Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_11-cv-00501/USCOURTS-azd-4_11-cv-00501-1/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1441 Petition for Removal

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Richard and Maria Shupe, 

Plaintiff, 

vs.

JPMorgan Chase Bank of Arizona, 

Defendant. 

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No. CV 11-501-TUC-RCC (BPV)

ORDER

Plaintiff filed an action in Pima County Superior Court alleging Defendant violated

the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, and invaded their privacy

when Defendant made over 100 telephone calls to Plaintiffs’ residence. (Doc. 1-3).

Defendant subsequently removed the action based on federal question jurisdiction. (Doc. 1).

Thereafter, Defendant filed a Motion to Dismiss (Doc. 4), and Plaintiffs filed a Motion to

Remand (Doc. 6). The Honorable Bernardo P. Velasco, United States Magistrate Judge, filed

a Report and Recommendation (Recommendation) in this action, which advised the Court

to deny both motions. (Doc. 23). The Court will adopt the Recommendation and deny both

motions.

I. Factual Summary

Plaintiffs allege in their Complaint that they defaulted on their mortgage in May 2010.

 (Doc. 1-3). In August 2010, they wrote to Defendant to “terminate their business

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relationship with the Defendant.” Thereafter, Defendant made in excess of 100 calls to

Plaintiff at their residential telephone number and retained third parties to do the same.

Defendant used an auto-dial system to make these calls. Plaintiffs, on multiple occasions,

told Defendant not to call this number. Plaintiff Maria Shupe has a medical condition that

was aggravated by Defendant’s calls.

II. Motion to Remand

No objection appearing, the Court has reviewed the Recommendation for clear error and

finds none. Accordingly, the Court will adopt the Recommendation as to the Motion to

Remand and deny the motion. See Advisory Committee Notes to Fed.R.Civ.P. 72 (citing

Campbell v. United States Dist. Court, 501 F.2d 196, 206 (9th Cir.1974)).

III. Motion to Dismiss

Defendant has filed objections to the Recommendation as to the Motion to Dismiss.

(Doc. 25). Therefore, the Court will review this portion of the Recommendation de novo.

Thomas v. Arn, 474 U.S. 140, 149–50 (1985) (quoting 28 U.S.C. § 636(b)(1) (C)).

A. Motion to Dismiss Standard

To survive a motion to dismiss under Rule 12(b)(6), a pleading must allege facts

sufficient “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007). A claim must be plausible and allow a court to draw the

reasonable inference that the defendant is liable for the conduct alleged. Ashcroft v. Iqbal,

129 S.Ct. 1937, 1949 (2009). “The plausibility standard is not akin to a ‘probability

requirement,’ but it asks for more than a sheer possibility that a defendant has acted

unlawfully.” Id. (quoting Twombly, 550 U.S. at 557.)

“[A]ll well-pleaded allegations of material fact are taken as true and construed in a light

most favorable to the nonmoving party.” Wyler Summit P’ship v. Turner Broad. Sys. Inc.,

135 F.3d 658, 661 (9th Cir. 1998). However, “[a] pleading that offers ‘labels and

conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’” Id.

(quoting Twombly, 550 U.S. at 555); see Spreewell v. Golden State Warriors, 266 F.3d 979,

988 (9th Cir. 2001). In addition, a court is limited in its analysis to those facts alleged in the

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Complaint and documents incorporated by reference into the complaint. Knievel v. ESPN,

393 F.3d 1068, 1076 (9th Cir. 2005).

B. TCPA

The TCPA prohibits callers from(1) making calls (2) using an “automatic telephone

dialing system” (3) to a number assigned to a residential telephone line (4) without the “prior

express consent” of the receiving party or for a non-exempt reason. 47 U.S.C. §

227(b)(1)(B). A call made without the prior express consent of the receiving party is exempt

if it is made (1) for emergency purposes, (2) for a non-commercial purpose, (3) for a

commercial purpose but “does not include or introduce an unsolicited advertisement or

constitute a telephone solicitation”, (4) to someone the caller has an established business

relationship with, or (5) by a tax-exempt nonprofit organization. 47 C.F.R. § 64.1200(a)(1).

Defendant argued in its Motion to Dismiss that its calls to Plaintiffs were exempt from

the TCPA because Defendant is a debt collector. Because Defendant presents this argument

in a summary fashion, the Court is unable to determine whether Defendant is claiming an

exemption because (1) the calls were made solely for the purposes of debt collection, or (2)

Defendant had an established business relationship with Plaintiffs. The Court will address

both possibilities below.

1. Debt Collection

The FCC has unequivocally stated that calls made solely for the purpose of debt

collection are exempt calls under the TCPA because they either (1) stem from an existing

business relationship, or (2) are made for a commercial purpose other than solicitation. In

re Rules & Regulations Implementing the TCPA, 23 FCC Rcd. 559, 565 ¶ 5 (Jan. 4, 2008)

(citing 1995 TCPA Reconsideration Order, 10 FCC Rcd 12391, 12400 ¶ 17 (July 26, 1995)).

As the Recommendation noted, however, Defendant did not establish or argue that its calls

were made for this purpose, (Doc. 23 at 10-11). Defendant only established that it had a

debtor-creditor relationship with Plaintiff. (Id.; Doc. 4 at 7-13). Therefore, Defendant

cannot claim this exemption for its calls at this stage in the proceedings.

2. Established Business Relationship

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Except where the calls are placed solely for debt collection purposes, an established

business relationship may be terminated by the receiver by informing the caller to place the

receiver on a do-not-call list. 47 C.F.R. § 64.1200(f)(4)(i). Termination of the established

business relationship refers only to termination of the privilege to call based on the

exemption and does not require a termination of all business between the parties. (Id.). 

Plaintiffs allege they had a business relationship with Defendant but terminated the

relationship in August 2010. (Doc. 1-3). Plaintiffs further allege that the calls began after

they wrote to Defendant to terminate the relationship. (Id.). Defendant argues, however, that

Plaintiffs could not terminate the relationship unilaterally because (1) “as a matter of law and

reason, the business relationship lasts as long as the promissory note and deed of trust were

executory” and (2) unilateral termination by Plaintiffs would create an irreconcilable conflict

with A.R.S. § 33-807.01. (Doc. 25 at 2-3).

As to Defendant’s first argument, an established business relationship is a term of art

under the TCPA and so is its termination. The regulations make clear that termination of an

established business relationship is not equivalent to termination of the entire relationship

between a caller and a receiver. It simply means the caller’s business relationship with the

recipient no longer entitles it to initiate solicitation phone calls to the recipient using an

artificial or prerecorded voice.

As to Defendant’s second argument, A.R.S. § 33-807.01 requires a mortgage lender to

contact in writing a borrower who occupies the subject property as his principal residence

at least thirty days before notice of a trustee’s sale is given in order to explore options to

avoid foreclosure. Clearly, a statute requiring an attempt to contact a borrower in writing is

not inconsistent with the borrower’s right to terminate the established business relationship

within the meaning of the TCPA.

Plaintiffs sufficiently alleged they terminated their established business relationship with

Defendant in accordance with 47 C.F.R. § 64.1200(f)(i). Therefore, for the purposes of this

Motion to Dismiss, Defendants cannot claim the established business relationship exemption.

3. Conclusion

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The Recommendation correctly found Defendant did not establish the calls at issue were

made solely for the purpose of debt collection. In addition, Plaintiffs sufficiently alleged

termination of their established business relationship, and Defendant has not offered

argument or evidence that requires a contrary conclusion. The Court will adopt the

Recommendation as to these findings and deny the Motion to Dismiss as to the TCPA claims.

C. Invasion of Privacy

The Restatement defines invasion of privacy as:

One who intentionally intrudes, physically or otherwise, upon the solitude

or seclusion of another or his private affairs or concerns, is subject to

liability to the other for invasion of his privacy, if the intrusion would be

highly offensive to a reasonable person.

Hart v. Seven Resorts Inc., 190 Ariz. 272, 279 (App. 1997) (quoting Restatement (Second)

of Torts § 652B). The Recommendation found Plaintiffs sufficiently alleged this tort, but

Defendant claims the Recommendation applied the wrong standard. Defendant argues

Plaintiffs must show Defendant’s conduct was extreme and outrageous. (Doc. 25 at 3)

(citing Godbehere v. Phoenix Newspapers, Inc., 162 Ariz. 335, 339 (1989)).

In Godbehere, the Arizona Supreme Court held extreme and outrageous conduct is not

an element of the tort of false light invasion of privacy and adopted the Restatement’s

definition of the claim. Id. at 339-41. Defendant argues Godbehere’s holding is limited only

to false light claims and did not eliminate the requirement of extreme and outrageous conduct

for invasion of privacy/intrusion on seclusion claims. (Doc. 25 at 3). The Arizona Supreme

Court has never decided whether a claim for invasion of privacy/intrusion on seclusion must

include an allegation of extreme and outrageous conduct. Prior to Godbehere, the Arizona

Court of Appeals required extreme and outrageous conduct. Godbehere, 162 Ariz. at 339

(citing Creamer v. Raffety, 145 Ariz. 34 (App.1985); Valencia v. Duval Corp., 132 Ariz. 348

(App.1982); Davis v. First Nat’l Bank of Ariz., 124 Ariz. 458 (App.1979); Cluff v. Farmer's

Ins. Exch., 10 Ariz.App. 560 (1969)). Since Godbehere, that court has abandoned this

requirement in favor of the Restatement’s definition. Hart, 190 Ariz. at 279. Therefore,

Plaintiffs are not required to show extreme or outrageous conduct to state a claim for

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invasion of privacy/intrusion on seclusion.

IV. Conclusion

The Recommendation correctly advised the Court to deny the Motion to Remand, and

the Court finds Defendant’s objections to the Recommendation as to the Motion to Dismiss

unpersuasive. Accordingly,

The Court ACCEPTS the Recommendation of Magistrate Judge Velasco. (Doc. 23)

IT IS ORDERED denying both the Motion for Remand and the Motion to Dismiss.

(Docs. 4 and 6).

IT IS FURTHER ORDERED referring this matter back to Magistrate Judge Velasco

for all pretrial proceedings and report and recommendation in accordance with the provisions

of 28 U.S.C. § 636(b)(1), FED.R.CIV.P. 72, and L.R.Civ 72.1, 72.2 and 72.3.

DATED this 18th day of April, 2012.

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