In Lucas v. Telemarketer Calling From (407) 476-5680, 2014 WL 3845893 (S.D.Ohio 2014), Judge Siegel stayed a TCPA telemarketing case to allow the FCC to rule on Plaintiff’s novel liability theory.
It is essential to understand who the current Defendants are in this litigation and their alleged relationship to one another. The Accuardi Defendants consist of three corporate entities and three individuals. Plaintiff describes International Telephone Com-pany (“ITC”) as a “shell company” organized in the country of Belize that does business in the United States under the name Pacific Telecom Communications Group (Third Amended Complaint (“TAC”), doc. 59 ¶¶ 1, 45). Pacific Telecom Communications Group (“PacTel”) is a “competitive local exchange carrier” (“CLEC”) that is registered with The Public Utilities Commission of Ohio and currently licensed in other states, including Montana and Washington (TAC, doc. 59 ¶¶ 28, 81; doc. 70 at 3). As a CLEC, PacTel serves as an alternative to the providers that were incumbent as of the date of the enactment of the Telecommunications Act of 1996, once known as the “Baby Bells.” See Ohio Admin. Code 4901:1–7–01(C). In other words, PacTel competes with other “local” telephone companies for a consumer’s residential landline subscription. Telephone Management Corporation, Inc. (“TMC”) supplies telephone numbers to its various telemarketer clients from which they make solicitation calls, and, as part of the package, provides to them a “Caller ID Name Management Service” (“CNAM–MS”). Telemarketers are required to display a telephone number and name under the Federal Trade Commission’s Telephone Sales Rule, see 16 C.F.R. § 310.4(a)(8); subscription to a CNAM–MS such as TMC is apparently one method to achieve compliance. Plaintiff alleges that PacTel has assigned “thousands of telephone numbers” within its control to ITC (see, e.g., TAC, doc. 59 ¶¶ 2, 19, 30, 47, 69). In turn, ITC has “reassigned” them to (that is, permitted them to be used by) telemarketing companies such as Capital Solutions Group, S.A. (organized in Panama), All In One Service AIOS, LLC (a named Defendant) and Edwin Adquilen Valbuena Jr., a Philippine business owner doing business with ITC as VICIdial (also a named Defendant) FN4 (TAC, doc. 59 ¶¶ 19, 30, 35, 37–38). Each time a provider “queries” a CNAM–MS database to retrieve caller ID information so that it can be displayed on a residential landline as required, it pays a business such as TMC a “dip” fee (TAC, doc. 59 ¶¶ 2–3, 10, 52; doc. 70 at 3). TMC then shares a portion of that fee with the client that made the telemarketing call (TAC, doc. 59 at 55). Dip fees are financed by the revenue collected from consumers via payment of their monthly residential telephone bills (TAC, doc. 59 ¶ 11).We turn now to the identity, and ostensible connection between, the individual Defendants. Fred Accuardi is alleged to run ITC and be a director of PacTel and president of TMC (TAC, doc. 59 ¶¶ 43, 93). According to Plaintiff, he has commingled his personal finances with those of ITC and TMC (TAC, doc. 59 ¶ 88). Mr. Accuardi’s son, F. Antone Accuardi, is legal counsel to all three entities (TAC, doc. 59 ¶ 46). Steve Hamilton is listed as the only officer of PacTel, serving as its president, secretary, treasurer and sole director (TAC, doc. 59 ¶ 84). Plaintiff claims that the conduct of all Defend-ants, including the Accuardi Defendants, constituted violations of the federal Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, as well as the Ohio Telemarketing Act, the Ohio Telephone Solicitation Act, and the Ohio Consumer Sales Protection Act (“OCSPA”). He also sues under the common law tort theories of invasion of privacy, negligence and nuisance, and in this regard, maintains that individual Defendants Fred Accuardi, F. Antone Accuardi and Steve Hamilton are personally liable for the corporate actions of their alter egos, namely ITC and TMC in the case of the Messrs. Accuardi, and PacTel in the case of Mr. Hamilton.
The District Court stayed the Action, to allow Plaintiff to petition the FCC on whether vicarious liability attaches under the TCPA not for control, but for lack of control and turning a profit.
Against this backdrop, the Accuardi Defendants posit that they cannot be held vicariously liable because Plaintiff has not alleged a formal agency relationship between them and the telemarketers or pled a theory of either apparent authority or ratification. To the contrary, they highlight Plaintiff’s premise that they turned a “blind eye” of sorts by consciously avoiding knowledge that the telephone numbers they assign are being used for illegal telemarketing (see TAC, doc. 59 ¶ 2). The Magistrate Judge agrees that FCC 13–54 establishes a standard of vicarious liability “incompatible” with Plaintiff’s theory of his case (doc. 91 at 13). She rejected Plaintiff’s reliance on what might appropriately be termed dicta, including but not limited to the FCC’s remark that “it may well be that the Commission could ultimately decide that ‘on behalf of’ liability goes beyond agency principles[ ]” (id. (quoting FCC 13–54 at ¶ 32)). She also rejected his policy arguments, among them that a failure to expand liability to the Accuardi Defendants, and those like them, will serve only to encourage illegal telemarketing through a scheme of shared revenue, with said revenue increasing with every call made (id. at 14)). Accordingly, she has recommended that the Accuardi Defendants’ motion to dismiss for failure to state a claim on a theory of vicarious liability be granted. However, the Magistrate Judge reads paragraph 34 (in conjunction with paragraphs 22 and 32) of the Third Amended Complaint to be an allegation of direct liability against TMC itself as the originator of two calls (from 508–475–1352 and 508–475–1394) received by Plaintiff. In this purported circumstance, TMC “initiated” and hence stands in the shoes of a telemarketer, thus exposing it to liability for the pre-recorded message left on Plaintiff’s answering ma-chine under Section 227(b) (1)(B). Therefore, the Magistrate Judge recommends that this particular TCPA claim against TMC (and Defendant Fred Accuardi) remain (doc. 91 at 18, 33, 34). Defendants Fred Accuardi and TMC and Plaintiff have filed objections to the Report and Recommendation (see docs. 96 and 97, respectively). Further, Plaintiff has filed a memorandum in opposition to Defendants Fred Accuardi and TMC’s objection (doc. 102), to which they have replied (doc. 103). ¶ . . .The instant motion asks not only for a stay, but also for a referral to the FCC—under the primary jurisdiction doctrine—of the question presented in Plaintiff’s Petition. See Charvat v. EchoStar Satellite, LLC, 630 F.3d 459 (6th Cir.2010). Such a referral is indicated when a ruling by the agency will advance regulatory uniformity, or when the issue either falls within the agency’s discretion or would benefit from technical or policy considerations within the agency’s expertise. Id. at 466 (citations and quotations omitted). We agree—on all three counts—that this is such a case. The theory upon which Plaintiff proceeds appears to be one of first impression and wide-reaching consequence. In essence, he is asking this Court to read Sections 227(b) and (c) as if the language appearing within 16 C.F.R. § 310.03(b) FN8 is implicit. We believe that the FCC, the principal agency dedicated to policing the telecommunications industry, is in the best position to opine first on this topic. Defendants’ arguments to the contrary are unavailing. To state that the Commission already has ruled on this issue in FCC 13–54 is simply inaccurate. Plaintiff does not allege that the Accuardi Defendants are sellers. Nor do they present themselves as such. Rather, Plaintiff alleges that—like sellers—the Accuardi Defendants benefit financially from telemarketing calls, both legal and illegal, through the “dip” fees they collect. He further alleges that this financial benefit is not happenstance, but instead the product of an intentional abuse of the statutory scheme in place to protect consumers. Only through voluminous calling, he avers, will either party turn a substantial profit. This issue plainly does not require the technical expertise of the Commission, but it very obviously presents a policy consideration of major proportion. Moreover, if the Sixth Circuit, the only circuit court of appeals by which we are bound, concluded—in EchoStar—that a referral was appropriate concerning the vicarious liability of sellers, it follows that it would make the same choice with regard to CNAM–MS providers and CLECs. We make no predictions whether, as Defendants intimate, the Commission will be more “sympathetic” to Plaintiff (see doc. 117 at 7–8). However, in advance of this Court ruling on Defendants’ motion to dismiss, we think it proper to “appeal” to the Commission’s expertise so as to inform our opinion, but not bind our decision, on this question.