Van Elzen v. Global Strategy Group, LLC

Background

David Van Elzen brought a proposed class action against Global Strategy Group, LLC and American Directions Research Group, Inc. He alleged that the defendants violated the Telephone Consumer Protection Act, a federal law regulating certain automated calls and texts, by sending him and others an unsolicited text-message survey.

The message said: “DAVID, We’re texting voters about local issues and your opinion matters. Please click to participate,” followed by a link. The link led to a survey prepared by Kalamata Research, which the opinion says is partly owned by Global Strategy. Van Elzen alleged that he received the message on December 22, 2019, and that it was an annoyance, nuisance, and invasion of privacy. He also alleged that other people received nearly identical messages.

The opinion describes Global Strategy as a New York-based public relations and research firm. It describes American Directions as a Washington, D.C.-based and incorporated firm that conducts telephone interviews and surveys. Van Elzen was a Wisconsin resident. He alleged that Global Strategy hired American Directions to perform an automated text campaign.

American Directions’ Motion to Dismiss

American Directions moved under Federal Rule of Civil Procedure 12(b)(2), which permits dismissal when the court lacks personal jurisdiction over a defendant. The court explained that personal jurisdiction requires either general jurisdiction, meaning the defendant is essentially at home in the forum, or specific jurisdiction, meaning the lawsuit is connected to the defendant’s activities in the forum.

Van Elzen relied on New York’s long-arm statute. He argued that American Directions was subject to specific jurisdiction because it contracted with Global Strategy, a New York company. The court held that this allegation was not enough. The complaint did not show that the contract was ongoing rather than a single completed agreement, and it did not allege where the contract was negotiated, whether it had a New York choice-of-law provision, whether American Directions sent payments or notices to New York, or whether American Directions had personnel in New York.

The court also rejected the argument that American Directions had contracted to provide services in New York. Unlike a case involving a New York resident who received a text at a New York telephone number, Van Elzen was a Wisconsin resident and did not allege that the message went to a New York number. The court concluded that the alleged New York contacts were too weak to satisfy New York’s long-arm statute. It therefore granted American Directions’ motion to dismiss under Rule 12(b)(2) and dismissed the claim against American Directions.

Global Strategy’s Motion to Stay

Global Strategy moved to stay, or pause, the case while the Supreme Court reviewed Facebook v. Duguid. That case concerned whether an “automatic telephone dialing system” under the Telephone Consumer Protection Act must use a random or sequential number generator.

The court found that issue potentially important to Van Elzen’s only claim against Global Strategy. Because the message addressed Van Elzen by name, the court reasoned that the technology appeared to use a list containing names and telephone numbers. The court stated that, if the Supreme Court required a prohibited system to use a random or sequential number generator, Van Elzen’s claim might not survive a motion to dismiss for failure to state a claim.

The court determined that a stay would avoid unnecessary discovery costs and conserve judicial resources. It found little risk of harm from delay because the alleged injury was the minor annoyance of receiving an unsolicited text message. The court therefore granted Global Strategy’s motion to stay the case pending the Supreme Court’s resolution of Facebook v. Duguid.

Disposition

The court granted American Directions’ Rule 12(b)(2) motion to dismiss and granted Global Strategy’s motion to stay. The case was stayed pending the Supreme Court’s resolution of Facebook v. Duguid. The opinion does not state a final ruling on the merits of Van Elzen’s Telephone Consumer Protection Act claim against Global Strategy.