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O.P. Schuman & Sons, Inc. v. DJM Advisory Group, LLC

United States District Court, E.D. Pennsylvania

February 16, 2017

O.P. SCHUMAN & SONS, INC.
v.
DJM ADVISORY GROUP, LLC, et al.

          MEMORANDUM

          JUAN R. SÁNCHEZ, J.

         Plaintiff O.P. Schuman & Sons, Inc. brings this putative class action alleging Defendants DJM Advisory Group, LLC, Banner Life, and William Penn Life Insurance Company violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, by transmitting a single-page facsimile advertising Defendants' term life insurance that did not include the opt-out notice required by 47 C.F.R. § 64.1200(a)(4). Defendants move to dismiss this action for lack of standing pursuant to Federal Rule of Civil Procedure 12(b)(1), to stay or dismiss the case pursuant to the first-filed doctrine, or, in the alternative, to strike Plaintiff's proposed class definition pursuant to Rule 12(f). Plaintiff argues that if the Court finds the first-filed rule applies, this case should be transferred to the Middle District of Florida where an earlier related action is pending. Because the Court finds relief is warranted under the first-filed rule, Defendants' motions to dismiss are granted insofar as the case will be transferred to the Middle District of Florida. Defendants' motions to dismiss for lack of standing and to strike Plaintiff's proposed class definition are denied.

         BACKGROUND[1]

         In April 2013, Defendants sent a single-page facsimile transmission to Plaintiff advertising Defendants' term life insurance. Plaintiff did not invite or provide permission to Defendants to send the facsimile, and the facsimile did not include an opt-out notice that complied with 47 C.F.R. § 64.1200(a)(4). According to the Complaint, Defendants sent the same facsimile to more than 39 individuals around the country. As a result of receiving the facsimile, Plaintiff and the other recipients suffered damages, including loss of paper, ink toner, the use of their fax machines, the use of telephone lines, time, and privacy.

         Plaintiff alleges the sending of the facsimile without a compliant opt-out notice violated the TCPA. Plaintiff seeks to pursue a TCPA claim on behalf of:

All persons who were sent one or more telephone facsimile messages on or after four years prior to the filing of this action, that advertised the commercial availability or quality of any property, goods, or services offered by “DJM, ” “Banner Life Insurance Company, ” or “William Penn Life Insurance Company, ” that did not contain an opt-out notice that complied with federal law.

Compl. ¶ 25.

         DISCUSSION

         Defendants argue the Complaint should be dismissed because Plaintiff lacks Article III standing as it has failed to plead a concrete and particularized injury, and at most has pleaded a de minimis injury. The “irreducible constitutional minimum of standing consists of three elements”: (1) an “injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (internal quotation marks and citation omitted). “To establish injury in fact, a plaintiff must show that he or she suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical. Id. at 1548. A plaintiff does not satisfy the injury-in-fact requirement by merely alleging a statutory violation. See Id. at 1549 (“Article III standing requires a concrete injury even in the context of a statutory violation.”).

         Plaintiff alleges Defendants' actions “caused the recipients to lose paper and toner, ” “used the fax machines of Plaintiff and the other class members, ” “cost Plaintiff time, ” and “unlawfully interrupted Plaintiff and the other class members' privacy interests in being left alone.” Compl. ¶ 54. Such allegations sufficiently allege concrete and particularized harm, as they set forth more than a “bare procedural violation.” Spokeo, Inc., 136 S.Ct. at 1549; see Van Patten v. Vertical Fitness Grp., LLC, No. 14-55980 (9th Cir. Jan. 30, 2017) (holding “[u]nsolicited telemarketing phone calls or text messages, by their nature, invade the privacy and disturb the solitude of their recipients, ” and are thus sufficient for standing purposes); Palm Beach Golf Center-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245, 1251-53 (11th Cir. 2015) (holding the successful transmission of a single unsolicited fax may constitute a “concrete and personalized injury in the form of the occupation of [the recipient's] fax machine for the period of time required for the electronic transmission of the data” and is thus sufficient to establish Article III standing); Imhoff Inv., L.L.C. v. Alfoccino, Inc., 792 F.3d 627, 633 (6th Cir. 2015) (finding Article III standing where the plaintiff suffered a “violation of the statutorily-created right to have one's phone line and fax machine free from the transmission of unsolicited advertisements” by receiving a fax transmission on two occasions). Plaintiff thus has Article III standing to pursue this case.

         Defendants further argue this matter should be dismissed or stayed pursuant to the first-filed doctrine, as an earlier-filed and substantively similar putative class action complaint was filed against the same Defendants in the Middle District of Florida on December 21, 2015, seven months before Plaintiff filed the Complaint in this case. See JWD Auto., Inc. v. DJM Advisory Grp. LLC, No. 15-793, 2016 WL 6835986 (M.D. Fla. Nov. 21, 2016). Plaintiff argues that if the Court finds the first-filed rule applies, this case should be transferred to the Middle District of Florida. The Florida action is based on the transmission of the same facsimile at issue in this case, and the allegations in that case are substantially the same as the allegations here-namely that, in violation of the TCPA, Defendants sent the plaintiff and others unsolicited commercial advertisements by facsimile. The proposed class definition in the Florida case is also substantially similar to the class definition in this case:

All persons who (1) on or after four years prior to the filing of this action, (2) were sent telephone facsimile messages of material advertising the commercial availability of any property, goods, or services by or on behalf of Defendants, and (3) which Defendants did not have prior express permission or invitation [to send], or (4) which did not display a proper opt-out notice. Excluded from the Class are the Defendants, their employees, agents and members of the Judiciary.

Id. at *5. Defendants contend discovery in the Florida action is well underway. On November 21, 2016, the judge in the Florida case denied Defendants' motion to dismiss or strike.

         The first-filed rule, “grounded on equitable principles, ” provides that “in all cases of federal concurrent jurisdiction, the court which first has possession of the subject matter must decide it.” EEOC v. Univ. of Pa., 850 F.2d 969, 971, 977 (3d Cir. 1988) (internal quotation marks and citation omitted). The rule “encourages sound judicial administration and promotes comity among federal courts of equal rank, ” by guiding “courts of equal jurisdiction to exercise forbearance to avert conflicts and to avoid ‘interference with the process of each other.'” Id. at 971-72 (quoting Kline v. Burke Const. Co., 260 U.S. 226, 229 (1922)). The “applicability of the first-filed rule is not limited to mirror image cases where the parties and the issues perfectly align. Rather, the principles underlying the rule support its application where the subject matter of the later filed case substantially overlaps with that of the earlier one.” Villari Brandes & Kline, PC v. Plainfield Specialty Holdings II, Inc., No. 09-2552, 2009 WL 1845236, at *6 (E.D. Pa. June 26, 2009). “[T]he critical substantive inquiry of the first-filed rule ...


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