United States District Court, E.D. Michigan, Southern Division
OPINION & ORDER GRANTING SUMMARY JUDGMENT IN
FAVOR OF DEFENDANTS
F. Cox, United States District Court Judge
Opinion & Order issued on April 7, 2016, this Court
certified this Telephone Consumer Protection Act
(“TCPA”) case as a class action. Discovery has
closed and the matter is now before the Court on: 1)
Plaintiff's Motion for Summary Judgment; and 2)
Defendants' Motion for Summary Judgment. The motions have
been fully briefed and the Court heard oral argument on the
motions on September 7, 2017.
explained below, the law pertaining to TCPA cases has
developed over the several years during which this case has
been pending before this Court. It is now undisputed that
Defendants cannot be held liable for the offending faxes in
this case on a strict liability basis. In order to prevail on
the TCPA claims asserted against Defendants, Plaintiff and
the Class must establish, among other things, that the fax
ads were sent “on behalf of” Defendants. In a
TCPA decision issued on May 9, 2016, the Sixth Circuit set
forth the multi-factor “on behalf of” standard
that the parties agree applies to the fax ads at issue in
Defendant Charity Marketing, LLC, there is no evidentiary
basis for imposing liability against that entity. This
Defendant is entitled to summary judgment as to the claims
asserted by Plaintiff and the Class.
Defendant Richard Stephens (the individual who owns the two
corporate Defendants), Plaintiff's Counsel acknowledges
that there is no Sixth Circuit authority that supports
Plaintiff's position that Stephens can be held personally
liable under the TCPA. Several district courts that have
addressed the personal-liability issue have concluded that
individuals acting on behalf of a corporation may be held
personally liable for violations of the TCPA where they had
“direct, personal participation in or personally
authorized the conduct found to have violated the
statute.” But here, Plaintiff has failed to produce
evidence that Stephens had such involvement. Thus, Stephens
is also entitled to summary judgment in his favor as to
Plaintiff and the Class.
as to the remaining Defendant, the Court concludes that it is
also entitled to summary judgment because Plaintiff and the
Class cannot produce sufficient evidence at trial such that a
reasonable jury could conclude that the two fax ads at issue
in this case were sent “on behalf of” Defendant
Manufacturers Financial Corporation.
the Court shall deny Plaintiff's Motion for Summary
Judgment and grant Defendants' Motion for Summary
case, filed in 2009, has a lengthy history that need not be
repeated here. This Court's April 7, 2016 Opinion &
Order contains a broad overview of the case. (D.E. No. 107).
April 7, 2016, this Court certified the following class in
this TCPA case:
All persons or entities who were sent one or more faxes on
November 29, 2005, or November 30, 2005, that contained a
“Remove” Hotline number of (718) 645- 2018, Ext
2234 and a “Complaint” Hotline number of (718)
645-2021, Ext 232. and offered either a “Limited
Release Refinance Program” with a toll free number of
(800) 264-3898 or a “Fast Track Approval for Licensed
Brokers! [sic] that included contact information for Julia
(Id. at Pg ID 3871).
Sixth Circuit issued a TCPA decision, Siding and
Insulation Co. v. Alco Vending, Inc., 822 F.3d 886 (6th
Cir. 2016), on May 9, 2016. Plaintiff's counsel were
aware of that decision, as class counsel Phillip Bock was
also plaintiff's counsel in that case and was involved in
Court approved the class notice in this case in an order
issued on June 6, 2016. Thereafter, a few class members opted
Court held a Status Conference on September 13, 2016. At that
conference, Plaintiff's counsel advised that the only
additional discovery desired was the deposition of Caroline
Abraham. On September 13, 2016, this Court issued an order
that provided that Plaintiff's Counsel shall take the
deposition of Caroline Abraham by December 14, 2016. (D.E.
No. 124). The order also allowed the parties to file summary
judgment motions by that date.
request of the parties, the Court later extended the date for
filing summary judgment motions until May 2, 2017.
(See 3/21/17 Minute Entry). Thereafter, both parties
filed summary judgment motions. The motions reflect that
Plaintiff's Counsel did not depose Caroline Abraham in
this action, despite efforts to do so.
Motion for Summary Judgment stresses that district courts
often grant summary judgment motions in TCPA cases. The
motion asserts that the evidence is “un-refuted”
and that the Court should grant summary judgment “in
favor of Plaintiff and the Class for the 14, 125 unsolicited
fax advertisements Defendants sent to them, ” and
“enter summary judgment in favor of the Class and
against Defendants in the amount of $7, 062, 500 in statutory
damages for Defendants' violations of the TCPA” and
issue an appropriate injunction.
body of Plaintiff's Motion for Summary Judgment contains
the following argument sections:
A. Defendants violated the TCPA
1. The faxes at issue are “advertisements” for
2. Defendants' fax advertisements were
3. Defendants' advertisements were successfully sent by
fax to 14, 137 different telephone numbers
B. The Class is entitled to statutory damages under the TCPA
C. The Court should enjoin Defendants from sending
unsolicited fax advertisements to Michigan consumers
(D.E. No. 140 at Pg ID 5711). Although the motion includes a
sentence acknowledging that in order to prevail Plaintiff and
the Class must show that “Defendants' faxes were
sent on their behalf” (Id. at Pg ID 5715), and
Plaintiff's Counsel was aware of the Sixth Circuit's
decision in Siding & Insulation Co., and that
its “on behalf of” standard applies to the fax
ads at issue in this case, Plaintiff's motion for summary
judgment does not include a section on that issue. It does
not even cite Siding & Insulation Co. or discuss
the standard of liability set forth in that case.
opposing Plaintiff's Motion for Summary Judgment,
Defendants stress that Plaintiff did not depose Caroline
Abraham in this case and that they presumably cannot produce
her for trial.
filed their own Motion for Summary, which asserts that all
three Defendants are entitled to summary judgment. Among
other things, Defendants contend that, based upon the Sixth
Circuit's decision in Siding & Insulation
Co., Plaintiff and the Class cannot establish that the
faxes at issue were “sent on behalf of” the three
Defendants (MFC, Stephens, and Charity Marketing LLC).
evidence produced by the parties is rather extensive, and
includes all of the following.
Sole Named Plaintiff
Compressor Engineering Corporation (“Plaintiff”
or “Compressor”) is the sole named Plaintiff and
Class Representative in this case. It is undisputed that
Compressor received a single fax ad, the one that it attached
as an exhibit to the Complaint. (See D.E. No. 1 at
Pg ID 11). As will be explained later, this is “Fax Ad
Three Named Defendants
are three different named Defendants in this action: 1)
Manufacturers Financial Corporation (“MFC”); 2)
“Charity Marketing, LLC”; and 3) Richard
Defendant Richard Stephens
Richard Stephens (“Stephens”) is an individual,
who was the President and sole owner of MFC and Charity
a Michigan corporation and Stephens was its sole shareholder,
President, and Treasurer throughout its duration. (Stephens
Dep. at 8-9). MFC had two locations, Farmington Hills and
Grosse Pointe, Michigan. (Id.). MFC was a financial
company that offered residential and commercial mortgages.
(Id. at 10). Stephens testified that MFC began in
1991 and operated until 2007 or 2008. (Id. at 9).
testified that all advertising at MFC was supposed to go
through him. (Stephens Dep. at 22).
undisputed that MFC employed Julia Kahn and Larry Brundage as
loan officers and account executives and that MFC's
telephone numbers were (248) 427-0800 and (248) 427-9800 (a
fax line). (D.E. No. 144 at Pg ID 6193). Stephens testified
that Kahn “wasn't an ad man, she was just a loan
officer.” (Stephens Dep. at 53). Stephens testified
that MFC itself did not engage in fax marketing. (Stephens
Dep. at 36).
testified that he does not recall: 1) him or anyone else at
MFC communicating with a fax marketing company to send fax
ads on behalf of MFC; 2) having communicated with someone
named Kevin Wilson; or 3) any communications with a company
called B2B in New York regarding fax advertising. (Stephens
Dep. at 40-41). Stephens does not recall anyone at MFC having
authorized Kahn to work with Charity Marketing Services, LLC
to create a fax advertising campaign. (Id. at 71).
testified that MFC “engaged marketing companies,
” such as Charity Marketing Services, LLC, and those
marketing companies “could have had a fax
campaign.” (Id. at 37).
recalls that Charity Marketing Services, LLC did some
“lender to broker industry” faxes, wherein it
faxed “rate sheets” to brokers. (Id. at
testified that he does not recall ever having employed a
person named Jim Busch or Joseph Busch. Stephen does not
recall the name Joseph Busch as anyone he ever communicated
with. Stephens does not know if Charity Marketing Services,
LLC or Ernie Feigelman employed a person by that name.
(Stephens Dep. at 32, 38-39, 48, 56, 57).
Defendant Charity Marketing, LLC
also owned and operated Charity Marketing, LLC. (Stephens
Dep. at 13-16). During the 2005-2006 time period, that entity
engaged in marketing services, specifically direct mail and
telemarketing. (Id. at 13).
entity was located in Farmington Hills, Michigan and had its
own bank account, at Metrobank. (Id. at 14).
Stephens testified that Charity Marketing LLC did not have a
bank account at Flagstar bank, and Stephens was the only
person authorized to sign checks for the entity.
(Id. at 14-15). The entity performed work for MFC
(Id. at 24), had no employees and hired independent
contractors. (Id. at 14). It is undisputed that
Charity Marketing, LLC never operated under the name Charity
Marketing Services, LLC. (D.E. No. 144 at Pg ID 6193).
testified that Charity Marketing, LLC never performed any fax
campaigns that utilized fax blasts. (Stephens at 84).
Of Other Characters - None Of Whom Are Parties
are other persons and entities that were involved in the
events surrounding the fax ads at issue in this case.
Yuliya Kahn was hired by Stephens as a loan officer for MFC.
(Kahn Dep. at 14-16). Kahn's native language is Russian
and when Stephens hired her, Kahn's “social skills
and language skills were very limited.” (Id.
at 20). Kahn worked exclusively with residential mortgages
(Id. at 11) and was hired at MFC to obtain
residential mortgage business from her friends and family in
the Russian community in Michigan. (Id. at 20).
testified that she “created flyers for” MFC and
that Stephens “saw my flyers.” (Id. at
22). Kahn testified that she does not recall if Stephens
approved of the flyers or the language or descriptions she
put in them, but also testified that she would not have
created a flyer without his approval. (Id. at 22).
Kahn testified that she created such “flyers”
while working at MFC and mailed them to her friends and
family, and passed them out in neighborhoods. (Id.
at 21). Kahn did other advertising for herself while employed
by MFC, such as putting her own ad in the “Yellow
Russian Pages.” (Id. at 22)
testified that all the advertising she did was with the
knowledge and approval of Stephens. (Id. at 23). But
Kahn testified that her work “wasn't so much
advertisement as you think, ” explaining that she did
two or three flyers and “that was it. It wasn't a
big campaign.” (Id. at 23). As to her flyers,
Kahn testified: “[s]o if I sent it to anybody, I
usually had to talk to someone to get the fax number or
e-mail address or anything, or mail address.”
(Id. at 23).
testified: “I was never involved in any marketing with
anybody but my Russian single people.” (Id. at
28). Kahn testified that she does not know if MFC engaged in
Q. Okay. At any point in time while you worked at
Manufacturers Financial had they or did they engage in fax
A. I can't remember that. And I wouldn't even know,
probably, even if they did.
(Kahn Dep. at 33-34). Kahn further testified that she does
not have any recollection of having spoken to or corresponded
with a fax marketing company in New York, or a marketing
company by the name of Business to Business Solutions, or a
company named Maxileads or Macaw. (Id. at 32).
testified that she was not “someone who was involved in
anything that had to do with the company. I was pretty much
working for myself.” (Id. at 32-33). Kahn
Q. Okay. Did you, from time to time, follow up on interaction
with marketing or advertising companies that Mr. Stephens
asked you to call or follow through and communicate with?
A. No. He would never ask me. At that time my English
wasn't even that good.
A. They wouldn't understand what I'm saying.
. . . .
Q. While you were working at Manufacturers Financial did
Manufacturers Financial ever purchase lists of names or
A. I don't remember. And again, I wasn't involved, so
they wouldn't tell me what they do.
Q. During the period of time that you worked for
Manufacturers Financial did Manufacturers Financial maintain
a database of names and phone numbers or fax numbers of
people that they were - had contracted or were hoping to
contact about their lending products?
A. It wasn't available to me it they did. I have no idea.
Q. Do you know of or have ever worked with anyone at
A. No. Is a Russian person there? Maybe it's somebody
Russian there, then, you know, they could have contacted me,
but other than that, I wouldn't know who they are.
(Id. at 33-34).
her deposition, Kahn was shown various documents provided to
Plaintiff by Abraham and Kahn testified that she does not
remember seeing the documents, that she has “no idea
who Kevin Wilson is, ” and that the handwriting on most
of the documents does not look like her handwriting.
(Id. at 36-49).