Knapper v. Cox Communications Incorporated

Filing 88

*ORDER denying 40 Motion to Stay. See order for details. Signed by Judge Steven P Logan on 1/17/2019. (LMR) *Modified to add WO on 1/17/2019 (SLQ).

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Joanne Knapper, on behalf of herself
and others similarly situated,

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Plaintiff,

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vs.

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Cox Communications, Inc.,

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Defendant.

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No. CV-17-00913-PHX-SPL
ORDER

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Before the Court is Defendant’s Motion to Stay (Doc. 40), Plaintiff’s Response

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(Doc. 47), and Defendant’s Reply (Doc. 51). For the following reasons, the motion will be

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denied.1

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I.

Background

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On March 28, 2017, Plaintiff filed a complaint against Defendant for violating the

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Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. (Doc. 1.) Plaintiff

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alleges, on behalf of a class, that Defendant “routinely violates [the TCPA] by using an

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automatic telephone dialing system [or an artificial or prerecorded voice] to place non-

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emergency calls to numbers assigned to a cellular telephone service, without prior express

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consent.” (Doc. 1 ¶¶ 3, 11.) In other words, Defendant allegedly “places autodialed calls

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to wrong or reassigned telephone numbers.” (Doc. 1 ¶ 3.)

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Because it would not assist in resolution of the instant issues, the Court finds
the pending motion is suitable for decision without oral argument. See LRCiv. 7.2(f); Fed.
R. Civ. P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998).

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On June 6, 2018, Defendant filed a motion to stay this case. (Doc. 40.) On July 2,

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2018, Plaintiff filed her response. (Doc. 47.) On July 16, 2018, Defendant filed its reply.

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(Doc. 51.) Both parties have filed supplemental authority notices. (Docs. 48, 52, 62, 65,

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68, 80.)

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II.

Discussion

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Defendant argues that this case should be stayed in light of ACA Int’l v. FCC, 885

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F.3d 687 (D.C. Cir. 2018), and the Federal Trade Commission’s (“FCC”) subsequent

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Public Notice. (Doc. 40.) It argues that the FCC should soon rule on what constitutes an

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automatic telephone dialing system (“ATDS”), a “called party,” in terms of reassigned

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number liability, and a possible good faith defense pursuant to the TCPA, all of which bear

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directly on its potential liability. (Doc. 40.) It argues that it would be prejudiced if this case

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were to move forward without guidance from the FCC because part of its defense is that

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(1) it did not use regulated ATDS technology when making the calls at issue, (2) Plaintiff

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is not a “called party,” and (3) it should be exempt from liability for good faith calls to

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reassigned numbers. (Doc. 40.) It bases its request for a stay on the primary jurisdiction

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doctrine and the Court’s inherent authority to manage its docket. (Doc. 40.)

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Plaintiff argues that this Court should not issue a stay pursuant to its inherent

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authority because (1) Defendant has not established a clear case of hardship, (2) Plaintiff

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and her putative class will be prejudiced, and (3) judicial economy will not be served. (Doc.

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47 at 4-7.) Plaintiff argues that primary jurisdiction is also not a basis for the issuance of a

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stay because the definitions at issue here do not require any specialized expertise or fact-

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finding abilities by the FCC. (Doc. 47 at 8.) She also argues that a stay could be “indefinite”

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because there is no guarantee that the FCC will issue its guidance in the near future or that

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any guidance will be directly on point to the issues in this case. (Doc. 47.)

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III.

Analysis

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A.

Primary Jurisdiction Doctrine

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Primary jurisdiction is reserved for a “limited set of circumstances that requires

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resolution of an issue of first impression, or of a particularly complicated issue that
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Congress has committed to a regulatory agency.” Astiana v. Hain Celestial Grp., Inc., 783

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F.3d 753, 760 (9th Cir. 2015) (quoting Clark v. Time Warner Cable, 523 F.3d 1110, 1114

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(9th Cir. 2008)) (internal quotations omitted). In considering primary jurisdiction, a court

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considers: “(1) the need to resolve an issue that (2) has been placed by Congress within the

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jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute

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that subjects an industry or activity to a comprehensive regulatory authority that (4)

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requires expertise or uniformity in administration.” Id. (quoting Syntek Semiconductor Co.

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v. Microchip Tech. Inc., 307 F.3d 775, 781 (9th Cir. 2002)). “Efficiency” is the deciding

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factor in whether to invoke primary jurisdiction. Id. (quoting Rhoades v. Avon Prods., Inc.,

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504 F.3d 1151, 1165 (9th Cir. 2007)).

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Congress has delegated the FCC with the authority to make rules and regulations to

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implement the TCPA. Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 953 (9th Cir.

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2009) (citing 47 U.S.C. § 227(b)(2)). Therefore, the FCC has interpretative authority over

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the TCPA and its accompanying regulations. See Barrera v. Comcast Holdings Corp., No.

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14-CV-00343-TEH, 2014 WL 1942829, at *2 (N.D. Cal. May 12, 2014) (quoting Charvat

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v. EchoStar Satellite, LLC, 630 F.3d 459, 466-67 (6th Cir. 2010)). Thus, in determining the

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stay factors, the second through fourth prongs are met. The issue here is whether there is

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an issue that the FCC needs to resolve. The Court finds there is not.

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1.

ATDS

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Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018), ruled on the

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definition of an ATDS within the meaning of the TCPA. Defendant argues that the Ninth

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Circuit’s ruling is an outlier and inconsistent with the binding authority of ACA

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International. (See Doc. 68 at 1.) The Court is not persuaded. First, ACA International did

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not make any determinations after it set aside the FCC’s 2015 Declaratory Order as it

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related to an ATDS and reassigned number liability. The Marks court explained that ACA

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International overturned the FCC’s 2015 Declaratory Ruling as to an ATDS, which also

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overturned “any prior FCC rules that were reinstated by the 2015 order.” Id. at 1049. As

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such, the Marks court reasoned that the FCC’s relevant rulings were no longer binding law.
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Id. The court then engaged in its own statutory analysis and ultimately defined what

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constituted an ATDS. Id. at 1052. Therefore, Marks represents binding law in this Circuit.

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Consequently, there is no matter of first impression or of such complexity inhibiting this

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Court from proceeding.
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Good Faith Defense

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As Defendant points out, “the FCC has adopted new rules to establish a reassigned

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numbers database and create a safe harbor from TCPA liability for inadvertent calls to

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recycled numbers.” (Doc. 81 at 2.) In its recent Report and Order, the FCC determined the

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availability of a good faith defense. It stated that callers will be shielded from TCPA

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liability if they rely on the new database to learn if a number has been reassigned. See

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Second Report and Order, In re Advanced Methods to Target and Eliminate Unlawful

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Robocalls, CG Docket No. 17-59, FCC 18-177, (Dec. 12, 2018), available at

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https://docs.fcc.gov/public/attachments/FCC-18-177A1.pdf. The FCC went on to state that

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it considered not adopting any safe harbor or whether it should adopt a more expansive

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version. See id. at p. 45 ¶ 37. Though within the context of providing a safe harbor to those

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callers who would avail themselves of this new database, the FCC’s analysis necessarily

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indicates that there would likely be no good faith defense available to callers unless they

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used the new database. See id. at p. 19-22, 30, 46.

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Given the FCC’s recent Report and Order, the Court finds that the applicability of a

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good faith defense is no longer an issue in this case. To the extent the FCC should issue a

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new and different rule addressing reassigned liability by way of a defense, the Court finds

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that that rule, along with the one recently adopted, would likely be applied prospectively,

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and, thus, would have little effect on this case addressing past harm. See MacLean v. Dep’t

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of Homeland Sec., 543 F.3d 1145, 1152 (9th Cir. 2008) (citing Bowen v. Georgetown Univ.

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Hosp., 488 U.S. 204, 208 (1988)) (stating that “administrative rules will not be construed

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to have retroactive effect unless their language requires this result.”). This cuts in favor of

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denying a stay because the interests of consistency and uniformity would not be furthered.

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3.

“Called Party”

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As to the “called party” issue, ACA International held that the FCC’s interpretation

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of “called party” was a permissible one and, thus, did not overrule it. See ACA Int’l, 885

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F.3d at 706 (holding that the seventh circuit’s analysis of a “called party,” defined as the

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current subscriber, and not the intended recipient, was persuasive in that it supported the

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Commission’s same interpretation). Therefore, there is no matter here that needs to be

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decided by the FCC.

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Even if the D.C. Circuit had set aside the FCC’s interpretation of a “called party,”

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the Court finds that it is capable of deciding that issue. See Abrantes v. Northland Grp.,

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Inc., No. 14-CV-05311-YGR, 2015 WL 1738255, at *3 (N.D. Cal. Apr. 13, 2015) (stating

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that district courts have routinely analyzed the term “called party” within the meaning of

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the TCPA and are well-suited to resolve this kind of statutory interpretation); Pieterson v.

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Wells Fargo Bank, N.A., No. 17-CV-02306-EDL, 2018 WL 3241069, at *3 (N.D. Cal. July

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2, 2018) (acknowledging that, though not binding law, the courts in this circuit have

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addressed the “called party” issue, which would shed light on a court’s interpretation of

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“how the TCPA treats liability for reassigned numbers”). Simply because Congress has

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delegated implementing authority over the TCPA to the FCC, including the authority to

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determine the meaning of “called party,” such authority does not preclude a court from

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engaging in statutory construction. See Larson v. Harman Mgmt. Corp., No. 1:16-CV-

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00219-DAD-SKO, 2018 WL 6459964, at *4 (acknowledging that there “may be some risk

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of inconsistent rulings involving specific issues not addressed by the court in Marks, [but]

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such is the case in every developing area of the law.); Peralta v. Rack Room Shoes, Inc.,

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No. 18-3738, 2018 WL 6331798, at *8 (stating that the court was capable of adjudicating

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the parties’ dispute by applying the TCPA and other applicable law). Thus, the Court finds

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that, regardless of ACA International’s treatment of the term “called party,” determining

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this issue is not so particularly complex or technical that this case must be stayed pending

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the FCC’s potentially contrary ruling on that issue.

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Additionally, though Commissioner O’Rielly, in commenting on the FCC’s recent

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Report and Order, indicated that he had been promised “a comprehensive redo of [the

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FCC’s] TCPA rules will be considered promptly,” there is no indication as to what

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constitutes “promptly” and when the “redo” would be finalized and released. See Report

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and Order, p. 48. Nor is there any guarantee the FCC will actually address—and depart

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from—the FCC’s interpretation of “called party.” See id. In sum, there is simply no telling

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if and when the FCC might rule on this issue and if that ruling would be appealed. See

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Larson, 2018 WL 66459964, at *5 (noting that the FCC’s 2015 Declaratory Ruling was

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appealed, thus extending the delay in stayed cases awaiting guidance from its ruling). To

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the extent Defendant is concerned that the FCC will issue a decision that is inconsistent

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with this Court’s ultimate decision on the relevant issues (see doc. 51 at 6, 8), that risk does

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not weigh in favor of a stay because the FCC’s interpretation of “called party” still stands.

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Even if it did not, courts have already heavily weighed in on the meaning of “called party,”

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thus allowing this Court to engage in its own statutory construction analysis.2

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Lastly, the Court acknowledges that the parties have already conducted discovery,

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and, thus, there is little prejudice to Plaintiff in terms of document retention. However, the

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Court finds that there is little left open following ACA International. The Ninth Circuit has

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ruled on what constitutes an ATDS, the FCC’s and various courts’ interpretation of “called

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party” was not disturbed by ACA International, and the FCC’s recent Report and Order

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defining its good faith defense for reassigned liability absolves the Court of any hesitation

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in moving forward. Thus, there seems little chance that any guidance from the FCC, at

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some unknown, speculative, future date, would affect this case. Therefore, Plaintiff would

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be prejudiced, and the Court would be burdened, by preventing Plaintiff from continuing

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to pursue her case under these circumstances. Accordingly, the Court will not stay this

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This analysis would also extend to the issue of a good faith defense. See
Molnar v. NCO Fin. Sys., Inc., No. 13-CV-00131-BAS JLB, 2015 WL 1906346, at *6
(S.D. Cal. Apr. 20, 2015) (denying stay because “the Court [was] not persuaded that
interpretation of whether a good faith exception exists require[d] the FCC’s expertise, and
[because] there [was] no imminent likelihood of agency clarification”).
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action pursuant to the primary jurisdiction doctrine.

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B.

A Court’s Inherent Authority to Stay Its Proceedings

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“[T]he power to stay proceedings is incidental to the power inherent in every court

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to control the disposition of the causes on its docket with economy of time and effort for

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itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936).

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Deciding whether to grant a stay pending the outcome of other proceedings “calls for the

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exercise of judgment, which must weigh competing interests and maintain an even

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balance.” Id. at 254-55. The party seeking a stay must “make out a clear case of hardship

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or inequity in being required to go forward, if there is even a fair possibility that the stay

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for which he prays will work damage to some one [sic] else.” Id. at 255. In considering

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whether to grant a stay, a court will weigh the following factors: “[1] the possible damage

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which may result from the granting of a stay, [2] the hardship or inequity which a party

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may suffer in being required to go forward, and [3] the orderly course of justice measured

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in terms of the simplifying or complicating of issues, proof, and questions of law which

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could be expected to result from a stay.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir.

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1962) (citing Landis, 299 U.S. at 254-55).

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While a short stay in this case would likely cause little prejudice to Plaintiff, as the

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Court has noted, there is little indication that this stay would be short. There is no guarantee

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that any FCC action is on the horizon or would ultimately simplify “issues, proof, and

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questions of law in this case.” See id. This is because the Ninth Circuit and the FCC have

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already provided the guidance this Court needs. Therefore, there is at least “a fair

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possibility” that a stay in this case would “work damage” to Plaintiff and the putative class

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members if the Court were to halt proceedings in this case. Landis, 299 U.S. at 255. As

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such, the Court is not persuaded that Defendant has made out a “clear case of hardship or

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inequity in being required to go forward.” Id. at 254-55. Defendant argues that it will be

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prejudiced by continuing to defend against this lawsuit because the FCC, at some point in

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time, might rule on potentially relevant and dispositive issues in this case. That argument

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alone, however, is not a sufficient basis for claiming hardship or inequity. See Lockyer v.
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Mirant Corp., 398 F.3d 1098, 1112 (9th Cir. 2005). Further, although future action by the

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FCC and the Ninth Circuit may ultimately impact this case, the Court finds that, at this

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stage,3 a stay would provide little benefit “to the orderly course of justice.” CMAX, 300

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F.2d at 268.

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IV.

Conclusion

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The Court will not issue a stay based on the reasons stated above under either the

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primary jurisdiction doctrine or its inherent authority to stay its cases. If future

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developments before the FCC or the Ninth Circuit justify revisiting the request for a stay,

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either party may file an appropriate motion with the Court.

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Accordingly,

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IT IS ORDERED that Defendant’s Motion to Stay (Doc. 40) is denied.

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Dated this 17th day of January, 2019.

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Honorable Steven P. Logan
United States District Judge

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The Court notes that this case is on the eve of its two-year mark.
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