Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01983/USCOURTS-azd-2_08-cv-01983-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1441 Petition for Removal- Declaratory Judgement

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Consumer Protection Corp.,

Plaintiff, 

vs.

Neo-Tech News (fictitiously named);

Joytoto USA, Inc.,

Defendants. 

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No. CV 08-1983-PHX-JAT

ORDER

Pending before this Court is Defendant Joytoto USA, Inc.’s (“Joytoto”) Motion to

Dismiss for Failure to State a Claim. (Doc. #13.) For the reasons that follow, the Court denies

Joytoto’s motion. 

BACKGROUND

On or about August 5, 2008, Plaintiff received an unsolicited fax (the “Fax”) from

Neo-Tech News. (Id. at ¶ 19.) The Fax contained information about Joytoto and its stock

(“JYTO”). (Exh. 1.) The Fax listed the share price of JYTO and stated that “JYTO IS

ALREADY A WINNER!”and is a “Strong Buy.” (Id.) 

Plaintiff filed its complaint (Doc. #2-2) on September 24, 2008, alleging a violation

of the Telephone Consumer Protection Act of 1991 (“TCPA”), civil conspiracy, and aiding

and abetting a violation of the TCPA. (Compl. at ¶¶ 42, 55, and 60.) Plaintiff alleges that

Joytoto transmitted the Fax in violation of the TCPA, and that the transmission of the Fax

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1

 Plaintiff’s motion also included a motion to dismiss under 12(b)(2) (Mot. at 4);

however, the motion under 12(b)(2) is moot as the party to whom it applied was dismissed.

(Doc. #14.) 

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caused Plaintiff damages due to loss of paper and toner, the temporary loss of use of the

facsimile machine, and the potential loss of business while its machine was receiving the

Fax. (Compl. at ¶¶ 19-20, 38.) On December 8, 2008, Joytoto filed its motion to dismiss

under Federal Rules of Civil Procedure 12(b)(6). (Doc. #13.)1

 

ANALYSIS

Rule 12(b)(6) Standard

A motion to dismiss for failure to state a claim is disfavored and rarely granted.

Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 248-49 (9th Cir. 1997). This Court construes

the facts alleged in the complaint in the light most favorable to Plaintiff, and the Court must

accept all well-pleaded factual allegations as true. See Shwarz v. United States, 234 F.3d 428,

435 (9th Cir. 2000). Nonetheless, Plaintiff must still satisfy the pleading requirements of

Federal Rules of Civil Procedure 8(a)(2). 

Under Rule 8(a)(2), the complaint must contain “a short and plain statement of the

claim showing that the pleader is entitled to relief” in order to “give the defendant fair notice

of what the . . . claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41,

47 (1957). A complaint does not need detailed factual allegations. Id.; Sanjuan v. Am. Bd.

of Psychiatry & Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994). However, a “plaintiff's

obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels

and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). See also Papasan v. Allain, 478 U.S.

265, 286 (1986) (“[Courts] are not bound to accept as true a legal conclusion couched as a

factual allegation.”). Rule 8(a)(2) requires a “‘showing,’ rather than a blanket assertion of

alleged entitlement to relief. Without some factual allegation in the complaint, it is hard to

see how a claimant could satisfy the requirement of providing not only ‘fair notice’ of the

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nature of the claim, but also ‘grounds’ on which the claim rests.” Bell Atl. Corp., 550 U.S.

at 544 n.3. The Supreme Court established a two prong analysis for sufficiency of a

complaint under Rule 8(a)(2) in Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009). First, the

Court determines which allegations are to receive a presumption of truth, noting that legal

conclusions are not presumed to be true. Id. Secondly, the Court determines whether the

factual allegations, presumed to be true, give rise to a “plausible” claim for relief. Id.

Alleged TCPA Violation Satisfies Rule 8(a)(2)

Joytoto asserts that Plaintiff’s claim against it must be dismissed on three grounds: (1)

Plaintiff’s complaint is inadequate under Fed. R. Civ. P. 8(a)(2); (2) Plaintiff fails to address

Joytoto specifically in the complaint; and (3) the Fax is not an “unsolicited advertisement”

as defined under the TCPA. The Court disagrees. 

Regarding the inadequate complaint claim, the Court disagrees with Joytoto’s

argument that Plaintiff’s complaint fails to allege sufficient facts. Under the first prong of the

Ashcroft test, the Court must first determine which allegations are presumed to be true for

the purposes of this motion. Plaintiff makes multiple allegations that the Court considers to

be legal conclusions that do not merit a presumption of truth–specifically, the numerous

variations of the allegation that Joytoto sent (also transmitted, broadcasted, caused to be sent)

the unsolicited fax. (Compl. at ¶¶ 6, 19, 26, 42, 43.) Plaintiff also alleges, however, that

Joytoto knew that the transmitted faxes were advertisements; participated in the preparation

of the content of the faxes; provided or obtained the fax telephone numbers of Plaintiff and

the members of the class; compensated a third party for transmitting the unsolicited faxes to

telephone facsimile machines; and/or knew that Plaintiff and other members of the class had

not authorized the fax. (Id. at ¶ 44.) The Court finds that these allegations constitute factual

allegations that are presumed to be true for the purposes of this Motion to Dismiss.

Under the second prong of the Ashcroft test, the Court must determine whether the

allegations, taken as true, support a plausible claim for relief. The Supreme Court in Ashcroft

stated that analysis under this prong will be a “context-specific task that requires the

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reviewing court to draw on its judicial experience and common sense.” Ashcroft, 129 S. Ct.

at 1950. In Ashcroft, the Supreme Court found that the allegations, although presumed to be

true, did not raise the claim of relief from the realm of possible to that of plausible because

the alleged conduct was merely parallel conduct consistent with unlawful behavior and could,

with equal or greater likelihood, be compatible with lawful behavior. In this case, unlike in

Ashcroft, the factual allegations do not describe parallel conduct; rather, they describe a clear

violation of the TCPA. Moreover, based upon the pleadings before the Court, Defendant has

provided no lawful explanation for why Defendant would compensate a third party to

transmit faxes to parties who had not authorized their transmission. The Court therefore finds

that Plaintiff alleges sufficient factual material in its Complaint to satisfy the standard under

Rule 8(a)(2). 

Regarding the failure to address Joytoto specifically, the cases upon which Joytoto

relies to establish that Plaintiff must specify how each named defendant participated in the

legal wrongs, Hinman v. M & M Rental Center, Inc., 545 F. Supp. 2d 802, 805 (N.D. Ill

2008); Closterman v. Johnson, No. 92-514-FR, 1992 WL 220683 (D. Or. 1992), are neither

convincing nor controlling. Alleging that the “defendants” committed the above-stated acts

is sufficient, as Joytoto is a named defendant. Therefore, Plaintiff’s TCPA violation claim

is adequate under Rule 8(a)(2). 

Regarding the unsolicited advertisement, the TCPA defines an unsolicited

advertisement as “any material advertising the commercial availability or quality of any

property, goods, or services, which is transmitted to any person without that person’s prior

express invitation or permission, in writing or otherwise.” 47 U.S.C. § 227(a)(5). Joytoto’s

argument that Plaintiff fails to allege that the Fax advertises the commercial availability or

quality of JYTO is unconvincing. On a motion to dismiss, we are required to assume that all

general allegations embrace whatever specific facts might be necessary to support them.

Peloza v. Capistrano Unified Sch. Dist., 37 F.3d 517, 521 (9th Cir. 1994), cert. denied, 515

U.S. 1173 (1995) (citations omitted). Therefore, requiring Plaintiff to demonstrate in detail

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how the Fax constitutes an advertisement is unnecessary. Moreover, even if it were

necessary, the fact that the Fax lists the share price and states that JYTO is a “Strong Buy”

and that it is “ALREADY A WINNER” makes it reasonable to conclude, for the purposes

of a motion to dismiss under Rule 12(b)(6), that the Fax was advertising JYTO. (Exh. 1.) 

Joytoto further argues that JYTO does not constitute property, a good, or a service,

and therefore the Fax cannot be an advertisement as defined in the statute. § 227(a)(5). This

issue has never been addressed by the Ninth Circuit Court of Appeals. It is true that securities

can be distinguished from the ordinary meaning of property, goods, and services; however,

it is also true that, as stated above and for the purposes of Rule 12(b)(6), the Fax advertises

the quality of JYTO, and that the sender of the Fax successfully shifted its advertising costs

by sending the Fax, which aligns with the purpose of the prohibition. Destination Ventures,

Ltd. v. F.C.C., 46 F.3d 54, 56 (9th Cir. 1995) (stating that Congress’s goal was to prevent the

shifting of advertising costs). As we are bound to construe the facts in the light most

favorable to Plaintiff, we find that Joytoto’s argument will not support a motion to dismiss.

Therefore, Joytoto’s motion to dismiss the TCPA violation claim under Rule 12(b)(6)

is denied. 

Declaratory Judgment Is Not Duplicative

Joytoto argues that Plaintiff’s request for declaratory judgment should be dismissed

because it is duplicative and unnecessary. The Court disagrees.

The TCPA explicitly permits Plaintiff to bring actions for both injunctive relief and

recovery of damages. § 227(b)(3)(A-C). Plaintiff has elected to bring both such actions.

(Compl. at 14.) Inasmuch as a declaration could aid Plaintiff in the pursuit of injunctive

relief, it is not duplicative. Therefore, Joytoto’s motion to dismiss Plaintiff’s request for

declaratory judgment under Rule 12(b)(6) is denied. 

Plaintiff’s Civil Conspiracy and Aiding and Abetting Claims Satisfy Rule 8(a)(2)

Joytoto argues that Plaintiff’s civil conspiracy and aiding and abetting claims must be

dismissed on three grounds: (1) they are derivative to the TCPA violation claim, which,

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Joytoto argues, must also be dismissed; (2) the complaint fails to allege sufficient facts to

establish a basis for the claims; and (3) Plaintiff fails to specify which defendants were

parties to the agreement. The Court disagrees. 

Inasmuch as the Court denied Joytoto’s motion to dismiss the TCPA violation claim,

the Court also rejects Joytoto’s argument that Plaintiff’s civil conspiracy and aiding and

abetting claims must be dismissed on the grounds that they are derivative claims. 

Regarding the sufficiency of the factual allegations, the Court applies the two prong

Ashcroft test described above. Under the first prong, although Plaintiff alleges a substantial

number of legal conclusions that do not merit a presumption of truth (Compl. at ¶¶ 55, 56,

60(c)(iii-iv)), Plaintiff also includes factual allegations that merit a presumption of truth.

Plaintiff alleges that Defendants provided the fax numbers of Plaintiff and other members of

the class (Compl. at ¶ 44); Defendants compensated a third party for the transmission of the

fax (Id.); Defendants knew that Plaintiff and other members of the class had not authorized

the transmission of the fax; and Defendants provided the information contained in the fax.

(Compl. at ¶ 60(c)(i)). Under the second prong, these factual allegations, taken as true,

support a claim for both civil conspiracy and aiding and abetting. Moreover, the factual

allegations, when taken as a whole, are not compatible with any lawful behavior. The Court

therefore finds that Plaintiff’s claims of civil conspiracy and aiding and abetting are sufficient

under Rule 8(a)(2). 

Moreover, Joytoto’s argument that Plaintiff fails to specify which defendants were

party to the agreement fails because, inasmuch as Joytoto is a named defendant, it is

sufficiently put on notice that it is accused of civil conspiracy. 

Therefore, Joytoto’s motion to dismiss the civil conspiracy and aiding and abetting

claims pursuant to Rule 12(b)(6) is denied.

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Accordingly,

IT IS ORDERED that Defendant Joytoto USA Inc.’s Motion to Dismiss for Failure

to State a Claim (Doc. #13) is DENIED.

DATED this 16th day of July, 2009.

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