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Hatch v. Demayo

United States District Court, M.D. North Carolina

October 8, 2017

JONATHAN HATCH, MARK DVORSKY, and SHATERIKA NICHOLSON, on behalf of themselves and others similarly situated, Plaintiffs,
v.
MICHAEL A. DEMAYO, individually; THE LAW OFFICES OF MICHAEL A. DEMAYO, P.C.; LAW OFFICES OF MICHAEL A. DEMAYO, L.L.P.; JASON E. TAYLOR, individually; LAW OFFICES OF JASON E. TAYLOR, P.C.; BENJAMIN T. COCHRAN, individually; HARDISON & COCHRAN, PLLC; CARL B. NAGLE, individually; NAGLE & ASSOCIATES, P.A.; JOHN J. GELSHENEN, individually; DAVIS & GELSHENEN LLP; MARK I. FARBMAN, individually, MARK FARBMAN, P.A.; TED A. GREVE, individually; TED A. GREVE & ASSOCIATES, P.A.; CHRISTOPHER T. MAY, individually and ESTWANIK AND MAY, P.L.L.C; Defendants.

          MEMORANDUM OPINION AND ORDER

          LORETTA C. BIGGS UNITED STATES DISTRICT JUDGE

         Plaintiffs initiated this action alleging that the above-named Defendants violated the Driver's Privacy Protection Act (“DPPA”), 18 U.S.C. § 2721, et seq. (ECF Nos. 1, 5.) Before the Court are the following two motions to dismiss filed by Defendants: (1) Motion to Dismiss First Amended Complaint, filed by Defendants Mark I. Farbman and Mark Farbman, P.A., (collectively, “the Farbman Defendants”); and (2) Motion to Dismiss, filed by Michael A. Case 1:16-cv-00925-LCB-LPA Document 35 Filed 09/29/17 Page 1 of 22 DeMayo, Law Offices of Michael A. DeMayo, P.C., Law Offices of Michael A. DeMayo, LLP, Jason E. Taylor, Law Offices of Jason E. Taylor, P.C., Benjamin T. Cochran, Hardison & Cochran, PLLC, Carl B. Nagle, Nagle & Associates, P.A., John J. Gelshenen, Davis & Gelshenen, LLP, Ted A. Greve, Ted A. Greve & Associates, P.A., Christopher T. May, and Estwanik and May, PLLC, (collectively, “the DeMayo Defendants”). (ECF Nos. 21, 23.) For the reasons set forth below, each motion will be denied.

         I. BACKGROUND

         Based on the allegations in Plaintiff's First Amended Complaint (the “Complaint”), [1]each Plaintiff is a driver of a vehicle that was involved in a motor vehicle accident. (ECF No. 5 ¶¶ 27, 39, 51.) A law enforcement officer was sent to the scene of each accident to conduct an investigation. (Id. ¶¶ 28, 40, 52.) At the accident scene involving Plaintiff Johnathan Hatch, the investigating officer requested and obtained Plaintiff Hatch's driver's license. (Id. ¶ 29.) Likewise, the investigating officer at the accident scene involving Plaintiff Mark Dvorksy requested and obtained Plaintiff Dvorsky's driver's license. (Id. ¶ 41.) Each investigating officer prepared an accident report, known as a DMV-349, using information directly from the driver's licenses of Plaintiffs Hatch and Dvorsky. (Id. ¶¶ 29, 41.) The information included Plaintiffs Hatch's and Dvorsky's names, addresses, dates of birth, telephone numbers and driver's license numbers. (Id. ¶¶ 29, 41.) Plaintiffs allege that the source of this information was the North Carolina Division of Motor Vehicles (“NCDMV”). (Id. ¶¶ 29, 41.) The officers also verified that the information reflected on Plaintiffs Hatch's and Dvorsky's driver's licenses was correct. (Id. ¶¶ 30, 42.) Each officer then “checked a box on the DMV-349 to indicate” that the actual address of Plaintiffs Hatch and Dvorsky matched the address on each of their driver's licenses. (Id. ¶¶ 30, 42.)

         At the accident scene involving Plaintiff Shaterika Nicholson (“the Nicholson Accident”), the investigating officer “obtained Plaintiff Shaterika Nicholson's name from first responders already on the scene.” (Id. ¶ 53.) The investigating officer then “returned to his patrol car and . . . entered Plaintiff Shaterika Nicholson's name in the vehicle's onboard computer, which, in turn, accesse[d] the NCDMV database, ” and identified Plaintiff Nicholson by her driver's license number. (Id.) The “onboard computer” prompted the investigating officer to enter Plaintiff Nicholson's “DMV information into the DMV-349, which is a self-populating computer form.” (Id.) The officer selected the electronic option for Plaintiff Nicholson's full name and address to be entered on the DMV-349 computer form.” (Id.) The officer also entered Plaintiff Nicholson's vehicle registration information onto the DMV-349. (Id. ¶ 54.) Plaintiffs allege that the “source of this information was the NCDMV database accessed by the onboard computer in [the investigating officer's] patrol car.” (Id. ¶ 54.) A completed DMV-349 form for each accident involving Plaintiffs was filed with each officer's police department, which, in turn, filed each DMV-349 form with the NCDMV. (Id. ¶¶ 32, 44, 55.)

         Defendants are North Carolina attorneys and law firms that, within a few days of each accident involving Plaintiffs, obtained a copy of each accident report. (Id. ¶¶ 33, 45, 56.) Each Defendant allegedly “obtained the DMV-349[s] . . . or personal information from a motor vehicle record procured by an agent from a copy of the DMV-349, for the sole and specific purpose of marketing [that] Defendant[']s legal services.” (Id. ¶¶ 34, 46, 57.) Using information from the DMV-349 forms, including Plaintiffs' names and addresses, Defendants addressed and mailed “marketing materials” to each Plaintiff's address. (Id. ¶¶ 36, 48, 59.)

         The instant lawsuit arises from Plaintiffs' allegations that Defendants' conduct violates the DPPA. Defendants have each moved to dismiss the Complaint for lack of subject-matter jurisdiction and failure to state a claim, pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. (ECF Nos. 21, 23.)

         II. STANDARDS OF REVIEW

         A. Rule 12(b)(1)

         Under Rule 12(b)(1), a party may seek dismissal based on the court's “lack of subject-matter jurisdiction.” Fed.R.Civ.P. 12(b)(1). Subject-matter jurisdiction is a threshold issue that relates to the court's power to hear a case and must be decided before a determination on the merits of the case. Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474, 479- 80 (4th Cir. 2005). A motion under Rule 12(b)(1) raises the question of “whether [the plaintiff] has a right to be in the district court at all and whether the court has the power to hear and dispose of [the] claim.” Holloway v. Pagan River Dockside Seafood, Inc., 669 F.3d 448, 452 (4th Cir. 2012). The burden of proving subject-matter jurisdiction rests with the Plaintiff. McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). When evaluating a Rule 12(b)(1) motion to dismiss, a court should grant the motion “only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). On a motion to dismiss for lack of standing, the court must construe the complaint in the plaintiff's favor, accepting as true the factual allegations in the complaint. Warth v. Seldin, 422 U.S. 490, 501 (1975); see also Kerns, 585 F.3d at 192.

         B. Rule 12(b)(6)

         A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure “challenges the legal sufficiency of a complaint, ” including whether it meets the pleading standard of Rule 8(a)(2). Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). Rule 8(a)(2) requires a complaint to contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), thereby “giv[ing] the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). A complaint may fail to state a claim upon which relief can be granted in two ways: first, by failing to state a valid legal cause of action, i.e., a cognizable claim, see Holloway, 669 F.3d at 452; or second, by failing to allege sufficient facts to support a legal cause of action, see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013).

         While a court's evaluation of a Rule 12(b)(6) motion to dismiss is “generally limited to a review of the allegations of the complaint itself, ” a court can properly consider documents “attached to the complaint as exhibits.” Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016). A court may also consider a “document submitted by the movant that was not attached to or expressly incorporated in a complaint, so long as the document was integral to the complaint and there is no dispute about the document's authenticity.” Id. at 166. Here, no party has challenged the authenticity of the various documents attached to Defendants' motions to dismiss. Therefore, in addition to considering the documents attached to Plaintiffs' Complaint, the Court also considers the exhibits attached to the instant motions to dismiss.

         III. DISCUSSION

         A. Article III Standing

         The Farbman Defendants and the DeMayo Defendants move to dismiss the Complaint on a number of grounds, including that Plaintiffs lack Article III standing to assert a claim under the DPPA. (See ECF Nos. 21, 23.) Because standing is a threshold issue, the Court will, first, address this basis for dismissal. See Warth, 422 U.S. at 517-18 (stating that standing is a “threshold determinant[ ] of the propriety of judicial intervention”).

         Under Article III of the United States Constitution, the jurisdiction of a federal court is limited to cases and controversies. U.S. Const. art. III, § 2. Standing to sue, therefore, “ensure[s] that federal courts do not exceed their authority.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016). To establish constitutional standing at the motion to dismiss stage, Plaintiffs must plausibly allege that they have: “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id. Plaintiffs bear the burden of establishing these elements. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). “Where, as here, a case is at the pleading stage, [Plaintiffs] must ‘clearly . . . allege facts demonstrating' each element.” Spokeo, 136 S.Ct. at 1547 (quoting Warth, 422 U.S. at 518).

         Relying in large measure on the Supreme Court's decision in Spokeo, Inc. v. Robins, Defendants argue that Plaintiffs lack Article III standing to sue because “their allegations are divorced from any concrete harm, ” (ECF No. 22 at 9 (internal quotation marks omitted)), and they have failed to allege any actual damages, (see ECF No. 24 at 9-13). Plaintiffs essentially argue that they have Article III standing because they have alleged the precise type of harm encompassed by the DPPA-invasion of privacy-which is an injury closely related to harms traditionally regarded as providing a basis for ...


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