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Inc. v. Casares

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

February 12, 2018

JT'S FRAMES, INC., Plaintiff,
v.
JESSE CASARES, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Robert M Dow Jr.United States District Judge

         Plaintiff JT's Frames, Inc. (“Plaintiff”) brings this proposed class action against Defendants Jesse Casares, Joe Casares, Patricia Bezabaleta a/k/a Patricia Zabeleta, David A. Ozuna, John Medina, Marketech d/b/a Interfax.net, Avigdor Tessler, Jay M. Kamenetsky, and Does 1-10 for alleged violations of the Telephone Consumer Protection Act of 1991 (“TCPA”), as amended by the Junk Fax Prevention Act of 2005 (“JFPA”).[1] In this opinion, the Court will refer to Defendants Marketech Corp. (“Marketech”), Avigdor Tessler (“Tessler”) and Jay M. Kamenetsky (“Kamenetsky”) collectively as “the Marketech Defendants.” Currently before the Court is the Marketech Defendants' motion to dismiss Plaintiff's Second Amended Complaint (“SAC”) for lack of subject matter jurisdiction, lack of personal jurisdiction, and failure to state a claim [46], as well as Plaintiff's motion to take limited jurisdictional discovery [67]. For the reasons explained below, Plaintiff's motion to take limited jurisdictional discovery [67] is granted and the Marketech Defendants' motion to dismiss [46] is denied without prejudice to renewal following limited jurisdictional discovery. This case is set for status hearing on March 6, 2018. The parties are directed to file a proposed schedule for jurisdictional discovery no later than March 1, 2018.

         I. Background

         Plaintiff is an Illinois corporation. Plaintiff alleges on information and belief that Marketech is a Texas corporation; that Tessler is Marketech's President and CEO and a resident of Texas; and that Kamenetsky is Marketech's Vice President of Sales and also a resident of Texas. Plaintiff alleges generally that the Court “has personal jurisdiction over Defendants, ” including the Marketech Defendants, “because Defendants transact business within this judicial district, have made contacts within this judicial district, and have committed tortious acts within this judicial district.” [38] at 3.

         In particular, Plaintiff alleges that between September 20 and October 6, 2015, a fax advertisement (the “Fax”) “was transmitted to Plaintiff's fax number by Defendants utilizing a telephone facsimile machine, computer, or other device.” [38] at 5; see also [38-1] (copy of the Fax). The Fax is an advertisement of a Texas travel agency (the “Travel Agency”) owned and operated by Defendants Jesse Casares, Joe Casares, and Zabeleta (collectively, the “Travel Agency Defendants”) promoting an “END OF SUMMER Super Sale” for a variety of vacation destinations. “The Fax transmitted successfully and a copy of it was printed from Plaintiff's fax machine, using Plaintiff's paper and ink toner.” [38] at 5.

         Plaintiff alleges on information and belief that Marketech is a fax broadcaster and “physically transmitted the Fax to Plaintiff.” [38] at 6. Plaintiff also alleges on information and belief that Marketech “selected Plaintiff's fax number from a database of recipient fax numbers that [it] maintain[s] and use[s]” and that it “actively solicit[s] third party advertisers to compile the[] database.” Id. Plaintiff further alleges on information and belief that Marketech “determined the number and frequency of transmissions for the Fax, ” “created and w[as] responsible for the opt-out notice on the Fax, ” and “handled the opt-out requests for the Fax.” Id. Plaintiff alleges that “[t]he phone number provided on the Fax for removal of fax numbers” is Marketech's number. Id. Plaintiff also alleges on information and belief that Tessler and Kamenetsky “had direct and personal participation in creating the opt-out notice for the Fax, handling the opt-out requests for the Fax, in the decision of sending the Fax, maintaining and using the database of recipient fax numbers to which the Fax was sent, and in determining the number and frequency of transmissions for the Fax.” Id.

         Based on these allegations, Plaintiff alleges a single claim against all Defendants for violation of the JFPA, 47 U.S.C. § 227. Plaintiff alleges that the Fax was unsolicited and that each Defendant had a high degree of involvement in sending the Fax. Plaintiff also alleges that the Fax did not have the opt-out notice that is required to maintain an affirmative defense under the JFPA.

         II. Analysis

         The Marketech Defendants move to dismiss Plaintiff's SAC pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction, Rule 12(b)(2) for lack of personal jurisdiction, and Rule 12(b)(6) for failure to state a claim. The threshold jurisdictional issues must be addressed first. See Leibovitch v. Islamic Republic of Iran, 188 F.Supp.3d 734, 744 (N.D. Ill. 2016). Because “subject-matter jurisdiction generally should be considered before personal jurisdiction, ” the Court will begin its analysis with the Marketech Defendants' Rule 12(b)(1) argument. Central States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 939 n.2 (7th Cir. 2000); see also El-Khader v. Perryman, 264 F.Supp.2d 645, 648 (N.D. Ill. 2003).

         A. Subject Matter Jurisdiction

         Defendants challenge Plaintiff's standing to bring a JFPA claim. A motion to dismiss for lack of standing is a challenge to the court's subject matter jurisdiction under Rule 12(b)(1). See Scanlan v. Eisenberg, 669 F.3d 838, 841 (7th Cir. 2012); Jimenez v. Illinois, 2012 WL 174772, at *2 (N.D. Ill. Jan. 18, 2012); Smith v. GC Services Limited Partnership, 2017 WL 2629476, at *1 (S.D. Ind. June 19, 2017). In considering a motion under Rule 12(b)(1), the Court “accept[s] as true all well-pleaded factual allegations and draw[s] reasonable inferences in favor of the plaintiff[].” Bultasa Buddhist Temple of Chicago v. Nielsen, 878 F.3d 570, 573 (7th Cir. 2017).

         The Marketech Defendants argue that, pursuant to Stoops v. Wells Fargo Bank, N.A., 197 F.Supp.3d 782, 805 (W.D. Pa. 2016), Plaintiff lacks standing to bring this suit because it is a “professional plaintiff” that has been the lead plaintiff in at least four prior TCPA cases. [47] at 14. The Marketech Defendants surmise that “Plaintiff is a junk fax litigation business that happens to sell frames on the side, rather than a frame business that has been unfortunately injured.” Id.

         Stoops does not compel dismissal of Plaintiff's case for lack of subject matter jurisdiction. Most obviously, it is an out-of-circuit district court case that has no precedential value here. Further, it was decided at summary judgment based on undisputed facts in the record, not on a motion to dismiss based on the Marketech Defendants' assumption that Plaintiff must be a professional plaintiff given its participation in other TCPA lawsuits. The district court in Stoops held that a Plaintiff who admittedly purchased cell phones and cell phone minutes for the sole purpose of receiving calls to enable her to file TCPA lawsuits did not suffer an economic “injury in fact” because “a plaintiff ‘cannot manufacture standing by choosing to make expenditures based on hypothetical future harm that is not certainly impending.'” Stoops, 197 F.Supp.2d at 801 (quoting Clapper v. Amnesty Int'l USA, 568 U.S. 398, 402 (2013)). In this case, the Marketech Defendants do not allege, nor provide any evidence that, Plaintiff purchased its fax machine and fax machine supplies simply to receive junk faxes and file JFPA claims. To the contrary, Plaintiff alleges that it received an unsolicited Fax from the Marketech Defendants, which used Plaintiff's fax paper and toner, caused wear and tear on its fax machine, and tied up its fax line. For these reasons, dismissal for lack of subject matter jurisdiction would not be warranted even if Stoops were binding on this Court.

         B. ...


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