Freeman et al v. Wilshire Commercial Capital L.L.C.

Filing 100

ORDER signed by Senior Judge William B. Shubb on 3/6/18, ORDERING that plaintiffs' 73 Motion for Summary Judgment is DENIED, and defendant's 72 Motion to Deny Class Certification is DENIED. (Kastilahn, A)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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VERINA FREEMAN and VALECEA
DIGGS, individually and on
behalf of all others
similarly situated,
Plaintiffs,

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v.

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CIV. NO. 2:15-1428 WBS AC

MEMORANDUM AND ORDER RE:
DEFENDANT’S MOTION TO DENY CLASS
AND PLAINTIFFS’ MOTION FOR
SUMMARY JUDGMENT

WILSHIRE COMMERCIAL CAPITAL
L.L.C., a California limited
liability company, dba
WILSHIRE CONSUMER CREDIT,

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Defendant.

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Verina Freeman (“Freeman”) and Velecea Diggs (“Diggs”)

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(collectively “plaintiffs”) initiated this class action against

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defendant Wilshire Commercial Capital, L.L.C. (“WCC”) alleging

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violations of the Telephonic Consumer Protection Act (“TCPA”), 47

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U.S.C. § 227.

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to Deny Class Certification (Docket No. 72) and plaintiffs’

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Motion for Partial Summary Judgment (Docket No. 73.)

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I.

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Presently before the court is defendant’s Motion

Factual and Procedural Background
Non-party Shanell White (“White”) procured an
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automobile title loan from defendant on January 13, 2009.

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of Ana Vela (“Vela Decl.”) (Docket No. 72-4) ¶ 5.)

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application required that White list references, for which she

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provided the names and cell phone numbers of Freeman and Diggs.

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(Id.)

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throughout the putative class period.

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(“FAC”) (Docket No. 40) ¶ 23.)

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White became delinquent.

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Decl.”) (Docket No. 72-2) ¶ 16.)

(Decl.

The loan

Freeman and Diggs had no relationship with defendant
(First Amended Compl.

During the course of her loan,

(Decl. of Bryan McGuire (“McGuire
In the course of collection

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efforts, between December 17, 2010 and November 29, 2011,

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defendant allegedly called Freeman nine times and Diggs five

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times in an effort to locate and collect money from White.

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Plaintiffs initiated this case on July 6, 2015.

(Id.)
In

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November 2015, the court stayed the case pending the resolution

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of defendant’s motion in a separate, but similar, matter.

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(Docket No. 19.)

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“to conduct limited discovery on the issue of the dialing system

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that defendant used to call plaintiffs and the putative class

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members in this action.”

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lifted the stay.

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ordered that prior to class discovery and any motion for class

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certification, the parties would first brief the threshold issues

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of (1) “plaintiffs’ Article III Standing” and (2) “the alleged

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capacity of defendant’s Automatic Telephone Dialing System to

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make autodialed calls to plaintiffs and proposed class members.”

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(Docket No. 38.)

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for Summary Judgment due to Lack of Article III Standing of

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Plaintiffs (Docket No. 42), which the court denied.

In the meantime, the court allowed the parties

(Id.)

On April 11, 2016, the court

(Docket No. 28.)

In September 2016, the court

On January 19, 2017, defendant filed a Motion

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(Docket No.

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58.)

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II.

Defendant’s Motion to Deny Class Certification

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“At an early practicable time after a person sues or is

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sued as a class representative, the court must determine by order

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whether to certify the action as a class action.”

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P. 23(c)(1)(A).

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plaintiffs with the exclusive right to put the class

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certification issue before the district court or prohibits a

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defendant from seeking early resolution of the class

Fed. R. Civ.

Nothing in the federal rules “either vests

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certification question.”

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571 F.3d 935, 939-40 (9th Cir. 2009).

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“per se rule that precludes defense motions to deny

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certification, and Plaintiffs have produced no authority to the

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contrary.”

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Vinole v. Countrywide Home Loans, Inc.,
Accordingly, there is no

Id. at 940.

However, the Vinole court also determined that these

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types of “preemptive” motions should not be brought or ruled upon

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until the plaintiff has had a reasonable opportunity to conduct

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class discovery.

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Circuit allowed defendant to bring a motion to deny class

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certification prior to plaintiff filing a motion to certify a

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class, it did so in light of the fact that “[p]laintiffs were

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provided with adequate time in which to conduct discovery related

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to the question of class certification.”

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Id. at 942.

In that case, although the Ninth

Id.

Here, the court has repeatedly made it clear in

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numerous status orders that the issues of Article III standing

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and phone capacity are to be resolved prior to class

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certification.

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and 69 at 3-6.)

(See Docket Nos. 52 at 3-5, 72 at 3-6, 67 at 3-6,
At this point, defendant has not produced
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discovery beyond these two threshold issues.

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1, 2017, defendant objected to plaintiffs’ document requests,

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arguing that the “request is overly broad in that it extends

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beyond the discovery permitted at this stage of litigation as it

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seeks information beyond telephone calls made to the PLAINTIFFS.”

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(Decl. of Elliot Conn (“Conn Decl.”), Ex. 3 (Docket No. 87-3).)

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Notably, on March

Prior to a Rule 23 Motion seeking class certification,

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the parties are entitled to conduct discovery in order to provide

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the court with evidence to either support or refute the requested

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certification.

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on the information above, the court concludes that plaintiffs

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have not been given the opportunity to engage in the necessary

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class discovery.

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210 (9th Cir. 1975) (“The propriety of a class action cannot be

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determined in some cases without discovery.”)

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court concludes that defendant’s motion is premature and should

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be denied.1

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III. Plaintiffs’ Motion for Partial Summary Judgment

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A.

See Vinole, 571 F.3d 935 at 942.

However, based

See Kamm v. Cal. City Dev. Co., 509 F.2d 205,

Therefore, the

Legal Standard

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The court also notes that defendant seeks denial of
class certification because plaintiffs “cannot demonstrate that
an auto-dialer was ever utilized to call them.” (Def.’s P. & A.
in Supp. of Mot. to Deny Class Cert. (Docket No. 72-1) at 19.)
However, “neither the possibility that a plaintiff will be unable
to prove his allegations, nor the possibility that the later
course of the suit might unforeseeably prove the original
decision to certify the class wrong, is a basis for declining to
certify a class.” Blackie v. Barrack, 542 F.2d 891, 901 (9th
Cir. 1975). Accordingly, by asking the court to determine
whether or not an auto-dialer was in fact used to call
plaintiffs, defendant is seeking to obtain a ruling on the
merits, which is inappropriate at this stage.
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Summary judgment is proper “if the movant shows that

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there is no genuine dispute as to any material fact and the

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movant is entitled to judgment as a matter of law.”

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P. 56(a).

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of the suit, and a genuine issue is one that could permit a

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reasonable jury to enter a verdict in the non-moving party’s

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favor.

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(1986).

Fed. R. Civ.

A material fact is one that could affect the outcome

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

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The party moving for summary judgment bears the initial

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burden of establishing the absence of a genuine issue of material

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fact and can satisfy this burden by presenting evidence that

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negates an essential element of the non-moving party’s case.

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Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).

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Alternatively, the movant can demonstrate that the non-moving

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party cannot provide evidence to support an essential element

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upon which it will bear the burden of proof at trial.

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inferences drawn from the underlying facts must, however, be

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viewed in the light most favorable to the party opposing the

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motion.

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U.S. 574, 587 (1986).

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B.

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Id.

Any

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475

Discussion

In order to prove that defendant violated the TCPA,

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there are three elements plaintiffs need to prove: “(1) the

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defendant called a cellular telephone number; (2) using an

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automatic telephone dialing system; (3) without the recipient’s

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prior express consent.”

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LLC, 707 F.3d 1036, 1043 (9th Cir. 2012).

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issue is whether defendant used an “automatic telephone dialing

Meyer v. Portfolio Recovery Assocs.,

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Here, the element at

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system” to call plaintiffs.

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that, as a matter of law, defendant did in fact use this type of

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phone system, and thereby violated the TCPA.

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Plaintiffs ask the court to find

It is undisputed that defendant used two different

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dialing systems to place its phone calls--an Aspect Unified IP

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6.6 Predictive Dialer (“Aspect”) and an Avaya PBX (“Avaya”).

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Avaya is a manual dialer system whereas the Aspect is,

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undeniably, an automatic telephone dialing system, also known as

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an auto-dialer system.

The

(Decl. of Jose Hernandez (“Hernandez

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Decl.”) (Docket No. 72-3) ¶¶ 7, 8.)

Thus, the question for the

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court is whether defendant used the Aspect to call plaintiffs.

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A.

Defendant’s Phone Records

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Defendant uses a system known as Daybreak to record all

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account activity, including all phone calls made as part of

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collection efforts.

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automatically generated and instead are inputted manually by

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defendant’s employees.

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error, defendant also relies upon automatically generated call

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records to maintain a more accurate log of all calls placed.

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(Hernandez Decl. ¶ 18.)

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automatically recorded in a database system called “ECAS.”

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¶ 14.)

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calls as well, but those records are only maintained for fifteen

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days.

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the invoice records of defendant’s phone carrier,

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Paetec/Windstream (“Windstream records”).

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records only include phone calls that are picked up either by a

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person, an answering machine, or a voicemail.

(McGuire Decl. ¶ 3.)

(Id. ¶ 8.)

Daybreak notes are not

To catch any potential human

Calls made through the Avaya system are
(Id.

The Aspect system generates an automatic record of phone

(Id.)

All calls made on either system are reflected in

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(Id.)

However, these

(Id. ¶¶ 12, 13.)

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If the phone call is not picked up on the receiving end, there

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will not be a corresponding charge reflected in the Windstream

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records.

(Id. ¶ 13.)

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B.

Calls to Freeman

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Plaintiffs allege that defendant placed at least nine

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calls to Freeman.

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(Docket No. 42-3) ¶ 5.)

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Daybreak.

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calls were placed with the Avaya system, and the other four were

(Id.)

(Decl. of James Eyraud (“Eyraud Decl.”)
All of these calls are recorded in

Plaintiff further alleges that five of those

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placed with the Aspect.

Plaintiff argues that there are four

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calls recorded in Daybreak for which there are no corresponding

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entries in ECAS, the database that records all calls placed using

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Avaya.

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have been made using the Aspect system.

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of Mot. for Summ. J. (Docket No. 73) at 7.)2

Based on this fact, plaintiff avers that these calls must

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(Pls.’ P. & A. in Supp.

However, defendant raises several doubts as to whether

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this is true.

Specifically, defendant points out that the

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Daybreak notes are recorded manually and are consequently subject

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to error.

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but does not appear in the Avaya record, it is possible that the

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call was not in fact placed using the Aspect system but in fact

Therefore, if a call is listed in the Daybreak records

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Defendant points out that plaintiffs base most of these
conclusions on the expert report of Jeffrey Hansen, which
defendant claims is inadmissible because it is based on “simple
logic.” However, defendant does not dispute the underlying
records that Hansen’s report is based on, and thus the court need
not determine whether or not the report itself is admissible
because the court can analyze the admissible records themselves.
Accordingly, even if the report were stricken, it would have no
impact on the court’s analysis or decision.
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was not placed at all, and the call was only listed in Daybreak

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because of human error.3

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appears in Daybreak but was not in the Avaya records, plaintiffs

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conclude that the call must have been placed using Aspect, but,

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alternatively, the call could simply not have been placed at all.

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Plaintiffs argue that defendant previously provided the

In other words, for each call that

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court with a declaration in which defendant’s vice president

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admitted that the Daybreak notes demonstrate that defendant

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called Freeman nine times.

(Eyraud Decl. ¶ 5.)

Based on this,

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plaintiffs argue that defendant cannot now claim that these calls

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were never made.

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present this argument would contradict defendant’s earlier

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declaration, and therefore would violate Daubert v. NRA Group,

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LLC, 861 F.3d 382, 391 (3d Cir. 2017)(“When a nonmovant’s

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affidavit contradicts earlier deposition testimony without a

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satisfactory or plausible explanation, a district court may

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disregard it at summary judgment in deciding if a genuine,

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material factual dispute exists.”).

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Plaintiffs aver that allowing defendant to

However, the Daubert court explained that it only

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intended to prohibit subsequent “sham” declarations, and the

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court here does not find that defendant is presenting a sham

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declaration, nor even one that is contradictory to a previously

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made statement.

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Daybreak records do not list these nine calls, but instead is

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simply disputing the accuracy of those records.

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Defendant is not attempting to claim that the

It is possible,

Defendant admits that it previously had issues with its
employees entering false notes or inaccurate entries, and in fact
had to discipline multiple employees for “padding” the records to
receive certain incentives. (Vela Decl. ¶ 16.)
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and indeed the case here, for defendant to admit both that the

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Daybreak records reflect that a certain number of calls were

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made, and also to simultaneously argue that, despite what these

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records may indicate, these calls were not in fact ever made.

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Therefore, the court concludes that defendant’s previous

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declaration does not preclude defendant from now suggesting that

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the Daybreak notes are not accurate.

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Defendant also points out that there are some Daybreak
records indicating that a phone call was made and answered, and

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yet there is no corresponding entry in Windstream.

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argue that the fact that these phone calls do not appear in the

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Windstream records proves that the subject calls were not made.

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However, Windstream records are only generated for calls that are

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answered.

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Windstream records is insufficient to prove that the calls were

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not placed, although it does add more weight to defendant’s

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arguments.

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would appear in the Windstream records, and yet they do not.

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defendant’s employees could have mistakenly indicated in Daybreak

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that a call was answered when it was not, then it is plausible

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that the same employees could have indicated that a call was

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placed when in reality no such call was made.

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plaintiff seemingly must concede that at least a portion of the

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Daybreak records are incorrect, a reasonable trier of fact could

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find that the Daybreak records are inaccurate and do not

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correctly reflect whether certain calls were made.

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Defendants

Accordingly, the omission of the calls from the

Inarguably, if the calls had been answered, they
If

Therefore, because

Plaintiffs argue that the court should not be able to
consider the Windstream records because they are inadmissible
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hearsay.

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(Docket No. 91) at 3.)

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that telephone records are business records, and that an

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automatically generated record of a telephone call is admissible

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evidence.

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1989), abrogated on other grounds by Fla. V. White, 526 U.S. 559

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(1999).

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Administrator, declared that he was able to access and search all

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Windstream invoices and that these records were kept as part of

(Pls.’ Reply P. & A. in Supp. of Mot. for Summ. J.
However, the Ninth Circuit has concluded

United States v. Linn, 880 F.2d 209, 216 (9th Cir.

Further, Hernandez, a WCC Telecommunications

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WCC’s regular business practices.

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(Docket No. 90-3) ¶¶ 15-20.)

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consider the Windstream records, it would nonetheless conclude

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that defendant has raised sufficient doubts regarding whether the

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Aspect was used.

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(Decl. of Jose Hernandez

Moreover, even if the court did not

Accordingly, the court concludes that a genuine,

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material factual dispute exists as to whether defendant did in

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fact use the Aspect system to call Freeman.

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C.

Calls to Diggs

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Plaintiffs allege that defendant placed at least five

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calls to Diggs, that only one of those calls was placed with the

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Avaya system, and that the other four were placed with the

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Aspect.

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same reasoning explained above.

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court again finds that defendant has raised sufficient doubts as

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to whether defendant in fact used the Aspect system to call

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Diggs, and thus a dispute of material facts exists.

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In reaching this conclusion, plaintiffs rely upon the
As with the Freeman calls, the

IT IS THEREFORE ORDERED that plaintiffs’ Motion for
Summary Judgment (Docket No. 73) be, and the same hereby is,
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DENIED.

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IT IS FURTHER ORDERED that defendant’s Motion to Deny

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Class Certification (Docket No. 72) be, and the same hereby is,

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DENIED.

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Dated:

March 6, 2018

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