In In re: Portfolio Recovery Associates, LLC, Telephone Consumer Protection Act Litigation, here, Judge Houston held that the Plaintiff had adequately pleaded vicarious liability under the TCPA, and refused, at the pleadings stage, to strike Plaintiff’s prayer to recovery attorneys’ fees under the TCPA to the extent permitted by Code of Civil Procedure § 1021.5.
In opposition, plaintiffs contend their second cause of action sufficiently alleges defendants PRA Inc. and Stern are directly liable for the TCPA violations and sufficiently pleads theories of piercing the corporate veil, agency and ratification. See Doc. # 74. Plaintiffs point to their allegations that “PRA LLC ‘accounts for the overwhelming majority (approximate 80%) of PRA Inc.’s revenue’ and that ‘[a]ccordingly, PRA, Inc. directly manages PRA LLC’s daily operations – and does not treat PRA LLC as a passive investment.’” Id. at 1-2 (citing FACC ¶ 62). Plaintiffs further point out their FACC alleges “‘PRA Inc. is directly involved in’ PRA LLC’s TCPA violations and that ‘PRA Inc.’s employees and agents had direct, personal participation in [PRA LLC’s] TCPA violations …’” Id. at 2. Plaintiffs also note the FACC recites portions of defendants’ securities filing which, along with the FACC’s own recitations, explains the involvement of PRA Inc. personnel, including Stern, in the operation of PRA LLC’s call centers. Id. at 2-3. According to plaintiffs, “[t]he FACC’s most important allegation [regarding Stern’s involvement] is that ‘PRA Inc.’s compensation to Mr. Stern has been based, in part, on his development and implementation of strategies that increased the number of dollars recovered from consumers …’” Id. at 3 (quoting FACC ¶ 63). Second, plaintiffs point out the FACC clearly alleges “the circumstances of this case ‘support piercing the corporate veil,’” “amply alleges that PRA LLC acted as Stern and PRA Inc.’s agent when it violated the TCPA” and that “Stern and PRA Inc. are liable because they ratified PRA LLC’s TCPA violations.” Id. at 3-4, 7 (citing FACC ¶¶ 66, 67, 68). . . . This Court agrees with defendants that there are no allegations PRA Inc. or Stern made or placed any calls to plaintiffs and, thus, plaintiffs’ direct liability theory fails. However, this Court’s review of the record reflects that plaintiffs sufficiently plead facts in support of vicarious liability in the form of veil-piercing, agency and/or ratification theories. Construing the facts presented here as true and in the light most favorable to plaintiffs, this Court finds there are sufficient allegations contained in the FACC to state a plausible theory for vicarious liability against defendants PRA Inc. and Stern. See Ashcroft, 129 S.Ct. at 1949. Therefore, this Court finds defendants’ motion to dismiss plaintiffs’ second cause of action for failure to state a claim for relief must be DENIED.
The Court also refused to strike the demand for attorneys’ fees under the TCPA, finding such fees possibly recoverable under Code of Civil Procedure § 1021.5.
Defendants also seek dismissal of plaintiffs’ request for attorneys’ fees under California Civil Code Section 1021.5 on the grounds that the TCPA does not expressly authorize the award of attorneys’ fees. See Doc. # 71 at 17-18. Specifically, defendants explain that, in the Ninth Circuit, “‘courts generally are without discretion to award attorneys’ fees to a prevailing plaintiff unless . . . fee-shifting is expressly authorized by the governing statute.’” Id. at 18 (quoting In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011); In re Bybee, 945 F.2d 309, 316 (9th Cir. 1991)). Defendants point out the governing statute in this case, the TCPA, does not authorize feeshifting or an award of attorneys’ fees. Id. (citing 47 U.S.C. § 227; Klein v. Vision lab Telecomms. Inc., 399 F.Supp.2d 258, 542-43 (S.D.N.Y. 2005)(dismissing claim for attorneys’ fees under the TCPA because the statute makes no provision for such fees or costs). Defendants note “[p]laintiffs cannot point to any decision – not a single case – in which a court has found fees under California [Civil Code] § 1021.5 to be available in a TCPA action, like this one.” Id. Defendants argue that the Court should not accept plaintiffs’ invitation to be the first court to so find. Id. In opposition, plaintiffs concede Section 1021.5 does not explicitly provide for an award of attorneys’ fees but contend there is no case authority prohibiting this Court from awarding attorneys’ fees under Section 1021.5 based on a violation of the TCPA. Doc. # 74 at 19-20. Plaintiffs, however, point out that “[d]efendants have failed to produce a single case here a court held that section 102.5 does not apply to a TCPA claim.” Id. at 19 (emphasis in original). Thus, plaintiffs contend this Court should decline to be first court to do so, especially since courts have “routinely awarded attorneys’ fees under section 1021.5 for the vindication of rights arising under federal law.” Id. (citing Maria P. v. Riles, 43 Cal.3d 1281, 1293 (1987)(attorneys’ fees awarded under Section 1021.5 based on violation of the Family Educational Rights and Privacy Act of 1974); Citizens Against Rent Control v. City of Berkeley, 181 Cal.App.3d 213 (1986)(attorneys’ fees under Section 1021.5 awarded based on vindication of First Amendment rights); Slayton v. Pomona Unified School Dist., 161Cal.App.3d 538 (1984)(First Amendment rights as well as California law); Schmid v. Lovette, 154 Cal.App.3d 466 (1984)(confirming attorneys’ fee award under Section 1021.5 based on a state law that was “repugnant to the state and federal constitutions”)). Plaintiffs also contend the TCPA does not expressly or impliedly preempt an award of attorneys’ fees. Id. at 20-21. This Court finds plaintiffs’ arguments persuasive. Although plaintiffs do not dispute the TCPA does not expressly authorize fee-shifting or an award of attorneys’ fees, this Court finds no reason to deny plaintiffs the opportunity, at this early stage of litigation, to seek such an award should plaintiffs prevail. This Court is also persuaded by the cases cited by plaintiffs in which the courts determined that attorneys’ fees could be awarded pursuant to Section 1021.5 based on vindication of a federal right. See Maria P., 43 Cal.3d at 1293; Citizens Against Rent Control, 181 Cal.App.3d 213; Slayton, 161Cal.App.3d 538; Schmid v. Lovette, 154 Cal.App.3d 466. Thus, this Court finds plaintiffs should not be foreclosed from seeking attorneys’ fees under Section 1021.5 should they prevail under the TCPA. Therefore, defendants’ motion to dismiss plaintiffs’ claim and request for attorneys’ fees is DENIED.