Heinrichs v. Wells Fargo Bank N.A.

Filing 56

ORDER GRANTING 33 MOTION TO STAY.(whalc2, COURT STAFF) (Filed on 4/15/2014).

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
For the Northern District of California

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MARK HEINRICHS, individually and
on behalf of all others similarly situated,
No. C 13-05434 WHA

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Plaintiff,
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v.

ORDER GRANTING
MOTION TO STAY

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WELLS FARGO BANK, N.A.,
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Defendant.
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/

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INTRODUCTION
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In this putative class action brought under the Telephone Consumer Protection Act,
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defendant moves to stay this action. To the extent stated below, the motion is GRANTED.
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STATEMENT
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The sole basis for relief in this action is premised on liability under Section 227 of Title
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47 of the United States Code. The parties agree that a called party’s express consent is required
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before a call can be placed using an automated telephone dialing system. Where the parties
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differ is whether “called party” under Section 227(b)(1)(A) means “current subscriber” of the
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cell phone number or, as Wells Fargo Bank, N.A. contends, “intended recipient.” The problem
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arises when a cell phone number is reassigned from someone who gave consent to someone
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who did not without notice to the caller.
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Wells Fargo now moves to stay the action pending resolution of two dispositive
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petitions to the Federal Communications Commission. Both petitions — one seeking
declaratory ruling and the other formal rulemaking — essentially ask the FCC to shield

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robocallers from liability if they intend to call persons who gave prior express consent to

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receive automated calls (Troutman Exh. G; Exh. H). The FCC has invited public comment as to

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both petitions. The deadline for both has now passed. The FCC is now poised to either deny

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the petition or to proceed to proposed rulemaking.

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ANALYSIS
Our court of appeals has not directly addressed what the specific definition of “called

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party” is under Section 227(b)(1)(A). District courts in our circuit have generally rejected the

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“intended recipient” definition. See Olney v. Progressive Cas. Ins. Co., No. 13-cv-2058, 2014

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WL 294498, at *3 (S.D. Cal. Jan. 24, 2014) (Judge Gonzalo P. Curiel) (standing under TCPA

United States District Court
For the Northern District of California

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not limited to intended recipient); Gutierrez v. Barclays Group, No. 10-cv-1012, 2011 WL

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579238, at *5 (S.D. Cal. Feb. 9, 2011) (Judge Dana M. Sabraw) (adopting subscriber

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definition). But a stay was granted, however, in a recent district court action because the

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defendant there filed a petition with the FCC “to confirm that there is a good faith exception to

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liability under the TCPA for situations such as this one.” Matlock v. United Healthcare

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Services, Inc., No. 13-cv-02206, 2014 WL 1155541, at *2 (E.D. Cal. Mar. 20, 2014) (Chief

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Judge Morrison C. England, Jr.). That petition is cited by Wells Fargo in the instant action.

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Wells Fargo itself has not filed a petition related to the current issue.

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The Seventh and Eleventh Circuits, while not binding in this district, have ruled that

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“called party” means current subscriber under Section 227(b)(1)(A). Soppet v. Enhanced

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Recovery Company., LLC, 679 F.3d 637, 643 (7th Cir. 2012); Osorio v. State Farm Bank,

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F.S.B., No. 13-10951, 2014 WL 1258023, at *7 (11th Cir. 2014). These decisions highlight a

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particularly complicated issue that needs uniformity in administration.

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Section 227(b)(2) grants the FCC authority to promulgate regulations to implement the

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TCPA. Pursuant to said authority, the FCC has requested public comment on two petitions that

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would be dispositive of the very issue presented by the instant civil action, namely — what

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“called party” means under the TCPA. Indeed, Wells Fargo contends in its brief that “[d]istrict

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courts are bound to follow the FCC’s orders interpreting the TCPA and circuit courts grant

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these rulings Chevron deference” (Br. 6).
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With the deadline for public comment having passed for both petitions, the next step by

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the FCC is to decide whether to propose a rule change to deal with the issue (Hutchinson Decl.

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¶ 5). In light of the distinct possibility that the FCC will clarify (or not) whether the theory of

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the pending civil action is viable, this action will be stayed until the sooner of six months or

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such closer time as the FCC decides to act or rule in such a way as to eviscerate the pending

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action. There is minimal prejudice in doing so as this action is young and the FCC’s guidance

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will be determinative of the underlying basis for relief. Counsel shall file a joint statement

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advising this Court of the status of the FCC petitions by NOON ON OCTOBER 15, 2014.

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United States District Court
For the Northern District of California

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CONCLUSION
To the extent stated above, Wells Fargo’s motion to stay is GRANTED. Counsel’s joint
statement is due by NOON ON OCTOBER 15, 2014.

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IT IS SO ORDERED.

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Dated: April 15, 2014.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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