Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_16-cv-00198/USCOURTS-caed-1_16-cv-00198-1/pdf.json

Parties Involved:
David A. Steinberg
Defendant
Sergio Mora
Plaintiff
Zeta Interactive Corp.
Defendant

Document Text:

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

SERGIO MORA,

Plaintiff,

v.

ZETA INTERACTIVE CORP.; DAVID 

STEINBERG,

Defendants.

No. 1:16-cv-00198-DAD-SAB

ORDER DENYING DEFENDANTS’

MOTION TO DISMISS

(Doc. No. 17)

In this 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. 

13.)1 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.

 

1

Plaintiff’s first amended complaint was filed after the filing of a prior motion to dismiss

brought by defendants. (Doc. Nos. 11 & 13.) The court vacated the hearing date on the first 

motion to dismiss upon finding that the amended complaint had rendered that motion moot. (Doc. 

No. 14.)

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BACKGROUND

Defendants 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. 17-1.) 

In relevant part, plaintiff’s amended complaint alleges that:

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 Steinberg.

LEGAL STANDARD

The 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 678.

In 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. 

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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 defendant-unlawfully-harmed-me accusation.” 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 (1983).

ANALYSIS

As a 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).2 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 

 

2 Citation to this unpublished Ninth Circuit opinion is appropriate pursuant to Ninth Circuit Rule 

36-3(b).

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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).

In the 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.3 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.)

 

3

 Defendants have attached the declaration of defendant Steinberg in support of their motion to 

dismiss. (Doc. No. 17-2.) However, plaintiff correctly argues that “[i]n considering a motion to 

dismiss, the Court’s review is limited to the allegations in the complaint, and the Court may not 

consider a declaration submitted by the other party.” (Doc. No. 21, at 4) (quoting Healy v. DJO, 

LLC, No. 11-cv-673-IEG-JMA, 2012 WL 474482, at *2 (S.D. Cal. Feb. 14, 2012)).

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The 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 

cause [the corporate defendant] to make telemarketing calls with its 

Do–No–Call lists disabled.

65 F. Supp. 3d at 1061 (citations omitted). These allegations were also was found sufficient to 

state a claim. Id. at 1061. The Ott court differentiated its case from Mais where there were “bare 

assertions that the defendant, who was vice president and 20% owner, controlled and authorized 

the policies and practices regarding the TCPA.” Id.

With the exception that the alleged unlawful activity here is fax advertisements rather than 

telephone calls, plaintiff’s allegations essentially mirror those in Bais. Moreover, while the

allegations of the complaint in Ott were slightly more detailed than those before the court here, 

specifically regarding emails that the individual defendants had allegedly received, the allegations 

of plaintiff’s first amended complaint are still much more similar to those found to be sufficient in

Ott than to those found deficient in Mais. See also Starr v. Baca, 652 F.3d 1202, 1216-17 (9th 

Cir. 2011) (concluding in the context of a prisoner’s civil rights action that the complaint’s 

allegations were sufficient to state a claim of supervisorial liability in wake of the decisions in 

Iqbal and Twombly in part because “[p]laintiff’s complaint may be dismissed only when 

defendant’s plausible alternative explanation is so convincing that plaintiff’s explanation is 

im plausible.”) Accordingly, the court finds that the allegations of the first amended complaint 

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are sufficient to state a cognizable claim against defendant Steinberg for violation of the TCPA.

CONCLUSION

For the reasons set forth above,

1) Defendant’s motion to dismiss (Doc. No. 17) is denied; and

2) The matter is referred back to the Magistrate Judge for further proceedings including 

the setting of a scheduling conference.

IT IS SO ORDERED.

Dated: June 24, 2016 

UNITED STATES DISTRICT JUDGE

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