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Mauer v. American Intercontinental University, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 7, 2016

AMY MAUER, individually and on behalf of all others similarly situated, Plaintiff,
v.
AMERICAN INTERCONTINENTAL UNIVERSITY, INC., AIU ONLINE, LLC, EVEREST UNIVERSITY, EVEREST UNIVERSITY ONLINE, ZENITH EDUCATION GROUP, INC., ECMC GROUP, INC., and JOHN DOE CORPORATION, Defendants.

          OPINION AND ORDER

          Sara L. Ellis, Judge

         Plaintiff Amy Mauer brings a class action complaint against Defendants American Intercontinental University, Inc. and AIU Online, LLC (collectively, "AIU"); Everest University, Everest University Online, Zenith Education Group, Inc., and ECMC Group, Inc. (collectively, "Everest"); and John Doe Corporation ("John Doe"). Mauer asserts that AIU, Everest, and John Doe violated the Telephone Consumer Protection Act (the "TCPA"), 47 U.S.C. § 227 et seq., by calling her cellular telephone using an automatic telephone dialing system ("ATDS") without her express consent. AIU and Everest have filed motions to dismiss, arguing that Mauer has not adequately tied them to the call she received or adequately alleged that the call she received came from an ATDS.[1]The Court denies their motions because, based on the facts alleged in Mauer's amended class action complaint, she has sufficiently pleaded a basis to hold AIU and Everest vicariously liable and that John Doe utilized an ATDS while calling her cellular phone.

         BACKGROUND[2]

         On March 17, 2015, around 6:35 p.m., Mauer received a call on her cellular phone from John Doe, a telemarketing agency, through an ATDS using the number (603) 913-2771. When Mauer answered the phone call, she observed a "noticeable pause" before a voice came on the other line. Doc. 18 ¶ 42. The person claimed to be a representative of the U.S. Education Network and tried to get Mauer's contact information to help her "further her education." Id. Mauer attempted to get more information from the representative, but when the representative did not provide any additional information, Mauer hung up.

         Shortly after Mauer received the call on March 17, 2015, as part of her counsel's investigation, a call was placed to the same number that called Mauer, (603) 913-2771. The representative that answered the call offered educational services to the caller. The caller provided the representative with a telephone number and email address. Within a matter of minutes, AIU and Everest called the given telephone number and sent information to the given email address. AIU and Everest both provide career education services around the country. Mauer never provided express written consent to be contacted on her cell phone by or on behalf of John Doe, AIU, or Everest.

         LEGAL STANDARD

         A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded facts in the plaintiffs complaint and draws all reasonable inferences from those facts in the plaintiffs favor. Anchor Bank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Bell Ail. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678.

         ANALYSIS

         Under the TCP A, a plaintiff must allege the following four elements to state a cause of action: (1) a call was made, (2) the caller used ATDS or artificial or prerecorded voice, (3) the call was made to a cellular telephone number, and (4) the recipient of the call did not give the caller express written consent to make the call. 47 U.S.C. § 227(b)(l)(A)(iii); Oliver v. DirecTV, LLC, No. 14-cv-7794, 2015 WL 1727251, at *2 (N.D. Ill. Apr. 13, 2015). Under certain circumstances, parties that do not initiate calls may nonetheless be held vicariously liable for TCPA violations committed by third-party telemarketers "under a broad range of agency principles, including not only formal agency, but also principles of apparent authority and ratification." In re Dish Network, LLC, 28 FCC Red. 6574, 6584 (2013). Here, ARJ and Everest do not dispute that Mauer has sufficiently pleaded a call was made to her cellular telephone without her express written consent. However, they challenge (1) whether she has adequately pleaded a basis to hold them vicariously liable for the call, either under a classic agency or ratification theory;[3] and (2) whether she has adequately pleaded that the John Doe representative used ATDS in making the call. The Court will address these issues in turn.

         I. Vicarious Liability

         Mauer argues that AIU and Everest can be held liable for the call she received based on classic agency and ratification principles. A party may be held vicariously liable for a TCPA violation committed by a third-party telemarketer "under federal common law principles of agency." Id. Agency is "the fiduciary relationship that arises when one person (a 'principal') manifests assent to another person (an 'agent') that the agent shall act on the principal's behalf, and the agent manifests assent or otherwise consents so to act." Restatement (Third) of Agency § 1.01 (2006).[4] Agency is typically a factual issue, with the plaintiff at the pleading stage only required to allege a factual basis that gives rise to an inference of an agency relationship through the use of generalized as opposed to evidentiary facts. Dish Network, 28 FCC Red. 6593 n. 139 ("[N]othing in our ruling requires a consumer to prove at the time of their complaint (rather than reasonably allege) that a call was made on the seller's behalf"); Clarendon Nat'l Ins. Co. v. Medina, 645 F.3d 928, 935 (7th Cir. 2011); Jackson, 2012 WL 2503956, at *2. Further, a plaintiff need not allege facts completely within the defendant's knowledge at the pleading stage. See Oliver, 2015 WL 1727251, at *2. Plaintiffs may obtain evidence of a relationship between a vendor and telemarketer through discovery if they do not know the information on their own. Charvat v. Allstate Corp., 29 F.Supp.3d 1147, 1151 (N.D. Ill. 2014) (citing Dish Network, 28 FCC Red. at 6592-93). Thus, at the pleading stage, it is irrelevant that a plaintiff cannot identify the third-party telemarketer, or what arrangement that third party had with the defendant vendors because the defendants, and not the plaintiff, are reasonably expected to know this information. See Id. at 1150-51 (motion to dismiss denied where plaintiff did not identify the third-party telemarketer who made the call or allege the precise relationship the third-party had with the defendant); Jackson, 2012 WL 2509356 at *2 (motion to dismiss denied where it was possible the alleged principal may not have actually had the right to control the alleged agent).[5]

         Under these agency standards, then, Mauer has sufficiently alleged that John Doe acted as Everest's and AIU's agent in placing the call to her cellular phone. As both AIU and Everest argue, the existence of the alleged contract aids but is not sufficient to establish an agency relationship. Chemtool, Inc., 148 F.3d at 745. But Mauer does not base her agency allegations solely on the existence of such a contract. Mauer claims that the representative making the call stated he or she was from the U.S. Education Network and tried to get information from Mauer so that she could "further her education." Doc. 18 ¶ 42. Moreover, immediately following the call, someone affiliated with Mauer placed a call to the same telephone number that called Mauer, receiving an offer of similar education services. Then, having provided the representative with a telephone number and email address, within minutes, AIU and Everest made contact with the individual using the provided telephone number and email address. This detailed chain of events sufficiently ties AIU and Everest to John Doe, the company that called Mauer. See Charvat, 29 F.Supp.3d at 1151 (allegations tying defendant to automated call were sufficient to allow plaintiff to proceed to discovery on issue of vicarious liability).

         But AIU and Everest take issue with several aspects of Mauer's pleading to argue that her agency allegations nonetheless fail. They argue that the subsequent investigatory call has no connection to the call Mauer received from John Doe and that it cannot be used to hold AIU or Everest liable because the information provided during the investigatory call was fabricated. Any claims of fabrication are beyond the scope of the amended complaint and an issue for discovery and summary judgment. Setting that issue aside, Mauer pleads two facts that demonstrate a plausible link between these two calls, allowing her to proceed on her TCPA claim against both AIU and Everest. First, allegedly within a short period of time, the investigatory call was made to the same number from which Mauer received the call from John Doe-(603) 913-2771; the investigator did not call a random number not associated with John Doe. Second, representatives on both calls followed a similar script, purporting to represent a network that furthered education. Although the representative did not identify on whose behalf he or she was working, AIU and Everest offer educational services, making the connection plausible.

         AIU contends that "[t]here are hundreds of education providers in the United States and to suggest that any seller could be acting on behalf of any one (or all) of these education providers when it mentions education services does not comport within common sense." Doc. 41 at 12. Yet, hundreds of education providers in the United States did not call and email the very telephone number and email address provided to the representative by the investigator within minutes of receipt. AIU and Everest did, however, which under the circumstances makes Mauer's claim plausible. Given the short interval of time in which AIU and Everest acted after the investigator provided a John Doe representative with the contact information, and because AIU and Everest worked in the same line of business in which John Doe purported to work, the Court may draw the plausible inference that an agency relationship existed between John Doe on the one hand and AIU and Everest on the other. The fact that AIU and Everest are competitors also does not make Mauer's allegations implausible, as John Doe "may simultaneously be the agent[ ] of multiple principals." Fed. Trade Comm 'n v. Lifewatchlnc, __F.Supp.3d __, 2016 WL 1315063, at *14 (N.D. Ill. Mar. 31, 2016); see also 1-800 Contacts, Inc. v. Lens.com, Inc.,722 F.3d 1229, 1250 ...


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