Charvat v. DFS SERVICES LLC

Citations: 781 F. Supp. 2d 588; 2011 U.S. Dist. LEXIS 28265; 2011 WL 1043551Docket: 2:09-mj-00490

Court: District Court, S.D. Ohio; March 18, 2011; Federal District Court

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Plaintiff Philip Charvat initiated a lawsuit against multiple defendants, including DFS Services LLC, Discover Bank, Americall Group, Consolidated Communications Market Response, Epixtar Marketing Corp., and Visionquest Marketing Services, alleging violations of the Telephone Consumer Protection Act (TCPA), the Ohio Consumer Sales Practices Act (OCSPA), and the tort of invasion of privacy. Charvat claims to have received 67 unsolicited telemarketing calls from these defendants, despite requesting to be placed on do-not-call lists during several calls. His amended complaint outlines seven counts: three for TCPA violations, two for OCSPA violations related to a subset of the calls, one for invasion of privacy, and one seeking a declaratory judgment regarding OCSPA violations.

Currently, the court is considering Charvat's motion for default judgment against Epixtar, which has already been entered, and the motions to dismiss filed by Discover, Americall, and Consolidated Communications. The court has decided to hold Charvat's default judgment motion in abeyance and grant the motions to dismiss, suggesting that a judgment against Epixtar is premature given the presence of multiple defendants in the case. The court references legal precedent indicating that default judgments are typically deferred in multi-defendant situations until all parties have been resolved.

If the plaintiff loses the case, the complaint will be dismissed against all defendants, both defaulting and non-defaulting. The Court will pause Charvat's motion for default judgment against Epixtar until the case's merits are resolved, after which Charvat may seek to reactivate this motion. The defendants—Discover, Americall, and CCMR—have filed motions to dismiss counts two through seven of the amended complaint, arguing they do not state a valid claim under Federal Rule of Civil Procedure 12(b)(6). A complaint must contain sufficient factual content to establish a plausible claim, as per Ashcroft v. Iqbal and Bell Atlantic Corp. v. Twombly. While courts accept factual allegations as true for dismissal motions, they do not accept legal conclusions masked as facts.

The Court will evaluate the dismissal motions on a count-by-count basis. Americall and CCMR claim Counts 2 and 3 do not adequately state violations of the Telephone Consumer Protection Act (TCPA) or are redundant to Count 1. The TCPA allows private action for violations related to unsolicited calls, with specific provisions mandating that telemarketers must maintain do-not-call lists. Count 1 asserts that all sixty-seven calls violated 47 C.F.R. § 64.1200(d) due to the defendants' failure to implement required procedures. Count 2 alleges violations for not honoring Charvat's do-not-call request, while Count 3 claims violations for not recording such requests. Americall and CCMR argue that Counts 2 and 3 should be dismissed as they do not represent distinct violations of the TCPA, citing that the regulations do not explicitly prohibit calling someone after a do-not-call request or failing to document such requests. The Sixth Circuit's ruling in Charvat v. GVN Michigan, Inc. supports this position.

The district court's dismissal of Charvat's lawsuit was affirmed due to failure to meet the amount-in-controversy requirement for diversity actions. The court determined that the initiation of a phone call without implementing minimum procedures constituted a violation of regulations, concluding that Charvat could not collect statutory damages on a per-violation basis under the TCPA, which allows statutory damages only on a per-call basis. Consequently, Counts 2 and 3 against Americall and CCMR were dismissed for failing to state valid claims.

Regarding Count 1, Americall argued it should not be liable for calls made by CCMR, Epixtar, and Visionquest, as Charvat did not allege these calls were made on Americall's behalf. The court agreed, stating the burden was on Charvat to provide facts establishing Americall's liability. Additionally, Americall contended that it could only be liable for calls made after Charvat requested to be placed on the do-not-call list, limiting potential liability to six calls. However, this argument was rejected based on precedent indicating that liability arises from violations of TCPA regulations at the time of the call, regardless of Charvat's do-not-call request.

Count 4 asserted that calls four through sixty-seven violated the OCSPA based on the premise that TCPA violations are inherently OCSPA violations. Discover argued that these calls fell outside the OCSPA’s definition of "consumer transaction" since they involved a financial institution and its customers. Charvat disputed this, claiming he was not a Discover customer, but the court noted that it is not obligated to accept legal conclusions as factual allegations. A relevant Ohio appeals court decision reinforced that transactions with a financial institution retain their status regardless of whether the caller is a customer.

Charvat argues for the disregard of a prior decision, referencing Stanek v. Greco, which outlines that when a state’s highest court has not ruled on an issue, federal courts must determine how the highest court would likely decide based on available data, including lower court rulings. Charvat fails to provide evidence that the Supreme Court of Ohio would disagree with a specific appellate court decision regarding telemarketing calls, leading to the dismissal of Count 4 against Discover. 

For CCMR, as the only calls in question do not violate the Ohio Consumer Sales Practices Act (OCSPA), Count 4 is also dismissed. Americall seeks dismissal of Count 4, arguing that TCPA violations do not automatically equate to OCSPA violations. They cite Culbreath v. Golding Enterprises, where the Ohio Supreme Court ruled that the TCPA does not provide a private right of action and that the OCSPA was not violated since no unfair or deceptive practices were shown. Charvat contends this ruling should be viewed as dicta, but the Supreme Court explicitly indicated that without evidence of deception, an unsolicited fax does not violate the OCSPA. The court emphasizes that even if considered dicta, it strongly suggests the Ohio Supreme Court would rule similarly on whether TCPA violations also constitute OCSPA violations in the absence of deception.

Charvat's fourth count against Americall is dismissed for failing to state a claim under the Ohio Consumer Sales Practices Act (OCSPA). Count 5, which alleges that certain calls violated the OCSPA due to the use of an unregistered fictitious name, "Discover Card," is also dismissed. Discover's conduct is excluded from OCSPA coverage, and Charvat does not provide sufficient allegations to support a claim against CCMR under this count. Americall argues that the mere use of a fictitious name does not constitute a violation unless it is shown to be deceptive. This aligns with precedents indicating that without allegations of deceptive practices, the failure to register a fictitious name does not violate the OCSPA. Charvat’s reliance on unpublished lower court decisions to support his position is deemed overstated, as the Attorney General's inclusion of decisions in the Public Inspection File (PIF) does not grant them precedential value. Furthermore, cited appellate decisions do not substantiate Charvat's claims. The court concludes that without evidence of deception, the use of an unregistered fictitious name does not violate the OCSPA.

Charvat's fifth count against Americall is dismissed due to the lack of allegations that the term "Discover Card" was used deceptively. Count 6, which claims that 67 telemarketing calls from August 31, 2006, to April 24, 2009, constitute an invasion of privacy under Ohio law, is also dismissed. The defendants argue that an average of fewer than 2.5 calls per month does not meet the threshold for invasion of privacy, a position the Court supports. According to Ohio law, invasion of privacy requires unwarranted appropriation of personality or wrongful intrusion that significantly burdens an individual's peace. Citing precedent, the Court notes that 31 calls in three months were insufficient for such a claim, thus concluding that 67 calls over a longer period similarly do not constitute a substantial burden. Consequently, Count 6 is dismissed for failing to state a valid claim. Count 7, requesting a declaratory judgment that TCPA violations are also violations of the OCSPA and that using an unregistered fictitious name in telemarketing is illegal, is dismissed as the alleged conduct does not violate the OCSPA. The Court holds Charvat's Motion for Default Judgment in abeyance and grants the Motions to Dismiss from Discover, Americall, and CCMR, dismissing Counts 4 through 7 against Discover and Counts 2 through 7 against Americall and CCMR. Jurisdictional arguments raised by Americall are noted as foreclosed by a recent Sixth Circuit decision.