimile. not have consented (Id. ¶¶ 6-7). advertisements. to any advertisements via And he lists nine unsolicited fax (Id. ¶ 9). Summary judgment cannot be granted here in light of the competing affidavits from ComDoc and Germantown Copy. See Am. Metal Forming Corp. v. Pittman, 52 F.3d 504, 507 (4th Cir. 1995) (finding summary judgment could not be granted in the face of 13 conflicting affidavits). Genuine disputes over material facts remain. III. Conclusion For the foregoing reasons, the motion to dismiss or for summary judgment will be denied. A separate order will follow. /s/ DEBORAH K. CHASANOW United States District Judge 14

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