Pascal v. Agentra, LLC

• Court: District Court, N.D. California
• Decided: October 16, 2019
• Docket: 4:19-cv-02418
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LAWRENCE PASCAL, Case No. 19-cv-02418-DMR

8 Plaintiff, ORDER ON DEFENDANTS' MOTION 9 v. TO DISMISS

10 AGENTRA, LLC, et al., Re: Dkt. No. 20 11 Defendants.

12 Defendants Agentra, LLC (“Agentra”) and Data Partnership Group, LP (“DPG”) move 13 pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiff Lawrence Pascal’s first 14 amended complaint. [Docket No. 20.] This matter is suitable for resolution without a hearing. 15 Civ. L.R. 7-1(b). For the following reasons, the motion is granted. 16 I. BACKGROUND 17 In this putative class action, Plaintiff challenges Defendants Agentra, DPG, and I Health 18 and Life Insurance Services’s (“IHL”) alleged practice of making unauthorized phone calls to 19 telephones of consumers nationwide and playing artificial or prerecorded voice messages. 20 Plaintiff makes the following allegations in the first amended complaint (“FAC”), all of which are 21 taken as true for purposes of this motion.1 22 Agentra is a Texas company that sells health insurance plans. DPG provides financing 23 and/or administration services for Agentra’s plans, and IHL is an authorized sales agent for 24 Agentra and DPG’s products and services. [Docket No. 17 (FAC) ¶¶ 20, 27-29.] Defendant Doe 25 is a company that performs robocalls, or “artificial or prerecorded voice message telemarketing 26 1 When reviewing a motion to dismiss for failure to state a claim, the court must “accept as true all 27 of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) 1 calls” to cellular and residential phones. Id. at ¶¶ 2, 3, 30. IHL hired Doe on behalf of Agentra 2 and DPG to market their products and services. Id. at ¶ 31. Doe “placed robocalls on a mass scale 3 to generate sales for IHL’s health insurance products and services from Agentra and [DPG]” 4 without the recipients’ consent. Id. at ¶¶ 33, 37. 5 On April 4, 2019, Plaintiff received a call on his cell phone from Doe at the number 970- 6 713-2254. Id. at ¶¶ 38-39. When he answered the call, he heard an artificial or prerecorded voice 7 “advertising lower rates on health insurance” and instructing Plaintiff to “press one” to speak to a 8 representative. After he “pressed one,” Plaintiff was connected to a representative who hung up 9 on him when he asked the name of the company calling. Id. at ¶¶ 40-41. In order to identify the 10 caller, Plaintiff called 970-713-2254 and “heard a message indicating that the company was selling 11 health insurance.” Plaintiff then asked his attorney to investigate the call. Plaintiff’s attorney 12 called the number 970-713-2254 and spoke with a live representative who “solicited a health plan” 13 and refused to disclose “the name of the company.” Id. at ¶¶ 42-46. Plaintiff’s attorney then 14 purchased a health insurance policy from the representative, and “immediately received an email 15 identifying Defendants Agentra and IHL, copying the email address ‘support@ilifeandhealth.com’ 16 stating ‘Welcome to Agentra Healthcare Solutions’ and assigning” a member identification 17 number. In a welcome letter, DPG “indicated it would be providing financing and/or 18 administration for billing purposes.” Id. at ¶¶ 48, 49. Plaintiff never consented to receive calls 19 from any of the defendants. Id. at ¶ 50. He alleges that “Agentra, IHL and [DPG] knowingly and 20 actively accepted business that originated through the illegal telemarketing calls placed by John 21 Doe 1.” Id. at ¶ 64. 22 Plaintiff brings two claims against Defendants on behalf of himself and a class and 23 subclass of individuals: 1) violation of the Telephone Consumer Protection Act (“TCPA”), 47 24 U.S.C. § 227; and 2) violation of the California Consumers Legal Remedies Act, California Civil 25 Code section 1770(a)(22)(A). 26 Defendants Agentra and DPG now move to dismiss the TCPA claim. 27 II. LEGAL STANDARD 1 the complaint. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). 2 When reviewing a motion to dismiss for failure to state a claim, the court must “accept as true all 3 of the factual allegations contained in the complaint,” Erickson, 551 U.S. at 94 (2007) (citation 4 omitted), and may dismiss a claim “only where there is no cognizable legal theory” or there is an 5 absence of “sufficient factual matter to state a facially plausible claim to relief.” Shroyer v. New 6 Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (citing Ashcroft v. Iqbal, 556 7 U.S. 662, 677-78 (2009); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)) (quotation marks 8 omitted). A claim has facial plausibility when a plaintiff “pleads factual content that allows the 9 court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 10 Iqbal, 556 U.S. at 678 (citation omitted). In other words, the facts alleged must demonstrate 11 “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action 12 will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007) (citing Papasan v. Allain, 478 13 U.S. 265, 286 (1986)); see Lee v. City of L.A., 250 F.3d 668, 679 (9th Cir. 2001), overruled on 14 other grounds by Galbraith v. Cty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). 15 III. DISCUSSION 16 A. TCPA Claim 17 The TCPA makes it unlawful for any person in the United States

18 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 19 automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone 20 service . . . or any service for which the called party is charged for the call . . . . 21 47 U.S.C. § 227(b)(1)(A)(iii). It also makes it unlawful for any person in the United States “to 22 initiate any telephone call to any residential telephone line using an artificial or prerecorded voice 23 to deliver a message without the prior express consent of the called party,” subject to certain 24 exceptions. 47 U.S.C. § 227(b)(1)(B). 25 “The three elements of a TCPA claim are: (1) the defendant called a cellular telephone 26 number; (2) using an automatic telephone dialing system; (3) without the recipient’s prior express 27 consent.” Meyer v. Portfolio Recovery Assocs., LLC, 707 F.3d 1036, 1043 (9th Cir. 2012) (citing 1 47 U.S.C. § 227(b)(1)). “For a person to ‘make’ a call under the TCPA, the person must either (1) 2 directly make the call, or (2) have an agency relationship with the person who made the call.” 3 Abante Rooter & Plumbing v. Farmers Grp., Inc., No. 17-CV-03315-PJH, 2018 WL 288055, at *4 4 (N.D. Cal. Jan. 4, 2018) (citing Gomez v. Campbell-Ewald Co., 768 F.3d 871, 877-79 (9th Cir. 5 2014)); see Thomas v. Taco Bell Corp., 582 Fed. Appx. 678, 679 (9th Cir. 2014) (“[t]here are two 6 potential theories of liability [for a section 227(b) violation]: (1) direct liability; and (2) vicarious 7 liability.”). 8 Agentra and DPG move to dismiss the TCPA claim, arguing that the FAC does not allege 9 that either of them made the calls in question and does not plausibly allege their liability for the 10 calls under a vicarious liability theory. In response, Plaintiff concedes that Agentra and DPG did 11 not make the calls in question and so are not directly liable under the TCPA. Instead, he contends 12 that Agentra and DPG are vicariously liable for the calls. 13 “[A] defendant may be held vicariously liable for TCPA violations where the plaintiff 14 establishes an agency relationship, as defined by federal common law, between the defendant and 15 a third-party caller.” Gomez, 768 F.3d at 879. Three common law agency theories may provide a 16 basis for vicarious liability for violations of section 227(b): actual authority, apparent authority, 17 and ratification. See Jones v. Royal Admin. Servs., Inc., 887 F.3d 443, 448-49 (9th Cir. 2018) 18 (describing “bedrock theories of agency” through which “a principal can be held liable for the 19 legal consequences of its agent’s conduct”); Thomas, 582 Fed. Appx. at 679 (citing In re DISH 20 Network, LLC, 28 FCC Rcd. 6574, 6590 n.124 (2013)). 21 Plaintiff contends that Agentra and DPG face liability under each of those theories of 22 vicarious liability. Opp’n 3-8. 23 1. Actual Authority 24 In order to establish that Doe had “actual authority” to place calls on behalf of Agentra and 25 DPG, Plaintiff must establish both an agency relationship and “actual authority to place the 26 unlawful calls.” Jones v. Royal Admin. Servs., Inc., 887 F.3d 443, 449 (9th Cir. 2018). “Agency 27 is the fiduciary relationship that arises when one person (a ‘principal’) manifests assent to another 1 control, and the agent manifests assent or otherwise consents so to act.” Mavrix Photographs, 2 LLC v. Livejournal, Inc., 873 F.3d 1045, 1054 (9th Cir. 2017) (quoting Restatement (Third) of 3 Agency § 1.01 (Am. Law Inst. 2006)); see also United States v. Bonds, 608 F.3d 495, 506 (9th 4 Cir. 2010) (“To form an agency relationship, both the principal and the agent must manifest assent 5 to the principal’s right to control the agent.”). For an agency relationship to exist, an agent must 6 have authority to act on behalf of the principal and the principal must have the right to control the 7 agent’s actions. Mavrix, 873 F.3d at 1054. Further, “[a]gency means more than mere passive 8 permission; it involves request, instruction, or command.” Thomas v. Taco Bell Corp., 879 F. 9 Supp. 2d 1079, 1085 (C.D. Ca. 2012) (quoting Klee v. United States, 53 F.2d 58, 61 (9th Cir. 10 1931)). “Although the precise details of the agency relationship need not be pleaded to survive a 11 motion to dismiss, sufficient facts must be offered to support a reasonable inference that an agency 12 relationship existed.” Kristensen v. Credit Payment Servs., 12 F. Supp. 3d 1292, 1301 (D. Nev. 13 2014). As to “actual authority to place the unlawful calls,” the Ninth Circuit has held that 14 “[a]ctual authority is limited to actions ‘specifically mentioned to be done in a written or oral 15 communication’ or ‘consistent with’ a principal’s ‘general statement of what the agent is supposed 16 to do.’” Jones, 887 F.3d at 449. 17 The court concludes that the FAC does not sufficiently allege the existence of an agency 18 relationship between Agentra and/or DPG on the one hand and Doe, the purported caller, on the 19 other. Nor does the operative complaint allege facts supporting an inference that Doe had “actual 20 authority” to make the robocalls on their behalf. In order to allege actual authority, Plaintiff must 21 allege facts showing that Agentra and DPG controlled or had the right to control Doe; that 22 Agentra, DPG, and Doe “manifest[ed] assent” to their right to control Doe, see Mavrix, 873 F.3d 23 at 1054; and that Agentra and DPG either communicated a direction to Doe to engage in robocalls 24 or the robocalls were “consistent with” Agentra and DPG’s “general statement of what [Doe] 25 [was] supposed to do.” See Jones, 887 F.3d at 449. Here, the only allegations in the FAC 26 connecting Agentra or DPG with Doe are that IHL, as Agentra and DPG’s authorized sales agent, 27 hired Doe “to market [Agentra and DPG’s] products and services” by “call[ing] thousands of 1 contains the conclusory allegation that “Agentra, IHL, and [DPG] knowingly and actively 2 accepted business that originated through the illegal telemarketing calls placed by John Doe 1.” 3 Id. at ¶ 64. These allegations are insufficient to support a theory of agency liability based on 4 actual authority. 5 2. Apparent Authority 6 Apparent authority is an agency theory by which “a principal can be held liable for the 7 legal consequences of its agent’s conduct” where the agent “act[s] with apparent authority in its 8 dealings with a third party purportedly on behalf of the principal[.]” Jones, 887 F.3d at 449. 9 “Apparent authority arises from the principal’s manifestations to a third party that supplies a 10 reasonable basis for that party to believe that the principal has authorized the alleged agent to do 11 the act in question.” N.L.R.B. v. Dist. Council of Iron Workers of the State of Cal. & Vicinity, 124 12 F.3d 1094, 1099 (9th Cir. 1997) (citing N.L.R.B. v. Donkin’s Inn, 532 F.2d 138, 141 (9th Cir. 13 1976)); see also Restatement (Third) of Agency § 2.03 (2006) (“[a]pparent authority is the power 14 held by an agent . . . to affect a principal’s legal relations with third parties when a third party 15 reasonably believes the actor has authority to act on behalf of the principal and that belief is 16 traceable to the principal’s manifestations.”). The Ninth Circuit has explained that “[a]pparent 17 authority results when the principal does something or permits the agent to do something which 18 reasonably leads another to believe that the agent had the authority he purported to have.” 19 Donkin’s Inn, 532 F.2d at 141 (quoting Hawaiian Paradise Park Corp. v. Friendly Broadcast Co., 20 414 F.2d 750, 756 (9th Cir. 1969)). Examples of manifestations that give rise to apparent 21 authority include

22 [the principal’s] direct statements to the third person, directions to the agent to tell something to the third person, or the granting of 23 permission to the agent to perform acts and conduct negotiations under circumstances which create in him a reputation of authority in 24 the area which the agent acts and negotiates. 25 Donkin’s Inn, 532 F.2d at 141 (quoting Hawaiian Paradise, 414 F.2d at 756). 26 Apparent authority “must be established by proof of something said or done by [the 27 principal] on which [a third party] reasonably relied”; it “cannot be established merely by showing 1 at 1099. “Apparent authority exists only as to those to whom the principal has manifested that an 2 agent is authorized. There is, therefore, tort liability only if such a manifestation and its execution 3 by the apparent agent results in harm.” Thomas, 582 Fed. Appx. at 679 (quoting Restatement 4 (Second) of Agency § 265 cmt. a (1958)). 5 Here, the FAC does not plead sufficient facts to support an apparent authority theory that 6 Agentra and/or DPG is vicariously liable for the allegedly illegal telemarketing calls. See Thomas, 7 582 Fed. Appx. at 679-80; see, e.g., Canary v. Youngevity Int’l, Inc., No. 5:18-cv-03261-EJD, 8 2019 WL 1275343, at *8 (N.D. Cal. Mar. 20, 2019) (holding plaintiff failed to plead apparent 9 authority theory where he “does not allege that he reasonably relied upon something said or done 10 by [defendant] to his detriment”).2 11 3. Ratification 12 Finally, Plaintiff asserts a ratification theory of agency. Ratification is “the affirmance of a 13 prior act done by another, whereby the act is given effect as if done by an agent acting with actual 14 authority.” Kristensen v. Credit Payment Servs. Inc., 879 F.3d 1010, 1014 (9th Cir. 2018) 15 (quoting Restatement (Third) of Agency § 4.01(1)). “Although a principal is liable when it ratifies 16 an originally unauthorized tort, the principal-agent relationship is still a requisite, and ratification 17 can have no meaning without it.” Thomas, 582 Fed. Appx. at 680 (quoting Batzel v. Smith, 333 18 F.3d 1018, 1036 (9th Cir. 2003) (footnote omitted)). As discussed above, the FAC fails to 19 sufficiently allege an agency relationship between Agentra and/or DPG on the one hand and Doe, 20 the purported caller, on the other. It also fails to allege facts that support the affirmance by 21 Agentra and/or DPG of a prior act done by Doe. Therefore, it does not state a ratification theory 22 2 It is not clear whether a party seeking to plead an apparent authority theory of liability must also 23 sufficiently allege an agency relationship. While the Ninth Circuit has expressly held that a party must establish an agency relationship in order to maintain theories of actual authority and 24 ratification under the TCPA, see Jones, 887 F.3d at 449, and Thomas, 582 Fed. Appx. at 680 (quoting Batzel v. Smith, 333 F.3d 1018, 1036 (9th Cir. 2003)), the court’s own research did not 25 yield a definitive answer to this question with respect to apparent authority. The Restatement (Third) of Agency suggests that an agency relationship is not a requisite to establish apparent 26 authority: “The definition in this section does not presuppose the present or prior existence of an agency relationship . . . [t]he definition thus applies to actors who appear to be agents but are not, 27 as well as to agents who act beyond the scope of their actual authority.” Restatement (Third) of 1 of agency. 2 In sum, the TAC does not sufficiently allege facts giving rise to a plausible inference that 3 Agentra and/or DPG “made” the calls under the meaning of the TCPA. Accordingly, □□□□□□□□□□□ 4 section 227(b) claims are dismissed without prejudice. 5 B. CRLA Claim 6 The CLRA makes unlawful: 7 Disseminating an unsolicited prerecorded message by telephone without an unrecorded, natural voice first informing the person 8 answering the telephone of the name of the caller or the organization being represented, and either the address or the telephone number of 9 the caller, and without obtaining the consent of that person to listen 10 to the prerecorded message. Cal. Civ. Code § 1770(a)(22)(A). 11 In their opening brief, Defendants make no reference to Plaintiff's CLRA claim. On reply, 12 they argue that the CLRA claim is premised on the same vicarious liability theory as the TCPA 13 claim, and that the arguments in favor of dismissal of the TCPA claim apply to the CLRA claim. 14 See Reply 7. While it is improper to raise arguments for the first time on reply, as noted above, 15 5 Plaintiff does not allege that Agentra and/or DPG made the calls in question. Accordingly, 16 Plaintiffs vicarious liability theory applies equally to the CLRA claim. For the same reasons 17

discussed above, the FAC does not sufficiently state a vicarious liability theory as to Agentra and Z 18 DPG. Accordingly, the CLRA claim is dismissed with leave to amend. 19 IV. CONCLUSION For the foregoing reasons, Agentra and DPG’s motion to dismiss the TCPA and CRLA 21 claims is granted with leave to amend. Any amended complaint must be filed within 14 days of 22 the date of this order. <5 DISTRIC 23 Ko 23 S ON IT ISSO ORDERED ay . &y DY Dated: October 16, 2019 5 iT < 26 /> ADU 7 5 □□ Z\ \ Bana Ma Biha BYE ON Wied Sates © AP Stoteuhseeetrate Judg& 28 OX XOX Ay