Antitrust Law Daily Wrap Up, PRIVACY—D. N.J.: TCPA claim dismissed because consumer had “Established Business Relationship” with magazine, (Dec 13, 2013)

By Peter Reap, J.D., LL.M.

Richard M. Zelma’s claim against DialAmerica Marketing Inc. and other defendants for violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. (the “TCPA”) was dismissed because his wife’s subscription to Prevention Magazine triggered the TCPA’s “Established Business Relationship” exception in 47 C.F.R. § 64. 1 200(a)(4)( I), the federal district court in Newark has decided (Zelma v. Conway, December 11, 2013, Cavanaugh, D.). With Zelma’s lone federal claim dismissed, the court declined to exercise jurisdiction over the remaining state law claim for violation of New Jersey’s Do Not Call Law and granted the defendants’ motion to dismiss the amended complaint.

Background. Zelma based his claims on the grounds that the defendants made at least seven unsolicited calls to his residence. He claims his name is on both the Federal and New Jersey Do Not Call lists and asserts that these phone calls were therefore made in violation of both statutes. Zelma seeks statutory, punitive or actual damages for each of the unlawful calls under the TCPA and New Jersey’s Do Not Call Law as well as statutory treble damages under the TCPA for the defendants’ alleged “willful” and “knowing” violation. In addition, Zelma seeks costs and permanent injunctive relief.

Analysis. Zelma’s amended complaint did not cure the deficiencies present in the original complaint that the court found to be grounds for dismissal in its opinion of September 13. 2012. The court dismissed Zelma’s original complaint based on a finding that his wife had a subscription with Prevention Magazine and that the defendants’ phone calls were made to encourage subscription renewal. The court determined that these facts triggered the TCPA’ s “Established Business Relationship” exception.

Under this exception, the TCPA does not apply if calls are made to customers with whom the caller has an Established Business Relationship. The term “Established Business Relationship” is defined as:

a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of the subscriber’s purchase or transaction with the entity within the eighteen (18) months immediately preceding the date of the telephone call. . , which relationship has not been previously terminated by either party.

47 C.F.R. § 64.1200(0(5) (emphasis added).

Instead of providing clarity to the court, Zelma’s amended complaint served to muddy the factual allegations surrounding Zelma’s and his wife’s relationship with Prevention Magazine. However, it was clear that although Zelma’s wife may not have contracted directly with Prevention Magazine, she was receiving a subscription to the magazine through “SkyMiles,” her frequent flyer miles program with Delta/Continental Airlines, according to the court.

Since the Established Business Relationship exception applied “with or without an exchange of consideration,” the fact that Zelma’s wife may not have paid Prevention Magazine directly for the subscription was of no consequence, the court held. The election to receive a free Prevention Magazine subscription through the SkyMiles program was a sufficient “transaction” to trigger the Established Business Relationship exception. In addition, Zelma’s notation of “Do Not Call” on forms provided by SkyMiles in no way severed his business relationship with Prevention Magazine. Thus, the Established Business Relationship exception applied and therefore the calls made by the defendants were permissible under the TCPA.

Zelma’s claim for treble damages was also dismissed. Zelma did not provide any plausible factual allegation in his amended complaint to demonstrate that any of the defendants acted “willfully and knowingly,” as required for treble damages. 47 U.S.C. § 227(b)(3)(C).

The case is Civil Action No. 2:12-cv-00256 (DMC) (JBC).

Attorneys: Arthur Lee Raynes (Wiley, Malehorn & Sirota, Esqs.) for DialAmerica Marketing Inc., Rodale Inc., Prevention Magazine and ABC Corp.

Companies: DialAmerica Marketing Inc.; Rodale Inc.; Prevention Magazine; ABC Corp.

Cases: Privacy NewJerseyNews