Career Counseling, Inc. v. Amerifactors Fin. Grp.

Career Counseling, Inc. d/b/a Snelling Staffing Services, a South Carolina corporation,individually and as the representative of a class of similarly situated persons, Plaintiff, v. Amerifactors Financial Group, LLC, and John Does 1-5, Defendants.

Civil Action No. 3:16-cv-03013-JMC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA COLUMBIA DIVISION

April 12, 2021

ORDER AND OPINION

Plaintiff Career Counseling, Inc. d/b/a Snelling Staffing Services, on behalf of itself and all others similarly situated, filed the instant putative class action seeking damages and injunctive relief from Defendants Amerifactors Financial Group, LLC ("AFGL") and John Does 1-5 (collectively "Defendants") for alleged violations of the Telephone Consumer Protection Act ("TCPA") of 1991, as amended by the Junk Fax Prevention Act of 2005 ("JFPA"), 47 U.S.C. § 227, and the regulations promulgated under the TCPA by the United States Federal Communications Commission ("FCC"). (ECF No. 70.)

This matter is before the court on Career Counseling's Renewed Motion to Reconsider pursuant to Rule 54(b) of the Federal Rules of Civil Procedure (ECF No. 189). Specifically, Career Counseling seeks reconsideration of the court's Order (ECF No. 177) entered on January 12, 2021 (the "January Order"), denying Career Counseling's Motion for Entry of Court Order to Pursue Immediate Discovery Compliance from Third-Party Phone Carriers (ECF No. 172), and an Order (ECF No. 187) entered on February 10, 2021 (the "February Order"), denying without prejudice the Motion to Reconsider the January Order. (ECF No. 178.) AFGL opposes Career Counseling's Motion to Dismiss in its entirety. (ECF No. 192.) For the reasons set forth below, the court GRANTS Career Counseling's Renewed Motion to Reconsider. (ECF No. 189.)

I. RELEVANT BACKGROUND TO PENDING MOTIONS

Career Counseling alleges that "on or about June 28, 2016, Defendants transmitted by telephone facsimile machine an unsolicited facsimile to Plaintiff [Career Counseling]'s fax number of 803-359-3008" that stated in relevant part as follows:

AMERIFACTORS

--FUNDING BUSINESS IS OUR BUSINESS--

Phone: (407)566-1150

Fax: (407)566-1250

fsudovsky@amerifactors.com

Fax Cover

To: Gina McCuen

From: Frank Sudovsky

Fax: 8033593008

Date: 6/28/16

Re: Financing for SNELLING STAFFING SVC

AmeriFactors is ready to help your company with your financing needs. We have been in business since 1990, and have funded over $5 Billion to U.S. businesses of all sizes.

Our application process is fast and easy, with 98% of all applicants approved. Bankruptcy and bad credit are okay. The services we offer are not a loan and there is nothing to pay back.

If you would like to learn more, call me at the number below, or fill out the form and fax it back to me at 407-557-3611.

Sincerely,

Call me today and save $600 off of your closing costs!

407-566-1150

Frank Sudovsky

Senior Vice President of Business Development

407.566.1150

fsudovsky@amerifactors.comFill out this form and fax to: (407) 557-3611

Name:__________ Company:__________

Email:__________ Phone:__________

Amerifactors is a wholly owned subsidiary of Gulf Coast Bank,¹ Member FDIC

If you would like to be removed from our contact list, just dial 888-979-1777 and enter fax #. Thank you.

(ECF Nos. 70 at 3 ¶ 13, 70-1 at 2.) Career Counseling further alleges that "Defendants faxed the same and other unsolicited facsimiles without [permission or] the required opt-out language to Plaintiff and more than 25 other recipients." (ECF No. 70 at 4 ¶¶ 15, 16.)

On September 2, 2016, Career Counseling filed a putative Class Action Complaint in this court alleging violation of the TCPA. (ECF No. 1 at 8 ¶ 27-13 ¶ 36.) On October 28, 2016, AFGL filed a Motion to Dismiss. (ECF No. 29.) After the parties responded and replied to the Motion to Dismiss (ECF Nos. 43 & 47), the court entered an Order that granted AFGL's Motion to Dismiss pursuant to Rule 12(b)(1) and dismissed the Class Action Complaint without prejudice. (ECF No. 61 at 10.) After receiving leave from the court (see ECF No. 67), Career Counseling filed a First Amended Class Action Complaint on November 28, 2017, alleging revised class claims for violation of the TCPA. (See ECF No. 70.) AFGL then filed a Motion to Dismiss (ECF No. 72) on December 21, 2017, and a Motion to Stay Litigation Pending Resolution of Petition Before the FCC (ECF No. 76) on February 2, 2018.² On September 28, 2018, the court granted the stay, but denied the Motion to Dismiss with leave to refile. (ECF No. 88.) The court subsequently extendedthe stay twice. (ECF Nos. 92, 96.)

In response to the petition by AFGL asking the FCC "to clarify that faxes sent to 'online fax services' are not faxes sent to 'telephone facsimile machines,' the Consumer and Government Affairs Bureau³ issued a declaratory ruling on December 9, 2019, finding that an online fax service that receives faxes "sent as email over the Internet" is not protected by the TCPA.⁴ (See ECF No. 98-1 at 1, 4-5.) The court lifted the stay on January 8, 2020, but stayed the case again on April 16, 2020, after being informed by AFGL that it had sent a Notice of Constitutional Challenge (ECF No. 120) to the Attorney General of the United States pursuant to Rule 5.1(a) drawing into question the constitutionality of the TCPA, as amended by the JFPA. On May 18, 2020, the Government filed a response to AFGL's Notice of Constitutional Challenge asserting that "intervention [wa]s premature prior to Defendants' filing[] a motion to dismiss on constitutional grounds." (ECF No.126 at 2.)

On July 15, 2020, AFGL filed a Motion to Dismiss the First Amended [Class Action] Complaint. (ECF No. 137.) After considering the parties extensive briefing (see ECF Nos. 139, 147, 164, 165, 166, 169, 170), the court denied AFGL's Motion to Dismiss on December 22, 2020. (ECF No. 171.) Thereafter, in response to Career Counseling's Motion for Entry of Court Order to Pursue Immediate Discovery Compliance from Third-Party Phone Carriers pursuant to Rule 45 of the Federal Rules of Civil Procedure (ECF No. 172), the court made the following observations in the January Order:

This matter is before the court pursuant to Plaintiff Career Counseling Inc.'s Motion for Entry of Court Order to Pursue Immediate Discovery Compliance from Third-Party Phone Carriers pursuant to Rule 45 of the Federal Rules of Civil Procedure. (ECF No. 172.) Specifically, Career Counseling asserts that it needs a court order issued pursuant to 47 U.S.C. § 551(c)(2) to get specified phone carriers to respond to subpoenas requesting information on prospective class members. (Id. at 2 ¶¶ 4, 5.) Defendant Amerifactors Financial Group, LLC opposes Career Counseling's Motion arguing that the requested subpoenas "impose a heavy burden," "threaten to delay resolution of this case," and are defective because Career Counseling failed to provide the notice required by Rule 45. (ECF No. 176 at 1, 9, 11.) Upon its review, the court observes that § 551 of the Cable Communications Policy Act of 1984 provides that only a "governmental entity may obtain personally identifiable information concerning a cable subscriber pursuant to a court order." 47 U.S.C. § 551(h); see also id. at § 551(c)(2)(B) ("A cable operator may disclose such information if the disclosure is—subject to subsection (h), made pursuant to a court order authorizing such disclosure, if the subscriber is notified of such order by the person to whom the order is directed; . . . ."). In this regard, because Career Counseling is not a governmental entity, the court finds that it lacks authority to issue the order requested by Career Counseling to enforce its civil subpoenas. See Merrifield v. Gussman, 296 F. Supp. 3d 362, 366 (D. Mass. 2017) ("There is no mention or allowance, however, under the Cable Communications Policy Act for a court to issue disclosure in response to a civil subpoena."); Interscope Records v. Does 1-7, 494 F. Supp. 2d 388, 390 (E.D. Va. 2007) ("Because plaintiffs are not government entities, the CCPA does not authorize their ex parte subpoena."). Accordingly, the court DENIES Career Counseling's Motion for Entry of Court Order to Pursue Immediate Discovery Compliance from Third-Party Phone Carriers. (ECF No. 172.)

(ECF No. 177.) Then, in response to Career Counseling's Motion to Reconsider (ECF No. 178), the court entered the February Order, observing as follows:

TEXT ORDER: This matter is before the court on Plaintiff's Rule 54(b) Motion to Reconsider (ECF No. 178) the court's ORDER entered on January 12, 2021 (ECF No. 177) (the "January Order") pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. In the January Order, the court denied Plaintiff's Motion for Entry of Court Order to Pursue Immediate Discovery Compliance from Third-Party Phone Carriers (ECF No. 172) finding that because Plaintiff was not a governmental entity, the court lacked authority under 47 U.S.C. § 551(c)(2)(B) to issue an order requiring compliance with Plaintiff's subpoenas. (ECF No. 177.) In its Motion, Plaintiff argues that the court's reading of § 551 "is incorrect" and "results in manifest injustice to Plaintiff as it restricts Plaintiff's ability to obtain evidence." (ECF No. 178-1 at 7, 8.) In this regard, Plaintiff asserts that § 551(c)(2)(B) allows disclosure of subscriber information to a nongovernmental entity if the disclosure is made pursuant to a court order authorizing the disclosure. (ECF No. 178-1 at 8 (citing, e.g., CSC Holdings, Inc. v. Redisi, 309 F.3d 988, 996 (7th Cir. 2002); Fitch v. Doe, 869 A.2d 722, 728-29 (Me. 2005)).) Defendant opposes the Motion observing that the court "correctly denied Plaintiff's request to compel third-party phone carriers to respond to Plaintiff's Subpoenas and there is no basis for the Court to reconsider this ruling." (ECF No. 186 at 1.) Additionally, Defendant argues that Plaintiff's request is overly burdensome and not proportional to the needs of the case. (Id. at 2.) "Although Rule

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