Case 8:12-cv JST-MLG Document 5 Filed 02/06/13 Page 1 of 17 Page ID #:41

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MARK F. SULLIVAN, State Bar No. 111011

GEORGE P. GALBRAITH-ALBUTT, State Bar No. 243030 SULLIVAN TAKETA LLP

2629 Townsgate Road Suite 250

Westlake Village, California 91361-3755 Telephone: (818) 889-2299

Facsimile: (818) 889-4497

mark.sullivan@calawcounsel.com george.galbraith@calawcounsel.com

Attorneys for Defendants Pacific Telecom Communications Group, International Telephone Corporation, Telephone

Management Corporation, Steve Hamilton, and Fred Accuardi UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CHERI ASTRAHAN, et al. Plaintiff, v.

PACIFIC TELECOM

COMMUNICATIONS GROUP, a

Nevada Corporation; INTERNATIONAL TELEPHONE CORPORATION, a

Belize Corporation; TELEPHONE MANAGEMENT CORPORATION, an Oregon Corporation; STEVE

HAMILTON; FRED ANTHONY ANTONE ACCUARDI,

Defendants.

Case No. SACV 12-02184 JST (MLGx) ANSWER TO PLAINTIFF’S COMPLAINT BY DEFENDANTS PACIFIC TELECOM COMMUNICATIONS GROUP, INTERNATIONAL TELEPHONE CORPORATION, TELEPHONE MANAGEMENT CORPORATION, STEVE HAMILTON, AND FRED ACCUARDI

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Defendants Pacific Telecom Communications Group (“Pacific Telecom”), International Telephone Corporation (“IT Belize”), Telephone Management Corporation (“Telephone Management”), Steve Hamilton, and Fred Accuardi

(erroneously sued as “Fred Anthony Antone Accuardi”) hereby answer the Complaint, individually and not jointly, as follows.

DEFENDANTS’ RESPONSE TO PLAINTIFF’S ALLEGATIONS 1. As to the allegations in paragraph 1, Defendants admit that Plaintiff is purporting to bring this action as a class action, but deny that this action is appropriate for certification as a class action. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

I. JURISDICTION AND VENUE.

2. As to the allegations in paragraph 2, Defendants admit that this court has subject matter jurisdiction under 28 U.S.C. § 1331 and 28 U.S.C. § 1332(d)(2), but deny that this action is appropriate for class certification, either as a nationwide class or otherwise. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

3. As to the allegations in paragraph 3, Defendants admit that Pacific

Telecom has on occasion done business within the State of California and the County of Los Angeles. Defendants contend that venue in this action is proper only in the District of Oregon, on the grounds that this is the only district in which a substantial portion of the relevant events occurred. Alternatively, Defendants contend that venue should be set in the District of Oregon as that is the district where the majority of records and witnesses are located and accordingly would be the most convenient forum for trial of this action. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 II. PARTIES.

4. As to the allegations in paragraph 4, Defendants lack knowledge or information sufficient to form a belief about the truth of the allegations in this paragraph and on that basis deny each and every one.

5. As to the allegations in paragraph 5, Defendants admit that Pacific

Telecom is and at all times relevant hereto was a Nevada corporation, admit that Fred Accuardi is currently the Chief Executive Office of Pacific Telecom and that 75% of the shares of Pacific Telecom are owned by Fred Accuardi and his wife, and admit that Steve Hamilton is currently the President of Pacific Telecom and that 25% of the shares of Pacific Telecom are owned by Steve Hamilton. Except as expressly admitted,

Defendants deny each and every allegation in this paragraph.

6. As to the allegations in paragraph 6, Defendants admit that IT Belize is an International Business Corporation registered under the laws of Belize, with its

principal place of business in Portland, Oregon. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

7. As to the allegations in paragraph 7, Defendants admit that Telephone Management is an Oregon corporation with its principal place of business located at 2331 SW 5th Avenue, Portland, Oregon 97201. Except as expressly admitted,

Defendants deny each and every allegation in this paragraph.

8. As to the allegations in paragraph 8, Defendants admit that Steve Hamilton is the President of Pacific Telecom, and admit that Steve Hamilton is a resident of the County of Los Angeles, State of California. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

9. As to the allegations in paragraph 9, Defendants admit that Fred Accuardi is the beneficial owner of IT Belize, is the President of Telephone Management, and is a resident of the State of Oregon. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

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10. Defendants deny each and every allegation in paragraph 10. III. LEGAL REQUIREMENTS FOR DEFENDANTS' UNSOLICITED PRERECORDED ADVERTISING MESSAGES

11. As to the allegations in paragraph 11, Defendants admit that the portions of text beginning at page 3 line 22 of the Complaint are, excluding the underlining, an accurate excerpt from 47 U.S.C. § 227(b). Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

12. As to the allegations in paragraph 12, Defendants admit that the portions of text beginning at page 4 line 20 of the Complaint are, excluding the underlining, an accurate excerpt from 16 C.F.R § 310.4(b)(1)(v). Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

13. Defendants admit the allegations in paragraph 13.

14. As to the allegations in paragraph 14, Defendants admit that the FTC publishes a manual for businesses entitled Complying with the Telemarketing Sales Rule, and that this manual sets forth the quoted text in the paragraph. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

15. Defendants deny each and every allegation in paragraph 15. 16. Defendants deny each and every allegation in paragraph 16. IV. FACTUAL ALLEGATIONS

A. DEFENDANTS’ BUSINESS PRACTICES

17. As to the allegations in paragraph 17, Defendants deny each and every allegation in this paragraph. Defendant further objects to the graphical chart as vague, ambiguous, and as not in compliance with F.R.C.P. Rule 8.

18. As to the allegations in paragraph 18, Defendants: (a) admit that Pacific Telecom is a Competitive Local Exchange Carrier (“CLEC”) and that Steve Hamilton is its President; (b) admit that Fred Accuardi’s son, F. Antone Accuardi, is an Oregon attorney; and (c) admit that F. Antone Accuardi has never, at any relevant time, been an

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officer, employee, stockholder, member, or director of any of the Defendants. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

19. As to the allegations in paragraph 19, Defendants: (a) admit that IT Belize is an International Business Corporation registered under the laws of Belize, and that Fred Accuardi is beneficial owner of and has control of IT Belize, and (b) admit that IT Belize has signed contracts concerning calling party name (CNAM) identification and dip fees with businesses that make high volumes of calls. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

20. As to the allegations in paragraph 20, Defendants admit that Telephone Management has its principal place of business in Oregon. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

21. As to the allegations in paragraph 21, Defendants: (a) admit that Pacific Telecom is a CLEC, and in that status has obtained a block of approximately 69,000 numbers, each of which could be used as a calling party number (“CPN”) or as an automatic number identification (“ANI”) as those two terms are defined in 47 C.F.R. §64.1600, and (b) admit that businesses that regularly make high volumes of calls have contracted with IT Belize to obtain the right to use as ANIs some of these Pacific Telecom numbers. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

22. As to the allegations in paragraph 22, Defendants admit that from time to time the FTC has received complaints regarding telephone calls that were allegedly unsolicited and that allegedly originated from Pacific Telecom numbers. Defendants deny that any of them have made any prerecorded telemarketing calls to Plaintiff, to any member of the class or to anyone else. Defendants allege the FTC has never

investigated these complaints or determined whether any of these complaints has merit. Except as expressly admitted, Defendants deny each and every allegation in this

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23. Defendants deny each and every allegation in paragraph 23.

24. As to the allegations in paragraph 24, Defendants (a) admit that when a person who subscribes to enhanced Caller ID services receives a call to his or her wireline number, the recipient’s service provider sends a query to a centralized calling name (“CNAM”) database or directory that associates telephone numbers with names of up to 15 characters; (b) admit that if the database returns an associated name, the name, or both the name and the number, are displayed by the call recipient’s equipment while the call is ringing, unless a privacy code indicates that access to the name is blocked; (c) admit that the CPN is not the same as the calling party’s “automatic

number identification” (“ANI”); (d) admit that ANI refers to the delivery of the calling party’s billing number for billing and routing purposes; (e) admit that although the CPN and the ANI for a given call may be the same, the CPN and ANI may differ; (f) admit that the call recipient’s service provider pays a small fee, called a “caller ID fee,” “dip fee,” or “dip,” to the database or directory provider for the query; and (g) admit that such fees are typically a tiny fraction of a cent per call. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

25. As to the allegations in paragraph 25, Defendants admit that IT Belize has signed contracts concerning calling party name (CNAM) identification and dip fees with businesses that make high volumes of calls. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

26. As to the allegations in paragraph 26, Defendants admit that a third party contractor hosts a website for International Telephone LLC (“IT LLC”), whose sole member is Telephone Management, and that the servers of this third party contractor are at a data and colocation facility owned by Spire Tech. Except as expressly admitted, Defendants deny each and every allegation in this paragraph.

27. As to the allegations in paragraph 27, Defendants admit that IT LLC, through a contract with a third party vendor, formerly provided its clients access to a

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website at reports.inttelephone.com where these clients could: (1) input the maximum 15-digit characters that would appear as a caller ID; (2) review their dips revenue; (3) determine how a call to an ANI would be routed – (i) to the client’s toll-free number, e.g., an 800 number, (ii) to the client’s interactive voice response (“IVR”) system, or (iii) to an IVR system offered at no charge to clients by IT LLC; or (4) transfer the call by internet (“SIP forward”) to a different computer server. Except as expressly

admitted, Defendants deny each and every allegation in this paragraph. B. DEFENDANTS' CALLS TO PLAINTIFF AND THE CLASS

30. As to the allegations in paragraph 30, Defendants (a) admit that 206-496-0929 was a number which Pacific Telecom had leased to IT LLC for use solely as an ANI, and (b) admit that in turn, IT LLC made this ANI available for use to one of its clients. Defendants again deny that any of them have made any prerecorded

telemarketing calls to Plaintiff, to any member of the class or to anyone else. Except as expressly admitted, Defendants lack knowledge or information sufficient to form a belief about the truth of the allegations in this paragraph and on that basis deny each and every one.

32. As to the allegations in paragraph 32, Defendants (a) admit that of the twenty-four distinct numbers listed in this paragraph, thirteen of these were, as set forth in the table below, numbers which Pacific Telecom had leased to IT LLC for use solely as ANIs and which, in turn, IT LLC had made available for use to various clients, and

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(b) admit that that the remaining eleven numbers belong to CLECs other than Pacific Telecom, a fact which Plaintiff could readily have determined by accessing public sources such as the website www.telcodata.us. Defendants again deny that any of them have made any prerecorded telemarketing calls to Plaintiff, to any member of the class or to anyone else. Except as expressly admitted, Defendants lack knowledge or

information sufficient to form a belief about the truth of the allegations in this paragraph and on that basis deny each and every one.

2532362049 ANI of another CLEC 2532452041 ANI of another CLEC 2537539190 ANI of another CLEC 3603226073 ANI of another CLEC 3603226159 ANI of another CLEC 4252452701 ANI of another CLEC 4253205005 ANI of another CLEC 4253368023 ANI of another CLEC 4254069022 ANI of another CLEC 4254069074 ANI of another CLEC 4254069418 ANI of another CLEC 2064960929 ANI of Pacific Telecom 2533829098 ANI of Pacific Telecom 2533829903 ANI of Pacific Telecom 2533829909 ANI of Pacific Telecom 3604743901 ANI of Pacific Telecom 3604743986 ANI of Pacific Telecom 3605296807 ANI of Pacific Telecom 5034571789 ANI of Pacific Telecom 5034571829 ANI of Pacific Telecom 5035922151 ANI of Pacific Telecom 5039028480 ANI of Pacific Telecom 9712131942 ANI of Pacific Telecom 9712179514 ANI of Pacific Telecom

33. As to the allegations in paragraph 33, Defendants again deny that any of them have made any prerecorded telemarketing calls to any member of the class or to

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anyone else. Defendants lack knowledge or information sufficient to form a belief about the truth of the remaining allegations in this paragraph and on that basis deny each and every one.

34. As to the allegations in paragraph 34, Defendants again deny that any of them purchased or otherwise obtained the cell phone number of Plaintiff or of any member of the class. Defendants lack knowledge or information sufficient to form a belief about the truth of each of the allegations in this paragraph and on that basis deny each and every one.

35. As to the allegations in paragraph 35, Defendants again deny that any of them have made any prerecorded telemarketing calls to Plaintiff, to any member of the class or to anyone else. Defendants deny each and every allegation in this paragraph.

36. As to the allegations in paragraph 36, Defendants again deny that any of them have made any prerecorded telemarketing calls to Plaintiff, to any member of the class or to anyone else. Defendants deny each and every allegation in this paragraph.

38. Defendants deny each and every allegation in paragraph 38. Defendants again deny that any of them have made any prerecorded telemarketing calls to Plaintiff, to any member of the class or to anyone else.

40. Defendants deny each and every allegation in paragraph 40. Defendants again deny that any of them have made any prerecorded telemarketing calls to Plaintiff, to any member of the class or to anyone else..

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41. Defendants deny each and every allegation in paragraph 41. Defendants again deny that any of them have made any prerecorded telemarketing calls to Plaintiff, to any member of the class or to anyone else..

v.

CLASS ALLEGATIONS

44. Defendants deny each and every allegation in paragraph 44. Defendants specifically deny that members of the class can be identified from records maintained by Defendants because, again, none of the Defendants have made any prerecorded telemarketing calls to Plaintiff, to any member of the class or to anyone else.

46. Defendants deny each and every allegation in paragraph 46. 47. Defendants deny each and every allegation in paragraph 47. 48. Defendants deny each and every allegation in paragraph 48. 49. Defendants deny each and every allegation in paragraph 49. 50. Defendants deny each and every allegation in paragraph 50.

COUNT I AGAINST ALL DEFENDANTS FOR NEGLIGENT VIOLATIONS OF THE TCPA 47 U.S.C. § 227(b)

51. Defendants deny each and every allegation in paragraph 51. 52. Defendants deny each and every allegation in paragraph 52. 53. Defendants deny each and every allegation in paragraph 53. 54. Defendants deny each and every allegation in paragraph 54. 55. Defendants deny each and every allegation in paragraph 55. 56. Defendants deny each and every allegation in paragraph 56. 57. Defendants deny each and every allegation in paragraph 57.

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58. Defendants deny each and every allegation in paragraph 58. COUNT II AGAINST ALL DEFENDANTS FOR WILLFUL/KNOWING VIOLATIONS OF THE TCPA 47 U.S.C. § 227(b)

59. Defendants deny each and every allegation in paragraph 59. 60. Defendants deny each and every allegation in paragraph 60. 61. Defendants deny each and every allegation in paragraph 61. 62. Defendants deny each and every allegation in paragraph 62. 63. Defendants deny each and every allegation in paragraph 63. 64. Defendants deny each and every allegation in paragraph 64. 65. Defendants deny each and every allegation in paragraph 65. 66. Defendants deny each and every allegation in paragraph 66. 67. Defendants deny each and every allegation in paragraph 67. VI. JURY TRIAL DEMAND

68. Defendants admit the allegations in paragraph 68 and similarly request a jury trial.

PRAYER FOR RELIEF

69. Defendants deny each and every allegation in Plaintiff’s prayer for relief.

DEFENDANTS’ AFFIRMATIVE DEFENSES

FIRST AFFIRMATIVE DEFENSE

1. The Complaint fails to state a claim upon which relief can be granted.

SECOND AFFIRMATIVE DEFENSE

2. At all times relevant to the complaint, Defendant Pacific Telecom was an intra-LATA CLEC subject to regulation by the Oregon, Washington, Montana and North Dakota state public service commissions. Under the Federal Communications

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Act, 47 U.S.C. § 152(b), the regulation of the provisioning of facilities and services by such intra-LATA and local carriers is presumptively subject to the primary jurisdiction of the respective state commissions in whose jurisdiction such a CLEC operates.

Plaintiff’s complaint seeks to apply federal law to regulate the use of utility facilities and services circumventing state jurisdiction in violation of 47 U.S.C. §152(b). The Court should stay or dismiss this action pending review by such Commissions.

THIRD AFFIRMATIVE DEFENSE

3. There are one or more complaints pending against Pacific Telecom in these state commissions which involve the same issue whether there has been an abuse or misuse of this Defendant’s privileges as a public utility. Under the terms of 47 U.S. Code section 152(b), the Court should stay or dismiss this action pending final

resolution of these issues by such Commissions.

FOURTH AFFIRMATIVE DEFENSE

4. The issue of the propriety of Pacific Telecom’s use of its facilities and privileges as a common carrier is subject to the primary jurisdiction of the Federal Communications Commission.

FIFTH AFFIRMATIVE DEFENSE

5. There are one or more complaints pending against Pacific Telecom in these state commissions which involve the same issue whether there has been an abuse or misuse of this Defendant’s privileges as a public utility. Under the doctrine of

primary jurisdiction of these states, courts of such states would not have jurisdiction over this action. Since under the Federal Telephone Consumer Protection Act (TCPA), a person is authorized to sue under it only “if otherwise permitted by the laws or rules

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of court of a State,” 47 U.S.C. § 227(b)(3), this suit should similarly not be permitted under the TCPA.

SIXTH AFFIRMATIVE DEFENSE

6. The Complaint seeks to regulate the terms and conditions under which a telephone common carrier may provide use of its services, facilities and privileges to members of the public and, as such, the Complaint would not be within the subject matter jurisdiction of California state trial courts under California Public Utilities Code section 1759. Since under the Federal Telephone Consumer Protection Act (TCPA), a person is authorized to sue only “if otherwise permitted by the laws or rules of court of a State,” 47 U.S.C. § 227(b)(3), this suit should similarly not be permitted under the TCPA.

SEVENTH AFFIRMATIVE DEFENSE

7. As a common carrier, Pacific Telecom is required to provide access to its services and facilities without discrimination. See, for example, California Public Utilities Code sections 453 and 532. Since none of the Defendants in fact makes any telemarketing or other prerecorded telephone broadcast calls, Plaintiff’s Complaint implicitly seeks to require Defendant Pacific Telecom, and its agents, to deny use of its ANIs (and its right of access to the national calling number identification databases) to customers based on improper, discriminatory criteria, including premature judgments concerning the possible misuse of these facilities. A California trial court would be precluded from making a determination as to the reasonableness of such discrimination by California Public Utilities Code section 1759. Since under the Federal Telephone Consumer Protection Act (TCPA), a person is authorized to sue only “if otherwise permitted by the laws or rules of court of a State,” 47 U.S.C. § 227(b)(3), this suit should similarly not be permitted under the TCPA.

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EIGHTH AFFIRMATIVE DEFENSE

8. In some or all of the states in the proposed nationwide class (and

particularly in states with a jurisdictional rule similar to California Public Utilities Code section 1759), this action could not be brought under the laws or rules of court of those states. Since under the Federal Telephone Consumer Protection Act (TCPA), a person is authorized to sue only “if otherwise permitted by the laws or rules of court of a State,” 47 U.S.C. § 227(b)(3), this suit should similarly not be permitted under the TCPA.

NINTH AFFIRMATIVE DEFENSE

9. Plaintiff and the class members gave their express prior consent to receiving the calls referenced in the Complaint.

TENTH AFFIRMATIVE DEFENSE

10. Some or all of the calls referenced in the Complaint that were allegedly made to wireless numbers did not violate the TCPA because such calls were made within 15 days of the wireless number being ported from wireline service.

ELEVENTH AFFIRMATIVE DEFENSE

11. Some or all of the calls referenced in the Complaint that were allegedly made to wireless numbers did not violate the TCPA because such calls were forwarded by the wireless number’s subscriber from a wireline service.

TWELFTH AFFIRMATIVE DEFENSE

12. Some or all of the calls at issue that were made to any residential line using an artificial or prerecorded voice to deliver a message without the prior express written consent of the called party did not violate the TCPA because the call either (i) was

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made for emergency purposes; (ii) was not made for a commercial purpose; (iii) was made for a commercial purpose but does not include or introduce an advertisement or constitute telemarketing; (iv) was made by or on behalf of a tax-exempt nonprofit organization; or (v) delivered a “health care” message made by, or on behalf of, a “covered entity” or its “business associate,” as those terms are defined in the HIPAA Privacy Rule, 45 C.F.R. 160.103.

THIRTEENTH AFFIRMATIVE DEFENSE

13. As a condition to the use of Defendant Pacific Telecom’s ANIs, Defendants require clients to agree in writing to comply with all federal laws and

regulations and provide the clients with a detailed manual prepared by a former Federal Trade Commission staff attorney for the express purpose of assuring compliance with governing federal regulations dealing with prerecorded calls and automated dialing.

FOURTEENTH AFFIRMATIVE DEFENSE

14. At all times relevant to the matters alleged in the Complaint, Defendants acted pursuant to the advice of a former Federal Trade Commission staff attorney with respect to complying with governing federal regulations dealing with prerecorded calls and automated dialing. If Defendants violated any regulation, such violation was not wilful.

FIFTEENTH AFFIRMATIVE DEFENSE

15. The proposed class does not meet the adequacy, typicality, commonality, or numerosity requirements of F.R.C.P. Rule 23(a).

SIXTEENTH AFFIRMATIVE DEFENSE

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SEVENTEENTH AFFIRMATIVE DEFENSE

17. The merits of consumer complaints referenced in this complaint as having been received by the FTC have not been investigated by the FTC. One or more of the Defendants has advised the FTC of the multiple and entirely ordinary ways that a consumer can erroneously conclude that they have received an unlawful prerecorded call and make a complaint where none was warranted. Additionally, Defendants have advised the FTC of the ease with which unauthorized third parties can misuse ANIs identified with a legitimate CLEC such as Defendant Pacific Telecom, and the FTC has further acknowledged the accuracy of this point. Accordingly, no weight or inference of wrongdoing can be derived from alleged numbers of complaints received by the FTC as they constitute highly prejudicial, unscientific evidence akin to an inadmissible survey.

EIGHTEENTH AFFIRMATIVE DEFENSE

18. Any award of statutory penalties would be excessive under the Fifth and Fourteenth Amendments to the U.S. Constitution.

NINETEENTH AFFIRMATIVE DEFENSE

19. Construing a statute like 47 U.S.C. § 227, that governs the making of telemarketing calls, to impose liability on parties who have not made such prerecorded calls would violate due process under the Fifth and Fourteenth Amendments to the U.S. Constitution.

TWENTIETH AFFIRMATIVE DEFENSE

20. Plaintiff’s claims are barred, in whole or in part, by applicable state statutes of limitation, applicable to the TCPA under 47 U.S.C. § 227(b)(3), including but not limited to the one-year statute of limitations in California Code of Civil

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Procedure section 340 and the two-year statute of limitations in California Code of Civil Procedure section 335.1.

TWENTY-FIRST AFFIRMATIVE DEFENSE

21. The TCPA is unconstitutionally void for vagueness because the term “prior express consent” is not adequately defined.

PRAYER FOR RELIEF Wherefore, Defendants pray:

1. That the Court order that this action is not appropriate for certification as a class action on either a nationwide or statewide basis;

2. That Plaintiffs take nothing by the Complaint and that it be dismissed with prejudice;

3. That judgment be entered in favor of Defendants; and

4. That Defendants be awarded attorney's fees, costs, and other relief as the Court may deem just and proper.

DATED: February 6, 2013 SULLIVAN TAKETA LLP

By: /s/

Mark F. Sullivan

Attorneys for Defendants Pacific Telecom Communications Group, International Telephone Corporation, Telephone Management Corporation, Steve