McCurley v. Royal Sea Cruises, Inc.

JOHN MCCURLEY and DAN DEFOREST, individuallyand on behalf of all others similarly situated, Plaintiffs, v. ROYAL SEA CRUISES, INC., Defendant.

Case No. 17-cv-00986-BAS-AGS

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA

January 28, 2021

ORDER:

(1) GRANTING DEFENDANT'S AMENDED MOTION FOR SUMMARY JUDGMENT

(ECF No. 165);

AND

(2) DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

(ECF No. 160)

Plaintiffs bring a Motion for Summary Judgment ("Plaintiffs' MSJ") (ECF No. 160), which Defendant opposes (ECF No. 176) and Plaintiffs reply (ECF No. 181). Defendant brings an Amended Motion for Summary Judgment ("Defendant's MSJ") (ECF No. 165), which Plaintiffs oppose (ECF No. 175) and Defendant replies (ECF No. 183). The Court held oral argument on both motions on January 27, 2021. Based on the papers filed and the oral arguments of the parties, the Court GRANTS Defendant's Motion (ECF No. 165) and DENIES Plaintiffs' Motion. (ECF No. 160).

I. BACKGROUND

Plaintiffs filed a Consolidated Class Action Complaint against Royal Seas Cruises, Inc. ("Royal Seas") alleging violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. §§227 et seq. and California's Invasion of Privacy Act ("CIPA"), Cal. Penal Code §§ 630 et seq. (ECF No. 31.) The Court certified a class with respect to the TCPA only of:

All persons within the United States who received a telephone call (1) from Prospects, DM, Inc. on behalf of Royal Seas Cruises, Inc. (2) on said Class Member's cellular telephone (3) made through the use of any automatic telephone dialing system or an artificial or prerecorded voice, (4) between November 2016 and December 2017, (5) where such calls were placed for the purpose of marketing, (6) to non-customers of Royal Seas Cruises, Inc. at the time of the calls, and (7) whose cellular telephone number is associated in Prospects DM's records with either diabeteshealth.info or www.yourautohealthlifeinsurance.com.

The Court also certified a Transfer Subclass of "[a]ll members of the Class whose call resulted in a transfer to Royal Seas Cruises, Inc." (ECF No. 87.) At Plaintiffs' request, the Court later decertified the class in part and allowed Plaintiffs to proceed solely on the Transfer Subclass. (ECF No. 191.)

Both Plaintiffs and Defendant now bring Motions for Summary Judgment. (ECF Nos. 160, 165.) Both Motions address three of the same issues: (1) whether proof exists that the calls were made using an automatic telephone dialing system ("ATDS") or prerecorded voice; (2) whether Royal Seas Cruises Inc. ("Royal Seas") can be held vicariously liable for the calls placed by Prospect DM ("Prospect"); and (3) whether Royal Seas has any evidence to support its defense that the calls were made with the express consent of all class members.

Defendant's Motion for Summary Judgment also challenges the TCPA as a violation of the constitutional right to free speech and moves for summary judgment on the CIPA claims. These last two arguments can be dispensed with quickly. Since Plaintiffs do not respond to Defendant's Motion for Summary Judgment on the CIPA claims,¹ the Court concludes Plaintiffs have waived this claim and GRANTS Defendant'sMotion for Summary Judgment on this ground. See Hurd v. Terhune, 8 Fed. App'x 676, 677 (9th Cir. 2001) (finding plaintiff waived a claim "by failing to delineate it specifically and explicitly in his opposition to defendant's motion for summary judgment") (citing Whittaker Corp. v. Execuair Corp., 953 F.2d 510, 515 (9th Cir. 1992)).

On the other hand, the Ninth Circuit has clearly held that the TCPA does not violate the First Amendment. Gomez v. Campbell-Ewald Co., 768 F.3d 871, 876 (9th Cir. 2014) (citing Moser v. FCC, 46 F.3d 970, 973-4 (9th Cir. 1995)), aff'd 577 U.S. 153 (2016) as revised (Feb. 9, 2016). Therefore, the Court denies Defendant's Motion on this ground.

The remaining three issues, however, require greater analysis. Ultimately, for the reasons stated below, the Court concludes Plaintiffs fail to elicit any facts supporting their theory of vicarious liability. Thus, the Court denies Plaintiff's Motion (ECF No. 160) and grants Defendant's Motion (ECF No. 165).

II. STATEMENT OF FACTS

The Court laid out the facts of this case in its Order Granting in Part Class Certification. (ECF No. 87.) Since the facts generally remain the same, the Court adopts its Statement of Facts from that order.

Generally, Royal Seas sells vacation packages by calling potential leads. (Joint Statement of Undisputed Facts ("JSUF") ¶ 1, ECF No. 184; Declaration of Jennifer Poole ("Poole Decl.") ¶ 4, Ex. 5 to Def.'s MSJ, ECF No. 165-6.) In November 2016, Prospect and Royal Seas entered into an agreement under which Royal Seas purchased leads from Prospect for possible purchasers of the Royal Seas vacation packages. (JSUF ¶¶ 3-4; Declaration of Joshua Grant ("Grant Decl.") ¶ 7, Ex. 6 to Def.'s MSJ, ECF No. 165-7.) The contract between the two parties delineated that Royal Seas would only pay for leads that were "generated in a TCPA-compliant manner." (Grant Decl. ¶ 7.)

According to Joshua Grant, the President of Prospect, a "real human being" from Prospect would call the telephone number to inquire whether the individual being called wants to hear more about the offer from Royal Seas. (Grant Decl. ¶ 12.) If so, then the Prospect employee would "live transfer" the call to a representative at Royal Seas. (Id.;Poole Decl. ¶ 5.) The "live human being" who placed the call from Prospect had "pre-scripted voice prompts" allowing the human being to use the computer to make the initial approach to the potential customer. (Deposition of Jennifer Poole ("Poole Dep.") 25:12-17, Ex. 4 to Def.'s MSJ, ECF No. 165-5; Deposition of Joshua Grant ("Grant Dep.") 167-173, Ex. 3 to Def.'s MSJ, ECF No. 165-4.) If the agent clicked the voice prompt, the prompt played. (Grant Dep. 168-171.) However, there was always a live agent on the calls. (Grant Dep. 225-227.) Some of the agents opted to use their own voices instead of the voice prompts. (Grant Dep. 227.)

Prospect used multiple third-party call centers to actually make the calls. (Grant Dep. 121-125.) When a Prospect agent was logged into the phone system and was ready to accept a call, he or she would hit a button and receive the call generated by the third-party dialer. (Grant Dep. 177.) There is no information in the record about how this third-party dialer placed the call.

Prospect received the leads from third-party web publishers. (Grant Dep. 133.) The web publisher would send the data about the telephone numbers through an application programming interface ("API") into the Prospect data base. (Grant Dep. 134.) These web publishers were required to ensure that the telephone numbers being called had opted in to receiving the telephone call. (Grant Dep. 149-154.) Typically, the web publishers would give Prospect all the opt-in data when Prospect purchased the leads from them. (Grant Dep. 433-434.) Similarly, Prospect sent all opt-in data for each lead transferred to Royal Seas via API at the time the customer was live transferred. (Poole Decl. ¶ 8.)

Prospect also checked by reviewing the website and the opt-in language and by verifying that their company name was in the opt-in language. (Grant Dep. 433-434.) Prospect employs TCPA attorneys and investigates any complaint about a violation of the TCPA. (Grant Dep. 161.) Prospect kept its own Do Not Call list, which was uploaded directly into the Prospect system bypassing the third-party dialer. (Grant Dep. 281-282.) This upload blocked the call from being made to anyone on the Do No Call list. (Id.)

Royal Seas received an opt-in for class representative John McCurley from the website www.diabeteshealth.info, which is a domain owned by Landfall Data, LLC ("Landfall"). Kevin Brody is the CEO of Landfall. (Declaration of Kevin Brody ("Brody Decl.") ¶¶ 2, 8, Ex. 7 to Def.'s MSJ, ECF No. 165-8.) According to Brody, every lead provided by Landfall was created by a user visiting the website landing page and completing the appropriate form. (Brody Decl. ¶ 10.) The individual must complete a form by entering his or her name, email address, and telephone number and by checking a box consenting to be called. (Brody Decl. ¶12.) The individual must then hit "NEXT" to process the opt-in. (Id.) Brody provides a copy of the opt-in form allegedly created by John McCurley's telephone number on April 30, 2017. (Brody Decl. ¶ 13.)

There is some confusion as to the website that provided the opt-in for class representative Daniel Deforest. Although the information provided by Royal Seas was that Mr. Deforest's opt-in came from the website domain www.myhealthcareauthority.com, Prospect indicates the correct website for Mr. Deforest's opt-in was www.yourautohealthlifeinsurance.com. (Grant Decl. ¶ 30.)

The website myhealthcareauthority.com is owned by Citadel Marketing Group, LLC f/d/a Transparent Data Services ("Citadel"). (Declaration of David Andras ("Andras Decl.") ¶ 3, Ex. 8 to Def.'s MSJ, ECF No. 165-9.) David Andras is the owner of Citadel. (Andras Decl. ¶ 2.) Any lead provided by Citadel was generated by an individual who visited its website and filled out a form including contact information, telephone number and consent to be called. (Andras Decl. ¶ 6.) All the information must be filled out, the consent box must be checked, and the user must click "submit" or the contact information would not be stored. (Andras Decl. ¶ 12.)

Neither party offers information about the ownership or practices of www.yourautohealthlifeinsurance.com, which is the website at issue in the certified class. Plaintiffs offer two experts (Nathan Bacon and Wesley Weeks) who claim the websites www.diabeteshealth.info and www.myhealthcareauthority.com could not have generated the opt-in information or traffic that they claim to have generated. (Expert Report ofNathan Bacon ("Bacon Report"), Ex. C to Pls.' Mot. for Class Certification, ECF No. 151-4; Expert Report...