Thane Charman v. Desert Lake Group,LLC ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 THANE CHARMAN, Case No. 23-cv-0959-BAS-KSC 12 Plaintiff, ORDER GRANTING MOTIONS TO 13 v. DISMISS WITH LEAVE TO AMEND (ECF Nos. 16, 18) 14 DESERT LAKE GROUP, LLC, et al., 15 Defendants. 16 17 18 Pending before the Court are Defendant Ryan Hoggan and Defendant Chris Tirrell 19 Armstrong’s motions pursuant to Federal Rules of Civil Procedure (“Rule”) 12(b)(2), 20 12(b)(5), and 12(b)(6) to dismiss Plaintiff Thane Charman’s action. (ECF Nos. 16, 18.) 21 For the following reasons, the Court GRANTS Defendants’ motions to dismiss. The Court 22 further GRANTS Plaintiff leave to amend his Amended Complaint. 23 24 I. Background 25 Plaintiff, a resident of San Diego, California, brings this action under the Telephone 26 Consumer Protection Act of 1991 (“TCPA), 47 U.S.C. § 227, which restricts phone 27 solicitations and the use of automated telephone equipment. Plaintiff alleges he registered 28 his phone number on the National Do-Not-Call Registry in May 2019 before receiving at 1 least nine unauthorized automated text messages to his cell phone between January and 2 July 2020. Plaintiff contends the text messages contained marketing materials and a link 3 to Desert Lake Group, LLC’s (“Desert Lake Group”) website. Desert Lake Group is an 4 online seller of products containing cannabidiol (“CBD”), a derivative of cannabis plants. 5 Plaintiff asserts Desert Lake Group must have used a random phone search to send these 6 messages because he does not have a prior relationship with the company. Because he did 7 not give prior permission for Desert Lake Group to contact him, Plaintiff claims these text 8 messages violate the TCPA. (FAC at ¶¶ 22–40.) 9 On May 25, 2023, Plaintiff initiated this suit against Desert Lake Group, a number 10 of other business entities connected to Desert Lake Group, and a number of individual 11 defendants including Ryan Dean Hoggan and Chris Tirrell Armstrong. On May 16, 2023, 12 Plaintiff filed his first Amended Complaint. (FAC, ECF No. 6.) Following notification 13 that Desert Lake Group had declared bankruptcy, Plaintiff dismissed his claims against 14 Desert Lake Group, its associated business entities, and many of the individual defendants. 15 (ECF No. 19.) 16 On January 12, 2024, Hoggan filed a motion to dismiss contending Plaintiff failed 17 to properly serve him and that Plaintiff fails to plead sufficient facts to assert personal 18 jurisdiction over Hoggan. (ECF No. 16.) On February 9, 2024, Plaintiff served Hoggan 19 again, and Hoggan stipulated service of process was proper. (ECF No. 43.) On January 20 15, 2024, Armstrong filed a motion to dismiss arguing Plaintiff failed to plead sufficient 21 facts to state a claim under the TCPA. (ECF No. 18.) The Court now considers Hoggan 22 and Armstrong’s motions to dismiss. 23 II. Legal Standard 24 When raised as a defense by motion, Rule 12(b)(2) authorizes the dismissal of an 25 action for lack of personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). When a dispute 26 between the parties arises concerning whether personal jurisdiction over a defendant is 27 proper, “the plaintiff bears the burden of demonstrating that jurisdiction is appropriate.” 28 Will Co. v. Lee, 47 F.4th 917, 921 (9th Cir. 2022). When the defendant’s motion is based 1 on written materials, and no evidentiary hearing is held, the court will evaluate only 2 whether the plaintiff demonstrates a prima facie showing of personal jurisdiction based on 3 the plaintiff’s pleadings and affidavits. Id. The court must take unchallenged allegations 4 in the complaint as true, and conflicts between the parties over statements within any 5 affidavits must be resolved in favor of the plaintiff. Id. 6 Under Rule 12(b)(6), the Court may dismiss a cause of action for “failure to state a 7 claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “A Rule 12(b)(6) 8 dismissal may be based on either a ‘lack of a cognizable legal theory’ or ‘the absence of 9 sufficient facts alleged under a cognizable legal theory.’” Johnson v. Riverside Healthcare 10 Sys., LP, 534 F.3d 1116, 1121 (9th Cir. 2008) (quoting Balistreri v. Pacifica Police Dep’t, 11 901 F.2d 696, 699 (9th Cir. 1990)). 12 A complaint must contain more than “naked assertions,” “labels and conclusions,” 13 or “a formulaic recitation of the elements of a cause of action.” Bell Atlantic Corp. v. 14 Twombly, 550 U.S. 544, 555–57 (2007). A complaint states a plausible claim “when the 15 plaintiff pleads factual content that allows the court to draw the reasonable inference that 16 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 17 (2009). The court must accept all factual allegations pleaded in the complaint as true and 18 draw all reasonable inferences in favor of the nonmoving party. Cahill v. Liberty Mut. Ins. 19 Co., 80 F.3d 336, 337–38 (9th Cir. 1996). The court need not accept conclusory allegations 20 as true; rather, it must “examine whether conclusory allegations follow from the description 21 of facts as alleged by the plaintiff.” Holden v. Hagopian, 978 F.2d 1115, 1121 (9th Cir. 22 1992) (citation omitted). 23 Where a complaint fails to state a plausible claim, the court “should grant leave to 24 amend even if no request to amend the pleading was made, unless it determines that the 25 pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 26 F.3d 1122, 1130 (9th Cir. 2000) (en banc) (internal quotations omitted). 27 28 1 II. Analysis 2 A. Personal Jurisdiction 3 Hoggan moves to dismiss Plaintiff’s Amended Complaint asserting Plaintiff’s 4 allegations are insufficient to assert personal jurisdiction over him. (ECF No. 16 at 8.) The 5 general rule provides personal jurisdiction over a defendant is proper if it is permitted by a 6 long-arm statute and if the exercise of that jurisdiction does not violate federal due process. 7 Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). For due process to be 8 satisfied, a defendant must have “minimum contacts” within the forum state such that 9 asserting jurisdiction over the defendant would not “offend traditional notions of fair play 10 and substantial justice.” Id. at 1155 (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 11 315 (1945)). Both California and federal long-arm statutes require compliance with due 12 process requirements. Daimler AG v. Bauman, 571 U.S. 117, 125 (2014). 13 There are two types of personal jurisdiction: general and specific. Id. at 118. 14 General jurisdiction allows a court to hear cases unrelated to the defendant’s forum 15 activities and exists if the defendant has “substantial” or “continuous and systematic” 16 contacts with the forum state. Fields v. Sedgewick Assoc. Risk, Ltd., 769 F.2d 299, 301 17 (9th Cir. 1986). Specific jurisdiction permits the court to exercise jurisdiction over a 18 defendant who has availed itself through forum-related activities that gave rise to the action 19 before the court. Bancroft & Masters, Inc. v. August Nat’l Inc., 223 F.3d 1082, 1086 (9th 20 Cir. 2000), overruled on other grounds in part by Yahoo! Inc. v. La Ligue Contre Le 21 Racisme Et L’Antisemitisme, 433 F.3d 1199 (9th Cir. 2006). 22 Plaintiff does not allege that Hoggan is subject to general jurisdiction in California, 23 and Hoggan attests he does not reside in California or conduct significant business 24 activities in California. (ECF No. 16-1 at 8.) The Court therefore examines if Plaintiff has 25 plead specific jurisdiction. The Ninth Circuit put forth a three-pronged test for specific 26 jurisdiction: 27 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform 28 1 some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and 2 protections of its laws; 3 (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and 4 (3) the exercise of jurisdiction must comport with fair play and substantial 5 justice, i.e. it must be reasonable. 6 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). The 7 plaintiff bears the burden of proving the first two prongs and, if successful, the burden 8 shifts to the defendant on the third prong to prove that jurisdiction is unreasonable. Id. If 9 any prong is not satisfied, then jurisdiction in the forum would deprive the defendant of 10 due process of law. AMA Multimedia, LLC v. Wanat, 970 F.3d 1201, 1208 (9th Cir. 2020). 11 Defendant Hoggan challenges Plaintiff’s assertion of personal jurisdiction arguing 12 the Amended Complaint fails to allege he personally undertook any actions and that he 13 does not direct the activities of the Desert Lake Group or do business in California. (ECF 14 No. 16-1 at 8.) In response to Hoggan’s motion, Plaintiff contends Hoggan “is at the center 15 of a business enterprise thru [sic] a web of interlocking LLC and Corporations” that violate 16 the TCPA. (ECF No. 35 at 2.) Plaintiff offers three consumer reports as evidence of the 17 “shell game” of corporations Hoggan uses to perpetrate his marketing scheme. (Id.) None 18 of the facts offered in response to Hoggan’s motion are included in Plaintiff’s Amended 19 Complaint. 20 When evaluating a motion to dismiss, the court may “consider only allegations 21 contained in the pleadings, exhibits attached to the complaint, and matters properly subject 22 to judicial notice.” Outdoor Media Grp., Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th 23 Cir. 2007) (citation and quotation marks omitted). Courts accordingly must disregard facts 24 that are not alleged on the face of the complaint or contained in documents attached to the 25 complaint. See Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n. 26 19 (9th Cir. 1990). The Court may consider facts raised in opposition papers, however, in 27 deciding whether to grant leave to amend. See Broam v. Bogan, 320 F.3d 1023, 1026 n. 2 28 (9th Cir. 2003). Plaintiff does not include these consumer reports in his Amended 1 Complaint. Courts are permitted to take into account documents that are incorporated by 2 reference in a complaint where the authenticity of those documents is not questioned, 3 Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994), but Plaintiff’s Amended Complaint 4 does not reference any of the consumer reports or any facts within them. The Court 5 therefore does not consider Plaintiff’s consumer reports evidence to assess whether he has 6 plead sufficient facts supporting personal jurisdiction. 7 Examining the face of the Amended Complaint, Plaintiff only alleges “Ryan Dean 8 Hoggan can be served at” a Canadian address. (FAC at ¶ 12.) This claim is insufficient to 9 establish personal jurisdiction over Hoggan. Plaintiff does not allege any other facts related 10 to Hoggan. Plaintiff thus fails to meet his burden for pleading personal jurisdiction. See 11 AMA Multimedia, 970 F.3d at 1208. Accordingly, pursuant to Rule 12(b)(2), Plaintiff’s 12 Amended Complaint is dismissed with respect to Hoggan. Plaintiff, however, may be able 13 to cure these defects with greater factual specificity. Therefore, the Court grants Plaintiff 14 leave to amend his Amended Complaint. 15 B. Individual Liability Under the TCPA 16 Armstrong argues Plaintiff’s Amended Complaint fails to allege facts supporting 17 individual liability for violations of the TCPA. (ECF No. 18-1 at 7.) Armstrong contends 18 Plaintiff fails to allege any personal participation such that Plaintiff fails to state a claim 19 against him. (Id. at 8.) Plaintiff, in his opposition to Armstrong’s Motion, contends 20 Armstrong “is at the center of a business enterprise thru [sic] a web of interlocking LLC 21 and Corporations that includes Desert Lake Group LLC.” (ECF No. 36 at 5.) Plaintiff 22 again cites three consumer reports as evidence of this “web” of corporations. (ECF No. 36 23 at 6–8.) 24 The TCPA establishes two potential theories of liability: direct liability and vicarious 25 liability. See Thomas v. Taco Bell Corp., 582 Fed. App’x. 678, 679 (9th Cir. 2014). An 26 individual may be directly liable where he personally made the telephone calls at issue or 27 directed someone to make those telephone calls on his behalf. See, e.g., Roylance v. ALG 28 Real Est. Servs., Inc., No. 5:14-CV-02445-PSG, 2015 WL 1522244, at *3 (N.D. Cal. Mar. 1 16, 2015), report and recommendation adopted as modified, No. 14-CV-02445-BLF, 2015 2 WL 1544229 (N.D. Cal. Apr. 3, 2015). An individual may be vicariously liable if “the 3 plaintiff establishes an agency relationship, as defined by federal common law, between 4 the defendant and a third-party caller.” Gomez v. Campbell-Ewald Co., 786 F.3d 871, 879 5 (9th Cir. 2014), aff’d, 136 S. Ct. 663 (2016). Vicarious liability is applicable when a 6 defendant “controlled or had the right to control [the entity violating the TCPA] and, more 7 specifically, the manner and means of the [telemarketing campaign it] conducted.” 8 Thomas, 582 Fed. App’x. at 679. 9 As discussed, the Court does not consider facts not alleged in the complaint or in 10 documents attached to the complaint in a motion to dismiss. See Outdoor Media, 506 F.3d 11 at 899. The Court therefore does not consider the consumer reports attached to Plaintiff’s 12 Opposition to Armstrong’s Motion. Looking only to the Amended Complaint, Plaintiff 13 alleges “Chris Tirrell Armstrong can be served at” a Utah address. (FAC at ¶ 6.) Plaintiff 14 otherwise fails to make any allegations with respect to Armstrong. 15 Plaintiff does, however, make a number of allegations regarding the singular 16 “Defendant” including that the “Defendant” placed the alleged automated text messages to 17 Plaintiff’s phone. (FAC at ¶¶ 31–38.) These allegations are deficient because they fail to 18 provide adequate detail to tell which defendant did what alleged wrong. See, e.g., 19 Armstrong v. Investor’s Bus. Daily, Inc., No. CV-18-2134-MWF-JPRX, 2018 WL 20 6787049, at *10 (C.D. Cal. Dec. 21, 2018) (dismissing a TCPA cause of action where the 21 plaintiff failed to distinguish who did what between four defendants); Hamilton v. El 22 Moussa, No. CV-19-8182-CJC-AFMX, 2020 WL 2614625, at *2 (C.D. Cal. Feb. 10, 2020) 23 (dismissing allegations against individual defendants for failing to identify what each 24 individual did). 25 Because Plaintiff’s Amended Complaint fails to allege Armstrong acted in violation 26 of the TCPA, the claims against Armstrong are dismissed. The Court need not reach 27 Armstrong’s additional arguments for dismissal. Because it may be possible to correct 28 these deficiencies, the Court grants Plaintiff leave to amend his claims against Armstrong. 1 Conclusion 2 Defendants’ motions to dismiss (ECF Nos. 16, 18) are GRANTED. The Court 3 || dismisses Plaintiff's Amended Complaint with leave to amend. If Plaintiff wishes to file 4 ||a Second Amended Complaint, he must do so by May 27, 2024. Any amended pleading 5 be separate and complete in and of itself and titled Second Amended Complaint. All 6 || exhibits should be attached to the Second Amended Complaint. 7 IT IS SO ORDERED. 8 9 || DATED: May 6, 2024 (pil A (Lyphaa 6 10 United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9]