Kramer v. Autobytel Inc et al, No. 4:2010cv02722 - Document 106 (N.D. Cal. 2010)
Court Description: ORDER by Judge Claudia Wilken ORDER DENYING DEFENDANTS' 58 66 MOTIONS TO DISMISS. (ndr, COURT STAFF) (Filed on 12/29/2010)
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Kramer v. Autobytel Inc et al Doc. 106 1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE NORTHERN DISTRICT OF CALIFORNIA 9 United States District Court For the Northern District of California 10 11 CHRISTOPHER KRAMER, individually and on behalf of all others similarly situated, 12 13 14 15 16 17 18 Plaintiff, v. No. 10-cv-02722 CW ORDER DENYING DEFENDANTS' MOTIONS TO DISMISS (Docket Nos. 58 & 66) AUTOBYTEL, INC., a Delaware Corporation; B2MOBILE, LLC, a California limited liability company; and LEADCLICK MEDIA, INC., a California Corporation, Defendants. ________________________________/ 19 Plaintiff Kramer has filed suit against Defendants Autobytel, 20 Inc., B2Mobile, LLC, and LeadClick Media, Inc., under the 21 Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. 22 (TCPA). The complaint alleges that Defendants sent Kramer and 23 other similarly situated individuals thousands of unauthorized 24 text messages. On October 26, 2010, on the parties' stipulation, 25 the Court dismissed with prejudice Kramer's individual claims 26 against Defendant Autobytel, and dismissed without prejudice the 27 28 Dockets.Justia.com 1 putative class claims Kramer advanced against Defendant Autobytel. 2 Docket No. 100. 3 The remaining two Defendants, B2Mobile and LeadClick, now 4 move to dismiss Kramer's claims. 5 opposes the motions. 6 the TCPA's constitutional validity, the Court notified the United 7 States of the constitutional challenge. 8 United States has intervened in the matter, and filed a memorandum 9 opposing Defendants' constitutional arguments. United States District Court For the Northern District of California 10 Docket Nos. 58 and 66. Kramer Because the motions have drawn into question Docket Nos. 71 & 73. The Docket No. 98. Having considered all of the parties' submissions and the 11 Government's memorandum, the Court DENIES Defendants' motion to 12 dismiss. 13 14 BACKGROUND Kramer's initial complaint named only Autobytel and B2Mobile 15 as Defendants. 16 subsequently amended his complaint, adding LeadClick as a 17 Defendant. 18 Docket No. 1., Compl. at ¶¶ 7 & 8. Kramer Docket No. 20, First Amended Compl. at ¶ 9. The First Amended Complaint (1AC), challenged in this motion, 19 alleges the following facts. 20 received ten text messages from Short Message Service (SMS) Code 21 77893, a code operated by Defendant B2Mobile. 22 On information and belief, Kramer alleges that B2Mobile acquires a 23 list of phone numbers from a third-party, and then sends massive 24 amounts of spam text message advertisements, including 25 advertisements for Autobytel. 26 was made using equipment that, upon information and belief, had 27 the capacity to store or produce telephone numbers to be called, 28 using a random or sequential number generator." Kramer, an Illinois resident, 1AC ¶ 18. 2 1AC ¶¶ 6 & 20-22. "Each such text message 1AC ¶ 37. 1 The mass transmission of these spam text messages began at 2 least in April, 2009, and reached thousands of consumers nation- 3 wide. 4 April 1, 2009. 5 identified the SMS short code 77893. 6 text message read: 1AC ¶ 19. 7 Kramer received one such message on or about 1AC ¶ 20. NEED SOME EXTRA GET A CASH GO TO PROMO CODE: 8 9 The "from" field of the message 1AC ¶ 21. The body of the CASH FOR YOU [sic] NEW EDUCATION? ADVANCE OF UP TO $1500! WWW.CASHPOTUSA.COM 7PX5E TO END REPLY STOP. United States District Court For the Northern District of California 10 1AC ¶ 21. 11 Plaintiff responded "Stop" in a text message to opt out of the 12 advertising messages. 13 Immediately after receiving the above text message, 1AC ¶ 22. Kramer alleges that he continued to receive text advertisements from SMS short code 77893. 1AC 14 ¶ 23. Kramer's complaint included one additional example of a 15 16 text message that he received from SMS short code 77893. 17 October 20, 2009, Kramer received the following text from 18 About B2Mobile: 19 DEAL ALERT: CARS FROM $99/MO! AVAIL. IN YOUR AREA! GO TO:WWW.CARS499.COM PROMO: 39075 FOR IMMEDIATE LISTINGS CALL 1800-387-6230. TO END REPLY STOP. 20 21 22 1AC ¶¶ 24-26. 23 allegedly directed consumers to MyRide.com, an automotive referral 24 website operated by Autobytel. 25 consent to the receipt of such text messages from Defendants. 26 The website promoted in the above text message 1AC ¶ 26. ¶ 28. 27 28 3 At no time did Kramer 1AC 1 Kramer alleged that, in "an effort to promote its automotive 2 products to consumers, Autobytel, the proprietor of one of the 3 nation's largest automotive referral services, through marketing 4 partners such as LeadClick, engaged B2Mobile to conduct an 5 especially pernicious form of marketing: the transmission of 6 unauthorized advertisements in the form of 'text message' calls to 7 the cellular phones of consumers throughout the nation." 1AC ¶ 2. 8 9 The complaint further stated, "In order to make their en masse United States District Court For the Northern District of California 10 transmission of text message advertisements economical, Defendants 11 used lists of thousands of cellular telephone numbers of consumers 12 acquired from third-parties." 13 "Defendant B2Mobile contracted with third parties to acquire lists 14 1AC ¶ 30 (emphasis in original). of phone numbers for the sole purpose of sending spam text 15 messages on behalf of advertisers for its own monetary gain. 16 Defendant Autobytel contracted with LeadClick, who thereafter 17 18 contracted with B2Mobile, for the purpose of advertising 19 Autobytel's products and services through spam text messages." 20 1AC ¶ 39. 21 22 23 B2Mobile refers to itself as a mobile advertiser. In its motion to dismiss, LeadClick describes itself as a California corporation that provides a variety of products and services, 24 including posting online information to solicit consumer names and 25 26 27 28 contact information. Defendants B2Mobile and LeadClick move to dismiss Plaintiff's complaint, arguing that the TCPA is so vague as to be 4 1 2 constitutionally void, and challenging the sufficiency of Kramer's pleading. 3 4 5 6 LEGAL STANDARD The Due Process Clause of the Fifth Amendment requires that individuals be given fair notice of what the law requires, so that they may conform their conduct accordingly. United States v. 7 Williams, 553 U.S. 285, 304 (2008). A law is unconstitutionally 8 9 vague only if it "fails to provide a person of ordinary United States District Court For the Northern District of California 10 intelligence fair notice of what is prohibited, or is so 11 standardless that it authorizes or encourages seriously 12 discriminatory enforcement." 13 constitutionally protected activity, such as free expression, 14 Id. Even when a law restricts "perfect clarity and precise guidance have never been required[.]" 15 Id.; Ward v. Rock Against Racism, 491 U.S. 781, 794 (1989). A 16 statute's vagueness is assessed "as applied to the particular 17 18 19 20 facts at issue[.]" Holder v. Humanitarian Law Project, __ U.S. __; 130 S. Ct. 2705, 2718-19 (2010). A sufficiently plead complaint requires a “short and plain 21 statement of the claim showing that the pleader is entitled to 22 relief.” 23 Fed. R. Civ. P. 8(a). Dismissal under Rule 12(b)(6) for failure to state a claim is appropriate only when the complaint 24 does not give the defendant fair notice of a legally cognizable 25 26 claim and the grounds on which it rests. Bell Atl. Corp. v. 27 Twombly, 550 U.S. 544, 555 (2007). 28 complaint is sufficient to state a claim, the court will take all 5 In considering whether a 1 material allegations as true and construe them in the light most 2 favorable to the plaintiff. 3 896, 898 (9th Cir. 1986). 4 to legal conclusions; “threadbare recitals of the elements of a 5 cause of action, supported by mere conclusory statements,” are not 6 NL Indus., Inc. v. Kaplan, 792 F.2d However, this principle is inapplicable Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, taken as true. 7 1949-50 (2009) (citing Twombly, 550 U.S. at 555). 8 Whether Plaintiff has stated a claim under the TCPA turns on 9 United States District Court For the Northern District of California 10 the statutory language of 47 U.S.C. § 227(b)(1)(A)(iii). 11 227 of the TCPA, entitled “Restrictions on use of telephone 12 equipment,” provides: 13 (a) 14 Section Definitions. As used in this section(1) 15 16 The term “automatic telephone dialing system” means equipment which has the capacity(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and 17 (B) to dial such numbers. 18 19 20 21 22 23 24 (b) Restrictions on use of automated telephone equipment. (1) Prohibitions. It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States(A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice- 25 26 27 28 . . . (iii) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other 6 radio common carrier service, or any service for which the called party is charged for the call. 1 2 DISCUSSION 3 4 5 6 I. The Constitutionality of the TCPA Defendants argue that the TCPA is constitutionally void, because it is vague as to the meaning of "prior express consent" 7 in the context of text messaging. The statute itself does not 8 address this precise issue, and agencies and courts purportedly 9 United States District Court For the Northern District of California 10 have failed to provide guidance. As a result, Defendants argue 11 that they and the mobile advertising industry in general have not 12 received notice of the parameters for lawful text messaging, with 13 the degree of specificity that the Constitution requires. 14 particular, Defendants argue that they had insufficient notice 15 In that the TCPA’s prohibition against telephone calls from automatic 16 dialing systems without “prior express consent” applied to text 17 18 19 messaging. Defendants disregard ample guidance available to ensure 20 compliance with the TCPA. 21 Communications Commission (FCC) explicitly stated that the TCPA's 22 prohibition on automatic telephone dialing systems "encompasses 23 Over seven years ago the Federal both voice calls and text calls to wireless numbers including, for 24 example, short message service (SMS) calls . . ." In re Rules and 25 Regulations Implementing the Telephone Consumer Protection Act of 26 27 28 1991, Report and Order, 18 F.C.C.R. 14014, 14115 (July 3, 2003). In 2009, early in the time period during which Kramer allegedly 7 1 received the unsolicited text messages, the Ninth Circuit held 2 unambiguously that a text message is a "call" for purposes of the 3 TCPA. 4 (9th Cir. 2009). 5 6 Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 Furthermore, in cases involving fax transmissions, courts have held both advertisers and advertisement broadcasters subject 7 to liability under the TCPA. Kopff v. Battaglia, 425 F. Supp. 2d 8 9 76, 92-93 (D.D.C. 2006); Accounting Outsourcing, LLC v. Verizon United States District Court For the Northern District of California 10 Wireless Personal Comm., L.P., 329 F. Supp. 789, 805-06 (M.D. La. 11 2004); American Blastfax, 121 F. Supp. 1085, 1089-90 (W.D. Tex. 12 2000)("It would circumvent the purpose of the TCPA to exempt 13 Blastfax from potential liability on the theory that it plays no 14 role in sending the advertisements at issue . . . Blastfax is not 15 exempt from TCPA liability on the grounds that it is a mere 16 "broadcaster" of third party advertisements."). 17 18 In Satterfield, the Ninth Circuit addressed the issue of 19 express consent, defining it as "[c]onsent that is clearly and 20 unmistakably stated." 21 Dictionary). 22 plaintiff took to consent online to the delivery of promotional 23 Id. at 955 (quoting Black's Law The court described in detail the steps that the messages to her cellular phone. Id. at 949. Ultimately, the 24 court held that the plaintiff's consent to receive promotional 25 26 materials from one entity did not constitute consent to receive 27 marketing from Defendants in the case. 28 court's ruling gives valuable guidance about what the TCPA 8 Id. at 955. Thus, the 1 2 requires, and provides a common sense interpretation of "express consent." 3 Defendants cite Leckler v. Cashcall, Inc., 554 F. Supp. 1025 4 (N.D. Cal. 2008), for the proposition that “prior express consent” 5 under the TCPA is ambiguous in the context of text messaging. 6 That decision, however, did not find ambiguity of the nature that 7 Defendants in the present case assert. Leckler found ambiguity 8 9 only as to whether the provision of a cell phone number on a loan United States District Court For the Northern District of California 10 application served as a express consent under the TCPA to receive 11 automated calls from creditors. 12 this limited context does not overshadow the clarity of the FCC’s 13 statement in 2003 that the TCPA encompasses text messaging, nor 14 Leckler’s finding of ambiguity in the subsequent Ninth Circuit decision in Satterfield. 15 Furthermore, the decision was later vacated for lack of subject 16 matter jurisdiction. Leckler v. Cashcall, Case No. C 07-04002, 17 18 2008 WL 5000528 (N.D. Cal.). Because the FCC announced years ago that the TCPA encompasses 19 20 text messages, and that is clearly the law in the Ninth Circuit, 21 Defendants are obliged to examine FCC guidance and court decisions 22 that address express consent for automated marketing under the 23 TCPA. Though Defendants raise a number of hypothetical situations 24 that may present challenges to discerning what the law requires, 25 26 identifying "close cases" is not sufficient to invalidate a 27 statute for vagueness under the Constitution. 28 at 305-06 (rejecting the lower court's use of hypothetical 9 Williams, 553 U.S. 1 situations to strike down a statute for vagueness, and stating, 2 "What renders a statute vague is not the possibility that it will 3 sometimes be difficult to determine whether the incriminating fact 4 it establishes has been proved; but rather the indeterminacy of 5 precisely what that fact is."). 6 For these reasons, Defendants' constitutional challenge is without merit. 7 II. The sufficiency of Kramer's complaint 8 9 Defendants challenge the sufficiency of Kramer's complaint on United States District Court For the Northern District of California 10 a number of bases. 11 conclusory allegation as to Defendants' use of an automatic 12 telephone dialing system to send text messages. 13 assertion, it is conclusory to allege that messages were sent 14 Defendants assert that Kramer provided only a As an isolated "using equipment that, upon information and belief, had the 15 capacity to store or produce telephone numbers to be called, using 16 a random or sequential number generator." Such a naked assertion 17 18 need not be taken as true. See Iqbal, 129 S. Ct. at 1049-50. 19 However, read as a whole, the complaint contains sufficient facts 20 to show that it is plausible that Defendants used such a system. 21 Kramer described messages from SMS short code 77893, a code 22 registered to B2Mobile. 23 The messages were advertisements written in an impersonal manner. Kramer had no other reason to be in contact with Defendants. Cf. Kazemi v. Payless Shoesource, Inc., 24 25 26 27 2010 WL 963225, at *2 (N.D. Cal.); Abbas v. Selling Source, LLC, 2009 WL 4884471, at *3 (N.D. Ill.). 28 10 1 Defendants argue that Kramer insufficiently plead the size of 2 the putative class. 3 advertising business, and the factual allegations identified in 4 the preceding paragraph, it is entirely plausible that thousands 5 of individuals may be entitled to relief from Defendants' alleged 6 misconduct. Given Defendants' online and mobile Requiring Kramer to plead with greater particularity 7 facts as to the size of the putative class is unnecessary at this 8 9 early stage of the litigation. The issue of numerosity is more United States District Court For the Northern District of California 10 properly determined on a motion for class certification. 11 v. Caplice, 2008 WL 2168762, at *2-3 (N.D. Ill.) (citing Wright, 12 Miller & Kane, Federal Practice & Procedure, Civil, 3d § 1798 13 ("Compliance with the Rule 23 prerequisites theoretically should 14 Holtzman not be tested by a motion to dismiss for failure to state a 15 claim[.]"). 16 Both B2Mobile and Leadclick challenge the sufficiency of 17 18 Kramer's allegations that they sent unauthorized messages, and his 19 allegations about their role in the text messaging. 20 however, stated plainly that he never consented to the receipt of 21 such messages, and described his attempt to opt out of receiving 22 messages from SMS code 77893, which was allegedly registered to 23 B2Mobile. Kramer, Kramer described the relationship between B2Mobile, 24 Autobytel, and LeadClick, and the roles involved in text message 25 26 advertising. Though on a motion to dismiss the Court need not 27 accept as true pleadings that are no more than legal conclusions 28 or "formulaic recitations of the elements" of a cause of action, 11 1 Iqbal, 129 S. Ct. at 1951, well-plead facts are taken as true and 2 construed in the light most favorable to the non-moving party. 3 Telesaurus VPC v. Power, 2010 WL 3928945 (9th Cir.); Cahil v. 4 Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). 5 6 Finally, LeadClick attacks Kramer's complaint for failure to include details about the content and dates of eight of the ten 7 text messages he allegedly received. Kramer has offered to make 8 9 this information available informally and through discovery; United States District Court For the Northern District of California 10 LeadClick seeks to make such allegations a pleading requirement. 11 To this end, LeadClick relies on Abbas, 2009 WL 4884471. 12 the plaintiff brought a class action lawsuit under the TCPA after 13 allegedly receiving unsolicited text messages. 14 In Abbas The court found the plaintiff's allegations regarding the text messages he 15 received insufficient, but granted leave to amend. In the sole 16 passage to address the issue, the court stated: 17 18 19 20 21 22 23 24 25 26 27 After alleging several facts regarding the initial, offending SMS message he allegedly received from Selling Source, Abbas makes broad, conclusory allegations regarding the “numerous” further messages that he allegedly received. See Compl. ¶¶ 17, 18. While Rule 8(a)(2) does not require facts to be pled with particularity, Abbas's allegations here provide no notice to Selling Source about the subsequent messages Abbas allegedly received. There is no allegation regarding when Abbas received the later messages, what those messages stated, or from what numbers he received the later messages. Some fair notice to Selling Source is particularly necessary here because Abbas seeks recovery for each violation of the TCPA. Abbas, 2009 WL 4884471 at *2. 28 12 To counter LeadClick's argument, Kramer cites Kazemi, 2010 WL 1 2 963225, and Lozano v. Twentieth Century Fox Film Corp., 702 F. 3 Supp. 2d 999 (N.D. Ill. 2010). 4 included details as to the first text message that the plaintiffs 5 In both cases the complaints allegedly received, but few allegations about the subsequent text 6 messages. Unlike Abbas, the courts did not address the 7 8 9 United States District Court For the Northern District of California 10 sufficiency of the pleadings with respect to the text messages, so they provide no guidance on the precise issue that LeadClick has raised. 11 12 13 As a Defendant, LeadClick is entitled to notice of the bases for the lawsuit Kramer has brought. It is also true that Rule 8 does not require Kramer to plead his claim with particularity. 14 LeadClick argues that, in the complaint's current form, "There is 15 16 no way to tell what involvement, if any, LeadClick had in the 17 dissemination of the remaining eight text messages." 18 this misses the crux of Kramer's putative class action under the 19 TCPA. 20 role in sending en masse unsolicited text messages to Kramer and 21 possibly thousands of other individuals. 22 However, The core of the complaint is that Defendants each played a The Court finds persuasive Kramer's argument that, because the TCPA is designed to 23 combat mass unsolicited commercial telemarketing, at times 24 25 involving thousands of calls or text messages, notice pleading 26 standards do not require a plaintiff to allege details at the 27 pleading stage about the time and context of every text message. 28 13 CONCLUSION 1 2 Because the TCPA is not unconstitutionally vague, and Kramer 3 has adequately plead his complaint, the Court DENIES Defendants' 4 motion to dismiss. 5 a case management conference, as previously scheduled, on January 6 The parties shall appear before the Court for 4, 2011 at 2:00 pm. 7 IT IS SO ORDERED. 8 9 United States District Court For the Northern District of California 10 11 Dated: 12/29/2010 CLAUDIA WILKEN United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14
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