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Gorss Motels, Inc. v. Eric Ryan Corp.

United States District Court, D. Connecticut.
May 21, 2020
461 F. Supp. 3d 5 (D. Conn. 2020)

Summary

In Gorss Motels, Inc. v. Eric Ryan Corp., 461 F. Supp. 3d at 15, the Connecticut district court granted summary judgment to Gorss finding that "[b]ecause the decision in Safemark regarding Gorss was based on the 2014 Franchise Agreement, and that Agreement was not in effect at the time the Faxes at issue in this case were sent in 2013, the Court does not agree with Eric Ryan that the facts in Safemark are 'nearly identical' to the facts in this case."

Summary of this case from Gorss Motels, Inc. v. Brigadoon Fitness Inc.

Opinion

No. 3:17cv126 (DJS)

05-21-2020

GORSS MOTELS, INC., Plaintiff, v. ERIC RYAN CORPORATION, Defendant.

Aytan Y. Bellin, Bellin & Associates, LLC, White Plains, NY, Ryan Michael Kelly, Anderson & Wanca, Rolling Meadows, IL, for Plaintiff. Christopher A. Cafardi, Pro Hac Vice, Ryan D. DeMotte, Pro Hac Vice, Cafardi Ferguson Wyrick Weis & Stotler, LLC, Sewickley, PA, Jonathan M. Shapiro, Aeton Law Partners LLP, Middletown, CT, for Defendant.


Aytan Y. Bellin, Bellin & Associates, LLC, White Plains, NY, Ryan Michael Kelly, Anderson & Wanca, Rolling Meadows, IL, for Plaintiff.

Christopher A. Cafardi, Pro Hac Vice, Ryan D. DeMotte, Pro Hac Vice, Cafardi Ferguson Wyrick Weis & Stotler, LLC, Sewickley, PA, Jonathan M. Shapiro, Aeton Law Partners LLP, Middletown, CT, for Defendant.

RULING ON MOTIONS FOR SUMMARY JUDGMENT

Dominic J. Squatrito, United States District Judge

The plaintiff, Gorss Motels, Inc. ("Gorss"), alleges that the defendant, The Eric Ryan Corporation ("Eric Ryan"), violated the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. § 227 ("TCPA"), by sending three unsolicited facsimile advertisements ("faxes") to Gorss during the time period between March 1, 2013, and December 1, 2013. Both parties have moved for summary judgment. For the reasons stated below, Gorss's motion for summary judgment is granted and Eric Ryan's motion for summary judgment is denied.

I. FACTS

Gorss formerly operated a Super 8 Motel in Connecticut as a franchisee of the Wyndham Hotel Group ("Wyndham"). Eric Ryan provides telecommunications and utility services, including auditing utility and telephone bills and providing consulting services relating to such bills.

In 1988 Gorss entered into a Franchise Agreement with Super 8 Motels, Inc. ("Super 8") that granted Gorss the right to operate a Super 8 Motel in Cromwell, Connecticut for a term of 20 years. The Franchise Agreement included the following language:

[T]he specifications and quality of items of personal property to be used in the franchised motel are established by FRANCHISOR [Super 8] from time to time to insure operation in accordance with FRANCHISOR'S standards, and further, [FRANCHISEE, i.e., Gorss] agrees to purchase from FRANCHISOR, or from such other vendor as FRANCHISOR may approve from time to time, or from any other source whose supplies and equipment have been approved in writing by FRANCHISOR, prior to acquisition, as meeting the standards and specifications designated by FRANCHISOR or conforming to the specimens or samples submitted or otherwise made available to FRANCHISEE by FRANCHISOR to preserve the uniformity of its System, the following items: mattresses, box springs, bed

frames, dresser-desks, chairs for use in guest rooms, nightstands, desk lamps, luggage racks, carpeting, drapes, sheets, blankets, pillows, pillowcases, bedspreads, towels, washcloths, bath mats, facial tissue, toilet tissue, soap, soap wrappers, matches, television receivers, and cabinets. FRANCHISOR shall not unreasonably withhold approval of such sources for personal property.

(Doc. # 77-4, at 17). On March 11, 2009, Gorss and Super 8 extended the 1988 Franchise Agreement for an additional five years, with an expiration date of August 15, 2014. Neither the original 1988 Franchise Agreement nor the 2009 five-year extension of that agreement contained a fax number for Gorss.

By this time, Super 8 Motels, Inc. had changed its name to Super 8 Worldwide, Inc.

On January 20, 2010, Gorss submitted a "Site Contact Form" to Wyndham. The "Current Contact Information" sections of that form listed the same fax number ((860) 632-8889) for all categories of contacts, i.e., "Entity Principal Contact," "Site Principal Contact," "General Manager," and "Customer Care." (Doc. # 96-1, at 2-3). During the time it operated a Super 8 Motel in Connecticut, Gorss had one fax machine, which was located behind the motel's front desk and had the fax number (860) 632-8889.

On September 10, 2014, Gorss and Super 8 Worldwide, Inc. entered into a new 20-year Franchise Agreement. Section 4.4 of the 2014 Franchise Agreement provided as follows:

We may offer optional assistance to you with purchasing items used at or in the Facility. Our affiliates may offer this service on our behalf. We may restrict the vendors authorized to sell proprietary or Mark-bearing items in order to control quality, provide for consistent service or obtain volume discounts. We will maintain and provide to you lists of suppliers approved to furnish Mark-bearing items, or whose products conform to System Standards.

(Doc. # 77-4, at 44, ¶ 4.4).

Wyndham Hotel Group is owned by Wyndham Worldwide Corporation. The predecessor of Wyndham Worldwide Corporation, Hospitality Franchise Systems, Inc., acquired Super 8 Worldwide, Inc. in 1993.

Worldwide Sourcing Solutions, Inc. ("WSSI") is a wholly owned subsidiary of Wyndham Hotels & Resorts, Inc. and an affiliate of Wyndham. Through its Approved Suppliers program WSSI supports Wyndham franchisees by negotiating prices, volume discounts, and commissions for products and services of third parties designated as Approved Suppliers. WSSI would often enter into an agreement with a vendor (a "Worldwide Sourcing Agreement") whereby the vendor would be designated as an Approved Supplier. As an Approved Supplier, a vendor could offer products or services for purchase or use by Wyndham franchisees and would pay commissions to WSSI. The Approved Supplier program offered discounts to Wyndham franchisees from the Approved Suppliers. Except as to certain items a franchisee was required to purchase from Approved Suppliers, a franchisee's participation in the Approved Supplier program was voluntary.

Wyndham and WSSI disclosed and promoted the Approved Supplier program to franchisees in various ways, including publishing and distributing a "Supplier Directory" to franchisees that identified Approved Suppliers; providing Approved Suppliers with the opportunity to participate at global conferences held for franchisees; and providing franchisees with on-line information regarding Approved Suppliers. WSSI also provided Approved Suppliers with the opportunity to participate in a marketing program in which WSSI arranged for a third party to send faxes to franchisees. Faxes sent through that program were sent to franchisees who had provided their fax numbers to Wyndham or its affiliates.

On October 15, 2010, WSSI and Eric Ryan entered into a Worldwide Sourcing Agreement (the "WSA") pursuant to which Eric Ryan became an Approved Supplier and WSSI agreed to promote Eric Ryan's goods and services to Wyndham franchisees. Eric Ryan paid a marketing fee to WSSI for these promotional services. Eric Ryan was an Approved Supplier from October 2010 through 2013.

Pursuant to the WSA, Eric Ryan was permitted to provide Wyndham with content for five faxes, as well as advertising information for placement on Wyndham's website and in a Wyndham sponsored catalog for the benefit of Wyndham franchisees. Eric Ryan was never provided with databases or contact lists of Wyndham franchisees.

In January 2013 a Wyndham employee requested that Eric Ryan provide content for a "Fax Blast" to be sent by Wyndham to its franchisees. Eric Ryan responded to the request by preparing a flyer providing its contact information and a summary of its services. The flyer was sent to Wyndham for its review and approval with the understanding that it would be sent by Wyndham via fax to Wyndham's franchisees pursuant to the WSA.

The term "blast-fax" means "to send (a fax) in multiple copies to numerous recipients at one time." https://www.merriam-webster.com/dictionary/blast-fax

Flyers promoting Eric Ryan's goods and services were faxed to various Wyndham franchisees, including Gorss, on March 1, 2013, November 1, 2013, and December 1, 2013. All three faxes (collectively "the Faxes") were successfully sent to Gorss's fax number, i.e., 860-632-8889.

Wyndham was a customer of Western Printing, a commercial printing company. On behalf of Wyndham, Western Printing arranged for the Faxes to be transmitted by a fax broadcasting service named WestFax. Wyndham decided which fax numbers would be targeted for each of the three faxes and paid Western Printing for its services. Eric Ryan had no business relationship with Western Printing and never had any direct contact with WestFax.

All of the Faxes advertised the commercial availability of Eric Ryan's services. By way of example, the March 1, 2013 fax included the following language: "Sign Up Now For a Free Utility and Telecommunications Bill Review....With no up-front cost, no obligations and flexible ‘fee for service’ options, Eric Ryan Corporation makes it easy for its hospitality clients to set and implement their own cost-cutting priorities for the benefit of their properties." (Doc. # 73-2, at 2). Each fax listed contact information (website, email address, phone number) where prospective clients could obtain further information about Eric Ryan's services. At the bottom of each fax, in smaller print, was the following sentence: "To opt out from future faxes, email strategic.sourcing@wyn.com or call this toll-free number: (877) 764-4212." (Id. at 2, 4, 6).

At no time did Gorss attempt to contact Wyndham or WSSI to opt out of faxes advertising the goods and services of Eric Ryan. Gorss sold the Cromwell Super 8 Motel in August 2016.

II. STANDARD

A motion for summary judgment shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Summary judgment is appropriate if, after discovery, the nonmoving party "has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "The burden is on the moving party to demonstrate the absence of any material factual issue genuinely in dispute." American International Group, Inc. v. London American International Corp. , 664 F.2d 348, 351 (2d Cir. 1981) (internal quotation marks omitted).

A fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute concerning a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. "When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Electric Industrial Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, the nonmoving party "must present specific evidence demonstrating a genuine dispute." Gannon v. UPS , 529 F. App'x 102, 103 (2d Cir. 2013).

In reviewing the record, the court must "construe the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor." Gary Friedrich Enterprises, L.L.C. v. Marvel Characters, Inc. , 716 F.3d 302, 312 (2d Cir. 2013). Summary judgment is improper if there is any evidence in the record from which a reasonable factual inference could be drawn in favor of the nonmoving party. See Security Insurance Co. of Hartford v. Old Dominion Freight Line, Inc. , 391 F.3d 77, 83 (2d Cir. 2004). In the context of a summary judgment motion, " ‘[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.’ " Davis-Garett v. Urban Outfitters, Inc. , 921 F.3d 30, 46 (2d Cir. 2019) (quoting Reeves v. Sanderson Plumbing Products, Inc. , 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) ).

III. DISCUSSION

The material facts in this case are, to a large extent, straightforward and undisputed. The legal significance of those facts as they relate to the TCPA, however, is very much in dispute. Gorss contends that the three faxes at issue were unsolicited advertisements sent to it by Eric Ryan in violation of the TCPA. Eric Ryan responds that, to the contrary, "[t]he faxes received by Gorss Motels were solicited faxes as Gorss Motels provided express invitation/permission to receive the faxes in question[ ]." (Doc. # 89, at 8). Eric Ryan also contends that Gorss "lacks standing to pursue its TCPA claims." (Doc. # 76, at 1).

The TCPA, as amended by the Junk Fax Protection Act, prohibits the use of "any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement...." 47 U.S.C. § 227(b)(1)(C). For purposes of the TCPA, the "sender" of a fax is "the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement." 47 C.F.R. § 64.1200(f)(10). An "unsolicited advertisement" is defined in the TCPA 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).

There is an exception to this prohibition known as the established business relationship exception ("EBR"). The record in this case is devoid of any evidence that there was an established business relationship between Gorss and Eric Ryan, and Eric Ryan has specifically stated that it "is not trying to establish that it has an EBR with Gorss Motels...." (Doc. # 89, at 32).

The TCPA directs the FCC to "prescribe regulations to implement the requirements" of the Junk Fax Protection Act. 47 U.S.C. § 227(b)(2).

The TCPA authorizes a person or entity to bring "an action to recover for actual monetary loss from ... a violation, or to receive $500 in damages for each ... violation, whichever is greater." 47 U.S.C. § 227(b)(3)(B). Gorss "requests that the Court award Plaintiff $1,500.00 in statutory damages (3 Faxes × $500.00)." (Doc. # 72-1, at 3).

The TCPA also authorizes treble damages "[i]f the court finds that the defendant willfully or knowingly violated this subsection...." 47 U.S.C. § 227(b)(3). Gorss has explicitly stated that it "does not seek treble damages in this motion...." (Doc. # 72-1, at 3 n.1).

A. STANDING

1. Article III Standing

Eric Ryan states its contention that Gorss lacks Article III standing as follows:

Gorss Motels claims that its injuries were caused by the non-compl[iant] opt-out notices on the faxes in question. However, Gorss Motels cannot satisfy its burden of establishing Article III standing as there is no causal connection between its claimed injuries, namely the loss of time and the loss of use of its fax machine, paper, and ink toner and Eric Ryan's alleged violation of the TCPA, namely the transmission of faxes with non-compl[iant] opt-out notices.

(Doc. # 76-1, at 30). Gorss did allege in the Complaint that the Faxes did not contain opt-out notices that complied with the requirements of the TCPA. With regard to Gorss's injuries, however, the Complaint alleges the following:

Unsolicited faxes damage their recipients. A junk fax recipient loses the value of its fax machine, paper, and ink toner. An unsolicited fax wastes the recipient's valuable time that would have been spent on something else. A junk fax interrupts the recipient's privacy. Unsolicited faxes prevent fax machines from receiving authorized faxes, prevent their use for authorized outgoing faxes, cause undue wear and tear on the recipients’ fax machines, and require additional labor to attempt to discern the source and purpose of the unsolicited message.

(Doc. # 1, at 2, ¶ 3). Contrary to Eric Ryan's assertion that Gorss is claiming its injuries were caused by non-compliant opt-out notices, Gorss is claiming its injuries were caused by the receipt of unsolicited fax advertisements.

In Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 194 L.Ed.2d 635 (2016), the Supreme Court reiterated the requirement that a plaintiff clearly allege facts demonstrating an injury that is both particularized and concrete on order to establish standing under Article III of the U.S. Constitution. Although "a bare procedural violation, divorced from any concrete harm" would not "satisfy the injury-in-fact requirement of Article III," an intangible harm may be concrete and "the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact." Spokeo , 136 S. Ct. at 1549.

Other courts within this district have found the same allegations of harm that are raised in the instant case sufficient to demonstrate concrete injury: "[I]t is clear there exists ample case law supporting the proposition that the TCA has created a legally cognizable interest in protecting individuals and entities from unwanted faxes, and that the violation of the statute creates a real and not abstract harm." Gorss Motels, Inc. v. Sysco Guest Supply, LLC , Civil Case No. 3:16-cv-01911-VLB, 2017 WL 3597880 at *5, 2017 U.S. Dist. LEXIS 133488 at *15 (D. Conn. Aug. 21, 2017) (internal quotation marks omitted); see also Gorss Motels Inc. v. Sprint Communications Co., L.P. , No. 3:17-cv-546 (JAM), ––– F.Supp.3d ––––, ––––, 2020 WL 818970 at *5, 2020 U.S. Dist. LEXIS 27957 at *14 (D. Conn. Feb. 19, 2020) ("Numerous courts have correctly concluded that an injury-in-fact arises from the wasted time that a junk fax recipient spends reviewing an unsolicited fax and the use of paper and ink toner in printing the fax advertisements.").

This Court likewise, and for the same reasons stated in the cases quoted above, concludes that the allegations of harm specified in the Complaint are sufficient to establish Article III standing.

2. Zone of Interests

Eric Ryan also argues that Gorss is not within the "zone of interests" protected by the TCPA and, as a result, lacks prudential standing to pursue this action. Gorss disputes the applicability of a prudential standing requirement in a case alleging a violation of the TCPA and contends in the alternative that it has, in any case, demonstrated that it falls within the statutory zone of interests.

"Prudential standing is a misnomer as applied to the zone-of-interests analysis, which asks whether this particular class of persons has a right to sue under the substantive statute." Lexmark International, Inc. v. Static Control Components, Inc. , 572 U.S. 118, 127, 134 S.Ct. 1377, 188 L.Ed.2d 392 (2014) (internal quotation marks and alteration omitted). "In sum, the question ... is whether [the named plaintiff] falls within the class of plaintiffs whom Congress has authorized to sue under [the pertinent statute]. In other words, we ask whether [the named plaintiff] has a cause of action under the statute." Id. at 128, 134 S.Ct. 1377.

Eric Ryan's argument that Gorss does not fall within the zone of interests intended to be protected by the TCPA relies to a large extent on the rulings in two cases: Stoops v. Wells Fargo Bank, N.A. , 197 F. Supp. 3d 782 (W.D. Pa. 2016) and Telephone Science Corp. v. Asset Recovery Solutions, LLC , No. 15-CV-5182, 2016 WL 4179150, 2016 U.S. Dist. LEXIS 104234 (N.D. Ill. Aug. 8, 2016).

In Stoops , the plaintiff had "purchased at least thirty-five cell phones and cell phone numbers with prepaid minutes for the purpose of filing lawsuits under the Telephone Consumer Protection Act." 197 F. Supp. 3d at 788. The court concluded that the plaintiff's interests, "which include purchasing cell phones with the hope of receiving calls from creditors for the sole purpose of collecting statutory damages," were "not within the zone of interests intended to be protected by the TCPA." Id. at 805.

In Telephone Science Corp. , the plaintiff TSC designed a service called "Nomorobo" to help consumers avoid robocalls. "Specifically, TSC maintains a ‘honeypot’ of telephone numbers to which TSC subscribes.... Nomorobo analyzes calls placed to TSC's honeypot numbers using a specialized algorithm, enabling it to ... distinguish between calls placed by robocallers and calls placed by non-robocallers." Telephone Science Corp. , 2016 WL 4179150 at *1, 2016 U.S. Dist. LEXIS 104234 at *2 (internal quotation marks omitted). TSC initiated an action under the TCPA alleging that the defendant had placed numerous robocalls to telephone numbers maintained by TSC. The court found that "instead of being ‘unwanted and unwelcome,’ robocalls to TSC numbers provide the analytical basis on which the Nomorobo service operates." Id. at *15, 2016 U.S. Dist. LEXIS 104234 at *48. "Because TSC has failed to allege an interest with which the TCPA is concerned -- privacy invasion, nuisance, public safety threat, and/or the shifting of costs based on unwelcome robocalls -- the Court finds that TSC lacks statutory standing under [the TCPA]." Id. at *16, 2016 U.S. Dist. LEXIS 104234 at *53.

In Bais Yaakov of Spring Valley v. Educational Testing Service , 367 F. Supp. 3d 93 (S.D.N.Y. 2019), the defendant, relying on Stoops and Telephone Science Corp. , argued that the plaintiff fell outside the zone of interests the TCPA was intended to protect "because ‘the TCPA was not intended to protect opportunistic serial plaintiffs bent on shaking down corporations with frivolous claims.’ " Id. at 114 (quoting Defendant's Mem. of Law in Supp. of Mot. for Summ. J.). The court found Stoops and Telephone Science Corp. "readily distinguishable," because "[i]n this case, the record is devoid of any evidence that Plaintiff set up its fax number in order to receive faxes upon which it might assert TCPA claims. To the contrary, the evidence shows that Plaintiff utilized its fax machine for business purposes and received unsolicited fax advertisements during its course of regular business." Id. at 115. The court found that the plaintiff had "prudential standing." Id. at 116 ; see also Sprint Communications Co. , ––– F.Supp.3d at ––––, 2020 WL 818970, at *6, 2020 U.S. Dist. LEXIS 27957, at *17 (Because "Gorss had a fax machine for its legitimate business purposes as a motel at the time that it received the unsolicited faxes in question ... Gorss was ... well within the zone of interests [protected by the TCPA]").

In support of its argument that Gorss falls outside the zone of interests protected by the TCPA, Eric Ryan stresses the fact that "[b]etween 2016 and 2017 Gorss Motels initiated approximately 21 lawsuits alleging TCPA violations according to the faxes it collected." (Doc. # 90, at 7). Eric Ryan contends that "[t]he TCPA was not designed to protect professional plaintiffs who seek to generate litigation based on technical statutory violations." (Id. at 6) (citing Stoops and Telephone Science Corp. ). A similar argument was made and rejected in Bais Yaakov : "In the absence of authority to the contrary, the Court concludes that Plaintiff's filing of other TCPA lawsuits does not remove it form the zone of interests that the TCPA was intended to protect." 367 F. Supp. 3d at 115 ; see also Sprint Communications Co. , ––– F.Supp.3d at ––––, 2020 WL 818970, at *6, 2020 U.S. Dist. LEXIS 27957, at *17 (same).

The Court concurs with the rulings in Bais Yaakov and Sprint Communications Co. and finds that Gorss falls within the zone of interests protected by the TCPA.

B. LIABILITY UNDER THE TCPA

As previously noted, the TCPA, as amended by the Junk Fax Protection Act, prohibits the use of "any telephone facsimile machine, computer, or other device to send , to a telephone facsimile machine, an unsolicited advertisement ...." 47 U.S.C. § 227(b)(1)(C) (emphasis added). The Court will proceed to determine whether the Faxes were advertisements, whether the Faxes were "sent" by Eric Ryan, and whether the Faxes were unsolicited.

1. The Faxes as Advertisements

The undisputed facts clearly demonstrate that the Faxes were advertisements. The content of each fax concerned "the commercial availability or quality of ... [Eric Ryan's] services." 47 U.S.C. § 227(a)(5). Additionally, Eric Ryan admits that the Faxes "describe[ ] the commercial availability of property, goods, or services offered by you." (Doc. # 73-4, at 33, ¶ 1).

2. Sender of the Faxes

The facts likewise demonstrate that Eric Ryan fit within the applicable definition of a fax "sender." Eric Ryan's Local Rule 56(a)2 Statement in opposition to Gorss's motion for summary judgment includes the following facts: "Eric Ryan prepared a color flyer that would provide Eric Ryan's contact information and a summary of its services to franchisees ... with the understanding that it would be sent by Wyndham via fax to the franchisees of Wyndham pursuant to the Worldwide Sourcing Agreement." (Doc. # 89-1, at 25, ¶¶ 28, 29). There is no doubt that Eric Ryan was "the person or entity on whose behalf" the Faxes were sent or "whose goods or services are advertised or promoted" in the Faxes. 47 C.F.R. § 64.1200(f)(10).

3. Status of the Faxes as Solicited or Unsolicited

According to Eric Ryan, "the question of whether each facsimile was solicited or unsolicited is the driving question of potential TCPA liability in the case at hand." (Doc. # 89, at 16). On this point the parties (and the Court) agree.

Since there appears to have been no communication between Gorss and Eric Ryan prior to the transmission of the Faxes, it is not surprising there is no evidence that Gorss provided a prior invitation or permission to transmit fax advertisements that specifically mentioned Eric Ryan. Eric Ryan argues instead that "by becoming a franchisee, by participating in the Approved Supplier Program, and by repeatedly providing its fax number to Wyndham, Gorss Motels provided prior express invitation or permission to receive the faxes in question." (Id. at 17). For its part, Gorss maintains that this question is governed by the 1988 Franchise Agreement (as extended in 2009) and that there was nothing in that Agreement that constituted prior express invitation or permission for Eric Ryan to send the Faxes to Gorss.

In making its argument that Gorss had provided prior express invitation or permission to receive the Faxes, Eric Ryan cites repeatedly to the decision of the Eleventh Circuit in Gorss Motels, Inc. v. Safemark Systems, LP , 931 F.3d 1094 (11th Cir. 2019), contending that "it would be difficult to find a more analogous case as the facts are nearly identical." (Doc. # 89, at 33). In Safemark , Gorss and another Wyndham franchisee claimed that the defendant Safemark violated the TCPA by sending two unsolicited fax advertisements, one sent in 2013 and one sent in 2015.

The Eleventh Circuit concluded that the two faxes at issue were in fact solicited and therefore not prohibited by the TCPA, because "the hotels executed franchise agreements in which they listed their fax numbers and agreed to receive information from their franchisor's affiliates, including Safemark." Safemark , 931 F.3d at 1101-02. The Court also referenced WSSI's Approved Supplier program and noted that Safemark was "an approved supplier of safes for Wyndham franchisees." Id. at 1097. With regard to Gorss, it is clear that the franchise agreement the Eleventh Circuit was relying upon was the 2014 Franchise Agreement. The Court specifically referenced section 4.4 of that Agreement in which "the hotels agreed that Wyndham ‘may offer optional assistance to [them] with purchasing items used at or in the Facility’ " and that "Wyndham's ‘affiliates may offer this service on [its] behalf.’ " Id. at 1097 (quoting section 4.4 of the franchise agreement). The Court then noted that "[t]he hotels provided their fax numbers in a later section of the [franchise] agreement." Id.

The Eleventh Circuit's decision does not discuss the difference between an affiliate and an approved vendor/supplier, and it is unclear why that Court characterizes Safemark as an affiliate.

Because the decision in Safemark regarding Gorss was based on the 2014 Franchise Agreement, and that Agreement was not in effect at the time the Faxes at issue in this case were sent in 2013, the Court does not agree with Eric Ryan that the facts in Safemark are "nearly identical" to the facts in this case. Eric Ryan contends that while the 2014 Franchise Agreement was not in effect at the time the Faxes were sent in 2013, this Court should nonetheless adopt the same reasoning followed by the Eleventh Circuit in Safemark . According to Eric Ryan, "by entering into the 1988 Franchise Agreement, Gorss Motels agreed to participate in the Approved Supplier Program." (Doc. # 90, at 8). The Approved Supplier program is run by WSSI, which is an affiliate of Wyndham. Wyndham in turn is owned by Wyndham Worldwide Corporation, whose predecessor, Hospitality Franchise Systems, Inc., did not acquire Super 8 Worldwide, Inc. until 1993, well after the execution of the 1988 Franchise Agreement. Thus, the fact that Gorss entered into a Franchise Agreement in 1988 does not indicate its agreement to participate in the Approved Supplier program.

Safemark does not address the fact that one of the two faxes at issue in that case was sent before Gorss entered into the 2014 Franchise Agreement.
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Eric Ryan also argues that "[t]he 1988 Franchise Agreement contains words equivalent in meaning to the words Gorss argues are necessary to convey prior express permission." (Doc. # 90, at 9). Eric Ryan then quotes the following language included in the 1988 Franchise Agreement:

[S]pecifications and quality of items of personal property to be used in the franchised motel are established by FRANCHISOR [Super 8] from time to time to insure operation in accordance with FRANCHISOR'S standards, and further, [FRANCHISEE, i.e., Gorss] agrees to purchase from FRANCHISOR, or from such other vendor as FRANCHISOR may approve from time to time, or from any other source whose supplies and equipment have been approved in writing by FRANCHISOR, prior to acquisition, as meeting the standards and specifications designated by FRANCHISOR or conforming to the specimens or samples submitted or otherwise made available to FRANCHISEE by FRANCHISOR to preserve the uniformity of its System ....

Id.

Eric Ryan's quote omits the remaining portion of that lengthy sentence, i.e., "the following items: mattresses, box springs, bed frames, dresser-desks, chairs for use in guest rooms, nightstands, desk lamps, luggage racks, carpeting, drapes, sheets, blankets, pillows, pillowcases, bedspreads, towels, washcloths, bath mats, facial tissue, toilet tissue, soap, soap wrappers, matches, television receivers, and cabinets." (Doc. # 77-4, at 17). In other words, Gorss agreed to purchase certain items of personal property specified in the 1988 Franchise Agreement from Super 8 or from another source approved by Super 8. That agreement is completely unrelated to the types of services provided by Eric Ryan.

In Safemark , the Eleventh Circuit found that "[b]y agreeing that Wyndham affiliates could offer assistance with purchasing items for the hotels and by providing their fax numbers , the hotels gave express permission to receive fax advertisements from affiliates, including Safemark." Safemark , 931 F.3d at 1100 (emphasis added). Neither the 1988 Franchise Agreement nor the 2009 five-year extension of that Agreement contains Gorss's fax number. Nonetheless, Eric Ryan argues that "the facts and evidence clearly demonstrate that Gorss Motels provided its fax number to Wyndham prior to the faxes in question being sent." (Doc. # 90, at 10). The evidence Eric Ryan refers to are "Site Contact Forms" Gorss submitted to Wyndham in 2010 and 2015. The Court will disregard the 2015 Form, since a communication made in 2015 could not constitute prior express permission for a fax sent in 2013. The 2010 "Site Contact Form" simply lists general contact information (address, phone number, email address, and fax number) for different areas of responsibility within the motel, e.g., site principal contact, general manager, guest services. (Doc. # 96-1, at 2-3). The fax number provided on the Form for all areas of responsibility was the 860 632-8889 number for the one fax machine at the motel.

"Express permission to receive a faxed ad requires that the consumer understand that by providing a fax number, he or she is agreeing to receive the faxed advertisements." In re Rules & Regulations Implementing the Telephone Consumer Protection Act (TCPA) of 1991 , 68 Fed. Reg. 44144, 44168 (F.C.C. 2003). No reasonable juror could find that by providing a fax number in a contact list, Gorss understood that it was agreeing to receive the Faxes sent by Eric Ryan (or any faxed ads for that matter).

Eric Ryan also maintains that a recent decision in this district supports its position. In Gorss Motels, Inc. v. Otis Elevator Co. , 422 F. Supp. 3d 487 (D. Conn. 2019), the Honorable Victor A. Bolden held that a fax advertisement sent to Gorss on August 13, 2015 did not violate the TCPA. That fax advertised the products and services of the Otis Elevator Company, which was a Wyndham-approved vendor. Judge Bolden based his decision on "two agreements entered into by Gorss Motels that ultimately provide the requisite ‘prior express invitation or permission.’ " Id. at 501 (quoting 47 U.S.C. § 227(a)(5) ). "First, the 2014 Franchise Agreement specifically addressed WSSI's Approved Supplier program, which provided that Wyndham affiliates may offer assistance in purchasing approved systems conforming to system standards. Second, [a 2014 stand-alone] Property Improvement Plan Report stated that Gorss's contact information could be used by Wyndham's approved vendors for the purpose of their offering [Gorss] products and services." Id. (internal quotation marks and citations omitted). Neither of the two documents relied upon by Judge Bolden were in effect in 2013, which is when the Eric Ryan Faxes were sent. Thus, the decision in Otis Elevator has no bearing on the decision in this case. The Court finds an even more recent decision in this district to be instructive. In Gorss Motels Inc. v. Sprint Communications Co., L.P. , No. 3:17-cv-546 (JAM), ––– F.Supp.3d ––––, 2020 WL 818970, 2020 U.S. Dist. LEXIS 27957 (D. Conn. Feb. 19, 2020), Gorss Motels claimed that nine faxes advertising Sprint's products and services were sent to it in violation of the TCPA. Sprint moved for summary judgment, arguing in part that Gorss had given its prior express invitation or permission to receive the faxes. Seven of the nine faxes at issue in Sprint were sent before Gorss entered into the 2014 Franchise Agreement. As to those seven faxes, Judge Meyer found Sprint's reliance on the 2014 Franchise Agreement to be misplaced:

Sprint relies most heavily on the terms of the 2014 Franchise Agreement. But this agreement was signed in September 2014, which was after seven of the nine faxes that are at issue in this case had already been sent. So anything in the 2014 Franchise Agreement is irrelevant to all but the last two faxes at issue in the complaint.

Id. at ––––, 2020 WL 818970, at *3, 2020 U.S. Dist. LEXIS 27957, at *8.

The Court finds that Gorss did not provide prior express invitation or permission to receive any of the three faxes at issue in this case. Consequently, all of those faxes were unsolicited. Since Eric Ryan does not claim that the established business relationship exception applies, each of the three faxes was an unsolicited advertisement sent to Gorss by Eric Ryan in violation of the TCPA.

CONCLUSION

For the reasons stated above, Gorss's motion for summary judgment (doc. # 72 ) is GRANTED and Eric Ryan's motion for summary judgment (doc.# 76 ) is DENIED .

Judgment shall enter in favor of the plaintiff Gorss Motels, Inc. against the defendant Eric Ryan Corporation in the amount of $1,500.00 and the Clerk shall close the file.

SO ORDERED this 21st day of May, 2020.


Summaries of

Gorss Motels, Inc. v. Eric Ryan Corp.

United States District Court, D. Connecticut.
May 21, 2020
461 F. Supp. 3d 5 (D. Conn. 2020)

In Gorss Motels, Inc. v. Eric Ryan Corp., 461 F. Supp. 3d at 15, the Connecticut district court granted summary judgment to Gorss finding that "[b]ecause the decision in Safemark regarding Gorss was based on the 2014 Franchise Agreement, and that Agreement was not in effect at the time the Faxes at issue in this case were sent in 2013, the Court does not agree with Eric Ryan that the facts in Safemark are 'nearly identical' to the facts in this case."

Summary of this case from Gorss Motels, Inc. v. Brigadoon Fitness Inc.
Case details for

Gorss Motels, Inc. v. Eric Ryan Corp.

Case Details

Full title:GORSS MOTELS, INC., Plaintiff, v. ERIC RYAN CORPORATION, Defendant.

Court:United States District Court, D. Connecticut.

Date published: May 21, 2020

Citations

461 F. Supp. 3d 5 (D. Conn. 2020)

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Gorss Motels, Inc. v. Brigadoon Fitness Inc.

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