Mendoza v. UnitedHealth Group Incorporated et al

Filing 61

ORDER by Judge Hamilton granting 50 Motion to Stay (pjhlc1, COURT STAFF) (Filed on 1/6/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SUZAN MENDOZA,
Plaintiff,

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v.

ORDER

UNITEDHEALTH GROUP INC., et al.,

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For the Northern District of California

United States District Court

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No. C 13-1553 PJH

Defendants.
_______________________________/

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Before the court is the motion of defendant MD247.com, Inc. ("MD247.com") for an

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order staying the above-entitled action. Having read the parties' papers and carefully

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considered their arguments and the relevant legal authority, the court hereby GRANTS the

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motion.

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Defendant argues that this action should be stayed on primary jurisdiction grounds,

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because the FCC has undertaken consideration of a threshold issue raised by plaintiff’s

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complaint, and that the court should defer any ruling on the issues until such time as the

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FCC has exercised its expertise in deciding those issues.

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The primary jurisdiction doctrine is "a prudential doctrine under which courts may,

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under appropriate circumstances, determine that the initial decision-making responsibility

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should be performed by the relevant agency rather than the courts.” Davel Commc’ns, Inc.

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v. Qwest Corp., 460 F.3d 1075, 1080, 1086 (9th Cir. 2006); see also Syntek Semiconductor

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Co., Ltd. v. Microchip Tech., Inc., 307 F.3d 775, 780 (9th Cir. 2002).

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The doctrine is applicable whenever the enforcement of a claim subject to a specific

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regulatory scheme requires resolution of issues that are within the special competence of

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an administrative body. See Davel Commc’ns, 460 F.3d at 1086. The doctrine is

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furthermore appropriate where conduct is alleged which is “at least arguably protected or

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prohibited by a regulatory statute,” and agency resolution of an issue “is likely to be a

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material aid to any judicial resolution.” See, e.g., GTE.Net LLC v. Cox Commc’ns, Inc., 185

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F. Supp. 2d 1141, 1144 (S.D. Cal. 2002) (granting motion to stay on primary jurisdiction

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grounds).

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While no fixed formula exists for applying the doctrine, the Ninth Circuit traditionally

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looks to four factors that must be satisfied for the doctrine to apply: (1) the need to resolve

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an issue that (2) has been placed by Congress within the jurisdiction of an administrative

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body having regulatory authority (3) pursuant to a statute that subjects an industry or
activity to a comprehensive regulatory scheme that (4) requires expertise or uniformity in

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For the Northern District of California

United States District Court

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administration. See Davel, 460 F.3d at 1087; United States v. Gen. Dynamics Corp., 828

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F.2d 1356, 1362 (9th Cir. 1987); see also Clark v. Time Warner Cable, 523 F.3d 1110,

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1115-16 (9th Cir. 2008).

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On balance, these factors are satisfied here. Plaintiff has alleged that defendants

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MD247.com, UnitedHealth Group Incorporated, Optum, Inc., and HealthAllies, Inc. violated

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the Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227, et seq. ("the TCPA") by

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initiating calls to plaintiff's cellular telephone without her prior express consent using an

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automatic telephone dialing system ("ATDS"). Cplt ¶¶ 2-3. The TCPA and implementing

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regulations promulgated by the Federal Communications Commission ("FCC") define

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ATDS as "equipment which has the capacity to store or produce telephone numbers to be

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called using a random or sequential number generator and to dial such numbers." See 47

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U.S.C. § 227(a)(1); 47 C.F.R. § 64.1200(f)(2). See, e.g., Complaint ¶¶ 21-22.

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MD247.com contends that at the time of the alleged calls, it did not utilize any

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capacity that its predictive dialer may have had to store or produce telephone numbers to

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be called using a random or sequential generator, and to dial such numbers. MD247.com

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asserts further that there has been considerable debate regarding what constitutes an

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ATDS, and of relevance to this action, whether the dialing equipment's present capacity is

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the determinative factor in classifying it as an ATDS, or whether the equipment's
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potential capacity with hardware and/or software alterations should be considered,

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regardless of whether the potential capacity is utilized at the time the calls are made.

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The FCC is currently considering multiple petitions for a declaratory ruling that

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addresses this issue. See, e.g., FCC Items on Circulation, available at

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http://transition.fcc.gov/fcc-bin/circ_items.cgi (last visited Jan. 6, 2014). For example, on

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June 25, 2013, the FCC's Consumer and Governmental Affairs Bureau ("CGB") issued a

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public notice requesting comment on a petition for an expedited declaratory ruling by

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YouMail, Inc., seeking clarification that its sofware is not an ATDS because it does not have

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the current capacity to store, produce, or dial random or sequential numbers. On
November 19, 2013, the CGB issued a public notice requesting comment on a petition for

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For the Northern District of California

United States District Court

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expedited declaratory ruling and/or rulemaking, from PACE, seeking a clarification that a

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dialing system is not an ATDS unless it has the capacity to dial numbers without human

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intervention. On December 2, 2013, the CGB issued a public notice requesting comment

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on a petition for expedited declaratory ruling filed by Glide Talk, Ltd., seeking clarification

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that the TCPA's restrictions on the use of autodialers to call wireless numbers applies only

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to equipment that could at the time of the call, be used to store numbers or generate

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sequential or randomized telephone numbers.

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As the issue raised by MD247 directly overlaps with the legal issues before the court

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by way of plaintiff’s complaint, the court concludes that the FCC is in the process of utilizing

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its recognized expertise to consider issues pending before the court. As such, the

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prerequisites for application of the primary jurisdiction doctrine are satisfied, and allowing

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the FCC to resolve the foregoing issues prior to adjudicating the issue in the present action,

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in order to obtain the benefit of the FCC’s guidance, is appropriate. See Davel Commc’ns,

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460 F.3d at 1087. While the court is sensitive to plaintiff's concerns that allowing the FCC

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to rule upon the issues before the court will engender unfair delay, the court also notes that

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the September 10, 2013 correspondence between the then-acting head of the FCC and

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Congressional representatives (cited in MD247.com's papers) indicates that FCC

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anticipates resolving this issue relatively soon.
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In these circumstances, and furthermore in view of the relatively early stage of the

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present action, the court finds that the benefit to be provided by FCC guidance on

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potentially dispositive issues in this litigation outweighs the benefit to plaintiff in allowing the

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action to proceed. As a result, the court accordingly GRANTS defendants’ request to

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STAY the current action, pending the FCC’s resolution of related issues.

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No later than six months from the date of this order, the parties shall file a status
statement with the court, advising as to the FCC's progress on resolving these issues.

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Dated: January 6, 2014
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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For the Northern District of California

United States District Court

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IT IS SO ORDERED.

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