Anderson v. Credit One Bank, National Association et al

Filing 31

ORDER Denying Defendant's #26 Motion to Stay. Signed by Judge Michael M. Anello on 10/17/2017. (ag)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 10 11 12 13 14 SOUTHERN DISTRICT OF CALIFORNIA Case No.: 16cv3125-MMA (AGS) RODGER DEAN ANDERSON, v. ORDER DENYING DEFENDANT’S MOTION TO STAY Plaintiff, [Doc. No. 26] CREDIT ONE BANK, NATIONAL ASSOCIATION, 15 Defendant. 16 17 18 Plaintiff Rodger Dean Anderson (“Plaintiff”) brings this action against Defendant 19 Credit One Bank, National Association (“Defendant” or “Credit One Bank”) alleging 20 three causes of action for: (1) violations of California’s Rosenthal Fair Debt Collection 21 Practices Act, California Civil Code § 1788 et seq.; (2) violations of the Telephone 22 Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq.; and (3) intrusion. See 23 Complaint. Defendant moves to stay this action. See Doc. No. 26. Plaintiff filed an 24 opposition, to which Defendant replied. See Doc. Nos. 28, 29. The Court found the 25 matter suitable for determination on the papers and without oral argument pursuant to 26 Civil Local Rule 7.1.d.1. See Doc. No. 30. For the reasons set forth below, the Court 27 DENIES Defendant’s motion to stay. 28 /// -1- 16cv3125-MMA (AGS) 1 2 BACKGROUND Plaintiff, a resident of California, applied online for a credit card with Credit One 3 Bank. Upon approval, Credit One Bank mailed Plaintiff a credit card. Plaintiff activated 4 his credit card in February 2015, and began using his credit card for personal and 5 household purposes. In June 2015, Plaintiff closed his credit card account “after paying 6 off the remaining balance.” Complaint ¶ 15. 7 Approximately four (4) months later, Credit One Bank began telephoning Plaintiff 8 and demanding payment. Complaint ¶ 16. Plaintiff claims Credit One Bank used an 9 “automatic telephone dialing system” (“ATDS”) in violation of the TCPA. Complaint ¶ 10 20. Plaintiff asserts he notified Credit One Bank that there was a $0.00 balance on his 11 account. Complaint ¶ 16. Credit One Bank informed Plaintiff that Plaintiff had not paid 12 the annual card fee. See Complaint ¶ 17. Plaintiff then paid the annual fee, but continued 13 to receive phone calls from Credit One Bank demanding payment for the annual credit 14 card fee. Complaint ¶ 19. Plaintiff contends Credit One Bank continued making calls, 15 often multiple times per day, in an attempt to collect this debt from Plaintiff. See 16 Complaint ¶ 20. Plaintiff further alleges that Credit One Bank “would often leave 17 recorded messages using an artificial voice.” Complaint ¶ 27. Plaintiff asserts he “has 18 never given Defendant permission to call his cellular phone and if Defendant did have 19 authorization, Plaintiff rescinded this authorization numerous times.” Complaint ¶ 25. 20 21 LEGAL STANDARD “A district court has discretionary power to stay proceedings in its own court 22 under Landis v. North American Co.” Lockyer v. Mirant Corp., 398 F.3d 1098, 1109 (9th 23 Cir. 2005) (citing Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)). “The power to stay a 24 case is ‘incidental to the power inherent in every court to control the disposition of the 25 causes on its docket with economy of time and effort for itself, for counsel, and for 26 litigants.’” Halliwell v. A-T Sols., 2014 WL 4472724, at *7 (S.D. Cal. Sept. 10, 2014) 27 (quoting Landis, 299 U.S. at 254). A district court may stay a case “pending resolution of 28 independent proceedings which bear upon the case,” even if those proceedings are not -2- 16cv3125-MMA (AGS) 1 “necessarily controlling of the action before the court.” Leyva v. Certified Grocers of 2 Cal., Ltd., 593 F.2d 857, 863–64 (9th Cir. 1979). However, “[o]nly in rare circumstances 3 will a litigant in one cause be compelled to stand aside while a litigant in another settles 4 the rule of law that will define the rights of both.” Landis, 299 U.S. at 255. In determining whether to grant a stay pursuant to Landis, courts in the Ninth 5 6 Circuit weigh the “competing interests which will be affected by the granting or refusal to 7 grant a stay,” including “the possible damage which may result from the granting of a 8 stay, the hardship or inequity which a party may suffer in being required to go forward, 9 and the orderly course of justice measured in terms of the simplifying or complicating of 10 issues, proof, and questions of law which could be expected to result from a stay.” See 11 Lockyer, 398 F.3d at 1110 (quoting CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 12 1962)). The burden is on the movant to show that a stay is appropriate. See Clinton v. 13 Jones, 520 U.S. 681, 708 (1997). 14 15 DISCUSSION A. Defendant’s Request for Judicial Notice 16 As an initial matter, Defendant requests the court take judicial notice of five 17 exhibits in connection with its motion to stay. See Doc. No. 27. Specifically, Defendant 18 requests the Court take judicial notice of: (1) the Second Amended Petition filed in ACA 19 International v. Fed. Comm’ns Comm’n, Appeal No. 15-1211 (D.C. Cir.); (2) the docket 20 in Marks v. Crunch San Diego, LLC, a case on appeal in the Ninth Circuit, No. 14-56834; 21 (3) a district court’s order granting the defendant’s motion to stay in Bowden v. Contract 22 Caller, Inc., 16-cv-6171-MMC (N.D. Cal. Apr. 5, 2017); (4) a district court’s order 23 granting the defendant’s motion to stay in Roark v. Credit One Bank, N.A., 16-cv-00173- 24 RHK-FLN (D. Minn. Dec. 6, 2016); and (5) a district court’s order granting the 25 defendant’s motion to stay in Kristensen v. Credit One Bank, N.C., 14-cv-7963-DMG- 26 AJWX (C.D. Cal. July 28, 2016). See id. Plaintiff did not file an opposition to 27 Defendant’s request for judicial notice. 28 Regarding Defendant’s requests for judicial notice of Exhibits 1 and 2, a court may -3- 16cv3125-MMA (AGS) 1 take judicial notice of matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 2 688-89 (9th Cir. 2001) (citing Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th 3 Cir. 1986)). Because Plaintiff does not dispute the authenticity of these documents, and 4 because the facts are not subject to reasonable dispute, the Court GRANTS Defendant’s 5 request for judicial notice of Exhibits 1 and 2. See Fed. R. Evid. 201(b). 6 Regarding Defendant’s request for judicial notice of Exhibits 3-5, to the extent 7 Defendant seeks to establish the existence of Exhibits 3-5, the Court GRANTS 8 Defendant’s request for judicial notice. However, to the extent Defendant seeks to 9 provide supplemental authority for the Court’s consideration, such a request is 10 misguided. See In re Bare Escentuals, Inc. Sec. Litig., 745 F. Supp. 2d 1052, 1067 (N.D. 11 Cal. 2010) (“[t]he court may take judicial notice of the existence of unrelated court 12 documents, although it will not take judicial notice of such documents for the truth of the 13 matter asserted therein.”); see also Garcia v. California Supreme Court, 2014 WL 14 309000, at *1 (N.D. Cal. Jan. 21, 2014) (“a request for judicial notice is not a proper 15 vehicle for legal argument.”). 16 B. 17 Defendant’s Motion to Stay Defendant moves to stay this action pending the outcome of the D.C. Circuit 18 Court’s decision in ACA International v. Fed Commc’ns Comm’n, Appeal No. 15-1211 19 (D.C. Cir.), in which the D.C. Circuit has been asked to review various aspects of an 20 order issued by the Federal Communications Commission (“FCC”) (hereinafter “2015 21 FCC Order”). In its order, the FCC clarified various provisions of the TCPA, including 22 the definition of ATDS and revocation of consent. See Defendant’s Request for Judicial 23 Notice (hereinafter “RJN”), Exh. 1. Defendant argues the ruling in ACA International 24 will affect two issues in this case: whether Defendant used an ATDS, and whether 25 Plaintiff effectively revoked any prior express consent. Defendant also notes that the 26 Ninth Circuit has stayed its review of Marks v. Crunch San Diego, 55 F. Supp. 3d 1288 27 (S.D. Cal. 2014), a case regarding the definition of an ATDS, pending the D.C. Circuit’s 28 decision in ACA International. See RJN, Exh. 2. Defendant claims the D.C. Circuit’s -4- 16cv3125-MMA (AGS) 1 ruling “will have a domino effect on the Ninth Circuit’s construction of an ATDS.” Doc. 2 No. 26-1 at 2. 3 Plaintiff opposes Defendant’s motion, arguing the ruling in ACA International will 4 likely not impact the issues in this case, and that Defendant has not demonstrated it will 5 suffer hardship in the absence of a stay. See Doc. No. 28. In ruling on the instant 6 motion, the Court considers: (1) whether a stay supports judicial economy; (2) whether 7 Defendant will suffer hardship or inequity in the absence of a stay; and (3) prejudice to 8 Plaintiff. See Lockyer, 398 F.3d at 1110. 9 10 1. Judicial Economy The Court must consider whether a stay would promote “the orderly course of 11 justice measured in terms of the simplifying . . . of issues, proof, and questions of law.” 12 Lockyer, 398 F.3d at 1110. Defendant contends the D.C. Circuit’s ruling in ACA 13 International will narrow key factual and legal issues including the FCC’s definition of 14 an ATDS and whether a consumer may revoke consent. See Doc. No. 26-1 at 5. In 15 response, Plaintiff asserts it is speculative whether the decision in ACA International will 16 even apply to this case. See Doc. No. 28 at 5. 17 The Court is not persuaded that a stay pending the D.C. Circuit’s ruling in ACA 18 International would promote judicial economy in this case. Plaintiff asserts two theories 19 in support of his TCPA claim. Plaintiff alleges Defendant used both an ATDS and an 20 “artificial voice.” Complaint ¶¶ 20, 27. A plaintiff may bring a claim under the TCPA 21 by alleging that the defendant called him or her using either an ATDS or an artificial 22 voice. See 47 U.S.C. § 227(b)(1) (emphasis added). As a result, Plaintiff’s TCPA claim 23 will remain even if the D.C. Circuit’s ruling impacts the definition of an ATDS. See 24 Declue v. United Consumer Fin. Servs. Co., 2017 WL 4541668, at *2 (S.D. Cal. Oct. 11, 25 2017); Mendez v. Optio Sols., LLC, 239 F. Supp. 3d 1229, 1233 (S.D. Cal. 2017) 26 (“[B]ecause Plaintiff alleges Defendant violated the TRCPA through both the use of an 27 ATDS and an artificial or prerecorded voice, Plaintiff’s TCPA claim will stand despite 28 the ATDS allegations.”) (emphasis in original). Moreover, “discovery regarding the type -5- 16cv3125-MMA (AGS) 1 of calling system Defendant uses will be necessary to determine whether it fits any 2 definition of ATDS, whether it will be that of the 2015 FCC Order or a new definition 3 provided by the D.C. Circuit.” Declue, 2017 WL 4541668, at *2. 4 Further, regardless of the D.C. Circuit’s ruling in ACA International, the parties 5 will need to conduct discovery on the issue of consent. Plaintiff argues he never 6 consented to the calls, but that even if he did, he “rescinded this authorization numerous 7 times.” Complaint ¶ 25. Thus, if Plaintiff did authorize such calls, the parties will need 8 to conduct discovery on the issue of revocation. As another court in this district recently 9 noted, 10 11 12 13 14 If the D.C. Circuit upholds the 2015 FCC Order, the parties will need to conduct discovery to determine whether [the plaintiffs’] revocation of consent was effective. If the 2015 FCC Order’s ruling on consent revocation does not survive, the parties will still need to conduct similar discovery, only under Ninth Circuit precedent. 15 Declue, 2017 WL 4541668, at *2 (citing Van Patten v. Vertical Fitness Grp., LLC, 847 16 F.3d 1037, 1047 (9th Cir. 2017) (holding that consumers may revoke their prior express 17 consent under the TCPA, even if the D.C. Circuit invalidates the 2015 FCC Order). 18 Plaintiff also argues that the decision by the D.C. Circuit Court is not binding on 19 this Court. Though district courts have reached different conclusions on the precedential 20 effect of the D.C. Circuit’s ruling in ACA International, the Court need not resolve this 21 issue at this time. See Cabiness v. Educ. Fin. Solutions, LLC, 2017 WL 167678, at *3 22 (N.D. Cal. Jan. 17, 2017) (“Although the ACA Int’l decision will be binding on this 23 Court, there is currently no live ATDS issue with respect to the Plaintiff in this case.”); 24 cf. O’Hanlon v. 24 Hour Fitness USA, Inc., 2016 WL 815357, at *5 (N.D. Cal. Mar. 2, 25 2016) (noting “any decision from the D.C. Circuit would not be binding on this Court”). 26 However, as Plaintiff notes, the losing party in ACA International will likely petition the 27 U.S. Supreme Court for review, “making it impossible to forecast if or when a decision in 28 ACA International will become final.” Hiemstra v. Credit One Bank, 2017 WL 4124233, -6- 16cv3125-MMA (AGS) 1 at *2 (E.D. Cal. Sept. 15, 2017). Thus, Defendant has not shown a stay would promote 2 judicial economy. 3 2. Hardship or Inequity 4 The Court must also consider the “hardship or inequity which a party may suffer in 5 being required to go forward” with the case. Lockyer, 398 F.3d at 1110. Defendant relies 6 exclusively on the cost and burden of defending a lawsuit in arguing it will suffer 7 hardship. “[B]eing required to defend a suit, without more, does not constitute a ‘clear 8 case of hardship or inequity’ within the meaning of Landis.” See Lockyer, 398 F.3d at 9 1112. Defendant’s reliance on Bowden v. Contract Callers, Incorporated, is misplaced, 10 as the district court there noted the defendant “would be harmed by burdensome class 11 discovery.” 2017 WL 1732017, at *2 (N.D. Cal. Apr. 5, 2017). Because this case does 12 not involve class allegations, there is no such risk present here. Moreover, Plaintiff 13 asserts the magistrate judge “has already limited the number and scope of discovery in 14 this case.” Doc. No. 28 at 2. Thus, Defendant has not made out “a clear case of hardship 15 or inequity.” Landis, 299 U.S. at 255. 16 3. Prejudice 17 Lastly, staying this case would prejudice Plaintiff. Defendant filed its motion more 18 than eight months after Plaintiff filed his Complaint. See Hiemstra, 2017 WL 4124233, 19 at *3 (noting a stay would prejudice the plaintiff where the defendant filed its motion 20 more than eight months after the plaintiff filed her complaint and discovery had not yet 21 commenced). Of significance is the fact that Defendant must still produce discovery to 22 settle the factual disputes regarding the use of an alleged artificial voice and whether 23 Defendant previously obtained Plaintiff’s consent. Additionally, Plaintiff’s artificial 24 voice basis for his TCPA claim, his Rosenthal Act claim, and his intrusion claim will all 25 remain regardless of the outcome in ACA International. Thus, imposing a stay will 26 prejudice Plaintiff. 27 28 In sum, in weighing the relevant factors, the Court is unconvinced that a stay is warranted in this case. The Court finds Defendant has not shown this is one of those -7- 16cv3125-MMA (AGS) 1 “rare” circumstances where a party in one case must “stand aside while a litigant in 2 another settles the rule of law that will define the rights of both.” Landis, 299 U.S. at 3 255. 4 5 6 7 CONCLUSION Based on the foregoing, the Court DENIES Defendant’s motion to stay proceedings pending the D.C. Circuit’s ruling in ACA International. IT IS SO ORDERED. 8 9 10 11 12 Dated: October 17, 2017 _____________________________ HON. MICHAEL M. ANELLO United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8- 16cv3125-MMA (AGS)

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