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Katz v. Liberty Power Corp., LLC

United States District Court, D. Massachusetts

September 24, 2019

SAMUEL KATZ and LYNNE RHODES, individually, and on behalf of all others similarly situated, Plaintiffs,
v.
LIBERTY POWER CORP., LLC and LIBERTY POWER HOLDINGS, LLC, Defendants.

          MEMORANDUM AND ORDER ON DEFENDANTS’ MOTION TO DISMISS AND MOTION FOR SUMMARY JUDGMENT

          ALLISON D. BURROUGHS U.S. DISTRICT JUDGE.

         In this putative class action, Samuel Katz (“Mr. Katz”) and Lynne Rhodes (“Ms. Rhodes” and together with Mr. Katz, “Plaintiffs”) allege that Liberty Power Corp., LLC and Liberty Power Holdings, LLC (together, “Liberty Power”) or their agents placed calls in violation of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. §§ 227 et seq.[1] They bring claims on behalf of four putative classes and claim that Liberty Power violated the TCPA by placing robocalls to cell phones, making telemarketing calls that used an artificial or prerecorded voice, calling numbers that were registered on the national Do Not Call Registry, and failing to maintain and respect an internal do-not-call list. [ECF No. 109 (“Second Amended Complaint” or “SAC”) ¶¶ 116–49]. Additionally, Plaintiffs allege that Liberty Power is engaged in actual and constructive fraudulent transfers in violation of Florida’s Uniform Fraudulent Transfer Act (the “UFTA”), Fla. Stat. § 726.105. [SAC ¶¶ 150–67].

         Presently before the Court are Liberty Power’s motion to dismiss the Second Amended Complaint [ECF No. 118] and its motion for summary judgment [ECF No. 163]. For the reasons explained herein, the motion to dismiss [ECF No. 118] is GRANTED in part and DENIED in part, and the motion for summary judgment [ECF No. 163] is DENIED.

         I. BACKGROUND

         A. Procedural History

         Mr. Katz filed this lawsuit on March 16, 2018. [ECF No. 1]. On June 25, 2018, Liberty Power filed its answer to the initial complaint together with a third-party complaint against its vendor, Mezzi Marketing LLC. [ECF No. 28]. Plaintiffs filed an amended complaint on July 16, 2018, and the operative Second Amended Complaint on November 14, 2018. [ECF Nos. 34, 109]. On February 27, 2019, the Court granted Liberty Power’s request to bifurcate discovery and stayed class discovery pending any summary judgment motion on facts specific to the named Plaintiffs. [ECF No. 125]. On April 11, 2019, the Court clarified that its bifurcation order did not require discovery or permit summary judgment motions associated with Liberty Power’s overall implementation of its do-not-call policies or issues concerning the relationship between Liberty Power and its vendors. [ECF No. 135].

         Liberty Power filed the instant motion to dismiss on January 9, 2019. [ECF No. 118]. Plaintiffs opposed the motion to dismiss on February 13, 2019, [ECF No. 124], and Liberty Power filed a reply on March 15, 2019, [ECF No. 130]. Because Liberty Power’s motion to dismiss argues that the TCPA is unconstitutional, on May 9, 2019, the Government intervened in this lawsuit and filed a brief arguing that the TCPA is constitutional. [ECF Nos. 141, 143, 144]. On June 21, 2019, Liberty Power and Plaintiffs responded to the Government’s brief. [ECF Nos. 166, 167].

         Liberty Power filed the instant motion for summary judgment on June 21, 2019. [ECF No. 163]. Its primary argument for summary judgment is that Plaintiffs lack standing to pursue their claims. On July 12, 2019, Plaintiffs opposed the motion for summary judgment, and on August 1, 2019, Liberty Power filed a reply. [ECF Nos. 175, 184]. On September 3, 2019, Liberty Power filed a notice of supplemental authority. [ECF No. 194].

         B. The TCPA and Plaintiffs’ Claims

         “Congress passed the TCPA in 1991, prompted by voluminous consumer complaints about abuses of telephone technology.” Physician’s Healthsource, Inc. v. Vertex Pharm. Inc., 247 F.Supp. 3d 138, 147 (D. Mass. 2017) (quotation marks and citation omitted). In pertinent part, the TCPA provides that it is unlawful:

to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system [(“ATDS”)] or an artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone service . . . or any service for which the called party is charged for the call, unless such call is made solely to collect a debt owed to or guaranteed by the United States; [or]
to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes, is made solely pursuant to the collection of a debt owed to or guaranteed by the United States, or is exempted by rule or order by the Commission under paragraph (2)(B).

47 U.S.C. § 227(b)(1). The TCPA provides a private right of action to remedy violations of those provisions and allows claims for actual damages or $500 in statutory damages per violation. Id. § 227(b)(3).

         Additionally, pursuant to provisions of the TCPA the Federal Communication Commission (“FCC”) created a national Do Not Call Registry and promulgated regulations requiring internal do-not-call lists. See id. § 227(c); 47 C.F.R. § 64.1200. The TCPA contains a second cause of action for persons who receive “more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the” FCC’s Do Not Call Registry regulations. 47 U.S.C. § 227(c)(5).

         Plaintiffs bring their claim on behalf of each of the following four putative nationwide classes:

Robocall Class: All persons in the United States who received one or more telemarketing calls to their wireless telephone numbers by or on behalf of Liberty Power, that were made using an autodialer or an artificial or prerecorded voice, from March 16, 2014 through the date the Court certifies the class.
Residential Class: All persons in the United States who received one or more telemarketing calls to their residential (wireless or landline) telephone numbers by or on behalf of Liberty Power, that were made using an artificial or prerecorded voice, from March 16, 2014 through the date the Court certifies the class.
National Do Not Call Class (“NDNC Class”): All persons in the United States whose residential (wireless or landline) telephone number was registered with the national Do-Not-Call registry for at least thirty days prior to receiving at least two telemarketing calls by or on behalf of Liberty Power to such number within any 12-month period at any time from March 16, 2014 through the date the Court certifies the class.
Internal Do Not Call Class (“IDNC Class”): All persons in the United States who received at least two telemarketing calls to their residential (wireless or landline) telephone number by or on behalf of Liberty Power within any 12-month period at any time from March 16, 2014 through the date the Court certifies the class.

[SAC ¶ 106]. Ms. Rhodes is the sole named representative for the Robocall Class, and both Ms. Rhodes and Mr. Katz purport to represent the Residential, NDNC, and IDNC Classes. Plaintiffs claim that Liberty Power or its agents: (1) called Robocall Class members in violation of the TCPA’s prohibition on using an ATDS or with an artificial or prerecorded voice in violation of 47 U.S.C. § 227(b)(1)(A)(iii) (“Count I”); (2) called Residential Class members using an artificial or prerecorded voice in violation of 47 U.S.C. § 227(b)(1)(B) (“Count II”); (3) called NDNC Class members’ registered Do Not Call Registry phone numbers with impermissible frequency in violation of 47 C.F.R. § 64.1200(c)(2) (“Count III”); and (4) placed telemarketing calls to IDNC Class members without proper internal do not call list procedures in violation of 47 C.F.R. § 64.1200(d) (“Count IV”). [SAC ¶¶ 116–49]. The Second Amended Complaint also asserts claims for actual fraudulent transfers (“Count V”) and constructive fraudulent transfers (“Count VI”) in violation of the UFTA, Fla. Stat. § 726.105. [SAC ¶¶ 150–67].

         C. Factual Summary

         This summary accepts the well-pled, class-wide allegations in the Second Amended Complaint as true. Because facts related to the named Plaintiffs and the allegedly impermissible calls they received have been the subject of discovery, those facts are drawn from Liberty Power’s statement of material facts, [ECF No. 176-22 at 11–17 (“DSOFR”), 18–42 (“DSOFK”)], [2] and Plaintiffs’ statement of material facts, [ECF No. 187-10 (“PSOF”)]. The Court draws all justifiable inferences in favor of Plaintiffs as the non-movants. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

         1. Liberty Power

         Liberty Power Corp., LLC and Liberty Power Holdings, LLC are Delaware entities with their principal place of business in Florida. [SAC ¶¶ 5–6]. Among other businesses, Liberty Power is a retail electric provider to Massachusetts residents. [SAC ¶ 8]. It contracts with customers to fulfill their electric needs, makes purchases from utilities that provide the electricity that it sells, and maintains reliable electric service for its customers. [SAC ¶ 9]. Liberty Power uses aggressive, outbound telemarketing campaigns, including pre-recorded or artificial voices to solicit potential residential customers. [SAC ¶¶ 23–24]. Potential customers are called based on their presence on “lead lists” that Liberty Power provides to its agents. [SAC ¶ 34]. The calls ask customers “to press 1 to save on their electric bills, ” and potential customers who press 1 are then connected to an agent. See [SAC ¶ 25]. Although Liberty Power exercises significant control over the manner of its agents’ telemarketing campaigns, the Second Amended Complaint alleges that its agents fail to obtain consent from consumers before placing unwanted calls that use prerecorded or artificial voices and make repeated calls to potential consumers, like Plaintiffs, whose telephone numbers are listed on the National Do Not Call Registry. [PSOF ¶¶ 1, 4, 22; SAC ¶¶ 28, 33, 45–52].

         2. Mr. Katz

         At the times relevant to this lawsuit, Mr. Katz was a resident of Bellingham, Massachusetts. [SAC ¶ 2]. Mr. Katz, a frequent litigant in TCPA cases, closely tracks the telemarketing calls that he receives. See [DSOFK ¶¶ 27, 31]. He has sent at least twenty-five TCPA claim demand letters and filed at least nine TCPA lawsuits. [DSOFK ¶¶ 30–31]. When Liberty Power’s agents placed the calls at issue here to Mr. Katz, he had four “residential” telephone numbers: a Google Voice number, his cell phone number, a landline for emergencies, and a second landline for business. [DSOFK ¶ 27; PSOF ¶ 44].

         In September and October of 2016, Mr. Katz received approximately thirteen artificial or prerecorded voice calls from Liberty Power’s agents on the residential landline that he maintained for emergencies. [PSOF ¶ 20; see SAC ¶ 57].[3] Mr. Katz’s landline phone was muted, but the landline telephone forwarded incoming calls to his Google Voice number, which then forwarded them to his cell phone. [PSOF ¶ 21]. Although the landline phone at Mr. Katz’s home did not ring, Mr. Katz’s cell phone did. [PSOF ¶¶ 23, 27]. On at least one occasion, one of Liberty Power’s agents, Mezzi Marketing, used a “spoofed” number to call Mr Katz, which Mr. Katz claims helped Liberty Power conceal the improper nature of the calls being made on its behalf. [PSOF ¶ 32].[4] All of Mr. Katz’s phone numbers were registered on the Do Not Call Registry. [PSOF ¶ 22].

         3. Ms. Rhodes

         In 2016 and 2018, Liberty Power’s agents placed several calls to Ms. Rhodes’ cell phone, which was registered on the Do Not Call Registry, and at least one of those calls used a prerecorded voice. [PSOF ¶¶ 1–2]. In late 2017, Ms. Rhodes also answered numerous calls on the landline at her father’s residence, which she had helped her father, Scoba Rhodes (“Mr. Rhodes”), register on the Do Not Call Registry. [PSOF ¶¶ 4, 15]. Ms. Rhodes answered several of those calls after having moved back in with Mr. Rhodes, who was suffering from dementia. [PSOF ¶ 5]. Mr. Rhodes also answered calls from Liberty Power or its agents himself. See [PSOF ¶ 14]. Given Mr. Rhodes’ health problems, Ms. Rhodes was concerned that the callers were trying to take advantage of him. [PSOF ¶¶ 7, 10]. The calls were relentless; for example, in November 2017 Liberty Power’s agents called Mr. Rhodes’ landline four to six times per week, and Ms. Rhodes answered most of those calls. [PSOF ¶ 7]. Ms. Rhodes was not officially listed on ...


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