United States District Court, N.D. Illinois, Eastern Division
MARSHALL SPIEGEL, individually and on behalf of a class of those similarly situated, Plaintiff,
ENGAGETEL, DENNIS CARLSON, ARASH AKHAVAN, ARG GROUP, WYOMING CORPORATE SERVICES, GERALD PITTS, JOHN DOES 1-10, Defendants.
MEMORANDUM OPINION AND ORDER
B. Gottschall United States District Judge
Marshall Spiegel (“Spiegel”) brings this
class-action lawsuit on behalf of himself and others who have
allegedly received unsolicited telephone calls from numerous
defendants, including EngageTel, Inc.
(“EngageTel”) and Dennis Carlson
“Defendants”), despite being on the National
“Do Not Call” Registry. Spiegel maintains that the
telephone calls at issue were made in violation of the
Telephone Consumer Protection Act and the Illinois Consumer
Fraud and Deceptive Business Practices Act, and that they
caused him both actual damages stemming from the need to
invest in call-blocking equipment, and emotional damages
stemming from aggravation and irritation associated with
receiving unwanted phone calls. The Defendants have moved for
judgment on the pleadings pursuant to Federal Rule of Civil
Procedure 12(c), asserting that Spiegel has failed to plead
any facts that support his claim for relief. For the reasons
set forth below, we deny the Defendants' motion in part
and grant it in part.
47-page Second Amended Complaint (“SAC”)
describes how the Defendants took part in a scheme to flood
residential phone lines with thousands of “junk”
calls containing fraudulent Caller ID information for
purposes of scam marketing and to collect so-called
“dip fees” associated with the calls. The most
relevant allegations, along with the source of the
information underlying them, if any, are set forth as
. EngageTel is a shell corporation owned by
Carlson. Carlson purchased EngageTel from a “company
notorious for setting up business entity fronts, shell
corporations, and shelf corporations.” (SAC at ¶
6). The source of this information is a Reuter's
news agency article dated June 28, 2011 about Wyoming
Corporate Services, the company Spiegel described as
“notorious.” (Id. at ¶ 7).
. Defendant ARG Group (“ARG”)
and/or its agent/representative Arash Akhavan
(“Akhaven”) “engaged” EngageTel for
Caller ID spoofing services. (Id. at ¶¶
10-11). AGR markets energy services by telephone and has been
sued several times for alleged violations under the Telephone
Consumer Protection Act. (Id. at ¶ 52).
. Spiegel, who is on the National Do Not
Call Registry, received numerous telemarketing calls made by
or on behalf of ARG and/or Akhaven, as facilitated by
EngageTel-who provided “platform services” that
rendered it intrinsic to the generation of the calls.
(Id. at ¶¶ 24-31). These calls provided
misleading identification information by providing names such
as “customer servic[e]” and “energy
service” but not “ARG” or “Akhaven,
” and were intended to sell scam energy services.
(Id. at ¶¶ 31-32). Spiegel provides as a
source for some of this information the internet website
“800notes.com, ” which is a free reverse
phone number lookup site. (Id. . at ¶ 33).
. Spiegel received numerous other phone
calls generated by EngageTel and other defendants by means of
an automatic dialer and/or recorded or artificial voice,
despite having a call-blocking system in place. (Id.
at ¶¶ 33, 43-45). Spiegel alleges this information
based on his information and belief.
. EngageTel's business is the provision
of virtual telephone numbers for purposes of misrepresenting
one's identity on Caller ID; as such, EngageTel traffics
in “spoofing” services. (Id. at
¶¶ 59-66). EngageTel is not the underlying carrier
for the telephone calls for which it provides Caller ID
services. (Id. . at ¶¶ 61-62).
. EngageTel employs a system called
“Caller ID Name” (“CNAM”) that allows
its clients (here, AGR and/or Akhaven) to customize their
CNAM information so as to provide fraudulent or deceptive
identification information and thereby leading consumers to
believe that they are getting a locally-placed phone call or
one that comes from originators other than the true callers.
(Id. at ¶¶ 67-77). Spiegel indicates that
he derived pertinent information from “[p]re-suit
investigation on internet sites, ” including
800notes.com. (Id. at ¶ 78).
. When a consumer receives a call from an
EngageTel number, the consumer can call the number back, at
which time he is connected to EngageTel and given the
opportunity via a recording to be placed on a Do Not Call
list; however, on Spiegel's information and belief, the
consumer is not actually placed on a Do Not Call list but
instead is providing her phone number to be
“harvested” for resale. (Id. at
. EngageTel receives a small “dip
fee” associated with each CNAM query. If the queried
number is not in the phone carrier's database, the query
is routed to the appropriate CNAM database, such as
EngageTel's, for retrieval of the calling party's
customer name. When this situation occurs, the recipient of
the CNAM inquiry receives the dip fee. Because the individual
dip fee is so small, and because dip fees are generated only
on subscribers of landline caller-ID services, EngageTel
relies on its clients to generate millions of phone calls
using EngageTel numbers. Spiegel does not identify the source
of this information, but the court notes that at least some
of the information appears to be industry practice.
(Id. at ¶¶ 89-100).
. EngageTel does not charge its clients for
spoofing services because it expects its clients to generate
dip fees through the placement of millions of phone calls.
EngageTel is actively and constructively aware that its
services are being used unlawfully because there is no
legitimate purpose on the part of any EngageTel client to
make a high volume of sales calls if not for purposes related
to telemarking and illegal data mining, and because high
volume call placement can only be done with the use of an
automatic telephone dialing system (“ATDS”).
(Id. at ¶¶ 100-102).
now move for a judgment on the pleadings, claiming that none
of the four counts asserted against them (Count II: violation
of the Telephone Consumer Protection Act; Count III:
violation of the Illinois Consumer Fraud and Deceptive
Business Practices Act; Count IV: unfair practice; and Count
V: unjust enrichment) state a claim upon which relief may be
granted. Defendants also argue that Spiegel has failed to set
forth facts supporting claims of vicarious liability under
the TCPA or facts sufficient to pierce EngageTel's
corporate veil. Defendants maintain that Spiegel's
allegations are “full of sound and fury” yet
signify no wrongdoing by Defendants. The court addresses each
of these arguments in turn.
STANDARD OF REVIEW
12(c) motion for judgment on the pleadings is “designed
to provide a means of disposing of cases when the material
facts are not in dispute and a judgment on the merits can be
achieved by focusing on the content of the pleadings and any
facts of which the court will take judicial notice.”
Illinois Tool Works, Inc. v. Home Indem. Co., 998
F.Supp. 868, 870 (N.D. Ill. 1998) (citing 5A Charles A.
Wright and Arthur R. Miller, Federal Practice and
Procedure § 1367 (1990) (now 5C Fed. Prac. &
Proc. Civ. § 1367 (3d ed.)). Stated somewhat
differently, “[t]he motion for a judgment on the
pleadings only has utility when all material allegations of
fact are admitted or not controverted in the pleadings and
only questions of law remain to be decided by the district
court.” 5C Fed. Prac. & Proc. Civ. § 1367 (3d
ed.). In evaluating a Rule 12(c) motion, the court employs
the same standards that apply when reviewing a motion to
dismiss for failure to state a claim under Rule 12(b)(6).
Buchanan-Moore v. Cnty. of Milwaukee, 570 F.3d 824,
827 (7th Cir. 2009). Thus, the court must view the facts
alleged in the complaint “in the light most favorable
to the nonmoving party and will grant the motion only if it
appears beyond doubt that the plaintiff cannot prove any
facts that would support her claim for relief. Id.
(internal citations and quotations omitted). Moreover, the
complaint's factual allegations need only “be
enough to raise a right to relief above the speculative
level.” Pisciotta v. Old Nat'l Bancorp,
499 F.3d 629, 633 (7th Cir. 2007) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation
marks omitted)). The court makes the assumption that all the
allegations in the complaint are true, even if they are
“doubtful in fact.” Twombly, 550 U.S. at
court decides a Rule 12(c) motion for judgment on the
pleadings based upon its review of the pleadings alone.
N. Ind. Gun & Outdoor Shows, Inc. v. City of S.
Bend, 163 F.3d 449, 452 (7th Cir. 1998). The pleadings
include the complaint, the answer, and any documents attached
as exhibits, such as affidavits, letters, and contracts.
Id. at 452-53; see also Fed. R. Civ. P.
10(c). The court may take judicial notice of matters of
public record. U.S. v. Wood, 925 F.2d 1580, 1582
(7th Cir. 1991).
Count II: The Telephone Consumer Protection Act (TCPA), 47