Cunningham v. Homeside Financial LLC

Filing 26

MEMORANDUM AND ORDER granting #17 Motion to Stay Proceedings; staying case until further order. Signed by Judge Marvin J. Garbis on 11/30/2017. (krs, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CRAIG CUNNINGHAM,
on behalf of himself and
others similarly situated
Plaintiff
vs.

Defendant
*

*
*
* CIVIL ACTION NO. MJG-17-2088

HOMESIDE FINANCIAL, LLC

*

*

*

*
*

*
*
*
*
MEMORANDUM & ORDER RE: STAY

*

*

The Court has before it Defendant’s Motion to Stay
Proceedings [ECF No. 17] and the materials related thereto.

The

Court has reviewed the materials provided by the parties and
finds that a hearing is not needed.

I.

BACKGROUND
Plaintiff Craig Cunningham (“Cunningham”) filed a putative

class action against Defendant Homeside Financial, LLC
(“Homeside”) asserting violations of the Telephone Consumer
Protection Act (“TCPA”), 47 U.S.C. § 227.

Cunningham alleges

that Homeside “placed telemarketing calls to [his] cellular
telephone number for the purposes of advertising its services
using an automated dialing system.”

Compl. ¶ 2, ECF No. 1.

The TCPA provides a private cause of action to persons who
receive calls in violation of 47 U.S.C. § 227(b)(1)(A).

47

U.S.C. § 227(b)(3).

The TCPA makes it unlawful “to make any

call (other than a call made for emergency purposes or made with
the prior express consent of the called party) using an
automatic telephone dialing system or an artificial or
prerecorded voice . . . to any telephone number assigned to a .
. . cellular telephone service.”

47 U.S.C. § 227(b)(1)(A)(iii).

Cunningham alleges that he did not consent to receive the calls,
and since telemarketing campaigns generally place calls to
thousands or millions of potential customers, he is suing on
behalf of a proposed nationwide class of others who also
received illegal telemarketing calls. Compl. ¶ 3.
Homeside asserts that it only contacts customers who have
consented to receive calls, and the dialing equipment it uses is
not an “automatic telephone dialing system” (“ATDS”) for
purposes of the TCPA.

Answer ¶¶ 11, 19-20, Fifth Affirmative

Defense, ECF No. 15.
In 2015, the Federal Communication Commission (“FCC”),
which has the authority to issue regulations implementing the
TCPA, released a Declaratory Ruling and Order that construed the
statutory definition of an ATDS, stating that “dialing equipment
generally has the capacity to store or produce, and dial random
or sequential numbers [and thus meets the TCPA’s definition of
‘autodialer’] even if it is not presently used for that purpose,
including when the caller is calling a set list of consumers.”

2

In re Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, 30 F.C.C. Rcd. 7961 (July 10, 2015).
The FCC ruling prompted significant litigation and was
challenged by a consolidated appeal to the D.C. Circuit in ACA
Int’l, et al. v. FCC, Case No. 15-1211.1

Briefing was completed,

and oral argument was held in the D.C. Circuit on October 19,
2016.
Homeside filed the instant motion to stay proceedings,
requesting that the Court stay this matter pending the D.C.
Circuit’s decision in ACA Int’l on the validity and meaning of
the FCC’s ruling with regard to the definition of ATDS.

II.

LEGAL STANDARD
“[T]he power to stay proceedings is incidental to the power

inherent in every court to control the disposition of the causes
on its docket with economy of time and effort for itself, for
counsel, and for litigants.”

Maryland v. Universal Elections,

Inc., 729 F.3d 370, 379 (4th Cir. 2013) (quoting Landis v. N.
Am. Co., 299 U.S. 248, 254–55 (1936)).

Indeed, “[a] trial court

may, with propriety, find it is efficient for its own docket and
the fairest course for the parties to enter a stay of an action

1

The D.C. Circuit can reverse the FCC ruling and remand the
case to the FCC to carry out the judgment of the Court, subject
to review by the Supreme Court upon writ of certiorari. 47
U.S.C. § 402.

3

before it, pending resolution of independent proceedings which
bear upon the case.”

Leyva v. Certified Grocers of Cal., Ltd.,

593 F.2d 857, 863-64 (9th Cir. 1979).
In exercising discretion to stay a case, a court “must
weigh competing interests.” Landis, 299 U.S. at 255.

When

deciding a motion to stay, courts weigh the following three
factors:
(1)

the interests of judicial economy;

(2)

hardship and equity to the moving party if the action
is not stayed; and

(3)

potential prejudice to the non-moving party.

Davis v. Biomet Orthopedics, LLC, No. CIV. 12-3738-JKB, 2013 WL
682906, at *1 (D. Md. Feb. 22, 2013)(quoting Johnson v. DuPuy
Orthopaedics, Inc., No. 12 Civ. 2274(JFA), 2012 WL 4538642, *2
(D.S.C. Oct. 1, 2012)).

Further, the court must ensure that the

stay is not “immoderate” and limit the scope of the stay within
a reasonable time frame.

Landis, 299 U.S. at 257.

III. DISCUSSION
Plaintiff’s primary argument in opposition to a stay
concerns the potential spoliation of telephone records.
Court does not find this argument persuasive.

The

Homeside has

initiated a litigation hold to preserve all records.
Additionally, on November 13, 2017, the Court granted the

4

Unopposed Motion Requesting Leave of Court to Commence Discovery
and Issue a Third Party Subpoena [ECF No. 24] to a third party,
QuoteLogic, the owner or operator of MinuteMortgageQuotes.com.
See Order, ECF No. 25.

As such, it appears that Plaintiff’s

concerns with regard to spoliation of records during the
pendency of a stay have been alleviated.
It also appears that resolution of the meaning of an ATDS
will directly affect this case, either by having a dispositive
effect on the claims or at least by focusing discovery.2

Because

the D.C. Circuit Court has the exclusive jurisdiction to review
the FCC ruling, 28 U.S.C. § 2343(1), its ruling will be binding.
Staying the case pending the ruling will permit the Court and
the parties to evaluate the viability of Plaintiff’s claims
under the most complete precedent and streamline the
proceedings.

Therefore, Plaintiff is unlikely to be prejudiced

by a stay that could reduce the burden of litigation on both
parties.

Further, a stay could promote the efficient use of

judicial resources.
The Court is, however, mindful of Plaintiff’s concern
regarding an indefinite stay.

Since oral argument in the ACA

2

Homeside has raised factual challenges to Cunningham’s
prerecorded-voice claims. If the Court were to find that
Cunningham failed to sustain a TCPA claim based on the use of a
prerecorded voice, the Court would still need to determine
whether Homeside used an ATDS, as defined in the FCC Order or
possibly as redefined by the D.C. Circuit.

5

Int’l case was over a year ago, a decision will not likely
remain pending for long.

The stay is not indefinite because it

is directly tied to the proceedings in that case.

Upon issuance

of the opinion in ACA Int’l, either party may move to lift the
stay.

IV.

CONCLUSION
For the foregoing reasons:
1.

Defendant’s Motion to Stay Proceedings [ECF No.
17] is GRANTED.

2.

The case is hereby STAYED until further Order.
a.

The case shall remain stayed until the
issuance of the opinion from the D.C.
Circuit.

b.

The parties shall notify the Court within
seven days of the D.C. Circuit opinion’s
filing.

c.

Either party may provide status reports as
deemed appropriate.

SO ORDERED, on Thursday, November 30, 2017.

/s/__________
Marvin J. Garbis
United States District Judge

6