Wengle v. DialAmerica Marketing, Inc.

132 F. Supp. 3d 910, 2015 WL 5595505
CourtDistrict Court, E.D. Michigan
DecidedOctober 2, 2015
DocketCase No. 14-cv-10644
StatusPublished
Cited by1 cases

This text of 132 F. Supp. 3d 910 (Wengle v. DialAmerica Marketing, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wengle v. DialAmerica Marketing, Inc., 132 F. Supp. 3d 910, 2015 WL 5595505 (E.D. Mich. 2015).

Opinion

AMENDED ORDER GRANTING DEFENDANT’S MOTION FOR SUM[912]*912MARY JUDGMENT (ECF #40)1

MATTHEW F. LEITMAN, UNITED STATES DISTRICT JUDGE

The Telephone Consumer Protection Act, 47 U.S.C. § 227 et. seq., and its implementing regulations (collectively, the “TCPA”) generally prohibit telemarketers from placing solicitation calls to consumers who have added their names to the National Do Not Call Registry. But calls placed “on behalf of’ a “tax-exempt nonprofit organization” are exempt from this prohibition. See 47 U.S.C. § 227(a)(4); 47 C.F.R. 64.1200(f)(14)(iii) (the “Nonprofit Exemption”). The question currently before the Court is whether calls placed by Defendant DialAmerica Marketing, Inc. (“DialAmerica”) to Plaintiff Geraldine Wengle (‘Wengle”) fall within the Nonprofit Exemption. DialAmerica argues that the calls are covered by the Nonprofit Exemption because it placed those calls on behalf of a tax exempt nonprofit organization, the Special Olympics of Michigan (“SOMI”). Wengle counters that the Nonprofit Exemption does not apply to DialAmerica’s calls to her because DialAmerica placed the calls for its own commercial purposes. The Court agrees with DialAmerica, and it therefore GRANTS DialAmerica’s Motion for Summary Judgment (ECF #40).

RELEVANT FACTUAL BACKGROUND

A. The Parties

Wengle is a resident of Dearborn, Michigan. On May 14, 2010, she registered her home phone number with the National Do Not Call Registry in order to avoid calls from telemarketers. (See Wengle Declaration, ECF #50 at 1, ¶2, Pg. ID 799; see also registration confirmation, ECF #50-2 at 1, Pg. ID 805.)

DialAmerica is a for-profit telemarketing company that frequently works as a professional fundraiser for charitable organizations. In 2008, DialAmerica obtained a State of Michigan License to Solicit Charitable Contributions. (See license, ECF #34-3 at 18, Pg. ID 535.) The State has renewed this license each year from 2009 through 2015. (See licenses, ECF #34-3 at 29-34, Pg. ID 546-551.)

SOMI is the authorized Michigan affiliate of the Special Olympics. (See Declaration of Lois Arnold, ECF #34-1 at 2, ¶2, Pg. ID 428.) SOMI is a tax-exempt charitable organization that provides year-round sports training and athletic competition for children and adults with intellectual disabilities. (See id. at 2, ¶¶ 2-3, Pg. ID 428) Lois Arnold (“Arnold”) is SOMI’s President and CEO. (See id. at 1, ¶1, Pg. ID 427.)

SOMI raises funds to promote its charitable mission in many ways. Its fundrais-ing methods include special events, direct mail, corporate sponsorships, and business-to-business fundraising. (See id. at 2, ¶4, Pg. ID 428) SOMI also uses professional telemarketers to raise funds. (See id. at 3, ¶5, Pg. ID 429) Arnold says that professional telemarketing is a “potent fundrais-ing method ... [that] is critical to fulfilling SOMI’s core 'mission because ... it enables SOMI to raise funds without having to incur the risk of paying for fundraising expenses that might exceed the revenue generated by SOMI.” (Id.)

B. DialAmerica’s Sponsor Fundraising Program and the Federal Communication Commission’s Refusal to Exempt the Sponsor Program from the TCPA

In the early 2000s, DialAmerica implemented what was called the “Sponsor Pro[913]*913gram” through which it sold magazine subscriptions and donated a portion of the proceeds to charitable organizations. The record does not contain a detailed description of the Sponsor Program, but DialAm-erica offered the following explanation of the program to the Federal Communications Commission (the “FCC”):

[T]hrough its Sponsor Program, Dia-lAmerica contracts with magazine publishers to offer magazine subscriptions at heavily discounted rates, creating a catalog of over 400 magazines for sale. It then works with a specific charity to conduct outreach and fund-raising. DialAmerica makes telephone calls to consumers, during which they describe the particular charity, and ask consumers to subscribe to a magazine of their choice. Consumers are told that 12 percent of each sale will go to the charity. If a consumer buys a magazine subscription, the charity receives 12 /£ percent of the subscription price. From the discounted subscription price, DialAmerica pays the magazine publisher an agreed upon amount. DialAmerica retains a portion of the subscription price to cover its costs.

20 FCC Red. 3788, 3799, n. 85 (2005).

In 2005, DialAmerica asked the FCC to rule that calls made pursuant to the Sponsor Program were covered by the Nonprofit Exemption. See id. at 3799, ¶29. As described in more detail below (see p. 14-15 infra), the FCC declined to grant Dia-lAmerica its requested exemption.

C. DialAmerica Replaces the Sponsor Program

In 2006, DialAmerica replaced the Sponsor Program with a new magazine-sales fundraising program that the parties have referred to as the “Professional Fundrais-ing Program.” {See, e.g., Wengle Response Brief, ECF #49 at 5, Pg. ID 776.) The Professional Fundraising Program differs from the Sponsor Program in many ways. For example, under the Professional Fundraising Program, if a consumer purchases a magazine, the resulting contractual and business relationship is between the consumer and the charity, not between the consumer and DialAmerica; indeed, the bill for the consumer’s purchase is “sent out in the name of the charity,” not in DialAmerica’s name. (Deposition of Dia-lAmerica Vice-President Noreen Kaminski, ECF #51-3 at 25, Pg. ID 829.) In addition, under the Sponsor Program consumers paid DialAmerica directly for the magazines they purchased and DialAmerica then donated a portion of those proceeds to charity, but under the Professional Fundraising Program, “[t]he monies go directly to the'charity. [The charities] have their own post office box and their own bank accounts.” {Id. at 24, Pg. ID 828.) After the money is deposited into a' charity’s bank account, the money is then transferred to DialAmerica for processing — i.e., for payment of the subscription price to the magazine publisher and for payment of DialAmerica’s fees and expenses. {See id. at 25-27, Pg. ID 829-831.) DialAmerica then remits 12.5-percent of the funds collected from magazine sales back to the charity. {See id.) Moreover, under the Professional Fundraising Program DialAmeri-ca collects “direct donations” from consumers who do not wish to purchase any magazines, and the charities receive 100-percent of those donations. {See id. at 24, Pg. ID 828.) DialAmerica did not collect direct donations under the prior Sponsor Program. {See id.)

D. SOMI Engages DialAmerica to Raise Money on Terms that Give SOMI Substantial Control and That Incorporate the Financial Structure of the Professional Fundraising Program

By written agreement dated July 23, 2008, SOMI engaged DialAmerica to con[914]*914duct a magazine-sale fundraising campaign “on-[SOMI’s] behalf’ (the “SOMI-DialAm-erica Program”). (SOMI-DialAmerica contract, ECF #34-1 at 12-13, Pg.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
132 F. Supp. 3d 910, 2015 WL 5595505, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wengle-v-dialamerica-marketing-inc-mied-2015.