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Norris v. Global Tel Link Corp.

United States District Court, D. Massachusetts

September 1, 2016

KEVIN T. NORRIS, Plaintiff,
v.
GLOBAL TEL LINK CORPORATION, AON RISK SERVICES SOUTH INC., GOLDMAN SACHS, VERITAS CAPITAL, AMERICAN SECURITIES LLC, and JOHN/JANE DOE, Defendants.

          MEMORANDUM AND ORDER ON MOTIONS TO DISMISS

          Leo T. Sorokin United States District Judge

         Plaintiff Kevin T. Norris (“Norris”), proceeding pro se, sued Global Tel Link Corporation (“GTL”), Aon Risk Services South, Inc. (“ARS”), GS Direct, LLC, [1] Veritas Capital, American Securities LLC, and John/Jane Doe (collectively, the “Defendants”) over various complaints Norris has with the telephone service provided by GTL. Doc. No. 16 at 6-20. The Defendants have moved to dismiss under Rules 12(b)(1), 12(b)(6) and 9(b). Doc. Nos. 21, 22 at 2, 23. For the reasons stated below, the Court ALLOWS the motions with respect to all Counts except Count III against GTL. The motion is DENIED as to Count III against GTL, but the action is stayed pending Norris's pursuit of his claims through the proper administrative channels.

         I. BACKGROUND

         The crux of Norris's complaint is dissatisfaction with the telephone service provided by GTL to individuals incarcerated in state prison. He alleges that the Massachusetts Department of Corrections contracted with GTL to provide telephone access to inmates. Compl. ¶ 8. Norris alleges that his family members, friends, and attorney were charged undisclosed service fees for participating in GTL's “advance pay program.” Id. ¶ 12. He further alleges that GTL altered the system such that inmates were no longer informed of their account balances. Id. ¶ 15. Additionally, according to Norris, “numerous telephone[] calls were … terminated early and malfunctioning.” Id. In the complaint Norris also avers that, following a rate decrease in March 2016, he continued to be charged the higher rates. Id. ¶¶ 23-24. Norris makes several allegations related to fraudulent conduct, including that GTL intentionally prematurely terminated his phone calls and lied about the reasons for termination, charged him for calls he did not make, imposed undisclosed service fees, collected illegal taxes, and failed to inform program participants of their account balances. Id. ¶ 17. GTL also responded to Norris's grievances with fraudulent misrepresentations, according to Norris. Id. ¶ 18.

         Norris asserts seven causes of action against GTL: violation of M.G.L. c. 93A (Count I), fraud (Count II), violation of the Federal Communications Act (“FCA”), 47 U.S.C. § 201 (Count III), and breach of contract (Count IV). In Count V, Norris claims defendant John/Jane Doe engaged in fraudulent misrepresentation and concealment. Norris contends that all defendants are vicariously or jointly liable in Count VI. Finally, Count VII, against GTL and John/Jane Doe, is for unfair methods of competition in violation of 15 U.S.C. § 45.

         II. LEGAL STANDARD

         A complaint will withstand a motion to dismiss under Fed.R.Civ.P. 12(b)(6) only if it contains sufficient factual matter, accepted as true, to “state a claim for relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court must “take all factual allegations as true and . . . draw all reasonable inferences in favor of the plaintiff.” Rodríguez-Ortiz v. Margo Caribe, Inc., 490 F.3d 92, 96 (1st Cir. 2007). The complaint need not contain “detailed factual allegations, ” but it must set forth “more than labels and conclusions, . . . and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. A plaintiff fails to state a claim when he does not proffer “factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.” Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir. 1997) (quoting Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir. 1988)). While the filings of pro se litigants should be liberally construed, see Ahmed v. Rosenblatt, 118 F.3d 886, 890 (1st Cir.1997), pro se litigants are not excused from compliance with procedural rules or substantive law. Id.

         III. DISCUSSION

         A. Counts I, II, and IV - VII are Dismissed Against All Defendants

         Most of the counts contained in Norris's complaint can be disposed of quickly. The first count of Norris's complaint, for violations of Chapter 93A, must be dismissed because he fails to allege that he sent a 30-day demand letter to GTL as required by Section 9(3) of the statute. M.G.L. c. 93A, § 9(3) (“At least thirty days prior to the filing of any such action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any prospective respondent.”); see Kanamaru v. Holyoke Mut. Ins. Co., 72 Mass.App.Ct. 396, 407-08 (2008) (stating that a plaintiff must “plead that he has complied with this requirement as a prerequisite to suit”). Moreover, to the extent that Norris purports to act on behalf of any unnamed plaintiffs, such as his wife and family members, he lacks standing to bring such a claim. He may pursue redress for only his own cognizable injuries. See Pagán v. Calderón, 448 F.3d 16, 27 (1st Cir. 2006) (a plaintiff's claim must be based on his own rights and not those of a third party).

         Norris asserts fraud in both Counts II (against GTL) and IV (against John/Jane Doe). “The elements of fraud are ‘[1] a false representation of material fact, [2] with knowledge of its falsity, [3] for the purpose of inducing the plaintiffs to act on this representation, [4] that the plaintiffs reasonably relied on the representation as true, and [5] that they acted upon it to their damage.'” Commonwealth v. Lucas, 472 Mass. 387, 394 (2015) (alteration in original) (quoting Cumis Ins. Soc'y, Inc. v. BJ's Wholesale Club, Inc., 455 Mass. 458, 471 (2009)). “[T]he procedure for pleading fraud in federal courts in all diversity suits is governed by the special pleading requirements of” Rule 9(b). Hayduk v. Lanna, 775 F.2d 441, 443 (1st Cir. 1985). That rule provides that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). To satisfy the particularity requirement, a plaintiff “is expected to specify the who, what, where, and when of the allegedly false or fraudulent representation.” Alternative Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 29 (1st Cir. 2004). Here, Norris fails to plead his fraud claims with sufficient specificity to withstand a Rule 9(b) challenge. He must allege who perpetrated the alleged fraud, what transpired, and when and where the incidents occurred. Without these details, Norris's fraud claims must be dismissed.

         Norris's claim for breach of contract (Count IV) is also problematic. Norris alleges that the Massachusetts Department of Corrections and GTL entered into a contract, but he does not allege he was a party to the contract or a third party beneficiary of it. “Usually a party lacks standing to sue for breach of contract if he is not a party to the contract or a third party beneficiary of it.” Kerr v. Vince, Civ. Action No. 07-30021-MBB, 2010 WL 1416511, at * 9 (D. Mass. Apr. 1, 2010). Because Norris has not demonstrated that he was a party to or a third-party beneficiary of the contract at issue, Count IV must be dismissed.

         Norris's claim titled “vicarious liability” also fails to pass muster (Count VI). Despite the heading of vicarious liability, the allegations seek to hold all of the Defendants “jointly liable” for the alleged wrongdoing. Compl. ¶¶ 57-59. Norris alleges that GS Direct, Veritas Capital, and American Securities are “jointly liable” due to [their] “ownership and/or one time ownership or majority shareholder.” Id. ¶ 57. A corporation's shareholder, however, is not liable for acts of the corporation. M.G.L. c. 156D, § 6.22(b) (“a shareholder of a corporation shall not be personally liable for the acts . . . of the corporation except that he may become personally liable by reason of his own acts or conduct”). Norris makes no allegations of any acts or conduct by GS Direct, Veritas Capital, or American Securities that would make them liable. In addition, Norris alleges that ARS is jointly liable because it provided insurance coverage to GTL. Compl. ¶ 59. Assuming Norris meant to allege vicarious liability against ARS, the claim fails because GTL, the insured, is not an agent of the insurer, ARS. There is no allegation that ARS controlled GTL's activities, a principle element of an agency relationship. See Bing v. Drexler, 69 Mass.App.Ct. 186, 190 (2007). Without allegations supporting an agency relationship, the underpinning of a claim of vicarious liability, Norris's claim against ARS fails.[2]

         In Count VII, Norris alleges that GTL and John/Jane Doe violated 15 U.S.C. § 45, which deems unlawful “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce.” 15 U.S.C. § 45(a)(1). The Federal Trade Commission is empowered with the statute's enforcement, see id. § 45(2), and there is no private right of action under the statute. Phillips v. Deutsche Bank ...


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