United States District Court, E.D. California
ORDER DENYING DEFENDANTS' MOTION TO DISMISS (DOC.
class action matter, on April 13, 2016, plaintiffs filed a
first amended complaint against defendant Zeta Interactive
Corp. and its CEO and founder David Steinberg alleging
violations of the Telephone Consumer Protection Act (TCPA),
42 U.S.C. § 227 et seq. (Doc. No.
On April 27, 2016, defendants moved to dismiss defendant
Steinberg from the action. (Doc. No. 17.) On June 7, 2016,
the court heard oral argument. (Doc. No. 26.) Attorney Josh
Arisohn appeared telephonically at the hearing for plaintiff.
(Id.) Attorneys John Du Wors, Nathan Durrance, and
Samantha Everett appeared telephonically for defendants.
(Id.) For the reasons that follow, the motion to
dismiss defendant Steinberg will be denied.
move to dismiss defendant Steinberg from the action on the
grounds that in light of the decision in Ashcroft v.
Iqbal, 556 U.S. 662, 663 (2009), the first amended
complaint does not sufficiently allege that defendant
Steinberg personally participated in or authorized the calls
which are at issue in this action. (Doc. No. 17-1.) According
to defendants such allegations are necessary to state a
cognizable claim against a corporate officer. (Doc. No.
relevant part, plaintiff's amended complaint alleges
Defendant David A. Steinberg is CEO and Founder of Zeta. He
also served as the CEO of Ward Media, Inc. until that
corporation was dissolved on October 29, 2015. Upon
information and belief, Defendant Steinberg, during all times
relevant to Plaintiff's claims, specifically,
individually, and personally directed and authorized all of
the unlawful calls described herein, and was intimately
involved in the program to make these calls, including the
selection of the calling equipment. Upon information and
belief, Defendant Steinberg was the guiding spirit and
central figure behind these unlawful calls being made in the
matter they were.
(Doc. No. 13, at 2-3.) The amended complaint does not contain
any other allegations pertaining specifically to defendant
purpose of a motion to dismiss pursuant to Rule 12(b)(6) is
to test the legal sufficiency of the complaint. N. Star
Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581
(9th Cir. 1983). "Dismissal can be based on the lack of
a cognizable legal theory or the absence of sufficient facts
alleged under a cognizable legal theory." Balistreri
v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th
Cir. 1990). A plaintiff is required to allege "enough
facts to state a claim to relief that is plausible on its
face." Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). "A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged." Iqbal, 556 U.S. at
determining whether a complaint states a claim on which
relief may be granted, the court accepts as true the
allegations in the complaint and construes the allegations in
the light most favorable to the plaintiff. Hishon v. King
& Spalding, 467 U.S. 69, 73 (1984); Love v. United
States, 915 F.2d 1242, 1245 (9th Cir. 1989). In general,
pro se complaints are held to less stringent standards than
formal pleadings drafted by lawyers. Haines v.
Kerner, 404 U.S. 519, 520-21 (1972). However, the court
need not assume the truth of legal conclusions cast in the
form of factual allegations. United States ex rel. Chunie
v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986).
While Rule 8(a) does not require detailed factual
allegations, "it demands more than an unadorned, the
Iqbal, 556 U.S. at 678. A pleading is insufficient
if it offers mere "labels and conclusions" or
"a formulaic recitation of the elements of a cause of
action." Twombly, 550 U.S. at 555. See also
Iqbal, 556 U.S. at 676 ("Threadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice."). Moreover, it is
inappropriate to assume that the plaintiff "can prove
facts which it has not alleged or that the defendants have
violated the . . . laws in ways that have not been
alleged." Associated Gen. Contractors of Cal., Inc.
v. Cal. State Council of Carpenters, 459 U.S. 519, 526
general rule of agency law, the personal liability of a
corporate director or officer must be "founded upon
specific acts by the individual director or officer."
United States v. Reis, 366 Fed.Appx. 781, 782 (9th
Cir. 2010). Numerous district courts have held that
corporate actors may be held individually liable for
violating the TCPA where they "‘had direct,
personal participation in or personally authorized the
conduct found to have violated the statute.'"
Sandusky Wellness Center, LLC v. Wagner Wellness,
Inc., No. 3:12-cv-2257, 2014 WL 1333472, at *3 (N.D.
Ohio Mar. 28, 2014) (quoting Texas v. Am. Blastfax,
Inc., 164 F.Supp.2d 892, 898 (W.D. Tex. 2001); see
also Jackson Five Star Catering, Inc. v. Beason, No.
10-10010, 2013 WL 5966340, at *4 (E.D. Mich. Nov. 8, 2013)
(personal participation in the payment for and authorization
of fax ads is sufficient to render a corporate officer liable
under the TCPA); Van Sweden Jewelers, Inc. v. 101 VT,
Inc., No. 1:10-cv-00253, 2012 WL 4074620 (W.D. Mich.
June 21, 2012); Maryland v. Universal Elections, 787
F.Supp.2d 408, 415-16 (D. Md. 2011) ("[I]f an individual
acting on behalf of a corporation could avoid individual
liability, the TCPA would lose much of its force.");
Versteeg v. Bennett, Deloney & Noyes, P.C., 775
F.Supp.2d 1316, 1321 (D. Wyo. 2011); Baltimore-Wash. Tel.
Co. v. Hot Leads Co., 584 F.Supp.2d 736, 745 (D. Md.
2008) (observing that if the defendants, who were the same
defendants as in American Blastfax, "actually
committed the conduct that violated the TCPA, and/or . . .
actively oversaw and directed the conduct, " they could
be held individually liable for the statutory violations);
Covington & Burling v. Int'l Mktg. & Research,
Inc., No. CIV A 01-0004360, 2003 WL 21384825, at *6
(D.C. Super. Apr. 17, 2003) (holding that corporate
executives were personally liable because they "set
company policies and [oversaw] day-to-day operations"
and were "clearly involved in the business
practices" that violated the TCPA). Where corporate
officers have not been found personally liable for such
violations, the evidence of the corporate officer's
direct participation in the wrongdoing has been lacking.
See, e.g., Mais v. Gulf Coast Collection Bureau,
Inc., No. 11-61936-CIV-SCOLA, 2013 WL 1283885 (S.D. Fla.
Mar. 27, 2013).
instant case, defendants argue that the allegations
specifically leveled against defendant Steinberg lack details
of his direct participation in any wrongdoing and are the
type of "threadbare recitals of a cause of action's
elements, supported by mere conclusory statements" found
to be insufficient by the Supreme Court. See
Iqbal, 556 U.S. at 663. In opposition, plaintiff's
rely upon the decisions in Bais Yaakov of Spring Valley
v. Graduation Source, LLC, No. 14-cv-3232-NSR, 2016 WL
1271693, at *1, *5-6 (S.D. N.Y. March 29, 2016) and Ott
v. Mortgage Investors Corp. of Ohio, Inc., 65 F.Supp. 3d
1046, 1060 (D. Or. 2014). Plaintiff argues that in these two
cases "nearly identical allegations [were] found to
sufficiently allege a violation of the TCPA against a
corporate officer." (Doc. No. 21, at 4.) Defendants
respond that "[e]ach case Plaintiff cites as support is
distinguishable in that each contained specific allegations
of the executives' direct participation in the alleged
TCPA violations." (Doc. No. 23, at 2.)
court finds that the allegations of plaintiff's amended
complaint are indeed relatively similar to the allegations
found to be sufficient in this context by the district courts
in Bais and Ott. In Bais, the
plaintiff alleged that the defendant "specifically,
individually and personally directed and authorized all of
the fax advertisements . . ., was intimately involved in the
program to send these fax advertisements, including the
design of the fax advertisements and authorized payment for
the sending of those fax advertisements." 2016 WL
1271693, at *5. The court found these allegations to be
sufficient to state a claim against the corporate officer
under the TCPA. Id. at *6. Likewise, in
Ott, the plaintiffs alleged that
the individual defendants were responsible for designing and
implementing all activity by [the corporate defendant's]
telemarketers, including deliberately turning off all
Do-Not-Call lists. In addition, three of them
‘personally received numerous emails concerning
requests to stop the calls by members of the Internal
Do-Not-Call Class, ' but ignored them and continued to