David Doerken v. USAA Federal Saving Bank et al

Filing 28

ORDER re: DEFENDANT'S MOTION TO STAY PROCEEDINGS 20 by Judge Ronald S.W. Lew: The Court GRANTS Defendant's Motion to Stay Proceedings. Defendant shall confer with Plaintiff and file a status report advising the Court of the outcome of th e decision from the United States Court of Appeals for the D.C. Circuit in ACA within 14 days from the date of decision. The status report shall include the parties' position as to how this Court should proceed. All dates on the Court's calendar are hereby vacated and will be reset as necessary. (jre)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 13 DAVID DOERKEN, 14 15 Plaintiff, v. 16 USAA SAVINGS BANK, 17 Defendant. 18 19 20 21 ) ) ) ) ) ) ) ) ) ) ) ) ) CV 16-08824-RSWL-MRW ORDER re: DEFENDANT’S MOTION TO STAY PROCEEDINGS [20] I. INTRODUCTION Currently before the Court is Defendant USAA 22 Savings Bank’s (“Defendant”) Motion to Stay Proceedings 23 (“Motion”) pending the United States Court of Appeals 24 for the D.C. Circuit’s decision in ACA Int’l v. Fed. 25 Commc’ns Comm’n, Appeal No. 15-1211 (D.C. Circuit) 26 (filed on Oct. 13, 2015) [20]. The Court, having 27 reviewed all papers and arguments submitted pertaining 28 to this Motion, NOW FINDS AND RULES AS FOLLOWS: 1 1 Defendant’s Motion to Stay Proceedings is GRANTED. 2 II. BACKGROUND 3 A. Factual Background 4 This action arises from Plaintiff David Doerken’s 5 (“Plaintiff”) claims that Defendant violated the 6 Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 7 227 and the Rosenthal Fair Debt Collection Practices Act 8 (“RFDCPA”), Cal. Civ. Code. § 1788. See Compl., ECF No. 9 1. 10 Plaintiff is an individual who resides in Los 11 Angeles County, California. Id. at ¶ 5. Defendant is a 12 bank with its principal place of business in Texas. Id. 13 at ¶ 9. 14 Defendant attempted to collect a debt that 15 Plaintiff allegedly owed. Id. at ¶ 11. Plaintiff 16 alleges between May 2016 and June 2016, Defendant called 17 Plaintiff more than forty-four times in its attempt to 18 collect the debt. Id. at ¶ 13. On June 27, 2016, 19 Plaintiff told a representative of Defendant that he 20 unequivocally revoked Defendant’s consent to contact him 21 on his cellular phone; however, between June 28, 2016, 22 and August 4, 2016, Defendant allegedly contacted 23 Plaintiff at least seventy-five additional times. Id. 24 at ¶¶ 14-15. 25 Plaintiff further alleges that Defendant called him 26 using an automatic telephone dialing system (“ATDS”), 27 which violates the TCPA. Id. at ¶¶ 21-22. Plaintiff 28 also alleges these calls violated the RFDCPA. 2 1 Defendant denies its dialing system meets the definition 2 of an ATDS and therefore it lacks liability under the 3 TCPA. Def.’s Mot. to Stay Proceedings (“Mot.”) 1:20-21, 4 ECF No. 20. 5 B. Procedural Background 6 On November 29, 2016, Plaintiff filed its Complaint 7 against Defendant [1]. On January 4, 2017, Defendant 8 filed its Answer [18]. On February 10, 2017, Defendant 9 filed an Amended Answer with Plaintiff’s stipulation 10 correcting Defendant’s name from USAA Federal Savings 11 Bank to USAA Savings Bank [19]. On February 21, 2017, 12 Defendant filed the instant Motion [20]. On March 1, 13 2017, Plaintiff filed its Opposition [23] and 14 Plaintiff’s Reply followed on March 13, 2017 [24]. 15 III. DISCUSSION 16 A. Legal Standard 17 A district court has “broad discretion to stay 18 proceedings as an incident to its power to control its 19 own docket.” Clinton v. Jones, 520 U.S. 681, 706 20 (1997)(citing Landis v. N. Am. Co., 299 U.S. 248, 254 21 (1936)). A court may “find it . . . efficient for its 22 own docket and the fairest course for the parties to 23 enter a stay of an action before it, pending resolution 24 of independent proceedings which bear upon the case.” 25 Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 26 863 (9th Cir. 1979). The rule applies to judicial 27 proceedings and does not require the issues of such 28 proceedings be necessarily controlling of the action 3 1 before the court. Id. at 863-64. A stay should not be 2 granted unless it appears likely that the other 3 proceedings will be concluded within a reasonable time 4 in relation to the urgency of the claims. Id.; see 5 Landis, 299 U.S. at 256-57 (holding the lower court 6 abused its discretion because the stay “continue[d] in 7 effect” without “reasonable limits”). 8 In exercising its discretion in determining whether 9 to grant a stay, a court must weigh the competing 10 interests of the various parties that may be affected by 11 the decision to grant or refuse to grant a stay. 12 Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 13 2005). Specifically, the court must consider: (1) the 14 possible damage or harm to the non-moving party which 15 may result from granting a stay; (2) the hardship or 16 inequity the moving party may suffer in being required 17 to go forward with the case if the request for a stay is 18 denied; and (3) “the orderly course of justice measured 19 in terms of the simplifying or complicating of issues, 20 proof, and questions of law which could be expected to 21 result from a stay.” Id. The proponent of a stay has 22 the burden of proving that a stay is justified. 23 Clinton, 520 U.S. at 708. 24 Regarding the second Lockyer factor, courts have 25 held that there is no likelihood of damage or harm to 26 the non-moving party merely because a stay could cause a 27 delay to the plaintiff in receiving money damages. See 28 Bay Area Surgical Grp., Inc. v. Aetna Life Ins. Co., No. 4 1 5:13-CV-05430-EJD, 2014 WL 2759571, at *5 (N.D. Cal. 2 June 17, 2014); see also Nussbaum v. Diversified 3 Consultants, Inc., No. 15-CV-600, 2015 WL 5707147, at *2 4 (D. N.J. Sept. 28, 2015) (“Because delay results 5 inherently from the issuance of a stay, courts have 6 found that mere delay does not, without more, 7 necessitate a finding of undue prejudice and clear 8 tactical disadvantage”). 9 B. 10 Analysis Defendant argues that the D.C. Circuit’s decision 11 in ACA will decide the exact issue pertinent to this 12 case—whether equipment constitutes an ATDS if it merely 13 has the potential capacity to generate random telephone 14 numbers to be dialed. Mot. 2:1-4. Defendant argues a 15 stay should be granted because: 1) a stay poses no risk 16 of harm to Plaintiff because he is only seeking 17 statutory damages; 2) Defendant will suffer prejudice 18 because it will force Defendant to expend significant 19 and potentially unnecessary costs in discovery and trial 20 preparation depending on the D.C. Circuit’s decision; 21 and 3) granting a stay promotes the interests of the 22 public and judicial economy in simplifying the issues in 23 this case. 24 Id. at 6:23-7:11; 8:5-23; 9:4-5. Plaintiff argues a stay should not be granted 25 because: 1) Defendant has not shown the ruling in ACA 26 will simplify issues in this case; 2) regardless of the 27 decision in ACA, discovery will need to be conducted; 3) 28 Plaintiff will suffer prejudice and undue delay if a 5 1 stay is granted; and 4) Defendant has failed to submit 2 any evidence it would suffer hardship or inequity if 3 required to move forward. Pl.’s Opposition (“Opp’n”) 4 7:16-23, ECF No. 23. 5 All of the factors a court must consider in 6 determining whether a stay should be granted weigh in 7 favor of granting a stay pending the D.C. Circuit’s 8 ruling in ACA. In exercising its discretion to 9 determine whether to grant a stay, a court must weigh 10 the competing interests of the various parties that may 11 be affected by the decision to grant or refuse to grant 12 a stay. Lockyer, 398 F.2d at 1110. The factors this 13 Court must consider are: (1) the possible damage or harm 14 to the non-moving party which may result from granting a 15 stay; (2) the hardship or inequity the moving party may 16 suffer in being required to go forward with the case if 17 the request for a stay is denied; and (3) “the orderly 18 course of justice measured in terms of the simplifying 19 or complicating of issues, proof, and questions of law 20 which could be expected to result from a stay.” 21 Id. Under the TCPA, an ATDS is equipment “which has the 22 capacity (A) to store or produce telephone numbers to be 23 called, using a random or sequential number generator; 24 and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1). 25 On appeal is the Federal Communications Commissions’ 26 (“FCC”) finding that a piece of equipment has sufficient 27 capacity to qualify as an ATDS if it has the present or 28 “potential” capacity to store or produce numbers to be 6 1 called using a random generator, but not if it only has 2 the “theoretical” capacity. See In re Rules & 3 Regulations Implementing the Tel. Consumer Prot. Act of 4 1991, 30 F.C.C.R. 7961 (2015) (“July 2015 Ruling”). The 5 July 2015 Ruling does not clarify the difference between 6 “potential” and “theoretical” capacity. 7 The competing risks of harm favor granting a stay. 8 Plaintiff’s conclusory statement that many of 9 Defendant’s employees are entry-level debt collectors 10 and that there is a high probability that they will no 11 longer work for Defendant once the stay is lifted and 12 will be unavailable as witnesses is unfounded. 13 9:12-10:4. Opp’n Moreover, a stay would not cause Plaintiff 14 such great stress and emotional strain to justify denial 15 of a stay given the significant effect the D.C. 16 Circuit’s ruling in ACA will have on the instant case. 17 In contrast, potential prejudice to Defendant is 18 significant because denying a stay would force Defendant 19 to conduct discovery and defend the TCPA claim in light 20 of the uncertain difference between “potential” and 21 “theoretical” capacity under the definition of an ATDS. 22 A stay will serve “the orderly course of justice 23 measured in terms of the simplifying or complicating of 24 issues, proof, and questions of law.” 25 at 1110. Lockyer, 398 F.2d In ACA, the D.C. Circuit will address, among 26 other things, what type of equipment constitutes an 27 ATDS. Because Plaintiff must prove that Defendant 28 called him using an ATDS to establish a TCPA claim, the 7 1 definition of an ATDS is indispensable in this 2 litigation.1 See Meyer v. Portfolio Recovery Assocs., 3 LLC, 707 F.3d 1036, 1043 (9th Cir. 2012) (“The three 4 elements of a TCPA claim are: (1) the defendant called a 5 cellular telephone number; (2) using an automatic 6 telephone dialing system [ATDS]; (3) without the 7 recipient's prior express consent”). 8 One issue on appeal, among others, is whether the 9 FCC’s treatment of the term “capacity. . . is arbitrary, 10 capricious, and an abuse of discretion, and results in 11 an approach that [fails to] comport with the caller's 12 constitutional rights of due process and freedom of 13 speech.” Chattanond v. Discover Fin. Servs., LLC, No. 14 CV 15-08549-RSWL-JCx, 2016 WL 8202736, at *4 (C.D. Cal. 15 Feb. 26, 2016)(internal quotation marks and citation 16 omitted). Because Defendant denies its dialing system 17 is an ATDS, the issue of what constitutes one is 18 pertinent to this case. 19 Moreover, briefing in ACA was completed on February 20 24, 2016. Therefore, the appeal is not likely to remain 21 pending for an extended period of time, and the possible 22 prejudice to Plaintiff is minimal. Provo v. Rady 23 Children’s Hospital-San Diego, No. 15cv0081 JM(BGS), 24 2015 WL 6144029, at *2 (S.D. Cal. July 29, 2015). 25 26 27 28 1 Plaintiff argues that predictive dialers qualify as an ATDS. Opp’n 5:9-10. However, as Defendant correctly points out, this argument is irrelevant because Plaintiff’s Complaint does not allege that Defendant used a predictive dialer to call Plaintiff. See Compl. 8 1 Granting a stay may simplify the issues in this case and 2 conserve resources both for the parties and the Court. 3 Id. Defendant has shown there would be minimal, if any, 4 harm or damage to Plaintiff if a stay is granted, 5 Defendant would suffer hardship if it is required to 6 move forward with discovery pending the D.C. Circuit’s 7 decision in ACA, and the ruling in ACA will serve to 8 simplify and answer indispensable questions pertinent to 9 the instant litigation. Thus, all factors weigh in 10 favor of granting a stay. 11 12 IV. CONCLUSION Accordingly, the Court GRANTS Defendant’s Motion to 13 Stay Proceedings [20]. Defendant shall confer with 14 Plaintiff and file a status report advising the Court of 15 the outcome of the decision from the United States Court 16 of Appeals for the D.C. Circuit in ACA within 14 days 17 from the date of decision. The status report shall 18 include the parties’ position as to how this Court 19 should proceed. All dates on the Court’s calendar are 20 hereby vacated and will be reset as necessary. 21 IT IS SO ORDERED. 22 DATED: April 26, 2017 s/ RONALD S.W. LEW 23 HONORABLE RONALD S.W. LEW 24 Senior U.S. District Judge 25 26 27 28 9

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